Now that the majority of the country’s COVID-19 restrictions have eased up, the populace is once again looking for social activities outside of the home. Going to the movies is still a relatively affordable thrill, in comparison to seeing a live concert, a theatrical show, a professional sports game, or even an escape room experience or an axe-throwing booking. The Midwest and Sunbelt markets have been especially hot for new movie theater growth , with emerging developing communities that are bereft of entertainment options seeing interest from theater brands with capital. These same cinema brands are especially interested in negotiating favorable lease terms to take over the ample vacant movie theater space made available due to COVID-induced bankruptcies. Large standalone buildings, mall theater space and even street-front units, including spaces away from Main and Main, in suburban areas near colleges and multifamily developments with heavy nighttime restaurant traffic are especially attractive to movie theater brands. Expect B&B Theatres, Cinergy Entertainment Group, Apple Cinemas and LOOK Dine-In Cinemas to be especially bullish with national growth. Also, look for movie theater chains that already have a huge national footprint, including Regal Cinemas and AMC Theatres, to continue to hunt for great empty theater spaces throughout the country.
It is true that there was a huge increase of TV subscriptions for streaming services during the quarantine lockdowns of 2020, but movie theaters expect that their amped-up bells and whistles will help to lure customers to their venues. The latest trend has been for movie theaters to provide multiple entertainment options under one roof to encourage customers to stay longer and participate in these extra activities. Other features include sophisticated cocktail and culinary dine-in options, plush reclining seats, and large screen advancements such as three-screen, side-wall projection viewing.
The family-owned B&B Theatres is focused on growth in markets in the Midwest, the Northwest and the South, and anticipates opening approximately 10 to 15 theaters per year over the next two years. B&B looks for opportunities to take over the leases of other bankrupt movie theater brands, and the chain is especially eyeing growth in Georgia, North Carolina, Minnesota, Virginia and Washington. The movie theater brand is keen to locate in up-and-coming neighborhoods in developing communities just outside of major cities that have a lack of entertainment venues. B&B is also open to being a large big-box tenant in new retail construction projects, provided there is an adequate population in the vicinity, such as multifamily and mixed-use developments. B&B Theatres can be flexible with its unit sizes, and the brand seeks space between 30,000 and 70,000 s.f. either as standalone units that border a retail development or end cap units in large strip centers, ideally near colleges, hotels and high-end food tenants such as Bad Daddy’s Burger Bar and Kilwins. B&B’s larger units feature additional entertainment options such as its unit expected to open by late 2021/early 2022 in Red Oak, Texas, which will feature 12 screens, an arcade and a bowling alley. B&B Theatres weathered the COVID-19 closures fairly well, partially due to its “rainy day fund,” as well as its concentration of theaters in Midwest destinations that reopened sooner than brands in California and New York. Its theaters feature the latest innovations such as its extra-large Grand Screen experience, and its Screen-X multi-projection that expands the picture to the sides of the theater’s walls.
Cinergy Entertainment hopes to open up to 10 new units per year over the next couple of years. Continued growth will be in middle- to high-income markets in Texas and Oklahoma, in addition to potential growth into Memphis, Tenn., Pittsburgh and Kansas City, Mo. The movie/entertainment venue looks for inline or standalone vacant movie theater space between 40,000 and 90,000 s.f. The site should not have a competing movie theater brand within three miles, and should ideally be within close proximity to a major interstate highway, as well as regional or major shopping centers, colleges, hotels, fine-dining restaurants and nightclub/bars. Space can be off Main and Main, as it is a one-stop-shop for all forms entertainment. Cinergy Entertainment not only provides a premium chef-driven dine-in movie experience, along with cocktails, but its venues also provide additional options such as rock climbing, bowling, zip lines, laser tag, escape rooms, virtual reality gaming, ropes courses and axe throwing
Apple Cinemas, with a presence in Connecticut and Massachusetts, expects to open at least 10 new movie theaters per year over the next 10 years in all U.S. markets. The brand would prefer to backfill existing vacant theaters, although its real estate team is willing to review all new development opportunities as well. Apple Cinema seeks space between 30,000 and 60,000 s.f. and would ideally prefer to have well-known nationally branded co-tenants, such as Starbucks and ULTA Beauty. The movie chain’s latest screens are expected to feature luxury seating in at least one or all of the screens. Its recent theater that opened in June at a former Spotlight Theatres space in Hartford, Conn., includes an upscale dine-in format.
