Hudson Pacific Properties (HPP) Q1 2025 earnings summary

Executive summary

• Achieved 630,000 sq ft of new and renewal leases in Q1 2025, the highest since Q2 2022, including a 232,000 sq ft, 20-year lease with the City and County of San Francisco at 1455 Market; new leasing accounted for 66% of activity.

• Office and studio leasing pipelines remain robust, with a pipeline of 2.1 million sq ft and over 700,000 sq ft in late-stage deals; office fundamentals improved with record leasing and reduced sublease availability.

• Non-strategic asset sales generated $97 million in liquidity, with further dispositions of $125–$150 million targeted; sold two office properties for $69 million and entered a contract to sell another for $28 million.

• Cost-cutting initiatives, especially at Quixote, have reduced annualized expenses by $14 million, including a $5.9 million one-time lease termination fee expected to yield $14.2 million in annualized savings.

• Portfolio included 14.3M sq ft of office, 1.7M sq ft of studio, and 3.2M sq ft of undeveloped land as of March 31, 2025.

Financial highlights

• Q1 2025 revenue was $198.5 million, down from $214 million year-over-year, mainly due to asset sales and lower office occupancy.

• Net loss was $80.3 million for Q1 2025, compared to $53.4 million in Q1 2024, a 50.5% increase in loss; net loss attributable to common stockholders was $74.7 million ($0.53 per diluted share), impacted by one-time lease termination fees and a non-cash impairment.

• FFO, excluding specified items, was $12.9 million ($0.09/share) vs. $24.2 million ($0.17/share) a year ago; FFO attributable to common stockholders and unitholders was $3.1 million, down from $22.0 million.

• Same-store cash NOI was $93.2 million, down from $103.4 million year-over-year; NOI decreased 18% to $85.2 million.

• Studio revenues were $33.2 million, $2.2 million lower due to production pauses and fires; studio NOI decreased $1.7 million, primarily from lower production activity at Sunset Gower Studios.

Outlook and guidance

• Q2 FFO per share expected between $0.03–$0.07, reflecting lower office NOI and higher interest expense, partially offset by higher studio NOI and lower G&A.

• Full-year guidance anticipates a 12.5–13.5% drop in same-store cash NOI and incorporates recent asset sales and debt repayments, but excludes future acquisitions, dispositions, or financings.

• Occupancy expected to stabilize and grow from Q3 2025 onward as expirations taper; lease-up of recent and under-construction developments expected to drive near- to mid-term cash flow growth.

• No material changes to risk factors or guidance since the 2024 Annual Report.