Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q4 2023 Earnings Presentation
33 slides from Hudson Pacific Properties's earnings presentation, Feb 13, 2024
Slide 1: Supplemental Information Fourth Quarter 2023
UDSON PACIFIC id PROPERTIES f = SUPPLEMENTAL INFORMATION FOURTH QUARTER 2023
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 December 31, 2023 "We are proud of our team’s efforts and our positive results that overcame a multitude of industry challenges in 2023 including ongoing economic uncertainty. Among our accomplishments for the year, we leased 1.7 million square feet and completed
Slide 4: Executive Summary (continued)
Executive Summary (continued) Three Months Ended December 31, 2023 Financial Results Compared to Fourth Quarter 2022 • Total revenue of $223.4 million compared to $269.9 million, largely due to the sales of Skyway Landing, 604 Arizona and 3401 Exposition, previously communicated tenant move-outs at
Slide 5: Executive Summary (continued)
Executive Summary (continued) Three Months Ended December 31, 2023 • Completed credit facility amendment to favorably adjust certain definitions and covenant calculations, for which aggregate lender commitments were reduced by $100.0 million to $900.0 million maturing in December 2026 (including ext
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 12/31/23 12/31/22 (Unaudited) ASSETS Investment in real estate, net $ 6,484,459 $ 7,175,301 Non-real estate property, plant and equipment, net 118,783 130,289 Cash and cash equivalents 100,391 255,761 Restricted cash 18,765 29,970 Accounts
Slide 9: Consolidated Statements of Operations
Consolidated Statements of Operations In thousands, except per share data Three Months Ended Year Ended 12/31/23 12/31/22 12/31/23 12/31/22 (Unaudited) (Unaudited) (Unaudited) REVENUES Office Rental revenues $ 191,319 $ 207,601 $ 797,095 $ 834,408 Service and other revenues 3,545 3,964 15,280 18,292
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 Year Ended 12/31/23 12/31/22 12/31/23 12/31/22 Net loss $ (88,654) $ (5,656) $ (170,700) $ (16,517) Adjustments: Depreciation and amortization—consolidated 1
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 Year Ended 12/31/23 12/31/22 % Change 12/31/23 12/31/22 % Change Same-store office statistics Number of properties 41 41 40 40 Square feet 11,572,1
Slide 12: NOI Detail
NOI Detail Three Months Ended December 31, 2023 | Unaudited, in thousands Same-Store Same-Store Non-Same- Non-Same- Office Studio Store Office Store Studio Total REVENUE Cash rent $ 145,974 $ 10,676 $ 18,374 $ 2,162 $ 177,186 Cash tenant recoveries 31,977 235 4,455 (68) 36,599 Straight-line rent (11
Slide 13: Debt Summary & Debt Metrics
Debt Summary & Debt Metrics As of December 31, 2023 | 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 fac
Slide 14: Debt Maturities, Composition & Hedging Instruments
Debt Maturities, Composition & Hedging Instruments(1) Unaudited, in thousands Debt Maturity Schedule Secured Unsecured $1,000,000 $800,000 $600,000 $530,767 $137,989 $340,865 $400,000 $55,576 $456,000 $500,000 $200,000 $400,000 $342,000 $350,000 $259,000 $0 $— 2024 2025 2026 2027 2028 2029 2030 + DE
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% 45.1% Unsecured indebtedness to unencumbered asset value(2) ≤ 65% 41.8% Adjusted EBITDA to fixed charges ≥ 1.5x 1.9x Secured indebtedness to tota
Slide 16: Existing Portfolio Summary
Existing Portfolio Summary Three Months Ended 12/31/23 9/30/23 6/30/23 3/31/23 12/31/22 Number of office properties owned 46 48 50 49 52 In-service office square feet 13,853,005 14,437,595 14,507,904 14,483,122 14,649,221 In-service office % leased 81.9 % 83.1 % 87.0 % 88.7 % 89.7 % In-service offic
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 % $ 65,008,326 $ 33,154,246 $ 67.21 West Los Angeles 2 784,280 93.8 99.0 40,78
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) $ 51,963,161 10.1% 2 Amazon 3 2025-2031 990,788 (2) 28,214,335 5.5 3 Netflix, Inc. 3 2031 722,305 (3) 25,507,912 5.0 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 12 558,295 100.0 % 82.4
Slide 21: Office Leasing Activity
Office Leasing Activity Dollars reflected are per square foot Three Months Ended Year Ended December 31, 2023 December 31, 2023 Gross Leasing Activity New cash rate $53.96 $45.04 Renewal cash rate $51.73 $51.15 New square feet leased 110,211 572,833 Renewal square feet leased 321,769 1,125,614 Total
Slide 22: Expiring Office Leases Summary
Expiring Office Leases Summary HPP’s Share Annualized Annualized # of % of Office Base Rent Annualized Base Rent Per Leases Square Feet Annualized Annualized Per Square Base Rent at Square Foot Expiring Expiring (1) Base Rent Base Rent Foot Expiration at Expiration Vacant 3,297,287 Q4-2023 23 155,23
Slide 23: Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters
Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters Q1 2024 Q2 2024 Q3 2024 Q4 2024 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 35,402 $ 51.83 1,
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) Includes Nutanix, Inc. at Concourse for 117,001 square feet in May 2024. (2) Includes DoorDash, Inc. at 901 Market for 50,821 square feet in August 2024. (3)
Slide 25: Under Construction & Future Development Pipeline
Under Construction & Future Development Pipeline(1) Unaudited, in thousands, except square feet UNDER CONSTRUCTION Project Total Estimated Estimated Estimated Costs Estimated Estimated Start Completion Stabilization Square % as of Project Stabilized Submarket Date(2) Date(3) Date Feet Leased 12/31/2
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 1,043,790 51.0 % Sunset Las Palmas Studios Blackstone Hollywood 999,152 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. Net Effective Rent: Weighted average initial annual cash rent, net of annualized concessions (i.e. free rent), tenant improvements and lease commissions.
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Unaudited, in thousands RECONCILIATION OF NET LOSS TO NOI Three Months Ended Year Ended 12/31/23 12/31/22 12/31/23 12/31/22 Net loss $ (88,654) $ (5,656) $ (170,700) $ (16,517) Adjustments: Loss (income) from unconsolidated real estate entities 1,683 788 3,902 (943) Fee inco
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 12/31/23 12/31/22 Net loss $ (88,654) $ (5,656) 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 12/31/23 12/31/22 Total assets $ 8,282,050 $ 9,319,140 Add: Accumulated depreciation 1,766,220 1,57
Slide 33: Hudson Pacific Properties
UDSON PACIFIC PROPERTIES HudsonPacificProperties.com
Hudson Pacific Properties — Q4 2023 Earnings Presentation on 6ix