Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q4 2020 Earnings Presentation
59 slides from Hudson Pacific Properties's earnings presentation, Feb 17, 2021
Slide 1: Supplemental Information Fourth Quarter 2020
PACIFIC PROPERTIES SUPPLEMENTAL INFORMATION FOURTH QUARTER 2020 REIMAGINING NOW. TO CREATE WHAT'S NEXT.
Slide 2: Forward-Looking Statements
Page 2 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 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 Exch
Slide 3: Table of Contents
Page 3 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Table of Contents Page Executive Summary, Corporate Data, Executive Management, Board of Directors, Equity Research Coverage, Fixed Income Coverage and Rating Agencies 4 Financial Information 9 Consolidated B
Slide 4: Executive Summary
Page 4 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Executive Summary Hudson Pacific Properties acquires, redevelops and develops creative office and studio properties in the West Coast tech and media epicenters of Los Angeles, Silicon Valley, San Francisco, S
Slide 5: Corporate Data
Page 5 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Corporate Data(1) Unaudited, in thousands, except per share data December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 Number of office properties owned 53 52 52 52 52 Office squ
Slide 6: Executive Management
Page 6 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Laura Campbell Senior Vice President, Investor Relations and Marketing Drew B. Gordon Senior Vice President, Northern California Gary Hansel Senior Vice President, Southern California Bill Humphrey Senior Vic
Slide 7: Board of Directors
Page 7 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 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 belie
Slide 8: Equity Research Coverage
Page 8 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Equity Research Coverage BMO Capital Markets Frank Lee | John Kim (415) 591-2129 | (212) 885-4115 BofA Securities James Feldman (646) 855-5808 BTIG Tom Catherwood (212) 738-6140 Citigroup Global Markets Micha
Slide 9: Financial Information
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Financial Information
Slide 10: Consolidated Balance Sheets
Page 10 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Consolidated Balance Sheets In thousands, except share data December 31, 2020 December 31, 2019 ASSETS Investment in real estate, net $ 7,112,269 $ 6,370,849 Cash and cash equivalents 113,686 46,224 Restrict
Slide 11: Consolidated Statements of Operations
Page 11 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Consolidated Statements of Operations Unaudited, in thousands, except share data Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 REVENUES Office Rental $ 181,263 $ 186,914 $ 721,2
Slide 12: Funds from Operations
Page 12 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Funds from Operations(1) Unaudited, in thousands, except per share data Three Months Ended Quarter To Date December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 NET (LOSS) INCOM
Slide 13: Funds from Operations (Year to Date)
Page 13 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (1) See definitions starting on page 54. Twelve Months Ended Nine Months Ended Six Months Ended Three Months Ended Twelve Months Ended Year To Date December 31, 2020 September 30, 2020 June 30, 2020 March 31
Slide 14: Adjusted Funds from Operations
Page 14 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Adjusted Funds from Operations(1) Unaudited, in thousands Three Months Ended Quarter To Date December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 FFO $ 61,991 $ 63,163 $ 76,621
Slide 15: Same-Store Property Performance—Consolidated
Page 15 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Same-Store Property Performance—Consolidated(1) Unaudited, in thousands, except number of properties and square feet SAME-STORE ANALYSIS—NET OPERATING INCOME Three Months Ended December 31, Year Ended Decemb
Slide 16: Same-Store Property Performance—Consolidated (continued)
Page 16 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Same-Store Property Performance—Consolidated(1) (continued) Unaudited, in thousands, except number of properties and square feet (1) The consolidated same-store property performance excludes the impact of ou
Slide 17: Same-Store Property Performance—Company's Share
Page 17 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Same-Store Property Performance—Company’s Share(1) Unaudited, in thousands, except number of properties and square feet SAME-STORE ANALYSIS—NET OPERATING INCOME Three Months Ended December 31, Year Ended Dec
Slide 18: Same-Store Property Performance—Company's Share (continued)
Page 18 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Same-Store Property Performance—Company’s Share(1) (continued) Unaudited, in thousands, except number of properties and square feet (1) On July 30, 2020, funds affiliated with Blackstone Property Partners ac
Slide 19: Net Operating Income Detail (NOI)
Page 19 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Net Operating Income Detail (NOI) Three Months Ended December 31, 2020 | Unaudited, in thousands Same-Store Office Properties(1) Same-Store Studio Properties(2) Non-Same-Store Office Properties(3) Reposition
Slide 20: Net Operating Income Detail footnotes
Page 20 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (1) See pages 27 and 28 for same-store office for the three months ended December 31, 2020. The consolidated same-store property performance in this table excludes the impact of our unconsolidated joint vent
Slide 21: Debt Summary
Page 21 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Debt Summary As of December 31, 2020 | Unaudited, in thousands Unsecured revolving credit facility Principal Amount(1) Interest Rate(2)(3) Contractual Maturity Date(4) Annual Debt Service(1) Balance at Matur
