NEW ORLEANS – Marcus & Millichap, a California-based commercial real estate brokerage firm, has announced an exclusive representation agreement with Deep South Studios LLC to secure joint venture equity in connection with the development of Deep South Studios Phase I. The project is a 262,560-gross-square-foot, full-service motion picture and television production facility in New Orleans.
Eric Michael Anton and Henri M. Kessler of Marcus & Millichap’s global capital division are representing the sponsor.
“In 2022, $220.2 billion was spent globally to make and acquire new feature films and TV programming industrywide,” said Kessler in a press release. “ Louisiana is the fourth-largest entertainment market in the United States. We are seeking an investment of over $100 million for Deep South Studios Phase I, which will be completed and managed by a talented team of professionals with many years of motion picture industry experience.”
Deep South Studios is led by CEO Scott Niemeyer. He says the facility’s major utilities are in place, three buildings are operating and generating income, and the site is fully entitled and ready for construction.
Plans call for six sound stages ranging in size from 16,500 to 30,000 square feet, two production offices and related vendor buildings totaling 99,000 square feet. There will be a construction mill for building sets, a grip and lighting building and up to 1,000 parking spaces.
“Deep South Studios Phase I is projected to generate $10.4 million in net-operating income, which equates to approximately $173 million at a 6% cap rate and 20 percent internal rate of return,” said Anton. “The $119.2 million in construction costs translates to an 8.72 percent return on cost.”
The facility is located on a 20-acre site in the Algiers neighborhood on the West Bank of the Mississippi River.
“Deep South Studios will address Louisiana’s under-served, yet highly lucrative film and television production market,” said Brian Hosey, first vice president and division manager with Marcus & Millichap’s Global Capital Division. “As the only full-service solution for Louisiana media production, Deep South Studios will provide economies of scale and scope to capitalize on a growing production ecosystem fueled by the 2002 Louisiana Motion Picture Tax Incentive Act, which offers incoming productions a 25% tax credit on qualifying in-state expenditures and up to 40% on in-state labor costs.”
Chris Shaheen is Marcus & Millichap’s broker of record in Louisiana.
