Can the film industry solve NYC’s office-vacancy problem?

It’s no secret that New York City has a growing office-vacancy problem. Residential conversions are a heavy lift for many of the city’s empty commercial towers because of zoning restrictions, costly logistical issues, or both. But one company is pitching a new possibility for Gotham’s vast, semi-windowless office caverns: conversion to film and TV production studios. 

Rosalind Tsang, a partner at architecture firm BDP, said that many office buildings with large floors don’t qualify for residential conversion unless the developer can cut a light well through the center of the building — essentially a massive hole that allows for more windows and legal internal bedrooms. Even buildings with smaller floor plates, which are much easier to convert to apartments, may not be zoned for residential use, which forces owners to consider creative commercial options to fill their space. And there’s no shortage of empty office floors, with Manhattan’s office-vacancy rate hovering at 24% in the second quarter of this year, Cushman & Wakefield's latest market report found. 

“We’ve been doing feasibility studies for office-to-residential conversions,” Tsang said. “But if you don't have the capital to do that, the question is, what do you do with these deep, dark floor plates?” Studios are “a clever idea for using these spaces that’s not really talked about. The beauty of it, too, is that you don’t need a ground-up construction. You’re dealing with an interior space.” 

A growing number of TV shows and movies are filmed on virtual sets, which are high-tech soundstages with built-in LED screens that allow directors to film actors in front of computer-generated sets in real time. They replace the longtime method of shooting actors in front of green screens and then adding effects and backgrounds in postproduction. Shows like “The Mandalorian,” “Westworld,” and “Stranger Things” have all been shot on these virtual soundstages, which make editing a lot easier. 

Tsang said that mid-century office properties with deep floor plates could be good candidates for conversion to virtual production facilities if they can be retrofitted with higher ceilings, more electrical voltage, additional ventilation, and acoustic insulation. Despite the amount of work it would take, she said it would still be cheaper than converting an office building to apartments or demolishing a building outright and constructing something new. 

The question then becomes, “How can we acoustically isolate this space?” Tsang said. “It does come down to the inch. We can run scenarios.” There could be an area of the slab or the floor that can be cored through for a studio.

Tsang talked about two BDP projects in Toronto where production companies successfully repurposed office buildings. For postproduction firm Company 3, which specializes in the mastering and sound-mixing of movie trailers and films, BDP carved out the interior of three office floors to create a double-height private cinema for client screenings, with editing suites for postproduction work. BDP also designed a large TV studio for Sportsnet, a Canadian broadcaster of hockey and baseball games, by raising the ceiling height of a downtown Toronto office building and adding acoustic insulation along its facade. 

Greg Hull, Company 3’s vice president of engineering and technology, said the postproduction company spent more than a year working with BDP on its 60,000-square-foot space at 901 King Street, constructing six sound-mixing stages that are completely isolated from both outside noise and the building’s concrete pillars, which can carry sound from other floors. 

“We had to figure out how to isolate these rooms from the rest of the building and protect our neighbors from our sound,” he said. “You don't want the guy in the room who likes to play music while he’s color correcting to affect the sound-mixing next door.”

To create the necessary 22-foot-high ceilings, Company 3 and BDP “convinced the landlord to blow the roof off the building and we were able to build a box within a box to create our mixing stage” as well as a color-correction stage. The work involved adding an extra 2.5 stories to the building, 12-inch-thick walls, and ceilings and floors that were separated from the structure of the building using insulation and sound-isolating wiring with springs. 

The office also has server and machine rooms, six color-correction rooms with projectors, and 22 postproduction suites and offices that clients can rent to finish editing projects on-site. The section of the office with the sound and color-correction stages is locked behind three swipe doors, so clients know their projects aren’t being leaked to the press.

Anthony Jasenski, who oversees film-studio leasing and sales transactions at real-estate brokerage CBRE, said that smaller-scale productions, like commercials, short-form video content, fashion shows, or music videos, have expressed interest in office space. But there are big caveats.

“We’ve taken clients through office buildings just this past quarter looking at spaces for film-studio purposes,” he said. But he cautioned that older office properties were not going to work for major TV and film shoots. 

