Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q4 2019 Earnings Presentation
58 slides from Hudson Pacific Properties's earnings presentation, Feb 20, 2020
Slide 1: Supplemental Information Fourth Quarter 2019
PA CLE UG PROPERTIES SUPPLEMENTAL INFORMATION FOURTH QUARTER 2019 REIMAGINING NOW. TO CREATE WHAT'S NEXT.
Slide 2: Forward-Looking Statements
Hudson Pacific Properties, Inc. Supplemental Information | Fourth 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 | Fourth Quarter 2019 Table of Contents Page Executive Summary, Corporate Data, Executive Management, Board of Directors, Equity Research Coverage and Rating Agencies 4 Financial Information 9 Consolidated Balance Sheets 10 Consolidated Statem
Slide 4: Executive Summary
Hudson Pacific Properties, Inc. Supplemental Information | Fourth 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 | Fourth Quarter 2019 Corporate Data(1) Unaudited, in thousands, except per share data December 31, September 30, June 30, March 31, December 31, 2019 2019 2019 2019 2018 Number of office properties owned 52 52 53 52 52 Office square feet(2) 1
Slide 6: Executive Management
Hudson Pacific Properties, Inc. Supplemental Information | Fourth 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 | Fourth 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 | Fourth Quarter 2019 Equity Research Coverage BofA Securities Mizuho James Feldman Omotayo Okusanya (646) 855-5808 (646) 949-9672 Barclays Capital Morgan Stanley Ross Smotrich | Upal Rana Vikram Malhotra (212) 526-2306 | (212) 526-4887 (212)
Slide 9: Financial Information
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Financial Information
Slide 10: Consolidated Balance Sheets
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Consolidated Balance Sheets In thousands, except share data December 31, 2019 December 31, 2018 ASSETS Investment in real estate, net $ 6,370,849 $ 6,363,906 Cash and cash equivalents 46,224 53,740 Restricted cash 12,034
Slide 11: Consolidated Statements of Operations
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Consolidated Statements of Operations Unaudited, in thousands, except share data Three Months Ended December 31, Year Ended December 31, 2019 2018 2019 2018 REVENUES Office Rental(1) $ 186,914 $ 143,407 $ 708,564 $ 533,18
Slide 12: Funds from Operations
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Funds from Operations(1) Unaudited, in thousands, except per share data Three Months Ended Quarter To Date December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 NET INCOME (LOSS) $ 16,963 $ 6
Slide 13: Funds from Operations (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Funds from Operations (continued) Unaudited, in thousands, except per share data Twelve Months Nine Months Six Months Three Months Twelve Months Ended Ended Ended Ended Ended Year To Date December 31, 2019 September 30, 2
Slide 14: Adjusted Funds from Operations
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Adjusted Funds from Operations(1) Unaudited, in thousands Three Months Ended Quarter To Date December 31, 2019 September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 FFO $ 84,555 $ 79,228 $ 75,478 $ 76,397 $ 78
Slide 15: Same-Store Property Performance—Consolidated
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Same-Store Property Performance—Consolidated Unaudited, in thousands, except number of properties and square feet SAME-STORE STATISTICS Three Months Ended December 31, Year Ended December 31, 2019 2018 % change 2019 2018
Slide 16: Same-Store Property Performance—Consolidated (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth 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 December 31, Year Ende
Slide 17: Same-Store Property Performance—Company's Share
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 (1) Same-Store Property Performance—Company’s Share Unaudited, in thousands, except number of properties and square feet SAME-STORE STATISTICS Three Months Ended December 31, Year Ended December 31, 2019 2018 % change 201
Slide 18: Same-Store Property Performance—Company's Share (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 (1) 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 December 31, Ye
Slide 19: Net Operating Income Detail (NOI)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Net Operating Income Detail (NOI) Three Months Ended December 31, 2019 | Unaudited, in thousands Repositioning/ Same-Store Same-Store Non-Same- Non-Same- Redevelopment Office Studio Store Office Store Studio Lease-Up Sold
Slide 20: Net Operating Income Detail (NOI) (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Net Operating Income Detail (NOI) (continued) (1) See pages 28 and 29 for same-store office for the three months ended December 31, 2019. (2) Same-store studio includes Sunset Bronson Studios, Sunset Gower Studios, Sunset
Slide 21: Debt Summary
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Debt Summary As of December 31, 2019 | Unaudited, in thousands Unsecured revolving credit facility Principal (2)(3) Contractual Annual Debt Balance at Undrawn Amount(1) Interest Rate Maturity Date(4) Service(1) Maturity C
