Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q3 2024 Earnings Presentation
33 slides from Hudson Pacific Properties's earnings presentation, Nov 12, 2024
Slide 1: Supplemental Information Third Quarter 2024
UDSON PACIFIC PROPERTIES SUPPLEMENTAL INFORMATION THIRD QUARTER 2024
Slide 2: Table of Contents
Table of Contents Page Executive Summary 3 Corporate Information 6 Consolidated Balance Sheets 8 Consolidated Statements of Operations 9 Funds from Operations & Adjusted Funds from Operations 10 Consolidated Same-Store Property Performance 11 NOI Detail 12 Debt Summary & Debt Metrics 13 Debt Maturit
Slide 3: Executive Summary
Executive Summary Three Months Ended September 30, 2024 "Year to date, we have leased 1.6 million square feet of office space, 25% ahead of this time last year, and following nearly 540,000 square feet signed in the third quarter, our leasing pipeline and touring activity remain strong," commented V
Slide 4: Executive Summary (continued)
Executive Summary (continued) Three Months Ended September 30, 2024 Financial Results Compared to Third Quarter 2023 • Total revenue of $200.4 million compared to $231.4 million, almost entirely due to the sale of One Westside and expiration of the Block lease at 1455 Market last year, all partially
Slide 5: Executive Summary (continued)
Executive Summary (continued) Three Months Ended September 30, 2024 Dividend • The Company's Board of Directors suspended payment of a quarterly dividend on its common stock and declared and paid a dividend on its 4.750% Series C cumulative preferred stock of $0.296875 per share Personnel Update • S
Slide 6: Corporate Information
Corporate Information Hudson Pacific Properties (NYSE: HPP) is a real estate investment trust serving dynamic tech and media tenants in global epicenters for these synergistic, converging and secular growth industries. Hudson Pacific’s unique and high-barrier tech and media focus leverages a full-se
Slide 7: Corporate Information (continued)
Corporate Information (continued) Corporate Contact: Corporate Headquarters Website Investor Relations 11601 Wilshire Boulevard www.hudsonpacificproperties.com Laura Campbell Ninth Floor Executive Vice President, Los Angeles, CA 90025 Investor Relations and (310) 445-5700 Marketing (310) 622-1702 Eq
Slide 8: Consolidated Balance Sheets
Consolidated Balance Sheets In thousands, except share data 9/30/24 12/31/23 (Unaudited) ASSETS Investment in real estate, net $ 6,548,957 $ 6,484,459 Non-real estate property, plant and equipment, net 122,958 118,783 Cash and cash equivalents 90,692 100,391 Restricted cash 23,243 18,765 Accounts re
Slide 9: Consolidated Statements of Operations
Consolidated Statements of Operations Unaudited, in thousands, except per share data Three Months Ended Nine Months Ended 9/30/24 9/30/23 9/30/24 9/30/23 REVENUES Office Rental revenues $ 162,908 $ 199,633 $ 506,931 $ 605,776 Service and other revenues 4,034 3,954 11,125 11,735 Total office revenues
Slide 10: Funds from Operations & Adjusted Funds from Operations
Funds from Operations & Adjusted Funds from Operations Unaudited, in thousands, except per share data FUNDS FROM OPERATIONS Three Months Ended Nine Months Ended 9/30/24 9/30/23 9/30/24 9/30/23 Net loss $ (107,013) $ (35,752) $ (207,925) $ (82,046) Adjustments: Depreciation and amortization—consolida
Slide 11: Consolidated Same-Store Property Performance
Consolidated Same-Store Property Performance Unaudited, in thousands, except number of properties and square feet SAME-STORE ANALYSIS Three Months Ended Nine Months Ended 9/30/24 9/30/23 % Change 9/30/24 9/30/23 % Change Same-store office statistics Number of properties 40 40 40 40 Square feet 11,39