“You’re not going to have a movie studio inside an office building,” Jasenski said. “You need at least 14,000 square feet of column-less space and you need a 25 foot clear height. And you’d need multiple of those stages.” 

Even if landlords could remove columns and make ceilings taller, elevators present another challenge. For a large production, moving equipment up and down in an elevator can present a time-consuming logistical challenge, which is why most soundstages are on first floors. Even so, most office buildings don’t have elevators large enough to accommodate film productions. 

“Unless you have massive dedicated freight elevators,” he said, retrofitting offices is generally “cost-prohibitive, and it doesn’t create functional space.” In an older office building, the need to remove columns, cut holes in the floors, and replace the elevators creates major hurdles for studio conversions. And that’s before dealing with utilities, heating and cooling, and insulation. To accommodate film and TV production, older buildings typically need layers of noise-dampening material on the walls, floors, and ceiling, along with upgrades to the electrical service, the ventilation systems, and potentially even reinforcement for the floor slabs and structure to support thousands of pounds of equipment. 

“There needs to be x amount of amps, power is a huge issue, noise insulation is a huge issue, and even getting up to the load-bearing capacity of the floor plate is an issue,” Jasenski said. “From a technical standpoint, there’s a lot of criteria, and every one of them is important.” 

There’s a reason most New York film and TV production happens in former industrial spaces in the five boroughs. Warehouses offer higher ceilings, can be easier to retrofit with new utilities, and often come with large freight elevators or ramps. New York University’s Tisch School of the Arts recently finished construction on its own virtual soundstage, where it cut a hole in the roof and constructed a waterproof box with 46,000 square feet of column-free space and 25-foot ceilings. Adding soundproof paneling, along with leaving air gaps between the panels and the building walls, helped create a virtually silent space. 

Despite the prospect of turning vacant office buildings into soundstages, questions remain if the space is even needed. The Writers Guild of America and the Screen Actors Guild both went on strike for several months last year, throwing the industry into chaos. Many production companies have kept their projects on ice until the three major unions that represent crew and support staff on sets — the International Alliance of Theatrical Stage Employees, the Teamsters, and Hollywood Basic Crafts — ratified their new contracts with the trade group that represents production companies, the Alliance of Motion Picture and Television Producers. The Teamsters and Hollywood Basic Crafts both ratified their new contracts on August 1, while IATSE voted its new contract through on July 18. 

“Productions have been holding off on greenlighting domestic shows because they didn't want to have production be interrupted,” Jasenski said. “I wouldn’t say the past 18 months is indicative of a larger market trend, but it’s an unfortunate series of events that has dampened market activity.”

But he added that studio rental rates have been on the rise since 2019, with streaming services pushing the number of TV and film productions to new highs following the Covid-induced pause in 2020. 2021 “blew the doors off of 2019, and 2022 was even busier,” he said. “Rental rates continued to climb — utilization and occupancy were at all-time highs. It ended up being a banner year for content production.”

Last year’s strikes caused a dramatic slowdown in production spending, which fell from an average of $26.2 million in the first quarter of 2023 to $8.3 million in the third quarter nationwide, CBRE’s July film-industry report found. After WGA and SAG-AFTRA settled their contracts last November, production resumed, with the average spend on film and TV projects hitting $46 million nationwide in the first quarter of this year. Locally, production has picked up but not quite rebounded to where it was 18 months ago. New York saw about 300 film-permit applications in January 2024, CBRE reported, fewer than half of the 650 filed last February, just before the labor disputes began.

So far this year, the New York City area has added 350,000 square feet of soundstage space, including the NYU Tisch Martin Scorsese Virtual Production Center, Wildflower Studios and Borden Studios in western Queens, and Port Washington Studios on Long Island. New York and New Jersey already have a combined 3 million square feet of production space, with another couple hundred thousand under construction. Jasenski said there would be plenty of TV and film projects to fill both the old and the new soundstages. Does the tristate area need even more? Probably not.

“It doesn't need to get back to that gangbusters style” of 2021 and 2022, he said. “If everything just stays the same and grows organically, I think there’s more than enough demand to fill the current and under-construction pipeline.”

Rebecca Baird-Remba is a freelance journalist in New York City.