Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q2 2019 Earnings Presentation
56 slides from Hudson Pacific Properties's earnings presentation, Jul 31, 2019
Slide 1: Reimagining Now. To Create What's Next.
REIMAGINING NOW. TO CREATE WHAT’S NEXT.
Slide 2: Forward-Looking Statements
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Forward-Looking Statements This Supplemental Information contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1
Slide 3: Table of Contents
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Table of Contents Page Executive Summary, Corporate Data, Executive Management, Board of 4 Directors, Equity Research Coverage and Rating Agencies Financial Information 9 Consolidated Balance Sheets 10 Consolidated Statem
Slide 4: Executive Summary
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Executive Summary Hudson Pacific Properties acquires, redevelops and develops creative office Studio Highlights and studio properties in the West Coast tech and media epicenters of Los • Trailing 12-month occupancy for th
Slide 5: Corporate Data
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Corporate Data(1) Unaudited, in thousands, except per share data June 30, March 31, December 31, September 30, June 30, 2019 2019 2018 2018 2018 Number of office properties owned 53 52 52 51 50 Office square feet(2) 15,32
Slide 6: Executive Management
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Executive Management Our Executive Management is comprised of highly seasoned, approachable experts who embrace innovation and always think outside the box. Together, they have decades of experience leading successful pub
Slide 7: Board of Directors
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Board of Directors Our accomplished Directors are committed to sound corporate governance, and ensuring full compliance and accountability to shareholders in accordance with all laws and regulations. We believe that dedic
Slide 8: Equity Research Coverage
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Equity Research Coverage Bank of America Merrill Lynch Mizuho James Feldman Haendel St. Juste (646) 855-5808 (212) 209-9300 Barclays Capital Morgan Stanley Ross Smotrich | Upal Rana Vikram Malhotra (212) 526-2306 | (212)
Slide 9: Financial Information
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Financial Information
Slide 10: Consolidated Balance Sheets
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Consolidated Balance Sheets In thousands, except share data June 30, 2019 December 31, 2018 (Unaudited) ASSETS Investment in real estate, net $ 6,296,023 $ 6,363,906 Cash and cash equivalents 48,172 53,740 Restricted cash
Slide 11: Consolidated Statements of Operations
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Consolidated Statements of Operations Unaudited, in thousands, except share data Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 REVENUES Office Rental(1) $ 172,256 $ 129,732 $ 342,453 $ 259,814
Slide 12: Funds from Operations
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Funds from Operations(1) Unaudited, in thousands, except per share data Three Months Ended Quarter To Date June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 NET INCOME (LOSS) $ 12,823 $ (36,8
Slide 13: Funds from Operations (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Funds from Operations (continued) Unaudited, in thousands, except per share data Six Months Three Months Twelve Months Nine Months Six Months Ended Ended Ended Ended Ended Year To Date June 30, 2019 March 31, 2019 Decembe
Slide 14: Adjusted Funds from Operations
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Adjusted Funds from Operations(1) Unaudited, in thousands Three Months Ended Quarter To Date June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 FFO $ 75,478 $ 76,397 $ 78,782 $ 73,090 $ 71,583
Slide 15: Same-Store Property Performance—Consolidated
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Same-Store Property Performance—Consolidated Unaudited, in thousands, except number of properties and square feet SAME-STORE STATISTICS Three Months Ended June 30, Six Months Ended June 30, 2019 2018 % change 2019 2018 %
Slide 16: Same-Store Property Performance—Consolidated (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Same-Store Property Performance—Consolidated (continued) Unaudited, in thousands, except number of properties and square feet SAME-STORE ANALYSIS—NET OPERATING INCOME (CASH BASIS) Three Months Ended June 30, Six Months En
Slide 17: Same-Store Property Performance—Company's Share
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Same-Store Property Performance—Company’s Share Unaudited, in thousands, except number of properties and square feet SAME-STORE STATISTICS Three Months Ended June 30, Six Months Ended June 30, 2019 2018 % change 2019 2018
Slide 18: Same-Store Property Performance—Company's Share (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Same-Store Property Performance—Company’s Share (continued) Unaudited, in thousands, except number of properties and square feet SAME-STORE ANALYSIS—NET OPERATING INCOME (CASH BASIS) Three Months Ended June 30, Six Months
Slide 19: Net Operating Income Detail (NOI)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Net Operating Income Detail (NOI) Three Months Ended June 30, 2019 | Unaudited, in thousands Same-Store Same-Store Non-Same- Non-Same- Redevelopment Office Studio Store Office Store Studio /Development Lease-Up Held-for-