Slide 12: NOI Detail
NOI Detail Three Months Ended September 30, 2024 | Unaudited, in thousands Same-Store Same-Store Non-Same- Non-Same- Office Studio Store Office Store Studio Total REVENUE Cash rent $ 129,659 $ 10,295 $ 12,658 $ 3,452 $ 156,064 Cash tenant recoveries 28,038 163 2,487 — 30,688 Straight-line rent (10,5
Slide 13: Debt Summary & Debt Metrics
Debt Summary & Debt Metrics As of September 30, 2024 | Unaudited, in thousands DEBT SUMMARY Outstanding HPP’s Stated Interest Maturity Balance Share Rate Date(1) UNSECURED DEBT Series B notes $ 259,000 $ 259,000 4.69% 12/16/25 Series D notes 150,000 150,000 3.98% 7/6/26 Unsecured revolving credit fa
Slide 14: Debt Maturities, Composition & Hedging Instruments
Debt Maturities, Composition & Hedging Instruments(1) Unaudited, in thousands Debt Maturity Schedule Secured Unsecured $1,200,000 $1,000,000 $800,000 $530,767 $600,000 $139,616 $400,000 $340,865 $55,576 $456,000 $500,000 $200,000 $445,000 $400,000 $350,000 $259,000 $0 $— 2024 2025 2026 2027 2028 202
Slide 15: Debt Covenant Compliance
Debt Covenant Compliance(1) Actual Covenant Performance Unsecured revolving credit facility and term loans Total liabilities to total asset value(2) ≤ 65% 48.7% Unsecured indebtedness to unencumbered asset value (2) ≤ 65% 45.3% Adjusted EBITDA to fixed charges ≥ 1.5x 1.7x Secured indebtedness to tot
Slide 16: Existing Portfolio Summary
Existing Portfolio Summary Unaudited, in thousands, except per share data Three Months Ended 9/30/24 6/30/24 3/31/24 12/31/23 9/30/23 Number of office properties owned 46 46 46 46 48 In-service office square feet 13,684,033 13,858,966 13,852,533 13,853,005 14,437,595 In-service office % leased 80.0
Slide 17: Office Properties by Location
Office Properties by Location Annualized HPP’s Share Base Rent Square % % Annualized Annualized Per Square Properties Feet Occupied Leased Base Rent Base Rent Foot Los Angeles, California Hollywood 5 967,194 100.0 % 100.0 % $ 66,839,973 $ 34,088,387 $ 69.11 West Los Angeles 2 783,435 94.5 94.5 42,38
Slide 18: Office Properties Occupancy Detail
Office Properties Occupancy Detail Submarket Square Feet % Occupied % Leased Los Angeles, California ICON Hollywood 326,792 100.0 100.0 EPIC Hollywood 301,127 100.0 100.0 Harlow Hollywood 129,931 100.0 100.0 6040 Sunset Hollywood 114,958 100.0 100.0 CUE Hollywood 94,386 100.0 100.0 11601 Wilshire We
Slide 19: 15 Largest Office Tenants
15 Largest Office Tenants HPP’s Share # of Lease Occupied Annualized % of Annualized Properties Expiration Square Feet Base Rent Base Rent 1 Google, Inc. 4 2025-2029 640,726 (1) $ 52,945,408 10.3% 2 Amazon 3 2024-2031 990,788 (2) 28,606,067 5.5 3 Netflix, Inc. 3 2031 722,305 (3) 26,274,579 5.1 4 Rio
Slide 20: Studio Properties & Services
Studio Properties & Services STUDIO PROPERITES Annualized HPP’s Share Base Rent Owned/ # of Square Stage % Total % Annualized Annualized Per Square Leased Submarket Stages Feet Leased Leased Base Rent Base Rent Foot Los Angeles, California Sunset Gower Studios Owned Hollywood 12 559,141 100.0 % 82.0
Slide 21: Office Leasing Activity
Office Leasing Activity Dollars reflected are per square foot Three Months Ended Nine Months Ended 9/30/24 9/30/24 Gross leasing activity New cash rate $51.55 $45.37 Renewal cash rate $47.92 $54.58 New square feet leased 302,121 951,236 Renewal square feet leased 237,151 636,182 Total square feet le
Slide 22: Expiring Office Leases Summary
Expiring Office Leases Summary HPP’s Share Annualized Square Annualized Annualized Base Rent # of Footage of % of Office Base Rent Base Rent Per Square Leases Square Feet Expiring Annualized Annualized Per Square at Foot at Expiring Expiring (1) Leases (1) Base Rent Base Rent Foot Expiration Expirat
