Hudson Pacific Properties, Inc. · NYSE:HPP
Hudson Pacific Properties — Q1 2024 Earnings Presentation
33 slides from Hudson Pacific Properties's earnings presentation, May 2, 2024
Slide 1: Supplemental Information First Quarter 2024
UDSON CACURIC PROPERTIES ‘ie ee eT SUPPLEMENTAL INFORMATION FIRST QUARTER 2024
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 March 31, 2024 "Our office leasing momentum accelerated to start off the year, as we signed over 500,000 square feet of leases in the first quarter. Leveraging our well-positioned portfolio and the strength of our platform, our team is executing on leasing even a
Slide 4: Executive Summary (continued)
Executive Summary (continued) Three Months Ended March 31, 2024 Financial Results Compared to First Quarter 2023 • Total revenue of $214.0 million compared to $252.3 million, with the primary drivers being asset sales, followed by a large tenant vacating space at 1455 Market, and lower occupancy and
Slide 5: Executive Summary (continued)
Executive Summary (continued) Three Months Ended March 31, 2024 Dividend • The Company's Board of Directors reinstated and declared a quarterly dividend on its common stock of $0.05 per share, and declared a quarterly dividend on its 4.750% Series C cumulative preferred stock of $0.296875 per share
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 3/31/24 12/31/23 (Unaudited) ASSETS Investment in real estate, net $ 6,441,809 $ 6,484,459 Non-real estate property, plant and equipment, net 119,750 118,783 Cash and cash equivalents 114,305 100,391 Restricted cash 19,267 18,765 Accounts r
Slide 9: Consolidated Statements of Operations
Consolidated Statements of Operations Unaudited, in thousands, except per share data Three Months Ended 3/31/24 3/31/23 REVENUES Office Rental revenues $ 171,427 $ 202,657 Service and other revenues 3,648 3,976 Total office revenues 175,075 206,633 Studio Rental revenues 13,600 16,253 Service and ot
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 3/31/24 3/31/23 Net loss $ (53,355) $ (14,817) Adjustments: Depreciation and amortization—consolidated 91,854 97,139 Depreciation and amortization—non-real e
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 3/31/24 3/31/23 % Change Same-store office statistics Number of properties 41 41 Square feet 11,572,070 11,572,070 Average % occupied 78.1 % 85.2 %
Slide 12: NOI Detail
NOI Detail Three Months Ended March 31, 2024 | Unaudited, in thousands Same-Store Same-Store Non-Same- Non-Same- Office Studio Store Office Store Studio Total REVENUE Cash rent $ 134,262 $ 10,344 $ 8,052 $ 2,835 $ 155,493 Cash tenant recoveries 29,208 244 1,906 (5) 31,353 Straight-line rent (3,308)
Slide 13: Debt Summary & Debt Metrics
Debt Summary & Debt Metrics As of March 31, 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 facili
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 $800,000 $530,767 $600,000 $136,485 $400,000 $340,865 $55,576 $456,000 $500,000 $200,000 $430,000 $400,000 $350,000 $259,000 $0 $— 2024 2025 2026 2027 2028 202
Slide 15: 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% 47.1% Unsecured indebtedness to unencumbered asset value (2) ≤ 65% 40.7% Adjusted EBITDA to fixed charges ≥ 1.5x 1.8x Secured indebtedness to tot
Slide 16: Existing Portfolio Summary
Existing Portfolio Summary Unaudited, in thousands, except per share data Three Months Ended 3/31/24 12/31/23 9/30/23 6/30/23 3/31/23 Number of office properties owned 46 46 48 50 49 In-service office square feet 13,852,533 13,853,005 14,437,595 14,507,904 14,483,122 In-service office % leased 80.5
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 Hollywood 5 967,194 100.0 % 100.0 % $ 65,537,844 $ 33,424,300 $ 67.76 West Los Angeles 2 784,407 97.0 98.3 41,95
Slide 18: 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 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. 4 2025-2029 640,726 (1) $ 52,625,818 10.1% 2 Amazon 3 2025-2031 990,788 (2) 28,214,335 5.4 3 Netflix, Inc. 3 2031 722,305 (3) 25,777,966 5.0 4 Ube
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 % 81.7
Slide 21: Office Leasing Activity
Office Leasing Activity Dollars reflected are per square foot Three Months Ended 3/31/24 Gross Leasing Activity New cash rate $41.63 Renewal cash rate $39.17 New square feet leased 293,059 Renewal square feet leased 215,556 Total square feet leased 508,615 Leases expired and terminated Contractual e
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 3,495,318 Q1-2024 12 105,33
Slide 23: Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters
Uncommenced, Backfilled & Expiring Office Leases—Next Eight Quarters Q2 2024 Q3 2024 Q4 2024 Q1 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 5,809 $ 18.97 3,9
Slide 24: Uncommenced, Backfilled & Expiring Office Leases (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 3/31/24
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 999,152 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 straight-line annual cash rent, net of annualized tenant improvements and lease commissions. Triple net (NNN) and mo
Slide 30: Non-GAAP Reconciliations
Non-GAAP Reconciliations Unaudited, in thousands RECONCILIATION OF NET LOSS TO NOI Three Months Ended 3/31/24 3/31/23 Net loss $ (53,355) $ (14,817) Adjustments: Loss from unconsolidated real estate entities 743 745 Fee income (1,125) (2,402) Interest expense 44,089 53,807 Interest income (854) (371
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 3/31/24 3/31/23 Net loss $ (53,355) $ (14,817) Interest income—con
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 3/31/24 3/31/23 Total assets $ 8,251,462 $ 9,124,091 Add: Accumulated depreciation 1,778,850 1,648,
Slide 33: Hudson Pacific Properties
UDSON PACIFIC PROPERTIES HudsonPacificProperties.com
Hudson Pacific Properties — Q1 2024 Earnings Presentation on 6ix