In the pre-pandemic days of August 2019, Quixote Studios got ahead of the content-demand curve when it opened its North Valley Studios at 12137 Montague St. in Pacoima.
The debut of the Xebec-developed, $30 million facility with five soundstages and 20,000 square feet of production offices for a 75,000-square-foot total footprint on 10 acres represented a giant leap forward for Pacoima.
Now, the landscape is changing all across East San Fernando Valley with so many studio lot projects in development, led by studios Warner Bros. and NBCUniversal as well as non-Hollywood firms Blackstone and Hudson Pacific.
Quixote Studios Chief Executive Mikel Elliott is well aware of the competition coming to North Los Angeles with the soundstage boom.
“We’ve been at it a lot longer than these guys,” Elliott said. “We better understand the business better than them.”
He believes he can create studio space faster and better because he has been ahead of this trend.
“We are taking big warehouses and turning them into grade-A stages,” he said. “So we can get new stages online in a much shorter period of time. We don’t have to go through the entitlements, development, all that process. We’re just taking a big box and cutting it up, as long as it’s got the height, 30 feet or so, and the right location. … We can repurpose a redistribution warehouse as a soundstage.”
Quixote Studios has a total of 25 soundstages nationwide, including in New York, Atlanta and three in New Orleans.
Twelve of the company’s soundstages – including five pending ones – are in North Los Angeles where they’re adding a sixth soundstage to the original 12137 Montague St. lot in Pacoima. There’s also a Quixote site in Sylmar and one in Sun Valley, which houses filmmaking equipment and a portion of the company’s fleet of 600 trucks.
Pacoima, the sequel
In April, Quixote Studios announced that it will expand with another Pacoima site: a 123,974-square-foot lease at 12154 Montague St. The Rexford Industrial Realty-owned property includes 95,394 square feet of warehouse space and 28,580 square feet of office space, plus six ground-level doors, dock-high doors, 24-foot clearance height, abundant parking and a fenced yard.
Newmark’s Calabasas-based industrial brokers Executive Managing Directors John DeGrinis and Patrick DuRoss and Senior Managing Director Jeff Abraham represented Rexford in the transaction while Greg Barsamian, senior vice president at CBRE Group, represented Quixote Studios.
The new Pacoima facility, currently under construction, will open in May.
Among the productions that have already been filmed at 12137 Montague St.: Amazon Prime’s series “Them,” Nickelodeon’s “Warped,” Warner Bros.’ “Mrs. Davis,” the Apple TV Plus series “Physical” and the final season of HBO’s “Insecure.” A Jay Leno game show, a Reebok commercial featuring Cardi B and the Lady Gaga music video “Rain on Me” were also shot there.
Since the outbreak began, there’s been no huge disruption of filming in Pacoima as Quixote has employed all COVID-19 protocols at its facilities. Interestingly, it was a labor issue rather than the pandemic that caused a minor pause in production at Elliott’s facilities.
“There was a bit of a hiccup with the threat of an IATSE strike (last month),” Elliott said. “So, people did not want to start any new shows until that got resolved. That was only like two or three weeks.”
Elliott co-founded Quixote in 1995 with his UCLA classmate Jordan Kitaen. They were both literature majors and Elliott originally wanted to produce and direct.
“I grew up in this business,” Elliott said. “My dad was a grip, so I’ve been running around sets forever. It’s kind of in my blood.”
“A lot of people start below the line to get into the industry,” Kitaen said. “We liked it below the line. We saw opportunity there.”
At the time, the entertainment industry’s below-the-line offerings appeared piecemeal.
“It wasn’t really professionalized,” Elliott said. “We thought, ‘Wow, we could do something really cool on the service side and still participate in the creativity of Hollywood and be near it.’ That, to me, was super-appealing.”
Originally, Elliott and Kitaen started their business driving motorhomes in 1995. That trailer and truck rental business soon expanded to include renting film equipment, which Quixote has a site for in Sun Valley.
In 1998, Quixote began leasing and buying studio space. Then came another big leap circa 2005 when they acquired what is now Q Park, a 100,000-square-foot soundstage near Griffith Park.