Slide 22: Debt Summary (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Debt Summary (continued) As of December 31, 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 N
Slide 23: Debt Summary (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Debt Summary (continued) (12) We own 55% of the ownership interest in the consolidated joint venture that owns Hill7. This loan bears interest only at 3.38% until November 6, 2026, at which time the interest rate will inc
Slide 24: Capital Structure
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Capital Structure As of December 31, 2019 | Unaudited, in thousands, except share data and percentages Aggregate Principal Shares/Units Amount or $ Equivalent Unsecured revolving credit facility $ 75,000 Unsecured term lo
Slide 25: Debt Maturities, Composition and Covenant Compliance
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Unsecured and Secured Debt Maturities, Composition and Covenant Compliance Unaudited, in thousands DEBT COMPOSITION DEBT COVENANT COMPLIANCE Weighted Average Covenant Actual % of Total Interest Years to Performance Amount
Slide 26: Debt Maturities, Composition and Covenant Compliance (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth 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 27: Operational and Portfolio Information
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Operational and Portfolio Information
Slide 28: In-Service Office Properties
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 In-Service Office Properties(1) Square Percent Percent Annualized Annualized Submarket (2) (3) Leased(3) Base Rent(4) Base Rent Per Feet Occupied Square Foot(4) SAME-STORE(5) Greater Seattle, Washington Northview Center L
Slide 29: In-Service Office Properties (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 In-Service Office Properties(1) (continued) Square Percent Percent Annualized Annualized Submarket (2) (3) (3) (4) Base Rent Per Feet Occupied Leased Base Rent (4) Square Foot Del Amo Torrance 113,000 100.0 100.0 3,327,20
Slide 30: In-Service Office Properties (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 In-Service Office Properties(1) (continued) (1) In-service office excludes the land, repositioning, redevelopment, development and held for sale properties described on pages 34 and 35. We define lease-up properties as of
Slide 31: In-Service Office Properties by Location
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 In-Service Office Properties by Location(1) Square Occupied Percent Leased Percent Annualized Annualized Base Rent Properties (3) (3) (4) (4) Feet(2) Square Feet Occupied Square Feet Leased Base Rent Per Square Foot STABI
Slide 32: In-Service Office Properties by Location (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 In-Service Office Properties by Location(1) (continued) Square Occupied Percent Leased Percent Annualized Annualized Base Rent Properties (3) (3) (4) (4) Feet(2) Square Feet Occupied Square Feet Leased Base Rent Per Squar
Slide 33: Studio Properties
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Studio Properties Square Percent of Percent Annual Annual Base Rent Per Feet Total Leased(1) Base Rent(2) Leased Square Foot(3) Sunset Gower Studios 531,756 (4) 43.4% 92.8% $ 18,394,200 $ 37.27 Sunset Bronson Studios 308,
Slide 34: Land Properties
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Land Properties Submarket Square Feet(1) Percent of Total Vancouver, British Columbia Bentall Centre—Development(2) Downtown Vancouver 450,000 16.8% Subtotal 450,000 16.8% Greater Seattle, Washington Washington 1000(3) De
Slide 35: Repositioning, Redevelopment, Development, and Held For Sale Properties
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Repositioning, 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(
Slide 36: Under Construction and Future Development Projects
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Under Construction and Future Development Projects Unaudited, in thousands, except square feet Estimated Construction Period Project Costs(1) Estimated Initial Project Total Stabilized Estimated Estimated Estimated Costs
Slide 37: Under Construction and Future Development Projects (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Under Construction and Future Development 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 ha
Slide 38: Recently Completed, Under Construction and Planned Project Images
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Recently Completed, Under Construction and Planned Project Images Fourth & Traction | Redevelopment CUE | Development 450 Alaskan | Development 95 Jackson | Redevelopment Los Angeles (Arts District) Los Angeles (Hollywood
Slide 39: Office Tenant Industry Diversification
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Office Tenant Industry Diversification(1) INDUSTRY DIVERSIFICATION TECHNOLOGY DIVERSIFICATION Company’s Share Company’s Share Annualized Annualized Annualized Annualized (2)(3) Base Rent as (2)(4) Base Rent as Square Base
Slide 40: Fifteen Largest Office Tenants