Slide 23: Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters
Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters Q4 2024 Q1 2025 Q2 2025 Q3 2025 Rent Per Rent Per Rent Per Rent Per Square Square Square Square Square Square Square Square Feet Foot Feet Foot Feet Foot Feet Foot Uncommenced Office Leases Los Angeles, California — $ — — $ — — $ —
Slide 24: Uncommenced, Backfilled & Expiring Office Leases (continued)
Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters (continued) Note: Definitions for commonly used terms on pages 27-29. (1) Excludes building management offices with various expiration dates. (2) Includes Bank of America at 1455 Market for 68,991 square feet in December 2024. (3)
Slide 25: In Process & Future Development Pipeline
In Process & Future Development Pipeline(1) Unaudited, in thousands, except square feet IN PROCESS DEVELOPMENT Project Total Estimated Estimated Estimated Costs Estimated Estimated Under Start Completion Stabilization Square % as of Project Stabilized Construction Submarket Date(2) Date(3) Date Feet
Slide 26: Consolidated & Unconsolidated Ventures
Consolidated & Unconsolidated Ventures Venture Partner Submarket Square Feet(1) HPP Ownership % CONSOLIDATED VENTURES Los Angeles, California(2) Sunset Gower Studios Blackstone Hollywood 1,044,636 51.0 % Sunset Las Palmas Studios Blackstone Hollywood 977,639 51.0 % Sunset Bronson Studios Blackstone
Slide 27: Definitions
Definitions Adjusted EBITDAre: Adjusted EBITDAre represents net income (loss) before interest, income taxes, depreciation and amortization, and before our share of interest and depreciation from unconsolidated real estate entities and further adjusted to eliminate the impact of certain non-cash item
Slide 28: Definitions (continued)
Definitions (continued) Estimated Stabilized Yield: Calculated as the quotient of estimated NOI and our investment in a property once project stabilizes and initial rental concessions, if any, have elapsed, excluding the impact of leverage. Cash rents related to development and redevelopment project
Slide 29: Definitions (continued)
Definitions (continued) In-Service Properties: Owned properties, excluding repositioning, redevelopment, development and held for sale properties. Studio development properties are incorporated into the in-service portfolio the earlier of one year following completion or the project’s estimated stab
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Unaudited, in thousands RECONCILIATION OF NET LOSS TO NOI Three Months Ended Nine Months Ended 9/30/24 9/30/23 9/30/24 9/30/23 Net loss $ (107,013) $ (35,752) $ (207,925) $ (82,046) Adjustments: Loss from unconsolidated real estate entities 3,219 759 6,443 2,219 Fee income (
Slide 31: Non-GAAP Reconciliations (continued)
Non-GAAP Reconciliations (continued) Unaudited, in thousands RECONCILIATIONS OF NET LOSS TO ADJUSTED EBITDARE (ANNUALIZED) AND TOTAL UNSECURED AND SECURED DEBT TO CONSOLIDATED DEBT, NET AND HPP’S SHARE OF DEBT, NET Three Months Ended 9/30/24 9/30/23 Net loss $ (107,013) $ (35,752) Interest income—co
Slide 32: Non-GAAP Reconciliations (continued)
Non-GAAP Reconciliations (continued) Unaudited, in thousands RECONCILIATIONS OF TOTAL ASSETS TO HPP’S SHARE OF UNDEPRECIATED BOOK VALUE AND TOTAL UNSECURED AND SECURED DEBT TO HPP’S SHARE OF DEBT, NET 9/30/24 9/30/23 Total assets $ 8,317,392 $ 8,986,802 Add: Accumulated depreciation 1,885,536 1,779,
Slide 33: HudsonPacificProperties.com
UDSON PACIFIC PROPERTIES HudsonPacificProperties.com
Hudson Pacific Properties — Q3 2024 Earnings Presentation on 6ix