NEW ORLEANS–(BUSINESS WIRE)–Marcus & Millichap (NYSE:MMI), a leading commercial real estate brokerage firm specializing in investment sales, financing, research and advisory services, today announced an exclusive representation agreement with Deep South Studios LLC to provide an equity interest in a joint venture in connection with the development of Deep South Studios Phase I. The project is a 262,560 gross square foot, full service film and television production facility in New Orleans, Louisiana. Upon completion, the facility will be the largest of its kind in the Southeastern United States. Construction of the remaining 85% is expected to take 12 to 18 months. Eric Michael Anton and Henry M. Kessler of the Global Capital Division of Marcus & Millichap represented the sponsor, Deep South Studios LLC.
Kessler stated, “In 2022, $220.2 billion was spent globally on the creation and acquisition of new feature films and television programs across the industry. 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 years of experience in the film industry.”
Deep South Studios is led by CEO Scott Niemeyer, who has over 30 years of experience in all aspects of film production. The facility’s main utilities are up and running and three buildings are operating and generating revenue. The site is fully licensed and ready for construction. Upon completion, the project will contain six sound stages ranging in size from 16,500 to 30,000 square feet, two production offices and associated vendor buildings totaling 99,000 square feet. There will be a construction mill to build world-class sets, a grip and lighting building and up to 1,000 parking spaces.
“Phase I of Deep South Studios is projected to generate $10.4 million in net operating income, which equates to approximately $173 million at a 6% cap and a 20% internal rate of return,” Anton said. “$119.2 million in construction costs represents an 8.72% return on costs.”
The facility sits on 20 acres, representing the largest contiguous undeveloped land in central New Orleans. Perched high on the west bank of the Mississippi River in the Algiers neighborhood, the property is easily accessible from Louis Armstrong New Orleans International Airport and Interstate 10. The city’s central business district and French Quarter are nearby.
“Deep South Studios will address the underserved but highly lucrative film and television production market in Louisiana,” said Brian Hosey, senior vice president and division manager of Marcus & Millichap’s Global Capital Division. “As the only full-service solution for media production in Louisiana, Deep South Studios will provide economies of scale and scope to take advantage of a growing production ecosystem fueled by the Louisiana Film Tax Incentive Act of 2002, which offers on inbound productions 25% tax credit on qualified in-state expenses and up to 40% on in-state labor expenses.” Chris Shaheen is the broker of record for Marcus & Millichap in Louisiana.
About Marcus & Millichap, Inc. (NYSE: MMI)
Marcus & Millichap, Inc. is a leading brokerage firm specializing in commercial real estate investment sales, financing, research and advisory services with offices in the United States and Canada. As of December 31, 2021, the company has 1,994 investment sales and financing professionals in 82 offices that provide investment brokerage and financing services to sellers and buyers of commercial real estate. The company also offers market research, consulting and advisory services to clients. Marcus & Millichap closed 13,255 transactions in 2021 with sales volume of approximately $84.4 billion. For additional information, please visit www.MarcusMillichap.com.