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Fifteen Largest Office Tenants Company’s Share Percent of Percent of Credit Rating(3) Market (1) Lease Total Leased Total Leased Annualized Tenant Property Rentable (2) Annualized Capitalization Expiration Square Feet Squ
Slide 41: Fifteen Largest Office Tenants (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Fifteen Largest Office Tenants (continued) (6) Nutanix, Inc. square footage by property: (i) 189,084 square feet at 1740 Technology, (ii) 131,351 square feet at Concourse, and (iii) 108,610 square feet at Metro Plaza. At
Slide 42: Office Property Leasing Activity
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Office Property Leasing Activity(1) Three Months Ended Year Ended December 31, 2019 December 31, 2019 Total gross leasing activity Rentable square feet(2) 434,619 2,535,089 Gross new leasing activity Rentable square feet
Slide 43: Office Property Leasing Activity footnotes
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 (5) Represents a comparison between initial straight-line rents on new and renewal leases as compared to the straight-line rents on expiring leases in the same space. New leases are only included if the same space was lea
Slide 44: Commenced Office Leases with Non-Recurring Upfront Abatements
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Commenced Office Leases with Non-Recurring Upfront Abatements(1) Lease Starting Submarket Square Rent Lease Feet Start Date Start Date Base Rents(2) Expiration Date San Francisco Bay Area, California 625 Second San Franci
Slide 45: Uncommenced Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Uncommenced Office Leases—Next Eight Quarters(1)(2) Company’s Share Q1 2020 Q2 2020 Q3 2020 Q1 2020 Q2 2020 Q3 2020 Starting Starting Starting Starting Starting Starting SF Rent per SF Rent per SF Rent per SF Rent per SF
Slide 46: Backfilled Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Backfilled Office Leases—Next Eight Quarters(1)(2) Company’s Share Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Starting Starting Starting Starting Starting Starting Starting Starting SF Rent per SF Ren
Slide 47: Expiring Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Expiring Office Leases—Next Eight Quarters(1) Company’s Share Q1 2020(2) Q2 2020 Q3 2020 Q4 2020 Q1 2020(3) Q2 2020 Q3 2020 Q4 2020 Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/
Slide 48: Expiring Office Leases—Next Eight Quarters (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Expiring Office Leases—Next Eight Quarters(1)(continued) Company’s Share Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring
Slide 49: Expiring Office Leases—Next Eight Quarters (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Expiring Office Leases—Next Eight Quarters(1) (continued) (6) Expiring rental rates have been converted from CAD to USD using the foreign currency exchange rate as of December 31, 2019. (7) Management office occupied by t
Slide 50: Expiring Office Leases—Annual
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Expiring Office Leases—Annual Company’s Share Percentage Annualized Square Square Percent of Annualized Number of of Office Annualized Base Rent Per Footage of Footage of Office Annualized Base Rent Year of Lease Expirati
Slide 51: Definitions and Reconciliations
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Definitions and Reconciliations
Slide 52: Definitions
Hudson Pacific Properties, Inc. Supplemental Information | Fourth 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 53: Definitions (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Fourth 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 54: Reconciliation of Net Income to Net Operating Income
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Reconciliation of Net Income to Net Operating Income Unaudited, in thousands Three Months Ended December 31, Year Ended December 31, 2019 2018 2019 2018 Net income $ 16,963 $ 19,257 $ 55,846 $ 111,781 Adjustments: Loss fr
Slide 55: Total Revenues Components
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Total Revenues Components Unaudited, in thousands Three Months Ended December 31, Year Ended December 31, 2019 2018 2019 2018 Office Cash rent $ 142,539 $ 126,254 $ 538,118 $ 481,677 Cash tenant recoveries 28,786 25,281 1
Slide 56: Reconciliation of Net Income to Company's Share of Net Operating Income
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Reconciliation of Net Income to Company’s Share of Net Operating Income Unaudited, in thousands Three Months Ended December 31, Year Ended December 31, 2019 2018 2019 2018 Net income $ 16,963 $ 19,257 $ 55,846 $ 111,781 A
Slide 57: Company Outlook
Hudson Pacific Properties, Inc. Supplemental Information | Fourth Quarter 2019 Company Outlook Unaudited, dollars and share data in thousands Current Guidance Q3 2019 Guidance Actuals Full Year 2020 Full Year 2019 Full Year 2019 Metric Low High Low High Total FFO per share $2.14 $2.22 $2.00 $2.06 $2
Slide 58: Los Angeles | Silicon Valley | San Francisco | Seattle | Vancouver
Los Angeles | Silicon Valley | San Francisco | Seattle | Vancouver HudsonPacificProperties.com
Hudson Pacific Properties — Q4 2019 Earnings Presentation on 6ix