Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q3 2023 Earnings Presentation
33 slides from Hudson Pacific Properties's earnings presentation, Nov 2, 2023
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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 September 30, 2023 "Our leasing activity accelerated once again in the third quarter and while the timeline for tenant decision making remains extended, we've seen a continued uptick in tours and inquiries at our assets into the fourth quarter as return-to-office
Slide 4: Executive Summary (continued)
Executive Summary (continued) Three Months Ended September 30, 2023 Financial Results Compared to Third Quarter 2022 • Total revenue of $231.4 million compared to $260.4 million, primarily due to the sales of 6922 Hollywood, Skyway Landing and Northview Center, previously communicated tenant move-ou
Slide 5: Executive Summary (continued)
Executive Summary (continued) Three Months Ended September 30, 2023 Dividend • The Company's Board of Directors suspended payment of a quarterly dividend on its common stock and declared and paid a dividend on its 4.750% Series C cumulative preferred stock of $0.296875 per share ESG Leadership • Sub
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 9/30/23 12/31/22 (Unaudited) ASSETS Investment in real estate, net $ 7,096,199 $ 7,175,301 Non-real estate property, plant and equipment, net 115,903 130,289 Cash and cash equivalents 75,040 255,761 Restricted cash 19,054 29,970 Accounts re
Slide 9: Consolidated Statements of Operations
Consolidated Statements of Operations Unaudited, in thousands, except per share data Three Months Ended Nine Months Ended 9/30/23 9/30/22 9/30/23 9/30/22 REVENUES Office Rental revenues $ 199,633 $ 208,779 $ 605,776 $ 626,807 Service and other revenues 3,954 4,712 11,735 14,328 Total office revenues
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 Nine Months Ended 9/30/23 9/30/22 9/30/23 9/30/22 Net loss $ (35,752) $ (6,792) $ (82,046) $ (10,861) Adjustments: Depreciation and amortization—consolidated
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 Nine Months Ended 9/30/23 9/30/22 % Change 9/30/23 9/30/22 % Change Same-store office statistics Number of properties 42 42 41 41 Square feet 12,16
Slide 12: NOI Detail
NOI Detail Three Months Ended September 30, 2023 | Unaudited, in thousands Same-Store Same-Store Non-Same- Non-Same- Office Studio Store Office Store Studio(1) Total REVENUE Cash rent $ 154,022 $ 10,252 $ 8,602 $ 2,695 $ 175,571 Cash tenant recoveries 36,890 228 2,024 — 39,142 Straight-line rent (2,
Slide 13: Debt Summary & Debt Metrics
Debt Summary & Debt Metrics As of September 30, 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 fa
Slide 14: 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 $39,154 $400,000 $340,865 $55,576 $670,000 $456,000 $500,000 $200,000 $400,000 $341,827 $350,000 $259,000 $0 2023 2024 2025 2026 202
Slide 15: 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% 49.0% Unsecured indebtedness to unencumbered asset value ≤ 60% 57.7% Adjusted EBITDA to fixed charges ≥ 1.5x 2.1x Secured indebte
Slide 16: Existing Portfolio Summary
Existing Portfolio Summary Unaudited, in thousands, except per share data Three Months Ended 9/30/23 6/30/23 3/31/23 12/31/22 9/30/22 Number of office properties owned 48 50 49 52 53 In-service office square feet 14,437,595 14,507,904 14,483,122 14,649,221 14,647,281 In-service office % leased 83.1
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 West Los Angeles 3 1,374,345 95.1 % 97.7 % $ 78,604,387 $ 69,168,596 $ 60.12 Hollywood 5 967,194 100.0 100.0 64,
Slide 18: Office Properties Occupancy Detail
Office Properties Occupancy Detail Submarket Square Feet % Occupied % Leased Los Angeles, California One Westside West Los Angeles 590,403 100.0 % 100.0 % 11601 Wilshire West Los Angeles 499,905 86.6 93.6 Element LA West Los Angeles 284,037 100.0 100.0 ICON Hollywood 326,792 100.0 100.0 EPIC Hollywo
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. 5 2025-2036 1,231,129 (1) $ 79,662,484 14.9% 2 Amazon 3 2025-2031 990,788 (2) 26,455,894 4.9 3 Netflix, Inc. 3 2031 722,305 (3) 25,506,655 4.8 4 R
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 % 82.6
Slide 21: Office Leasing Activity
Office Leasing Activity Dollars reflected are per square foot Three Months Ended Nine Months Ended 9/30/23 9/30/23 Gross Leasing Activity New cash rate $31.25 $42.85 Renewal cash rate $43.53 $50.89 New square feet leased 102,101 462,622 Renewal square feet leased 417,066 803,845 Total square feet le
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 3,334,936 Q3-2023 8 94,744
Slide 23: Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters
Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters Q4 2023 Q1 2024 Q2 2024 Q3 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 8,563 $ 66.00 6,0
Slide 24: Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters (continued)
Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters (continued) Note: Definitions for commonly used terms on pages 27-29. (1) Includes Nutanix, Inc. expiration at Concourse for 117,001 square feet in May 2024. (2) Includes Door Dash, Inc. at 901 Market for 50,821 square feet in Augu
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 9/30/23
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 999,209 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 Nine Months Ended 9/30/23 9/30/22 9/30/23 9/30/22 Net loss $ (35,754) $ (6,792) $ (82,047) $ (10,861) Adjustments: Loss (income) from unconsolidated real estate entities 759 352 2,219 (1,731) Fee in
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 9/30/23 9/30/22 Net loss $ (35,752) $ (6,792) Interest income—cons
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 9/30/23 9/30/22 Total assets $ 8,986,802 $ 9,320,419 Add: Accumulated depreciation 1,779,599 1,540,
Slide 33: Hudson Pacific Properties
UDSON PACIUFITC PROPERTIES HudsonPacificProperties.com
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