Slide 22: Debt Summary (continued)
Page 22 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Debt Summary (continued) As of December 31, 2020 | Unaudited, in thousands Other consolidated debt Principal Amount(1) Interest Rate(2) Contractual Maturity Date Annual Debt Service(1) Balance at Maturity Co
Slide 23: Capital Structure
Page 23 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Capital Structure As of December 31, 2020 | Unaudited, in thousands, except share data and percentages Shares/Units Aggregate Principal Amount or $ Equivalent Unsecured private placement $ 625,000 Unsecured
Slide 24: Debt Maturities, Composition and Covenant Compliance
Page 24 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Unsecured and Secured Debt Maturities, Composition and Covenant Compliance Unaudited, in thousands DEBT COMPOSITION Weighted Average Amount % of Total Debt Interest Rate(3) Years to Maturity COMPANY’S SHARE
Slide 25: Debt Maturities footnotes
Page 25 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (1) Includes the Company’s Share of principal amortization and maturities, based on contractual maturity dates, excluding: (i) in-substance defeased debt related to One Westside and 10850 Pico, (ii) unamorti
Slide 26: Operational and Portfolio Information
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Operational and Portfolio Information
Slide 27: In-Service Office Properties
Page 27 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 In-Service Office Properties(1) Submarket Square Feet(2) Percent Occupied(3) Percent Leased(3) Annualized Base Rent(4) Annualized Base Rent Per Square Foot(4) SAME-STORE(5) Vancouver, British Columbia Bental
Slide 28: In-Service Office Properties (continued)
Page 28 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 In-Service Office Properties(1) (continued) Submarket Square Feet(2) Percent Occupied(3) Percent Leased(3) Annualized Base Rent(4) Annualized Base Rent Per Square Foot(4) Los Angeles, California 6922 Hollywo
Slide 29: In-Service Office Properties footnotes
Page 29 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (1) In-service office excludes the land, repositioning, redevelopment, development and held for sale properties described on pages 33 and 34. We define lease-up properties as office properties that have not
Slide 30: In-Service Office Properties by Location
Page 30 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 In-Service Office Properties by Location(1) For footnotes (1), (2), (3) and (4) above refer to the descriptions on page 29. (5) Annualized base rent and rental rates have been converted from CAD to USD using
Slide 31: In-Service Office Properties by Location (continued)
Page 31 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 In-Service Office Properties by Location(1) (continued) Properties Square Feet(2) Occupied Square Feet Percent Occupied(3) Leased Square Feet Percent Leased(3) Annualized Base Rent(4) Annualized Base Rent Pe
Slide 32: Studio Properties
Page 32 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (1) Same-store studio defined as all studios owned and included in our portfolio as of January 1, 2019 and still owned and included in our portfolio as of December 31, 2020. (2) Percent leased for same-store
Slide 33: Land Properties
Page 33 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Land Properties (1) Square footage for land properties represents management’s estimate of developable square footage, the majority of which remains subject to entitlement approvals that have not yet been ob
Slide 34: Repositioning, Redevelopment, Development and Held For Sale Properties
Page 34 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Repositioning, Redevelopment, Development and Held For Sale Properties(1) Estimated Square Feet(2) Occupied Square Feet Percent Occupied(3) Leased Square Feet Percent Leased(3) Annualized Base Rent(4) Annual
Slide 35: Repositioning and Development footnotes
Page 35 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (4) Rent data for our office properties is presented on an annualized basis. Annualized base rent for office properties is calculated by multiplying (i) base rental payments (defined as cash base rents (befo
Slide 36: Under Construction and Future Development Projects
Page 36 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (1) Project costs exclude interest costs capitalized in accordance with Accounting Standards Codification (“ASC”) 835-20-50-1, personnel costs capitalized in accordance with ASC 970-360-25 and operating expe
Slide 37: Development Projects footnotes
Page 37 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (5) Square footage for office properties determined by management based upon estimated leasable square footage, which may be less or more than the Building Owners and Managers Association (BOMA) rentable are
Slide 38: Recently Completed, Under Construction and Planned Project Images
Page 38 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Recently Completed, Under Construction and Planned Project Images Maxwell | Redevelopment Los Angeles (Arts District) 102,963 SF | Completed 1Q19 Multi-Tenant EPIC | Development Los Angeles (Hollywood) 301,1
Slide 39: Office Tenant Industry Diversification
Page 39 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Office Tenant Industry Diversification(1) INDUSTRY DIVERSIFICATION Company’s Share Industry Square Feet(2)(3) Annualized Base Rent as Percent of Total Square Feet(2)(4) Annualized Base Rent as Percent of Tot
Slide 40: Fifteen Largest Office Tenants
