Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q3 2019 Earnings Presentation
57 slides from Hudson Pacific Properties's earnings presentation, Oct 30, 2019
Slide 1: Supplemental Information Third Quarter 2019
PAGIETE PROPERTIES SUPPLEMENTAL INFORMATION THIRD QUARTER 2019 REIMAGINING NOW. TO CREATE WHAT'S NEXT.
Slide 2: Forward-Looking Statements
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Forward-Looking Statements This Supplemental Information 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 Act of 19
Slide 3: Table of Contents
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Table of Contents Page Executive Summary, Corporate Data, Executive Management, Board of 4 Directors, Equity Research Coverage and Rating Agencies Financial Information 9 Consolidated Balance Sheets 10 Consolidated Stateme
Slide 4: Executive Summary
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Executive Summary Hudson Pacific Properties acquires, redevelops and develops creative office Studio Highlights and studio properties in the West Coast tech and media epicenters of Los • Trailing 12-month occupancy for the
Slide 5: Corporate Data
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Corporate Data(1) Unaudited, in thousands, except per share data September 30, June 30, March 31, December 31, September 30, 2019 2019 2019 2018 2018 Number of office properties owned 52 53 52 52 51 Office square feet(2) 1
Slide 6: Executive Management
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Executive Management Our Executive Management is comprised of highly seasoned, approachable experts who embrace innovation and always think outside the box. Together, they have decades of experience leading successful publ
Slide 7: Board of Directors
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Board of Directors Our accomplished Directors are committed to sound corporate governance, and ensuring full compliance and accountability to shareholders in accordance with all laws and regulations. We believe that dedica
Slide 8: Equity Research Coverage
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Equity Research Coverage Bank of America Merrill Lynch Mizuho James Feldman Haendel St. Juste (646) 855-5808 (212) 209-9300 Barclays Capital Morgan Stanley Ross Smotrich | Upal Rana Vikram Malhotra (212) 526-2306 | (212) 5
Slide 9: Financial Information
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Financial Information
Slide 10: Consolidated Balance Sheets
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Consolidated Balance Sheets In thousands, except share data September 30, 2019 December 31, 2018 (Unaudited) ASSETS Investment in real estate, net $ 6,320,672 $ 6,363,906 Cash and cash equivalents 56,777 53,740 Restricted
Slide 11: Consolidated Statements of Operations
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Consolidated Statements of Operations Unaudited, in thousands, except share data Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 REVENUES Office Rental(1) $ 179,197 $ 129,963 $ 521,650
Slide 12: Funds from Operations
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Funds from Operations(1) Unaudited, in thousands, except per share data Three Months Ended Quarter To Date September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 NET INCOME (LOSS) $ 62,955 $ 1
Slide 13: Funds from Operations (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Funds from Operations (continued) Unaudited, in thousands, except per share data Nine Months Six Months Three Months Twelve Months Nine Months Ended Ended Ended Ended Ended Year To Date September 30, 2019 June 30, 2019 Mar
Slide 14: Adjusted Funds from Operations
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Adjusted Funds from Operations(1) Unaudited, in thousands Three Months Ended Quarter To Date September 30, 2019 June 30, 2019 March 31, 2019 December 31, 2018 September 30, 2018 FFO $ 79,228 $ 75,478 $ 76,397 $ 78,782 $ 73
Slide 15: Same-Store Property Performance—Consolidated
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Same-Store Property Performance—Consolidated Unaudited, in thousands, except number of properties and square feet SAME-STORE STATISTICS Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 % change 20
Slide 16: Same-Store Property Performance—Consolidated (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Same-Store Property Performance—Consolidated (continued) Unaudited, in thousands, except number of properties and square feet SAME-STORE ANALYSIS—NET OPERATING INCOME (CASH BASIS) Three Months Ended September 30, Nine Mont
Slide 17: Same-Store Property Performance—Company's Share
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Same-Store Property Performance—Company’s Share Unaudited, in thousands, except number of properties and square feet SAME-STORE STATISTICS Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 % change
Slide 18: Same-Store Property Performance—Company's Share (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Same-Store Property Performance—Company’s Share (continued) Unaudited, in thousands, except number of properties and square feet SAME-STORE ANALYSIS—NET OPERATING INCOME (CASH BASIS) Three Months Ended June 30, Nine Months
Slide 19: Net Operating Income Detail (NOI)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Net Operating Income Detail (NOI) Three Months Ended September 30, 2019 | Unaudited, in thousands Same-Store Same-Store Non-Same- Non-Same- Redevelopment Office Studio Store Office Store Studio /Development Lease-Up Sold/O
Slide 20: Net Operating Income Detail (NOI) (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Net Operating Income Detail (NOI) (continued) (1) See pages 27 and 28 for same-store office for the three months ended September 30, 2019. (2) Same-store studio includes Sunset Bronson Studios, Sunset Gower Studios, Sunset
Slide 21: Debt Summary
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Debt Summary As of September 30, 2019 | Unaudited, in thousands Unsecured revolving credit facility Principal Contractual Annual Debt Balance at Undrawn Amount(1) Interest Rate(2)(3) Maturity Date(4) Service(1) Maturity Ca
Slide 22: Debt Summary (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Debt Summary (continued) As of September 30, 2019 | Unaudited, in thousands Secured notes Principal Amount(1) Interest Rate(2) Contractual Maturity Date Annual Debt Service(1) Balance at Maturity Company’s Share Met Park N
