Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — BofA Securities Global Real Estate Conference 2023
25 slides from Hudson Pacific Properties's conference presentation, Sep 12, 2023
Slide 1: Investor Update | BofA Securities Global Real Estate Conference
Investor Update | BofA Securities Global Real Estate Conference September 2023
Slide 2: Differentiated Tech & Media Focused REIT
Differentiated Tech & Media Focused REIT HPP is uniquely positioned to capitalize on TAMI sector investment and growth Focus on Tech & Modern, Amenitized Studio Platform with Media Epicenters Office Properties1 Embedded Upside2 West Coast Tech Hubs ~16 Yrs Avg. Building Age, ~85% 74 Stages + Full Pr
Slide 3: Return-To-Office: Tech Shifts to Enforcement
Return-To-Office: Tech Shifts to Enforcement As of August 31, 1.5 million office-based employees had new attendance policies take effect, with another 1.2 million facing mandates through year-end, pending increases for further announcements1 U.S. Employees Subject to Newly Effective RTO Mandates1 #
Slide 4: RTO Mandates & HPP Markets: A Turning Point in Seattle
RTO Mandates & HPP Markets: A Turning Point in Seattle Seattle welcomed back thousands of workers in 2023 as major employers’ RTO mandates take effect, while coincident with Amazon’s return, the city experienced an uptick in tech tenant lease requirements Downtown Seattle New Tech Transit Ridership
Slide 5: RTO Mandates & HPP Portfolio: Positive Momentum
RTO Mandates & HPP Portfolio: Positive Momentum Outside of Downtown San Francisco, 86% of HPP’s leased office square footage is utilized by hybrid / full-time in-office tenants, while non-must-take parking continues to outperform expectations HPP Tenant Hybrid & Full-Time Office Utilization1 HPP Par
Slide 6: Potential For Accelerated Tenant Demand Post-Labor Day
Potential For Accelerated Tenant Demand Post-Labor Day HPP’s current pipeline near record levels at 2.1 million square feet with number of tours continuing to trend upward to levels not seen since pre-pandemic, even as new deals take time to execute HPP’s 2.1M Sq Ft Current Leasing Pipeline On Par #
Slide 7: VC & AI Investment: Key Demand Drivers for HPP Markets
VC & AI Investment: Key Demand Drivers for HPP Markets HPP Markets Continue to Garner HPP Markets Receiving 97% of AI VC Funding with ~50% of VC Funding ~55% of All AI HQs $ in Billions 1H23 Funding on Pace Open Source AI Open Source AI with Pre-Covid Levels $400 Capital Raised (US) HQ Location (US)
Slide 8: Tackling 2023 Expirations, No Big Blocks Expiring 2024
Tackling 2023 Expirations, No Big Blocks Expiring 2024 HPP continues to make progress on upcoming expirations with approximately 50% coverage on remaining 2023 expirations, and currently has ~180,000 square feet of deals in-leases Remaining 2023 Office Lease Expirations Renewed Full-Building Tenant
Slide 9: Studio Union Strike Update: No Resolution Yet
Studio Union Strike Update: No Resolution Yet While the WGA strike commenced in May, representatives AMPTP, which represents media companies like Netflix and Disney, and WGA only started to engage in August with no agreement reached to date Strike Duration HPP’s Studio Cost Structure Adjustments WGA
Slide 10: Capital Recycling: New Studio Value Creation Opportunity
Capital Recycling: New Studio Value Creation Opportunity On the heels of selling 2 office assets, HPP executed on an off-market joint venture with BX / VNO taking its Sunset Studios platform to New York—entering another key global media market Potential Future HPP’s Share Studio NOI: Existing Assets
Slide 11: Selective Development & Diversified Future Pipeline
Selective Development & Diversified Future Pipeline HPP’s under construction and near-term planned projects require minimal additional spend—future pipeline consists of studio, residential and office opportunities to execute on when timing is right Under Construction – Studio Near-Term Planned – Stu
Slide 12: Focus on Fortifying the Balance Sheet
Focus on Fortifying the Balance Sheet HPP continues to take proactive steps to strengthen its balance sheet and enhance its liquidity position Dividend Reduction & Suspension Current Liquidity + 2Q23 50% dividend cut yielded ~$18M of Cash on Hand $109.2M liquidity Revolver Availability $506.0M + 3Q2
Slide 13: Appendix
APPENDIX
Slide 14: Studio Platform with Embedded Upside
Studio Platform with Embedded Upside Following the strike’s resolution, HPP expects to realize the full benefit of synergies from its combined studio and services platform—with further NOI growth through development over next 36 months ($ in Thousands) Potential Future Stabilized Studio NOI: Existin
Slide 15: Sunset Pier 94: Limited Capital, Fee-Enhanced Returns
Sunset Pier 94: Limited Capital, Fee-Enhanced Returns For HPP, Sunset Pier 94 represents a minimal capital outlay with strong potential asset-level returns further enhanced through development and management fees Sunset Pier 94 Project-Level & HPP’s Share Returns Est. Project Costs (Unlevered)1 $316
Slide 16: Path to Address Maturities Through Year-End 2025
Path to Address Maturities Through Year-End 2025 HPP has sufficient liquidity to pay down private placement debt and expects to execute on refinancings secured by Class A assets with significant WALT HPP’s Share Debt Maturities 3Q23 – 4Q25 ($ in Millions) Owned 75/25% Class A, 100% leased to Riot Ga
Slide 17: ESG Leader: HPPx2030 Vision
ESG Leader: HPPx2030 Vision HPP recently set ambitious new targets to reduce climate impact, grow its portfolio of green products and services, make innovative community investments and diversify management ESG Accolades HPPx2030 Vision + 100% carbon neutral and renewable electricity in operations f
Slide 18: Definitions
Definitions Cash 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
Slide 19: Definitions (Cont.)
Definitions (Cont.) HPP’s Share of Debt: Similar to consolidated debt except it includes HPP’s share of unconsolidated joint venture debt and excludes partners’ share of consolidated joint venture partner debt. In-Service Properties: Owned properties, excluding repositioning, redevelopment, developm
Slide 20: Reconciliations
Reconciliations 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 6/30/23 Net loss $ (31,474) Interest income—consolidated (236) Interest expense—consolidated 56,648 Depreciatio
Slide 21: Reconciliations (Cont.)
Reconciliations (Cont.) 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 6/30/23 Total assets $ 9,105,829 Add: Accumulated depreciation 1,722,941 Add: Accumulated amortization 196,173 Less: Partners’ share of
Slide 22: Reconciliations (Cont.)
Reconciliations (Cont.) STUDIO SAME-STORE CASH NET OPERATING INCOME Year Ended 12/31/22 Net loss $ (16,517) Adjustments: Income from unconsolidated real estate entites (943) Fee Income (7,972) Interest expense 149,901 Interest income (2,340) Management services reimbursement income - unconsolidated
Slide 23: Reconciliations (Cont.)
Reconciliations (Cont.) RECONCILIATION OF NET LOSS TO NOI AND TOTAL NOI TO HPP'S SHARE OF CASH NOI AND HPP'S SHARE OF STUDIO CASH NOI Year Ended 12/31/22 Net loss $ (16,517) Adjustments: Income from unconsolidated real estate entities (943) Fee income (7,972) Interest expense 149,901 Interest income
Slide 24: Disclaimer
Disclaimer Hudson Pacific Properties, Inc. is referred to herein as the “Company,” “Hudson Pacific,” “HPP,” “we,” “us,” or “our.” This document 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
Slide 25: HudsonPacificProperties.com
HudsonPacificProperties.com
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