LOOK Dine-In Cinemas, the upscale movie theater brand that resurfaced in July of 2021 after closing in the summer of 2020 because of the pandemic, is now a newly revamped company overseen by the former CEO of Studio Movie Grill. LOOK Dine-In Cinemas, which acquired around $12M in funding from 30 investors and expects to raise $13M through a Form D filing, has already overtaken four leases from Studio Movie Grill locations in Southern California, taking advantage of the latter theater’s reduction of its national footprint by half since re-emerging from bankruptcy in April. By the end of August, LOOK will have four of its branded theaters in Los Angeles and San Bernardino County, as well as a fifth unit in Dallas. By 2022, LOOK Cinemas expects to open up to 10 units sprinkled throughout Texas, as well as the East Coast states of New York and Florida. Anticipate the theater to continue opening at a rate of at least six to 10 new theaters per year until 2024. The brand seeks former theater space in the 40,000- to 60,000-s.f. range, in outlying suburban neighborhoods of MSAs. Potential sites can be either a standalone building off Main and Main, or an inline street-front space with favorable walkability and late night tenants popular with millennials and the Gen Z demographic, such as Cold Stone Creamery or Starbucks. The luxury-focused LOOK Dine-In Cinemas provides upscale menu and cocktail options for its dine-in meals.
Regal Cinemas, owned by Cineworld Group, already has a large footprint in the U.S., but is still opening new theaters in regions where it is underrepresented, as well as taking advantage of vacant theaters in regions where the brand would like to increase its presence. By the end of this year, Regal expects to open four new theaters, with a unit in the suburbs of Miami, a unit in Flushing, N.Y., as well as two theaters in California: in San Francisco and Fresno. This is on the heels of a new theater that opened in Spring, Texas, in June, and a new theater that opened in North Hollywood, Calif., in May. As for taking over vacant theaters, last month Regal bought the 65,000-s.f. Warren Theatre in Midwest City, Okla., that sits on a standalone pad within the Sooner Rose shopping center. Additional tenants at the power center include Burlington, Hobby Lobby and an Olive Garden. Regal has also signed a lease in June for the ArcLight Cinemas’ space in Sherman Oaks, Calif., where it expects to provide $10M in renovations to add features such as Screen X, a three-screen wraparound. Expect the theater chain to continue opening approximately 10 new units per year, as it seeks standalone and end cap space in the in the 45,000- to 65,000-s.f. range in regional centers, lifestyle centers, enclosed malls and lifestyle centers within the top 100 designated market areas in the country that have at least 150,000 people in the trade area. Space can be leased or for purchase, and should be near major interstates with visibility from the freeway. Ideal co-tenants include casual-dining restaurants, such as Chili’s Grill & Bar.
AMC Theatres, which was struggling during COVID-19 shutdowns, just promoted its CEO to the Chairman position in July. The new Chairman has admitted he is intent on expanding AMC to new territories. The movie theater has been in the news recently, as it not only overcame rumors of an Amazon buyout for potential fulfillment center space, but also recently raised close to $1.6B in stock sales after taking advantage of a grassroots social media push that encouraged the public to buy shares in order to offset investors’ betting against its stock. AMC now has the funds to invest in struggling cinema leases throughout the U.S., and in June took over the leases for two Pacific Theatres locations in Los Angeles in popular high-traffic sites: one at The Grove, the outdoor shopping complex in the city’s Fairfax District, and the other at the Americana at Brand mixed-use shopping center in Glendale, Calif. Both theaters will open by late August under the AMC name. The movie theater chain is also considering a similar deal with ArcLight Cinemas’ locations, a movie brand under the parent company, The Decurion Corporation, which also owns Pacific Theatres. Anticipate AMC to seek struggling or bankrupt theater chains in high-traffic areas with strong pre-COVID ticket sales.
AMC Theatres are generally in the 60,000-s.f. range and can be standalone or end cap spaces in all types of malls including regional, grocery-anchored, lifestyle and power centers, preferably within the top MSAs with high-traffic co-tenants, such as Target or Walmart. AMC, which was one of the first U.S. theaters to introduce the dine-in trend back in 2008, in addition to premiering the bar/lounge concept 10 years ago, now touts its “Prime” and its “D-Box” experiences, in which the seats move your body in alignment with action on the screen.
