Many landlords are looking for help with their theater properties. The Cinema Bridge’s Chuck Stilley offers advice on how shopping center owners and theatre operators can work together.
Interview by Randall Shearin:
Movie theatre box office sales in 2025 were on pace with 2024, but since the pandemic they have been about two-thirds of the industry’s volume. From 2015 to 2019, the motion picture exhibition industry averaged over $11 billion in annual box office sales. Since 2022, that number has settled to around $8 billion, according to anaylsis of data by Box Office Mojo. Hollywood has also released about 70 percent of the number of films since COVID compared to the number of releases before. Consumers continue to go to theatres, but not in the volumes they did pre-pandemic. As a result, many theatre operators have been streamlining their portfolios over the past few years. This can create issues for some landlords.
SCB recently interviewed Chuck Stilley, partner with The Cinema Bridge, to find out how landlords and theater operators can work together to create solutions.
SCB: Executives with The Cinema Bridge have sat at both sides of the table — as theatre executives and now as advisors to landlords. What’s the single biggest mistake you see shopping center owners make when they’re dealing with a struggling or vacant theatre box?
Stilley: Shopping center owners often do not know whether the theatre is still viable as a movie theatre or if it has become functionally obsolete and needs to be replaced by another tenant with a higher and better use.
SCB: A lot of landlords are holding onto hope that their cinema tenant will turn things around on their own. How do you help an owner assess whether their theatre is worth saving versus when it’s time to move on? What does that analysis look like?
Stilley: We would call that a viability analysis which creates a proforma showing either a positive or negative cash flow scenario. Film product distribution is the same for most theatres, and the variable will be in the operating expenses — including rent and common area maintenance (CAM) — and attendance/revenue increase created by amenities within the theatre such as large format auditoriums like Imax and reclining seats along with the shopping center environment including complementary retail and restaurant tenants and convenient parking.
SCB: What are some of the macro issues going on with the cinema business that landlords may not be aware of?
Stilley: Film distribution is recovering from the decline during the pandemic and has been on an up-and-down axis on an annual basis. Is it going to continue to increase back to 2019 numbers? Or has it already flattened out to a new normal caused by the decrease in the number of theatres/screens and the consolidations of movie studios limiting the number of films being distributed on an annual basis?
SCB: Lease restructuring is a big part of what The Cinema Bridge does. Walk us through what a realistic restructuring looks like today: what are operators willing to agree to, and where do negotiations typically breakdown?
Stilley: The most common restructuring is the rent reset to match the decline in revenue on the theatre side and the extension of term on the landlord side to make the lease more financeable. There are also many theatres that need renovations in both lobby and reclining seating conversions. The breakdown is not in negotiations but more often caused from the lack of capital available for the necessary renovations.
SCB: When a theatre goes dark, that space — often 40,000 to 60,000 square feet — becomes one of the most difficult spaces in a center to re-tenant because of the specialized construction of many theatres. What alternative uses are you seeing work, and which ones look good on paper but rarely pan out?
Stilley: The high ceiling height is attractive to many entertainment type users such as indoor golf. Any alterations needed within the space and additional cost limit the number of replacement tenants due to the already heavy rent obligations. Many of the existing theatres are in “destination” type locations, limiting typical retail tenants that drive their business from consumer traffic delivered from other adjacent and complementary daytime retail tenants. In other words, it looks good and sounds good, but doesn’t pencil out.
SCB: How should a landlord think about the capital investment required to reposition a former theatre space? Are there scenarios where it makes more financial sense to demolish than to repurpose?
Stilley: When the alteration and tenant improvement cost exceed the demo cost plus new construction cost. Like most situations regarding existing property, it is often cheaper to build new with cost savings due to efficiencies created with less space and more efficient construction methods versus making existing space work like new space.
SCB: For owners who still have a healthy cinema anchor, what proactive steps should they be taking right now to protect that relationship and their asset’s long-term value?
Stilley: Verify request and demands from the cinema tenant by engaging third-party consultants like The Cinema Bridge to understand the needs and associated cost with what their theatre tenants are requesting. This is very important before agreeing or negotiating with their theatre tenant. This takes away the guessing game which can often cause strife with the landlord/tenant relationship.
SCB: Content is at the heart of the movie theatre business. Streaming and at-home entertainment have changed audience behavior drastically over the past few years, but people still enjoy going out for a night at the movies. In your view, what does a theatre that survives the next decade look like, and what should landlords be underwriting when they consider the theatres they have today?
Stilley: Theatres of the future will be smaller in size, number of screens and should have enhanced amenities like reclining seating which will reduce the former seat counts. Having at least one large format auditorium is also desired for major film productions like Imax or Dolby content.
SCB: You’ve worked with major shopping center developers across the U.S. and internationally. Are there markets or property types where movie theatres still make strong strategic sense as an anchor, and are there situations where landlords should actively avoid bringing in a theatre?
Stilley: Theatres can still be an attractive traffic generating anchor tenant, especially in a higher end specialty retail environment. Movie theatres do not perform as well in lesser or challenged economic environments.
SCB: If a landlord is reading this and they have a theatre property that is keeping them up at night, what’s the first call they should make — and what should they have ready before they pick up the phone?
Stilley: They should call me and be ready to tell me the theatre name and location and the issue that is keeping them up at night!
This article was originally published in the May 2026 issue of Shopping Center Business magazine.