Slide 23: Capital Structure
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Capital Structure As of September 30, 2019 | Unaudited, in thousands, except share data and percentages Aggregate Principal Amount or $ Shares/Units Equivalent Unsecured revolving credit facility $ 80,000 Unsecured term lo
Slide 24: Unsecured and Secured Debt Maturities, Composition and Covenant Compliance
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Unsecured and Secured Debt Maturities, Composition and Covenant Compliance Unaudited, in thousands DEBT COMPOSITION DEBT COVENANT COMPLIANCE Weighted Average Actual % of Total Interest Years to Covenant Performance Amount
Slide 25: Debt Maturities, Composition and Covenant Compliance (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Unsecured and Secured Debt Maturities, Composition and Covenant Compliance (continued) (1) Includes the Company’s Share of principal amortization and maturities, based on contractual maturity dates, excluding: (i) in-subst
Slide 26: Operational and Portfolio Information
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Operational and Portfolio Information
Slide 27: In-Service Office Properties
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 In-Service Office Properties(1) Annualized Square Percent Percent Annualized (2) (3) (3) (4) Base Rent Per Submarket Feet Occupied Leased Base Rent Square Foot(4) SAME-STORE(5) Greater Seattle, Washington Northview Center
Slide 28: In-Service Office Properties (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 In-Service Office Properties(1) (continued) Annualized Square Percent Percent Annualized Base Rent Per Submarket Feet(2) Occupied(3) Leased(3) Base Rent(4) Square Foot(4) Del Amo Torrance 113,000 100.0 100.0 3,327,208 29.4
Slide 29: In-Service Office Properties (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 In-Service Office Properties(1) (continued) (1) In-service office excludes the land, redevelopment, development and held for sale properties described on pages 33 and 34. We define lease-up properties as office properties
Slide 30: In-Service Office Properties by Location
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 In-Service Office Properties by Location(1) Square Occupied Percent Leased Percent Annualized Annualized Base Rent Properties Feet(2) Square Feet Occupied(3) Square Feet Leased(3) Base Rent(4) Per Square Foot(4) STABILIZED
Slide 31: In-Service Office Properties by Location (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 In-Service Office Properties by Location(1) (continued) Square Occupied Percent Leased Percent Annualized Annualized Base Rent Properties Feet(2) Square Feet Occupied(3) Square Feet Leased(3) Base Rent(4) Per Square Foot(4
Slide 32: Studio Properties
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Studio Properties Square Percent of Percent Annual Annual Base Rent Per Feet Total Leased Base Rent Leased Square Foot Sunset Gower Studios 531,756 (1) 43.4% 92.2% $ 18,018,999 $ 36.74 Sunset Bronson Studios 308,026 25.2 9
Slide 33: Land Properties
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Land Properties Submarket Square Feet(1) Percent of Total Vancouver, British Columbia Bentall Centre—Development(2) Downtown Vancouver 450,000 16.8% Subtotal 450,000 16.8% Greater Seattle, Washington Washington 1000(3) Den
Slide 34: Redevelopment, Development and Held For Sale Properties
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Redevelopment, Development and Held For Sale Properties(1) Annualized Estimated Occupied Percent Leased Percent Annualized Base Rent Per Submarket Square Feet(2) Square Feet Occupied(3) Square Feet Leased(3) Base Rent(4) S
Slide 35: Under Construction and Future Value Creation Projects
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Under Construction and Future Value Creation Projects Unaudited, in thousands, except square feet Estimated Construction Period Project Costs(1) Estimated Initial Project Total Stabilized Estimated Estimated Estimated Cost
Slide 36: Under Construction and Future Value Creation Projects (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Under Construction and Future Value Creation Projects (continued) (6) Estimated initial stabilized yield on project costs calculated as the quotient of the estimated NOI and our investment in the property once the project
Slide 37: Value Creation Project Images
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Value Creation Project Images—Recently Completed, Under Construction and Planned Fourth & Traction | Redevelopment CUE | Development 450 Alaskan | Development 95 Jackson | Redevelopment Los Angeles (Arts District) Los Ange
Slide 38: Office Tenant Industry Diversification
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Office Tenant Industry Diversification(1) INDUSTRY DIVERSIFICATION TECHNOLOGY DIVERSIFICATION Company’s Share Company’s Share Annualized Annualized Annualized Annualized Base Rent as Base Rent as Base Rent Base Rent Percen
Slide 39: Fifteen Largest Office Tenants
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Fifteen Largest Office Tenants Company’s Share Percent of Percent of Credit Rating(3) Market Lease Total Leased Total Leased Rentable Annualized Annualized Capitalization Tenant(1) Property Expiration Square Feet Square Fe
Slide 40: Fifteen Largest Office Tenants (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Fifteen Largest Office Tenants (continued) (7) Nutanix, Inc. expirations by square footage and property: (i) 189,084 square feet at 1740 Technology, (ii) 108,610 square feet at Metro Plaza, and (iii) 102,421 square feet at
Slide 41: Office Property Leasing Activity
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Office Property Leasing Activity(1) Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Total gross leasing activity Rentable square feet(2) 551,721 2,100,470 Gross new leasing activity Rentable squa
Slide 42: Office Property Leasing Activity (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 (5) GAAP and cash rent growth was muted by the conversion of Github's 92,450-square-foot lease at 275 Brannan and 625 Second in San Francisco upon its renewal from a modified gross to triple net expense recovery structure.
