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Off The Record: February 2016 Column

Music & Recording Industry News By Dan Daley
Published February 2016

With property prices going up and up, finding studio space is becoming trickier than ever.

After air, water, food and sex comes shelter — and that means real estate. When it comes to recording studios, that has often meant leased properties, especially in big cities. But in the wake of the Great Recession — which had real estate at its core, in the form of tranched, diseased mortgages — that bit has to be rethought.

Avatar Studios in Manhattan is but the latest in a long line of studios that have been compelled to close or relocate due to changes in the local real-estate market. In Avatar’s case, they owned the property, but it was the increasingly stark differential between what it was worth as a studio versus what it could be worth as a high-rise luxury condo building that pushed it onto the sales block. But most studios aren’t fortunate or foresighted enough to own the earth they stand on. Instead, long-term leases eventually run out, and while a decade-long contract might have protected a facility against rent creep, when it expires, all of that accrued value comes down like a truncheon on the chequebook. That’s what’s happening to The Magic Shop, a downtown studio staple in Manhattan for 27 years. Home to classic records by David Bowie and Sonic Youth, it is now poised for eviction, since the gritty artists’ lofts that marked SoHo when it opened in 1988 have been replaced by Bloomingdale’s and Starbucks.Off The Record

That’s been especially the case in the last five years, during which time real-estate values have skyrocketed. The value of US commercial real-estate transactions in the first half of 2015 jumped 36 percent from a year ago, according to the Wall Street Journal. In Europe, transaction values shot up 37 percent, the strongest start to a year since 2007.

Los Angeles, by dint of its sprawl, finds its studio facilities somewhat less at risk of real-estate pressures. Ellis Sorkin, whose Studio Referral service has helped people book facilities for over two decades, says that there’s enough available space, in a region where it’s already normal to drive two hours to work, that developers can usually find what they need without displacing studios. That said, however, with the exception of a few iconic brands like Sunset Sound and Conway Recording, most others are tenants in their palaces of sound, and going forward, tenancy is going to be increasingly, well, tentative.

Solid Estate Logic

Like any other commodity, real estate inevitably rises over time. Even Chernobyl is going to come back at some point. (Over 1.6 million people live in Hiroshima and Nagasaki, both of which had it far worse with their nuclear encounters.) And even though a not-inconsiderable portion of Manhattan is actually landfill made up of garbage and detritus dating back to 17th-century Dutch beaver traders, real estate’s fundamental value lies in the fact that they’re not making more of it. In fact, as any number of climate scientists might confirm, we’re actually expecting to see less of it in the future. That will make what remains that much more valuable.

Recording studios are hardly alone in feeling the effects of rapid real-estate appreciation and the gentrification it brings. On Los Angeles’ west side, the artists for whom its Arts District is named are already all but gone, as luxury condos multiply. Miami’s Little Haiti neighbourhood, for years home to many whose families had fled the worst economy in the Western hemisphere, is on the verge of being overwhelmed by art galleries — galleries that are themselves being pushed out of another once-decrepit neighbourhood, Wynwood, where land values and gentrification have made it impossible for the galleries to pay rent. When an art gallery is the canary in your coal mine, you know things have changed.

Why This Matters

Owning the land under a tracking room provides a bulwark against encroachment, but it’s hardly a fortress wall. As with Avatar, there will inevitably be a tipping point at which the value of the dirt exceeds that of the business upon it, especially in the rapidly renovating urban downtown districts of the Midwest and the South. The financial dynamics that are dispossessing recording studios in big cities may also ultimately change the dynamics of record production in the long term, by making sizable acoustically desirable spaces less available. This could conceivably accelerate the laptop-studio model of production. It could also further encourage the shift of studios into personal residential spaces.

These possible future scenarios are offered without judgment — it would be hard to deny the fact that many very good and very successful records are produced in people’s homes, some of which have very nice recording studios in them, and equally difficult to condemn laptop production limited to all-virtual ambience as a step backwards. Diplo and Skrillex recently collaborated on Justin Bieber’s single ‘Where Are Now’ in an all-MacBook Pro environment, and neither is likely behind on his mortgage. But we’ve already seen a reduction in the social and artistic interaction that we lost with the decline of the multi-room facility, where the ability to bump into people in common areas produced more serendipitous outcomes than we can imagine.

Sound Investment

Real estate is, in the end, the best of all investments, assuming you’ve got at least a few years to let it bake. Think about everything that no longer has to be spent on studios (most notably on battleship tracking consoles, or on miles of copper cabling that’s quickly being reduced to a few strands of networked fibre), and consider putting that towards the down payment on a property. Not every former crack-house neighbourhood has been turned into a hipster haven yet. There are places in cities that are affordable, and which offer the space needed for a proper studio. Yes, there are fewer of them by the month at this pace, but if you build, some will come. And if you own the dirt, you’ll still be there when they come back.