Amid decline in film production, equipment rental company exits Atlanta

Hudson Pacific President Mark Lammas said in the news release Quixote is moving away from markets characterized by “structural cost or demand disadvantages.” Instead, it will focus on its office portfolio and higher-performing segments of its studio business.

Quixote is one of several equipment rental businesses in Atlanta. Operating out of a 40,000-square-foot facility in McDonough, it offered lighting and grip services, production equipment and studio trucks. The company slowly grew in Atlanta over the years, acquiring The Production Truck in 2021, a rental company based in both Atlanta and Burbank. Quixote also operated in New Orleans, a market it exited last year.

Hudson Pacific acquired Quixote in 2022 for $360 million amid a boom in film and television production dubbed “the streaming wars” — when studios and streamers were spending millions of dollars to expand their libraries with new content. Soundstages in Atlanta, filled by productions taking advantage of Georgia’s generous film tax credit, were at capacity. This period was characterized by a flurry of investment in production-adjacent businesses, with major private equity companies such as Blackstone entering the soundstage market specifically.

Nothing good can last forever. Following the 2023 writers and actors strikes, studios and streamers greenlit fewer projects, effectively resetting the production levels to what they were before the pandemic. Productions were sent to cities with lower costs and more competitive incentive programs than Atlanta, many of them outside of the country. New York and Los Angeles both increased their incentives to attract business back to their more established entertainment ecosystems.

Production isn’t dead in Georgia. A number of high-profile projects are underway or scheduled to shoot in the upcoming months, including the second installment of James Gunn’s “Superman,” a Judd Apatow-Glen Powell comedy and a live-action reboot of “Scooby Doo.” But it’s a fraction of what it was when production was booming and professionals and businesses were flocking to the state to share a piece of the pie.

As a result, some vendors in Atlanta have scaled back their operations or left the state entirely. Some soundstage owners have sold their properties or repurposed them. Actors and crew members have sold their homes and found work elsewhere or pivoted to new industries. Just this week, The Atlanta Journal-Constitution reported actor Josh Brolin put his home in Sandy Springs on the market, telling the AJC “we would not sell this property if my work didn’t take us west.”

At a conference in March, Hudson Pacific CEO and Chairman Victor Coleman said the company took a write-down on Quixote, a move that reflects the diminishing value of the unit.

“Obviously, clearly, it was not the best deal we’ve ever done,” Coleman said of Quixote during the conference. “But if you compare that to everything else we’ve done, then we’re doing OK.”

Coleman also noted secondary markets such as Atlanta, New Orleans and Albuquerque were “much more depressed” than Los Angeles and New York.

Some equipment assets will be relocated from Atlanta to Los Angeles and New York, where the company’s fleet, lighting and grip, production supplies and communications rental services will continue, according to the release.