Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q2 2024 Earnings Presentation
32 slides from Hudson Pacific Properties's earnings presentation, Aug 7, 2024
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Slide 2: Table of Contents
Table of Contents Page Executive Summary 3 Corporate Information 5 Consolidated Balance Sheets 7 Consolidated Statements of Operations 8 Funds from Operations & Adjusted Funds from Operations 9 Consolidated Same-Store Property Performance 10 NOI Detail 11 Debt Summary & Debt Metrics 12 Debt Maturiti
Slide 3: Executive Summary
Executive Summary Three Months Ended June 30, 2024 "With over 500,000 square feet of office leases signed in the second quarter, we have continued to build on our strong start to the year. While still challenging, our west coast office market conditions are gradually improving. We believe our solid
Slide 4: Executive Summary (continued)
Executive Summary (continued) Three Months Ended June 30, 2024 Financial Results Compared to Second Quarter 2023 • Total revenue of $218.0 million compared to $245.2 million, primarily due to asset sales and two tenant move outs, one at 1455 Market and one at Sunset Las Palmas Studios, all partially
Slide 5: 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 6: 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 7: Consolidated Balance Sheets
Consolidated Balance Sheets In thousands, except share data 6/30/24 12/31/23 (Unaudited) ASSETS Investment in real estate, net $ 6,617,811 $ 6,484,459 Non-real estate property, plant and equipment, net 120,761 118,783 Cash and cash equivalents 78,458 100,391 Restricted cash 21,482 18,765 Accounts re
Slide 8: Consolidated Statements of Operations
Consolidated Statements of Operations Unaudited, in thousands, except per share data Three Months Ended Six Months Ended 6/30/24 6/30/23 6/30/24 6/30/23 REVENUES Office Rental revenues $ 172,596 $ 203,486 $ 344,023 $ 406,143 Service and other revenues 3,443 3,805 7,091 7,781 Total office revenues 17
Slide 9: 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 Six Months Ended 6/30/24 6/30/23 6/30/24 6/30/23 Net loss $ (47,557) $ (31,474) $ (100,912) $ (46,293) Adjustments: Depreciation and amortization—consolidate
Slide 10: 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 Six Months Ended 6/30/24 6/30/23 % Change 6/30/24 6/30/23 % Change Same-store office statistics Number of properties 41 41 41 41 Square feet 11,573
Slide 11: NOI Detail
NOI Detail Three Months Ended June 30, 2024 | Unaudited, in thousands Same-Store Same-Store Non-Same- Non-Same- Office Studio Store Office Store Studio Total REVENUE Cash rent $ 133,390 $ 10,326 $ 7,878 $ 3,803 $ 155,397 Cash tenant recoveries 29,365 212 1,283 — 30,860 Straight-line rent (1,887) 109
Slide 12: Debt Summary & Debt Metrics
Debt Summary & Debt Metrics As of June 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 facilit
Slide 13: 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 $137,085 $400,000 $340,865 $55,576 $456,000 $500,000 $200,000 $422,000 $400,000 $350,000 $259,000 $0 $— 2024 2025 2026 2027 2028 202
Slide 14: 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% 48.1% Unsecured indebtedness to unencumbered asset value (2) ≤ 65% 42.6% Adjusted EBITDA to fixed charges ≥ 1.5x 1.7x Secured indebtedness to tot
Slide 15: Existing Portfolio Summary
Existing Portfolio Summary Unaudited, in thousands, except per share data Three Months Ended 6/30/24 3/31/24 12/31/23 9/30/23 6/30/23 Number of office properties owned 46 46 46 48 50 In-service office square feet 13,858,966 13,852,533 13,853,005 14,437,595 14,507,904 In-service office % leased 80.0
Slide 16: 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 % $ 66,655,770 $ 33,994,443 $ 68.92 West Los Angeles 2 783,311 91.6 92.8 41,22
Slide 17: 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 18: 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) $ 52,740,252 10.2% 2 Amazon 3 2025-2031 990,788 (2) 28,282,036 5.5 3 Netflix, Inc. 3 2031 722,305 (3) 26,180,636 5.1 4 Rio
Slide 19: 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 % 84.3
Slide 20: Office Leasing Activity
Office Leasing Activity Dollars reflected are per square foot Three Months Ended Six Months Ended 6/30/24 6/30/24 Gross Leasing Activity New cash rate $44.12 $42.97 Renewal cash rate $79.37 $58.38 New square feet leased 356,056 649,115 Renewal square feet leased 183,475 399,031 Total square feet lea
Slide 21: 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 3,561,665 Q2-2024 8 83,565
Slide 22: Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters
Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters Q3 2024 Q4 2024 Q1 2025 Q2 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 9,772 $ 63.57 — $
Slide 23: Uncommenced, Backfilled & Expiring Office Leases (continued)
Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters (continued) Note: Definitions for commonly used terms on pages 26-28. (1) Includes DoorDash, Inc. at 901 Market for 50,821 square feet in August 2024. (2) Includes Bank of America at 1455 Market for 68,991 square feet in December 2
Slide 24: 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 25: 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 998,934 51.0 % Sunset Bronson Studios Blackstone
Slide 26: 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 27: 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 28: 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 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Unaudited, in thousands RECONCILIATION OF NET LOSS TO NOI Three Months Ended Six Months Ended 6/30/24 6/30/23 6/30/24 6/30/23 Net loss $ (47,557) $ (31,474) $ (100,912) $ (46,293) Adjustments: Loss from unconsolidated real estate entities 2,481 715 3,224 1,460 Fee income (1,
Slide 30: 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 6/30/24 6/30/23 Net loss $ (47,557) $ (31,474) Interest income—con
Slide 31: 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 6/30/24 6/30/23 Total assets $ 8,352,782 $ 9,105,829 Add: Accumulated depreciation 1,824,042 1,722,
Slide 32: Hudson Pacific Properties
UDSON PACIFIC PROPERTIES HudsonPacificProperties.com
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