Slide 43: Commenced Office Leases with Non-Recurring Upfront Abatements
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Commenced Office Leases with Non-Recurring Upfront Abatements(1) Square Lease Rent Starting Lease Submarket Feet Start Date Start Date Base Rents(2) Expiration Date Greater Seattle, Washington 450 Alaskan Pioneer Square 57
Slide 44: Uncommenced Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Uncommenced Office Leases—Next Eight Quarters(1)(2) Company’s Share Q4 2019 Q1 2020 Q2 2020 Q4 2019 Q1 2020 Q2 2020 Starting Starting Starting Starting Starting Starting Rent per Rent per Rent per Rent per Rent per Rent pe
Slide 45: Backfilled Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Backfilled Office Leases—Next Eight Quarters(1)(2) Company’s Share Q4 2019 Q1 2020 Q2 2020 Q4 2019 Q1 2020 Q2 2020 Starting Starting Starting Starting Starting Starting Rent per Rent per Rent per Rent per Rent per Rent per
Slide 46: Backfilled Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Backfilled Office Leases—Next Eight Quarters(1)(2) Company’s Share Q3 2020 Q4 2020 Q3 2020 Q4 2020 Starting Starting Starting Starting Rent per SF Rent per SF Rent per SF Rent per SF SF (3) SF (3) SF (3) SF (3) San Francis
Slide 47: Expiring Office Leases—Next Eight Quarters
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Expiring Office Leases—Next Eight Quarters(1) Company’s Share Q4 2019(2) Q1 2020 Q2 2020 Q3 2020 Q4 2019(3) Q1 2020 Q2 2020 Q3 2020 Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/
Slide 48: Expiring Office Leases—Next Eight Quarters (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Expiring Office Leases—Next Eight Quarters(1)(continued) Company’s Share Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring Rent/ Expiring R
Slide 49: Expiring Office Leases—Next Eight Quarters (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Expiring Office Leases—Next Eight Quarters(1) (continued) (6) Expiring rental rates have been converted from CAD to USD using the foreign currency exchange rate as of September 30, 2019. (7) Top three expiring tenants at B
Slide 50: Expiring Office Leases—Annual
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Expiring Office Leases—Annual Company’s Share Percentage Annualized Square Square Percent of of Office Annualized Base Rent Per Number of Footage of Footage of Office Portfolio Base Rent Annualized Lease Square Leases Expi
Slide 51: Definitions and Reconciliations
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Definitions and Reconciliations
Slide 52: Definitions
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Definitions Adjusted Funds from Operations (“AFFO”): Non-GAAP financial measure we believe is a useful supplemental measure of our performance. We compute AFFO by adding to FFO the non-cash compensation expense and the Com
Slide 53: Definitions (continued)
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Definitions (continued) Funds from Operations (“FFO”): Non-GAAP financial measure we believe is a useful supplemental measure of our performance. We calculate FFO in accordance with the White Paper on FFO approved by the B
Slide 54: Reconciliation of Net Income to Net Operating Income
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Reconciliation of Net Income to Net Operating Income Unaudited, in thousands Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net income $ 62,955 $ 20,270 $ 38,883 $ 92,524 Adjustments:
Slide 55: Reconciliation of Net Income to Company's Share of Net Operating Income
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Reconciliation of Net Income to Company’s Share of Net Operating Income Unaudited, in thousands Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Net income $ 62,955 $ 20,270 $ 38,883 $ 9
Slide 56: Total Revenues Components
Hudson Pacific Properties, Inc. Supplemental Information | Third Quarter 2019 Total Revenues Components Unaudited, in thousands Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Office Cash rent $ 137,632 $ 120,010 $ 395,580 $ 356,018 Cash tenant recoveries 28,325
Slide 57: HudsonPacificProperties.com
Los Angeles | Silicon Valley | San Francisco | Seattle | Vancouver HudsonPacificProperties.com
Hudson Pacific Properties — Q3 2019 Earnings Presentation on 6ix