“We sort of walked in, it was really turnkey (ready),” Kitaen said. “We were able to sign a TV show pretty quick. That show did not last long but then another show rolled in called ‘Criminal Minds.’ That had a long run. That made us have an appetite for more studios.”
Then Quixote went national.
“We sort of had to chase productions,” Kitaen said. “We opened up a studio in Boston, in New Orleans, in New York and Atlanta. But we kept the bulk of our investment in Los Angeles.”
In 2014, the company acquired Movie
Movers Inc., a film and TV trailer business that put them in competition with Star Waggons, adding 370 trailers to its fleet; and last month, Quixote purchased Production Truck,
an industry provider of such inventory as make-up stations, refrigerators and walkie-talkies.
“For a couple of English majors from UCLA to have all these physical assets, we’ve been blessed with good timing,” Kitaen said. “I can’t say we had any vision; we just followed our nose and Mikel is an extremely smart man.”
Elliott now has 270 employees on the payroll. Kitaen, who remains a silent partner in the company, has not been involved in day-to-day operations for years.
In 2018, Elliott aligned with private equity partner Bison Capital Asset Management, which acquired 29 percent of Quixote Studios, to scale up his business.
“They provided some capital and some smarts,” Elliott said. “As an entrepreneur, you have a vision but if you want to scale and make this a little bigger, you need to bring in some outside investment. But you’ve got to find the right partners for that.”
With that kind of support, Quixote was able to go into neighborhoods such as Pacoima and Sylmar and create his sites, which are economic engines.
“We’re putting Pacoima on the map,” Elliott said. “We’re occupying over 20 acres over there and it was sort of downtrodden industrial. Now we’re making it a destination for production. It’s not that far from Burbank and it was affordable real estate at the time.”
CBRE’s Barsamian, who has known Elliott and Kitaen for years, has long-represented Quixote in its real estate transactions.
“(Elliott) is forward thinking because L.A. was completely land constrained,” Barsamian said. “We’re in a fully developed urban environment. (But) what’s impressive is having the vision and being able to execute on that.”
Elliott sees a lot of creativity in what he does.
“We definitely have a creative sort of element to our brand and what we do, but we’re very disciplined financially,” Elliott said. “There’s no brand that speaks directly to the crew. And that’s what we do.”
Whether it’s a soundstage or a piece of lighting equipment, Elliott said he wants to help film productions accomplish their goals.
“You can get a great high-end trailer for a celebrity or you can get a studio that is going to be super-clean and well-serviced and super-functional,” he said. “That’s unique about us.”
The most fulfilling aspect of his profession, Elliott said, is “the people. Creating a cool culture. A place that everybody digs and loves to come to work. I like the culture and the building of the brand.”
Right now the landscape is changing again and becoming more competitive for Quixote.
“Michael was born in Burbank and I was born in Van Nuys – we’re Valley boys,” Kitaen said. “Now we’re slugging it out with these huge institutional companies we never had to compete with before.”
Kitaen is surprised at all the announcements of new studio lots in development.
“We had no idea that we were at the beginning of something crazy,” Kitaen said. “All of these studios … none of them have been built yet. There sure are a lot of things in the planning stages.”
Kitaen said he feels wary of the institutional firms dipping into the Hollywood real estate waters.
“A lot of the players coming into this market don’t actually understand it,” Kitaen said. “Yes, they’re very smart people. Yes, there’s a real estate component but it’s a lot more complex than that.”
Roughly 35 percent of revenue comes from commercials – what Elliott calls “our legacy business” – and 65 percent from movies and television. But Elliott says the commercials sector is not growing and he expects the latter category — episodic TV — to grow exponentially as Netflix, Amazon Prime Video, Walt Disney Co.’s Disney Plus and Hulu, Apple TV Plus, Warner Bros.’ HBO Max, NBCUniversal’s Peacock, Paramount Plus and Roku all compete for viewers.
“You’ve got the most valuable companies on the planet vying for eyeballs,” Elliott said. “The demand for content is going to continue for quite a while.”