Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q1 2019 Earnings Presentation
48 slides from Hudson Pacific Properties's earnings presentation, May 2, 2019
Slide 1: Reimagining Now
UDSON | REIMAGINING NOW. bel SUNS TO CREATE WHAT’S NEXT.
Slide 2: Forward-Looking Statements
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Ferry Building | San Francisco Ferry Building | San Francisco Ferry Building | San Francisco Forward-Looking Statements This Supplemental Information contains forward-looking statements within the meaning of Section 27A of
Slide 3: Table of Contents
Hudson Pacific Properties, Inc. Supplemental Information | First 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 Stateme
Slide 4: Executive Summary
Hudson Pacific Properties, Inc. Supplemental Information | First 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 the
Slide 5: Corporate Data
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Corporate Data Unaudited, in thousands, except per share data March 31, December 31, September 30, June 30, March 31, 2019 2018 2018 2018 2018 Number of office properties owned 52 52 51 50 51 Office square feet(1) 13,866,7
Slide 6: Executive Management
Hudson Pacific Properties, Inc. Supplemental Information | First 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 publ
Slide 7: Board of Directors
Hudson Pacific Properties, Inc. Supplemental Information | First 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 dedica
Slide 8: Equity Research Coverage
Hudson Pacific Properties, Inc. Supplemental Information | First 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 | Trevor Young Vikram Malhotra (212) 526-2306 | (212
Slide 9: Financial Information
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Financial Information
Slide 10: Consolidated Balance Sheets
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Consolidated Balance Sheets In thousands, except share data March 31, 2019 December 31, 2018 (Unaudited) ASSETS Investment in real estate, net $ 6,251,086 $ 6,363,906 Cash and cash equivalents 52,445 53,740 Restricted cash
Slide 11: Consolidated Statements of Operations
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Consolidated Statements of Operations Unaudited, in thousands, except share data Three Months Ended March 31, 2019 2018 REVENUES Office Rental(1) $ 170,197 $ 130,082 Tenant recoveries(1) — 20,904 Service revenues(1) 5,661
Slide 12: Funds from Operations
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Funds from Operations(1) Unaudited, in thousands, except per share data Three Months Ended Quarter To Date March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 NET (LOSS) INCOME $ (36,895) $ 19,
Slide 13: Adjusted Funds from Operations
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Adjusted Funds from Operations(1) Unaudited, in thousands Three Months Ended Quarter To Date March 31, 2019 December 31, 2018 September 30, 2018 June 30, 2018 March 31, 2018 FFO(2) $ 76,397 $ 78,782 $ 73,090 $ 71,583 $ 69,
Slide 14: Same-Store Property Performance
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Same-Store Property Performance Unaudited, in thousands, except number of properties and square feet SAME-STORE STATISTICS Three Months Ended March 31, 2019 2018 % change SAME-STORE OFFICE STATISTICS(1)(2) Number of proper
Slide 15: Same-Store Property Performance (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Same-Store Property Performance (continued) Unaudited, in thousands, except number of properties and square feet SAME-STORE ANALYSIS—NET OPERATING INCOME (CASH BASIS) Three Months Ended March 31, 2019 2018 % change SAME ST
Slide 16: Net Operating Income Detail
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Net Operating Income Detail (NOI) Three Months Ended March 31, 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 17: Net Operating Income Detail (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Net Operating Income Detail (NOI) (continued) (1) See page 23 for same-store office for the three months ended March 31, 2019. (2) Same-store studio includes Sunset Bronson Studios, Sunset Gower Studios and Sunset Las Palm
Slide 18: Debt Summary
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Debt Summary Unaudited, in thousands March 31, December 31, Interest Contractual Annual Debt Balance at 2019 2018 Rate(1) Maturity Date Service(2) Maturity UNSECURED AND SECURED DEBT Unsecured debt Unsecured revolving cred
Slide 19: Debt Summary (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Debt Summary (continued) (1) Interest rate with respect to indebtedness calculated on the basis of a 360-day year for the actual days elapsed. Interest rates are as of March 31, 2019, which may be different than the intere
Slide 20: Unsecured and Secured Debt Maturities, Composition and Covenant Compliance
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Unsecured and Secured Debt Maturities, Composition and Covenant Compliance Unaudited, in thousands DEBT COMPOSITION DEBT COVENANT COMPLIANCE Weighted Average % of Total Interest Years to Actual Amount Debt Rate(2) Maturity
Slide 21: Debt Maturities, Composition and Covenant Compliance (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Unsecured and Secured Debt Maturities, Composition and Covenant Compliance (continued) (1) Principal amortization and maturities, including amounts due at maturity, exclude: (i) in-substance defeased debt related to One We
Slide 22: Operational and Portfolio Information
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Operational and Portfolio Information
Slide 23: In-Service Office Properties
Hudson Pacific Properties, Inc. Supplemental Information | First 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 24: In-Service Office Properties (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First 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 Hill7(7) South Lake Union 285,310 10