Page 40 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Fifteen Largest Office Tenants (1) Presented in order of Company’s Share of annualized base rent. (2) Annualized base rent is calculated by multiplying (i) base rental payments (defined as cash base rents (b
Slide 41: Largest Office Tenants footnotes
Page 41 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (6) Nutanix, Inc. expirations by square footage and property: (i) 199,445 square feet at 1740 Technology, (ii) 131,351 square feet at Concourse, and (iii) 108,610 square feet at Metro Plaza. At 1740 Technolo
Slide 42: Office Property Leasing Activity
Page 42 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Office Property Leasing Activity(1) Three Months Ended December 31, 2020 Year Ended December 31, 2020 Total gross leasing activity Rentable square feet(2) 279,392 800,336 Gross new leasing activity Rentable
Slide 43: Leasing Activity footnotes
Page 43 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (1) Represents 100% share of consolidated and unconsolidated joint ventures. (2) Includes square footage related to the Company’s management offices totaling 2,958 and 33,481 square feet for the three and tw
Slide 44: Commenced Office Leases with Non-Recurring Upfront Abatements
Page 44 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Commenced Office Leases with Non-Recurring Upfront Abatements(1) (1) Consists of leases that commenced on or prior to December 31, 2020 with up-front free base rent resulting in a rent start date after the c
Slide 45: Uncommenced Office Leases—Next Eight Quarters
Page 45 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Uncommenced Office Leases—Next Eight Quarters(1)(2) Company’s Share Q1 2021 Q2 2021 Q1 2021 Q2 2021 SF Starting Rent per SF(3) SF Starting Rent per SF(3) SF Starting Rent per SF(3) SF Starting Rent per SF(3)
Slide 46: Uncommenced Office Leases—Next Eight Quarters (continued)
Page 46 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Uncommenced Office Leases—Next Eight Quarters(1)(2) (continued) Company’s Share Q1 2022 Q2 2022 Q1 2022 Q2 2022 SF Starting Rent per SF(3) SF Starting Rent per SF(3) SF Starting Rent per SF(3) SF Starting Re
Slide 47: Backfilled Office Leases—Next Eight Quarters
Page 47 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Backfilled Office Leases—Next Eight Quarters(1)(2) Company’s Share Q1 2021 Q2 2021 Q1 2021 Q2 2021 SF Starting Rent per SF(3) SF Starting Rent per SF(3) SF Starting Rent per SF(3) SF Starting Rent per SF(3)
Slide 48: Backfilled Office Leases—Next Eight Quarters (continued)
Page 48 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Backfilled Office Leases—Next Eight Quarters(1)(2) (continued) Company’s Share Q3 2021 Q1 2022 Q2 2022 Q3 2021 Q1 2022 Q2 2022 SF Starting Rent per SF(3) SF Starting Rent per SF(3) SF Starting Rent per SF(3)
Slide 49: Expiring Office Leases—Next Eight Quarters
Page 49 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Expiring Office Leases—Next Eight Quarters(1) Company’s Share Q1 2021(2) Q2 2021 Q3 2021 Q4 2021 Q1 2021(3) Q2 2021 Q3 2021 Q4 2021 Expiring SF(4) Rent/ SF(5) Expiring SF(4) Rent/ SF(5) Expiring SF(4) Rent/
Slide 50: Expiring Office Leases—Next Eight Quarters (continued)
Page 50 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Expiring Office Leases—Next Eight Quarters(1) (continued) (1) This does not reflect 97,092 square feet, of which 76,956 square feet represents the Company’s Share, that expired on December 31, 2020. This tab
Slide 51: Expiring Office Leases footnotes
Page 51 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 (6) Expiring rental rates have been converted from CAD to USD using the foreign currency exchange rate as of December 31, 2020. (7) Top three expiring tenants at Bentall Centre by square footage: (i) Absolut
Slide 52: Expiring Office Leases—Annual
Page 52 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Expiring Office Leases—Annual (1) Total expiring square footage does not include 27,691 square feet of month-to-month leases. (2) Total expiring square footage does not include 16,587 square feet of month-to
Slide 53: Definitions and Reconciliations
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Definitions and Reconciliations
Slide 54: Definitions
Page 54 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Definitions Adjusted EBITDAre: Adjusted EBITDAre represents net income (loss) before interest, income taxes, depreciation and amortization, and before our share interest and depreciation from the unconsolida
Slide 55: Definitions (continued)
Page 55 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 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 Board of G
Slide 56: Reconciliation of Net (Loss) Income to Net Operating Income
Page 56 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Reconciliation of Net (Loss) Income to Net Operating Income Unaudited, in thousands Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Net (loss) income $ (3,168) $ 16,963 $ 16,430 $
Slide 57: Reconciliation of Net (Loss) Income to Company's Share of NOI
Page 57 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Reconciliation of Net (Loss) Income to Company’s Share of Net Operating Income Unaudited, in thousands Three Months Ended December 31, Year Ended December 31, 2020 2019 2020 2019 Net (loss) income $ (3,168)
Slide 58: Reconciliation of Consolidated Debt, Net to Adjusted EBITDAre
Page 58 of 58 Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2020 Three Months Ended Quarter To Date December 31, 2020 September 30, 2020 June 30, 2020 March 31, 2020 December 31, 2019 Net (loss) income $ (3,168) $ (1,362) $ 7,011 $ 13,949 $ 16,963 Interest income—Consolid
Slide 59: Hudson Pacific Properties
Los Angeles | Silicon Valley | San Francisco | Seattle | Vancouver HudsonPacificProperties.com
Hudson Pacific Properties — Q4 2020 Earnings Presentation on 6ix