Slide 20: Net Operating Income Detail (NOI) (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Net Operating Income Detail (NOI) (continued) (1) See page 27 for same-store office for the three months ended June 30, 2019. (2) Same-store studio includes Sunset Bronson Studios, Sunset Gower Studios and Sunset Las Palm
Slide 21: Debt Summary
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Debt Summary As of June 30, 2019 | Unaudited, in thousands Unsecured revolving credit facility Principal Contractual Annual Debt Balance at Undrawn Amount(1) Interest Rate(2)(3) Maturity Date(4) Service(1) Maturity Capaci
Slide 22: Debt Summary (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Debt Summary (continued) As of June 30, 2019 | Unaudited, in thousands Secured notes Principal Amount(1) Interest Rate(2) Contractual Maturity Date Annual Debt Service(1) Balance at Maturity Company’s Share Met Park North
Slide 23: Capital Structure
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Capital Structure As of June 30, 2019 | Unaudited, in thousands, except share data and percentages Aggregate Principal Amount or $ Shares/Units Equivalent Unsecured revolving credit facility $ 185,000 Unsecured term loans
Slide 24: Unsecured and Secured Debt Maturities, Composition and Covenant Compliance
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Unsecured and Secured Debt Maturities, Composition and Covenant Compliance Unaudited, in thousands DEBT COMPOSITION DEBT COVENANT COMPLIANCE Weighted Average Actual % of Total Interest Years to Covenant Performance Amount
Slide 25: Debt Maturities, Composition and Covenant Compliance (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Unsecured and Secured Debt Maturities, Composition and Covenant Compliance (continued) (1) Includes the Company’s Share of principal amortization and maturities, based on contractual maturity dates, excluding: (i) in-subs
Slide 26: Operational and Portfolio Information
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Operational and Portfolio Information
Slide 27: In-Service Office Properties
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 In-Service Office Properties(1) Annualized Square Percent Percent Annualized (2) (3) (3) (4) Base Rent Per Submarket Feet Occupied Leased Base Rent Square Foot(4) SAME-STORE(5) Greater Seattle, Washington Northview Center
Slide 28: In-Service Office Properties (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 In-Service Office Properties(1) (continued) Annualized Square Percent Percent Annualized Base Rent Per Submarket Feet(2) Occupied(3) Leased(3) Base Rent(4) Square Foot(4) NON-SAME-STORE Vancouver, British Columbia Bentall
Slide 29: In-Service Office Properties (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 In-Service Office Properties(1) (continued) (1) In-service office excludes the land, redevelopment, development and held for sale properties described on pages 33 and 34. We define lease-up properties as office properties
Slide 30: In-Service Office Properties by Location
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 In-Service Office Properties by Location(1) Square Occupied Percent Leased Percent Annualized Annualized Base Rent Properties Feet(2) Square Feet Occupied(3) Square Feet Leased(3) Base Rent(4) Per Square Foot(4) STABILIZE
Slide 31: In-Service Office Properties by Location (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 In-Service Office Properties by Location(1) (continued) Square Occupied Percent Leased Percent Annualized Annualized Base Rent Properties Feet(2) Square Feet Occupied(3) Square Feet Leased(3) Base Rent(4) Per Square Foot(
Slide 32: Studio Properties
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Studio Properties Square Percent of Percent Annual Annual Base Rent Per Feet Total Leased Base Rent Leased Square Foot Sunset Gower Studios 531,756 (1) 43.4% 92.6% $ 17,977,917 $ 36.52 Sunset Bronson Studios 308,026 25.2
Slide 33: Land Properties
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Land Properties(1) Submarket Square Feet(2) Percent of Total Vancouver, British Columbia Bentall Centre—Development(3) Downtown Vancouver 450,000 16.8% Subtotal 450,000 16.8% Greater Seattle, Washington Washington 1000(4)
Slide 34: Redevelopment, Development and Held For Sale Properties
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Redevelopment, Development and Held For Sale Properties(1) Annualized Estimated Occupied Percent Leased Percent Annualized Base Rent Per Submarket Square Feet(2) Square Feet Occupied(3) Square Feet Leased(3) Base Rent(4)
Slide 35: Under Construction and Future Value Creation Projects
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Under Construction and Future Value Creation Projects Unaudited, in thousands, except square feet Estimated Construction Period Project Costs(1) Estimated Initial Project Total Stabilized Estimated Estimated Estimated Cos
Slide 36: Under Construction and Future Value Creation Projects (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Under Construction and Future Value Creation Projects (continued) (6) Estimated initial stabilized yield on project costs calculated as the quotient of the estimated NOI and our investment in the property once the project
Slide 37: Value Creation Project Images
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Value Creation Project Images—Recently Completed, Under Construction and Planned Fourth & Traction | Redevelopment CUE | Development 450 Alaskan | Development 95 Jackson | Redevelopment Los Angeles (Arts District) Los Ang