Slide 25: In-Service Office Properties (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 In-Service Office Properties(1) (continued) (3) Percent occupied for office properties is calculated as (i) square footage under commenced leases as of March 31, 2019, divided by (ii) total square feet, expressed as a perc
Slide 26: In-Service Office Properties by Location
Hudson Pacific Properties, Inc. Supplemental Information | First 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) STABILIZED
Slide 27: In-Service Office Properties by Location (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First 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(4
Slide 28: Studio Properties
Hudson Pacific Properties, Inc. Supplemental Information | First 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% 91.3% $ 17,529,159 $ 36.10 Sunset Bronson Studios 308,026 25.2 9
Slide 29: Redevelopment, Development and Held For Sale Properties
Hudson Pacific Properties, Inc. Supplemental Information | First 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) S
Slide 30: Under Construction and Future Value Creation Projects
Hudson Pacific Properties, Inc. Supplemental Information | First 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 Cost
Slide 31: Under Construction and Future Value Creation Projects (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First 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 32: Value Creation Project Images
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Value Creation Project Images—Recently Completed, Under Construction and Planned ICON | Development CUE | Development 450 Alaskan | Development Fourth & Traction | Redevelopment Los Angeles (Hollywood) Los Angeles (Hollywo
Slide 33: Office Tenant Industry Diversification
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Office Tenant Industry Diversification(1) INDUSTRY DIVERSIFICATION TECHNOLOGY DIVERSIFICATION Annualized Annualized Base Rent as Base Rent as Percent of Percent of Industry Square Feet(2)(3) Total Sector Square Feet(2) Tot
Slide 34: Fifteen Largest Office Tenants
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Fifteen Largest Office Tenants Total Percent of Leased Rentable Percent of Number Number of Lease Square Square Annualized Annualized Tenant Property of Leases Properties Expiration Feet Feet Base Rent(1) Base Rent Google,
Slide 35: Fifteen Largest Office Tenants (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Fifteen Largest Office Tenants (continued) (6) Salesforce.com expirations by square footage: (i) 83,016 square feet expiring on July 31, 2025, (ii) 83,372 square feet expiring on April 30, 2027, (iii) 93,028 square feet ex
Slide 36: Office Property Leasing Activity
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Office Property Leasing Activity Three Months Ended March 31, 2019 Total gross leasing activity Rentable square feet 1,044,136 Gross new leasing activity Rentable square feet 947,013 New cash rate $ 59.61 Gross renewal lea
Slide 37: Commenced Office Leases with Non-Recurring Upfront Abatements
Hudson Pacific Properties, Inc. Supplemental Information | First 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 83 King Pioneer Square 24,724
Slide 38: Uncommenced Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Uncommenced Office Leases—Next Eight Quarters(1) Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Starting Starting Starting Starting Starting Starting Starting Starting Rent per Rent per Rent per Rent per R
Slide 39: Backfilled Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Backfilled Office Leases—Next Eight Quarters(1) Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q4 2021 Starting Starting Starting Starting Starting Starting Starting Starting Rent per Rent per Rent per Rent per Re
Slide 40: Expiring Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Expiring Office Leases—Next Eight Quarters(1) Q2 2019(2) Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expi
Slide 41: Expiring Office Leases—Next Eight Quarters (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Expiring Office Leases—Next Eight Quarters(1) (continued) (6) Top three expiring tenants by square footage: (i) Teachers Insurance & Annuity Association at Towers at Shore Center for 25,549 square feet, (ii) Inflection, LL
Slide 42: Expiring Office Leases—Annual
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Expiring Office Leases—Annual Annualized Square Percentage of Annualized Base Rent Per Number of Footage of Percent of Office Portfolio Base Rent Per Annualized Lease Square Leases Expiring Office Portfolio Annualized Annu
Slide 43: Definitions and Reconciliations
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Definitions and Reconciliations
Slide 44: Definitions
Hudson Pacific Properties, Inc. Supplemental Information | First 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 amortiz
Slide 45: Definitions (continued)
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Definitions (continued) Shares of Common Stock/Units Outstanding at End of Period: Represents shares of common stock (including unvested restricted shares), OP units outstanding and an estimate for our dilutive Outperforma
Slide 46: Reconciliation of Net (Loss) Income to Net Operating Income
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Reconciliation of Net (Loss) Income to Net Operating Income Unaudited, in thousands Three Months Ended March 31, 2019 2018 Net (loss) income $ (36,895) $ 52,563 Adjustments: Interest expense 24,350 20,503 Interest income (
Slide 47: Total Revenues Components
Hudson Pacific Properties, Inc. Supplemental Information | First Quarter 2019 Total Revenues Components Unaudited, in thousands Three Months Ended March 31, 2019 2018 Office Cash rent $ 125,323 $ 116,818 Cash tenant recoveries 24,737 20,904 Straight-line rent 16,275 9,755 Amortization of above-marke
Slide 48: Los Angeles | Silicon Valley | San Francisco | Seattle
Los Angeles | Silicon Valley | San Francisco | Seattle HudsonPacificProperties.com
Hudson Pacific Properties — Q1 2019 Earnings Presentation on 6ix