Hudson Pacific Properties (HPP) investor relations material

Portfolio and Leasing Performance

• Portfolio includes 46 properties totaling nearly 14.5 million sq ft, with a balanced tenant mix across tech, AI, media, legal, government, retail, financial, and business services sectors.

• Leasing rates rebounded from a low of 75% to 82.5%, with a target of 85% by year-end and 90%+ by end of 2027, marking the fourth consecutive quarterly occupancy gain.

• Record leasing activity in the last quarter reached 1.3 million sq ft, including a major 891K sq ft lease with the City and County of San Francisco, and a robust pipeline of 2.4 million sq ft.

• Lease terms have lengthened to over 63 months, and mark-to-market rents are trending above market.

• Office-to-residential re-entitlement filed for 901 Market, with expected approval by year-end, and amendments completed for other assets to allow mixed-use development.

Market Trends and Regional Insights

• Bay Area and Seattle are experiencing strong leasing momentum, with Seattle seeing its first quarter of positive absorption in core markets.

• Los Angeles remains strong in select submarkets like Beverly Hills, Century City, and Brentwood, with record-high rents and near-full occupancy.

• Robotics and aerospace sectors, especially around El Segundo, are emerging as bright spots.

Studio Business and Operational Improvements

• Studio platform is unique among public REITs, with the largest independent studio operation in Los Angeles and a fully leased New York portfolio.

• Studio segment turnaround with Quixote restructuring, reducing annualized cash NOI loss from nearly $20 million to approximately $4 million, and Core Studio NOI turning positive for the first time in two years.

• Hollywood stage leased rate at 95.5%, Sunset studio portfolio at 97% leased, and New York studios fully leased.

• Exploring new stage use cases, including micro-dramas and AI production, to capture growth segments.

• Federal and state tax incentives, including a proposed 20-30% federal tax benefit, are expected to boost production activity; labor risks mitigated by new four-year industry contracts.