Slide 38: Office Tenant Industry Diversification
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Office Tenant Industry Diversification(1) INDUSTRY DIVERSIFICATION TECHNOLOGY DIVERSIFICATION Company’s Share Company’s Share Annualized Annualized Annualized Annualized Base Rent as Base Rent as Base Rent Base Rent Perce
Slide 39: Fifteen Largest Office Tenants
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Fifteen Largest Office Tenants Company’s Share Percent of Percent of Credit Rating(3) Market Lease Total Leased Total Leased Rentable Annualized Annualized Capitalization Tenant(1) Property Expiration Square Feet Square F
Slide 40: Fifteen Largest Office Tenants (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Fifteen Largest Office Tenants (continued) (7) Nutanix, Inc. expirations by square footage and property: (i) 189,084 square feet at 1740 Technology, (ii) 108,610 square feet at Metro Plaza, and (iii) 102,421 square feet a
Slide 41: Office Property Leasing Activity
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Office Property Leasing Activity(1) Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Total gross leasing activity Rentable square feet(2) 504,613 1,548,749 Gross new leasing activity Rentable square feet 31
Slide 42: Commenced Office Leases with Non-Recurring Upfront Abatements
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Commenced Office Leases with Non-Recurring Upfront Abatements(1) Square Lease Rent Starting Lease Submarket Feet Start Date Start Date Base Rents(2) Expiration Date Greater Seattle, Washington 450 Alaskan Pioneer Square 5
Slide 43: Uncommenced Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Uncommenced Office Leases—Next Eight Quarters(1)(2) Company’s Share Q3 2019 Q4 2019 Q1 2020 Q3 2019 Q4 2019 Q1 2020 Starting Starting Starting Starting Starting Starting Rent per Rent per Rent per Rent per Rent per Rent p
Slide 44: Backfilled Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Backfilled Office Leases—Next Eight Quarters(1)(2) Company’s Share Q3 2019 Q4 2019 Q1 2020 Q3 2019 Q4 2019 Q1 2020 Starting Starting Starting Starting Starting Starting Rent per Rent per Rent per Rent per Rent per Rent pe
Slide 45: Backfilled Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Backfilled Office Leases—Next Eight Quarters(1)(2) Company’s Share Q3 2020 Q4 2020 Q3 2020 Q4 2020 Starting Starting Starting Starting Rent per SF Rent per SF Rent per SF Rent per SF SF (3) SF (3) SF (3) SF (3) San Franci
Slide 46: Expiring Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Expiring Office Leases—Next Eight Quarters(1) Company’s Share Q3 2019(2) Q4 2019 Q1 2020 Q2 2020 Q3 2019(2) Q4 2019 Q1 2020 Q2 2020 Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/
Slide 47: Expiring Office Leases—Next Eight Quarters (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Expiring Office Leases—Next Eight Quarters(1)(continued) Company’s Share Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring
Slide 48: Expiring Office Leases—Next Eight Quarters (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Expiring Office Leases—Next Eight Quarters(1) (continued) (5) Expiring rental rates have been converted from CAD to USD using the foreign currency exchange rate as of June 28, 2019. (6) Top three expiring tenants by squar
Slide 49: Expiring Office Leases—Annual
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Expiring Office Leases—Annual Company’s Share Percentage Annualized Square Square Percent of of Office Annualized Base Rent Per Number of Footage of Footage of Office Portfolio Base Rent Annualized Lease Square Leases Exp
Slide 50: Definitions and Reconciliations
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Definitions and Reconciliations
Slide 51: Definitions
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Definitions Adjusted Funds from Operations (“AFFO”): Non-GAAP financial measure we believe is a useful supplemental measure of our performance. We compute AFFO by adding to FFO the non-cash compensation expense and the Co
Slide 52: Definitions (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Definitions (continued) Funds from Operations (“FFO”): Non-GAAP financial measure we believe is a useful supplemental measure of our performance. We calculate FFO in accordance with the White Paper on FFO approved by the
Slide 53: Reconciliation of Net Income (Loss) to Net Operating Income
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Reconciliation of Net Income (Loss) to Net Operating Income Unaudited, in thousands Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income (loss) $ 12,823 $ 19,691 $ (24,072) $ 72,254 Adjustm
Slide 54: Reconciliation of Net Income (Loss) to Company's Share of Net Operating Income
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Reconciliation of Net Income (Loss) to Company’s Share of Net Operating Income Unaudited, in thousands Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Net income (loss) $ 12,823 $ 19,691 $ (24,07
Slide 55: Total Revenues Components
Hudson Pacific Properties, Inc. Supplemental Information | Second Quarter 2019 Total Revenues Components Unaudited, in thousands Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Office Cash rent $ 132,626 $ 119,192 $ 257,948 $ 235,096 Cash tenant recoveries 25,619 21,960 50,
Slide 56: HudsonPacificProperties.com
Los Angeles | Silicon Valley | San Francisco | Seattle | Vancouver HudsonPacificProperties.com
Hudson Pacific Properties — Q2 2019 Earnings Presentation on 6ix