Analysis of Coyote Real Estate Leases & Subleasing Strategy

at this one site. So the delta there, unfortunately, is our, our land. The delta is between what we're paying and what, what's there. The larger the site, usually the harder to clear, right, in terms of move, because usually someone that can take on that type of liability is going to not be making decisions a month out. They're going to be looking a year out or longer, right? And so The short of it is I can run an analysis for each of the sites to show you where comps are for each of the sites and then separately be able to tell you guys, okay, this is kind of the strategy. This is the confidence intervals that, you know, these months and this time and this rent. And I think we can get pretty close to it. You know, at the end of the day, um, and give you guys some, some visibility in terms of if we were going to take that on, like, what I think the reasonable expectation would be of clearing that real estate.

Okay, I, um, I pulled up the lease schedule here. You mentioned that they don't have any strict plots of dirt that we would need subleased. I think everything that we need subleased has some sort of structure, some sort of building. Or is like an office space. Um, I don't know if that's a pro or a con in terms of just getting things subleased, but there is no real like land like we have like Peoria.

Okay.

Um, also, it's also just quickly, in Georgia and New York, there's footprints there, however small.

Sure.

Then let's just do—

I've got people in both jurisdictions that I can work with to get clear those, so Are you going to throw a cost per square foot column in?

So I'm doing right now.

Yeah.

JD, also important to note, those top 3 are on EOD locations that they have.

You guys have a data room to all those?

Yeah. Yeah.

So this is our workbook. It's just an analysis. I can share the raw data that they shared with us.

No, it's okay. What, they give you leases or what they give you?

They gave us all of the lease information associated with the, uh, Kiyoti operation. Um, so you've got a production supplies, like, location that is an easy get rid of. Um, this Balboa location, uh, which is in Sylmar— it's on Balboa Street, but it's in Sylmar— that one is probably their priciest. Real estate, it's $107,000. There's a big like corporate office. Is that how you describe it, James? Like a corporate office space?

Yeah, it's a corporate office with a like shoehorned fleet maintenance kind of facility. It's Louis D'Argenzio owns it. Louis D'Argenzio is landlord for like a quarter of this.

Brilliant.

So we would sublease that location as well. This Penrose one rolls off, so not too relevant.

Penrose owned by Michael Elliott.

Right. Ralston, which is trailer manufacturing currently, that expires—

I know. Yeah, yeah, that's right.

Location middle of 2027. Yarnell, which is one we'd want to keep because it's just excess land that's very affordable. And Cascades, which, James, that's attached to the Sylmar location or that's further out?

It's not attached. It's down the street. It's an old golf course that they couldn't get off the ground.

If ever—

if I've ever sent you a picture of just like a bunch of trailers up on the hill, that's it. Okay, so, so it's just like, think the Arizona airplane boneyard.

Okay.

And then there's this ABQ one's going away, and then there's a couple in New York and then one in Georgia, um, that we don't have too much information on right now. It's probably not worth discussing, but the big two are this production supplies operation. What would you call this, James?

What I would call that, a production supply warehouse in the Deep Valley attached to other Coyote properties.

But where, I guess, what, like, colloquially would you call this? Sun Valley. Okay, so Sun Valley and then Sylmar, Balboa, those are the two, like, main locations that would need to be subleased from this. Um, because this is—

and just to be clear, this is none of their studio stuff. Right?

That's correct. Okay. There's a, there's a developing conversation maybe around taking the West Hollywood stage, but the West Hollywood stage, they're paying $130K a month and it's break-even before G&A and overhead each. So there's a conversation around leaving Cahuenga next year, which we're paying $75K a month for, consolidating that revenue into West Hollywood, which is they're both commercial-focused operations. You will lose some revenue there from the Avon side, but you kind of capture everything in the one ecosystem there and you ride out the end of the— commercials will be the most impacted by AI, so you're basically committing to ride that location effectively down to the commercial industry zero.

Okay. And then let me see, what's the square footage on the Norris Montauk Monaguee.

100,000. Um, the warehouse itself is 36,000. There's 64,000 of lot space there.

Okay, I'm looking at it now. It looks— so, and this is just down the street from their Quixote North studio stages, right? And they're— are they keeping those off of Glen Oaks? You guys know what I'm talking about?

Yeah, it's the one by Hanson Dam.

Yes. So they're unloading all of it, huh? Let me see.

This is 1, 2, 3, 7. Yeah, this entire block is Coyote, with the exception of like Universe, which is about to be Cintas. Um, basically all Coyote.

Yeah. All right.

But so we don't have to—

oh, that is one of those stages. Okay.

