Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q2 2023 Earnings Presentation
32 slides from Hudson Pacific Properties's earnings presentation, Aug 2, 2023
Slide 1: Supplemental Information Second Quarter 2023
UDSON CACURIIG PROPERTIES —————— — 1 SUPPLEMENTAL INFORMATION SECOND QUARTER 2023
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, 2023 "We continued to focus on the controllable aspects of our business during the quarter, which included leasing and expense management, given the industry challenges we are working to navigate," said Victor Coleman, Chairman & CEO. "Last month, the na
Slide 4: Executive Summary (continued)
Executive Summary (continued) Three Months Ended June 30, 2023 Financial Results Compared to Second Quarter 2022 • Total revenue of $245.2 million compared to $251.4 million, primarily due to previously communicated vacancies at Skyport Plaza and 10900-10950 Washington and the sales of 6922 Hollywoo
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 6/30/23 12/31/22 (Unaudited) ASSETS Investment in real estate, net $ 7,169,286 $ 7,175,301 Non-real estate property, plant and equipment, net 119,526 130,289 Cash and cash equivalents 109,220 255,761 Restricted cash 18,583 29,970 Accounts r
Slide 8: Consolidated Statements of Operations
Consolidated Statements of Operations Unaudited, in thousands, except share data Three Months Ended Six Months Ended 6/30/23 6/30/22 6/30/23 6/30/22 REVENUES Office Rental revenues $ 203,486 $ 211,836 $ 406,143 $ 418,028 Service and other revenues 3,805 4,408 7,781 9,616 Total office revenues 207,29
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 6/30/23 6/30/22 6/30/23 6/30/22 Net (loss) income $ (31,474) $ 3,546 $ (46,293) $ (4,069) Adjustments: Depreciation and amortization—consoli
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 6/30/23 6/30/22 % Change 6/30/23 6/30/22 % Change Same-store office statistics Number of properties 43 43 43 43 Square feet 12,085
Slide 11: NOI Detail
NOI Detail Three Months Ended June 30, 2023 | Unaudited, in thousands Same-Store Same-Store Non-Same- Non-Same- Office Studio Store Office Store Studio(1) Total REVENUE Cash rent $ 150,405 $ 12,455 $ 12,453 $ 3,281 $ 178,594 Cash tenant recoveries 35,005 230 1,305 — 36,540 Straight-line rent 3,049 4
Slide 12: Debt Summary & Debt Metrics
Debt Summary & Debt Metrics As of June 30, 2023 | Unaudited, in thousands DEBT SUMMARY Outstanding HPP’s Stated Interest Maturity Balance Share Rate Date(1) UNSECURED DEBT Series E notes $ 50,000 $ 50,000 3.66% 9/15/23 Series B notes 259,000 259,000 4.69% 12/16/25 Series D notes 150,000 150,000 3.98
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 $351,186 $800,000 $600,000 $374,957 $400,000 $55,550 $678,000 $456,000 $500,000 $200,000 $343,947 $350,000 $400,000 $259,000 $0 $50,000 2023 2024 2025 2026 202
Slide 14: Debt Covenant Compliance
Debt Covenant Compliance(1) Actual Covenant Performance Unsecured revolving credit facility, term loans and private placement Total liabilities to total asset value ≤ 60% 47.5% Unsecured indebtedness to unencumbered asset value ≤ 60% 53.7% Adjusted EBITDA to fixed charges ≥ 1.5x 2.4x Secured indebte
Slide 15: Existing Portfolio Summary
Existing Portfolio Summary Unaudited, in thousands, except per share data Three Months Ended 6/30/23 3/31/23 12/31/22 9/30/22 6/30/22 Number of office properties owned 50 49 52 53 54 In-service office square feet 14,507,904 14,483,122 14,649,221 14,647,281 14,639,067 In-service office % leased 87.0
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 West Los Angeles 5 1,481,981 97.0 % 98.8 % $ 85,481,615 $ 76,321,409 $ 59.44 Hollywood 5 967,194 100.0 100.0 64,
Slide 17: Office Properties Occupancy Detail
Office Properties Occupancy Detail Submarket Square Feet % Occupied % Leased Los Angeles, California One Westside(1) West Los Angeles 590,403 100.0 % 100.0 % 11601 Wilshire West Los Angeles 499,905 91.2 96.5 Element LA West Los Angeles 284,037 100.0 100.0 3401 Exposition West Los Angeles 63,376 100.
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. 5 2025-2036 1,231,129 (1) $ 78,618,024 14.1% 2 Amazon 3 2023-2031 990,788 (2) 26,164,044 4.7 3 Netflix, Inc. 3 2031 722,305 (3) 25,415,448 4.6 4 R
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 10 559,762 100.0 % 82.9
Slide 20: Office Leasing Activity
Office Leasing Activity Dollars reflected are per square foot Three Months Ended Six Months Ended 6/30/23 6/30/23 Gross Leasing Activity New cash rate $43.23 $46.45 Renewal cash rate $69.94 $60.46 New square feet leased 211,869 360,521 Renewal square feet leased 191,362 386,779 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 2,810,670 Q2-2023 7 27,926
Slide 22: Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters
Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters Q3 2023 Q4 2023 Q1 2024 Q2 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 (1) Los Angeles, California 6,258 $ — — $
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) Total uncommenced square footage consists of space to be occupied by the Company’s management office. (2) Includes Block, Inc. expiration at 1455 Market for
Slide 24: 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 6/30/23
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 1,045,257 51.0 % Sunset Las Palmas Studios Blackstone Hollywood 999,298 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. Net Effective Rent: Weighted average initial annual cash rent, net of annualized concessions (i.e. free rent), tenant improvements and lease commissions.
Slide 29: Non-GAAP Reconciliations
Non-GAAP Reconciliations Unaudited, in thousands RECONCILIATION OF NET (LOSS) INCOME TO NOI Three Months Ended Six Months Ended 6/30/23 6/30/22 6/30/23 6/30/22 Net (loss) income $ (31,474) $ 3,546 $ (46,293) $ (4,069) Adjustments: Loss (income) from unconsolidated real estate entities 715 (1,780) 1,
Slide 30: Non-GAAP Reconciliations (continued)
Non-GAAP Reconciliations (continued) Unaudited, in thousands RECONCILIATIONS OF NET LOSS (INCOME) 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 6/30/22 Net (loss) income $ (31,474) $ 3,546 Inte
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 6/30/23 6/30/22 Total assets $ 9,105,829 $ 9,050,638 Add: Accumulated depreciation 1,722,941 1,486,
Slide 32: Hudson Pacific Properties
PACIFIC PROPERTIES HudsonPacificProperties.com
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