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GREATER LOS ANGELES MARKETFLASH
Major Movie Theater Operators Eye Regional Expansion as Attendance Slowly Ticks Back Up
SEPTEMBER 14, 2021

Since the onset of the global Coronavirus pandemic, cinemas across the world were forced to close for most of 2020. Consequently, movie studios opted to either delay major Hollywood releases or resort to streaming video on demand (SVOD). The results were staggering as digital entertainment revenue in the U.S. increased 33% to $26.5 billion, and the number of people in the U.S. subscribing to a streaming platform jumped to over 300 million in 2020. With box office revenue plummeting 82% from 2019 to 2020, traditional movie theaters were struggling—but now that may be shifting.

AMC Entertainment, the largest movie theater operator in the world, announced in July that it would be taking over some spaces recently vacated by ArcLight Cinemas and Pacific Theaters after both companies filed for bankruptcy earlier this year. Two leases AMC confirmed to be taking over are at The Grove (30,000 sq. ft.) in West Hollywood and The Americana at Brand (43,412 sq. ft.) in Glendale. With the shuttering of ArcLight and Pacific Theaters, over 400,000 square feet of theater space is now up for grabs in the SoCal region—an opportunity major chains such as Regal, AMC, and Cinemark will likely capitalize on as the three make up nearly 70% of the regional cinema market.

Much of this recent activity is driven by a surge in revenue and overall ticket sales buoyed by pent-up demand from movie-goers headed back to cinemas over the summer. Domestic box office revenue totaled $90 million over the 2021 Labor Day weekend—smashing the previous record of $30.6 million in 2007. Overall box office revenue has increased 53.1% year-over-year—but is still 72% below 2019 levels. Though SVOD has taken a significant bite out the global cinema market share in 2020, the silver screen hasn’t lost its luster as some of the biggest players in the industry move to increase their regional footprint.

Regal, AMC, and Cinemark occupy 6.6 million square feet of space in SoCal—or 70% of the regional theater footprint. The closure of ArcLight and Pacific Theaters opens additional expansion opportunities for the region's largest chains.
Source: CoStar; CBRE Research, 2021.
Major film releases over the summer, coupled with pent-up demand, led many movie-goers back to the cinemas. Domestic box office revenue for 2021 has increased 53.1% over last year, but lags considerably behind pre-COVID levels.

Source: Box Office Mojo; CBRE Research, 2021.

Contacts
Dan Hunker
Research Analyst
CBRE Pacific Southwest Thought Leadership
+1 909 418 2117
dan.hunker@cbre.com | LinkedIn

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