JD, I would almost say how much term is left in these? I'm not— well, okay, hang on. I'm not so concerned on this particular one. This is one where I'm like, it's attached to your fucking campus.

Like, which one are we talking about?

Across the parking lot from their grip and lighting house. I think we can, like, cursory offer to, like— I don't know, the, the main focus one is about Bola.

Just hold on a sec, just to talk about this one, right? So you've got their big state— actually, there's a lot of stages here, right, at, um, Montague.

Yeah, they've got a ton there.

Yeah, but that is month to month. The lot? Oh, that they're keeping?

They actually— where's this building here?

They're going to keep—

wait, is it not contiguous? It is.

So let me Let me pull it up on the computer.

It's not contiguous.

What is not? The lot is not contiguous with the buildings? Is that what you're saying?

No, this stupid warehouse is not contiguous with the rest of their shit.

Well, so I'm looking at that location. If they're just, if that's just the production lot, you're right. That's a standalone lot that's right next to their stages, right? And then the Quixote, like, I don't know, warehouse, there's two of them.

So this is production supply, and then this is grip and lighting. I know it says Expendables. But they said they are across— they are two warehouses distinct from one another because this warehouse has a union deal and this warehouse does not. Okay, the union deals are address-specific.

Okay, but just, just so I'm super clear on this, they only want to— like, the deal that you guys would put together would only have you take, um, It would be the lot, so not, not the stages, correct?

We are not worried about what's happening over here. They're probably going to—

I can't see what you're sharing.

You can't?

No, no, we're looking at—

He's presenting.

Oh, here, let me— Can you see it now?

Are you on your phone?

I am. Hold on. I think you texted me. Let me just see if I can put it on my thing. Hold on a second.

You have a Mac computer?

No. I'm just going to send this link to myself. Give me a second. Change. Whoops. Copy link. Send to myself.

JD.

Yeah.

Oh.

I'm on mute. Bummer.

I'm of the mind that this is not our problem.

Norris?

Yes.

Because it's attached to their stage?

It's not necessarily attached, but it is just part of this larger ecosystem up here.

But it's where they run their production supply operation today out of, right?

As of 9 months ago.

Oh, interesting. Wait, so why? They just included it just to get it?

Like, we asked where— we asked what are the, like, the operating leases under the business units that we are interested in, right? But like, here's your grip and lighting. There's grip and lighting all over this thing. But so they've got 3 stages here. These were the brand new ones that they opened in 2022.

Wow, okay.

And then here's that giant one.

Was this where Line 206 was, where the new ones were?

Line 204 was right here.

Got it. Okay, never mind. So they opened right next door.

Yeah, but he got out of the stages progressively over the last 4 or 5 years, and he's not even there anymore at all.

Got it, got it, got it. Okay, but then Kehoe— okay, so they have that North Studios, which is 17 through 20, and then what I was looking at was the one up right there.

They got 11 through 16 here.

Okay.

And they've got 17 through 20 here. And then this is not them, right? And then coming down, you have to come down this alley to access either of these for grip and lighting here or production supply here. I'm of the mind, yeah, this is not our problem.

That's funny.

I—

that makes sense.

Why do you feel that way?

Because it is their— they, they have an unending amount of shit to deal with up here that us solving this for them doesn't help them when they have like a quarter million in lease obligations up here. And it's like, I think they just signed this. Like, I think they just did some of this stuff up here. And I also think that they are getting ready to— I think Michael Elliott owns this. And he is very nervous that they, they have been just— they defaulted on the Chandler Studios 2 weeks ago, like the day that we were talking to them, which is where they shot The Office. Yeah, they are, um, they are actively restructuring more of these things. And paying to get out of them, obviously. I just don't think that, like, I think that we're solving enough of a problem for them elsewhere that if we wanted to play the chip, like, we're not really taking this. Y'all just, like, take it, keep it, figure out what you're going to do with it as part of this larger system up here. Like, we will focus our efforts on Balboa because that is the meaningful one. I think the total lease obligation here is $107 million. You're—

oh, sorry, I thought you meant it Balboa. Uh, here it's 50. Oh no, are you talking about just Norris? Are you talking about all three of them? Norris is 40.

Norris is 40, but there's this lot situation here, which is—

well, that's just part of it though. So how much—

that lot is $1,500 a month.

Norris is how much a month?

$40,000.

And how much square footage is Norris?

It says 36,405.

Let me just double-check.

What's the Balboa address?

14002 Balboa Boulevard.

14002. It's somewhere.

Yep.

Oh, the Zella Ranch. Even named it. Wonder if I zoom in if it'll—

hey, what was the date this was taken?

I don't know. Is there a way to make it update?

I know you can go back in time, but I don't know if you can Let's see.

All right, so not recent.