Hudson Pacific Properties (HPP) investor relations material

Executive summary

• Leased 1.7 million sq ft year-to-date, including over 500,000 sq ft in Q3, marking the strongest leasing performance since 2019 and positive office absorption, with 80% of activity in the San Francisco Bay Area and significant AI tenant demand.

• Studio segment saw sequential occupancy improvement and cost-savings initiatives, with California's expanded tax credit program supporting a pipeline of new productions and allocating credits to 74 projects since July.

• Strengthened balance sheet with $1 billion in liquidity, all debt fixed or capped, and no maturities until the second half of 2026.

• Strategic acquisition of partner's 45% interest in Hill7 office property in Seattle, assuming $45.5 million in debt and receiving $1.4 million in cash, positioning for value creation as the market recovers.

• Leasing pipeline stands at 2.2 million sq ft, with the lowest lease expiration profile in four years, positioning for further recovery.

Financial highlights

• Q3 total revenues were $186.6 million, down from $200.4 million year-over-year, mainly due to asset sales and lower office occupancy.

• Net loss attributable to common stockholders was $136.5 million ($0.30 per share), compared to $97.9 million ($0.69 per share) last year, primarily due to a loss on deconsolidation of Sunset Glenoaks.

• FFO excluding specified items was $16.7 million ($0.04 per diluted share), up from $14.3 million ($0.10 per share) last year, driven by lower G&A, interest expense, and improved studio NOI.

• General and administrative expenses reduced by 30% to $13.7 million, reflecting organizational efficiency measures.

• Same-store cash NOI was $89.3 million, down from $100 million year-over-year, due to lower office occupancy.

Outlook and guidance

• Q4 FFO guidance is $0.01–$0.05 per diluted share, with lower studio NOI expected due to seasonality and a lag in tax incentive benefits.

• Full-year same-store cash NOI growth assumption unchanged; outlook excludes potential future transactions.

• General and administrative expenses for the year projected between $57.5 million and $63.5 million; interest expense expected between $166 million and $176 million.

• Management expects principal sources of liquidity to include cash on hand, operations, asset sales, equity offerings, and debt financings.

• The company remains focused on leasing, cost control, and capital recycling to navigate challenging market conditions.