Hudson Pacific Properties Inc. (NYSE:HPP) is one of the best NYSE penny stocks to invest in right now. On November 10, Piper Sandler lowered the firm’s price target on Hudson Pacific to $2.50 from $3 while maintaining a Neutral rating. Q3 2025 showed a split among REITs: some maintained their positive outlooks while others reduced expectations. This period made it clear that earnings growth is a necessity in the said sector. Given the overall underperformance of REITs, Piper Sandler believes that the prim ...

Nov 17, 2025 4:25 PM Eastern Standard Time Hudson Pacific Properties Announces Reverse Stock Split Share LOS ANGELES--(BUSINESS WIRE)--Hudson Pacific Properties, Inc. ("Hudson Pacific" or the "Company") (NYSE: HPP) today announced that it will effect a 1-for-7 reverse stock split (the "Reverse Stock Split") of its common stock, par value $0.01 per share ("Common Stock") that will become effective at 5:00 p.m. Eastern Time on December 1, 2025 (the "Effective Time"). About Hudson Pacific Properties Hudson Pac ...

Financial Performance - Total revenues for Q3 2025 were $186.6 million, a decrease of 6.4% compared to $200.4 million in Q3 2024[24] - Net loss for Q3 2025 was $144.1 million, compared to a net loss of $107.0 million in Q3 2024, representing a 34.6% increase in losses year-over-year[24] - Comprehensive loss for Q3 2025 was $149.5 million, compared to a comprehensive loss of $112.6 million in Q3 2024, indicating a worsening of overall financial performance[26] - For the nine months ended September 30, 2025, Hudson Pacific Properties reported a net loss of $312,124, compared to a net loss of $207,925 for the same period in 2024, reflecting an increase in losses of approximately 50.1%[34] - Total revenues for the nine months ended September 30, 2025, were $575,078, a decrease of 9.1% compared to $632,416 for the same period in 2024[182] Assets and Liabilities - Total assets decreased to $7.8 billion as of September 30, 2025, down from $8.1 billion at the end of 2024, reflecting a 4.1% decline[22] - Total liabilities decreased to $4.3 billion as of September 30, 2025, down from $5.0 billion at the end of 2024, a reduction of 13.1%[22] - The company's total liabilities decreased to $4,310,391 from $4,954,508 at the end of 2024, reflecting a reduction of approximately 13.0%[37] - The total capital of Hudson Pacific Properties rose to $3,433,338 from $3,118,637, an increase of about 10.1%[37] Cash and Liquidity - Cash and cash equivalents increased to $190.4 million from $63.3 million at the end of 2024, indicating a significant improvement in liquidity[22] - Cash provided by operating activities for the nine months ended September 30, 2025, was $61,673 thousand, a decrease of 62.5% compared to $164,495 thousand in 2024[51] - The company’s total cash and cash equivalents and restricted cash at the end of the period was $214,447 thousand, compared to $113,935 thousand at the end of the previous year, reflecting an increase of approximately 88.1%[51] Revenue Segments - Office rental revenues for Q3 2025 were $148.3 million, down 9.0% from $162.9 million in Q3 2024[24] - Studio rental revenues remained relatively stable at $13.6 million in Q3 2025 compared to $13.7 million in Q3 2024[24] - Studio segment revenues for Q3 2025 were $32,038, a decline of 4.2% from $33,451 in Q3 2024[182] Shareholder Information - The weighted average shares of common stock outstanding increased to 451.0 million in Q3 2025 from 141.2 million in Q3 2024, reflecting a significant increase in share count[24] - The company reported a net loss attributable to common unitholders of $138.2 million for the three months ended September 30, 2025, compared to a loss of $100.5 million in 2024[40] - The basic and diluted net loss available to common stockholders for the three months ended September 30, 2025, was $(136,467,000), compared to $(97,918,000) for the same period in 2024[153] Operating Expenses - Operating expenses for Q3 2025 totaled $211.8 million, a decrease of 4.2% from $221.1 million in Q3 2024[24] - The company experienced a total other expenses of $118.9 million for the three months ended September 30, 2025, compared to $84.2 million in the prior year[40] Dividends and Stockholder Equity - The company declared a dividend of $5,047,000 for the three months ended September 30, 2024, compared to $5,047,000 for the previous quarter[32] - As of September 30, 2024, Hudson Pacific Properties, Inc. reported total stockholders' equity of $3,286,312,000, a decrease from $3,395,808,000 as of June 30, 2024[32] Investment and Development - The company owns 20% of the unconsolidated joint venture entity that owns the Bentall Centre property, which is part of its broader investment strategy[54] - The company has five future development properties totaling 2,044,865 square feet, indicating ongoing expansion plans[54] Debt and Financing - Proceeds from unsecured and secured debt amounted to $1,291,000, while payments of unsecured and secured debt were $1,801,467, resulting in net cash provided by financing activities of $117,693[34] - The Company has a total capacity of $795.3 million available under its unsecured revolving credit facility, which can be increased up to $2.0 billion[102] Impairments and Charges - The Company recorded an impairment charge of $18.4 million related to the 625 Second office property during the nine months ended September 30, 2025[75] - The company recognized a loss on deconsolidation of $77.9 million related to Sun Valley Peoria, LLC and Sun Valley Services, LLC during the nine months ended September 30, 2025[64]

Core Insights - The West Coast office market is experiencing a recovery driven by strong demand from tech and AI companies, with significant leasing activity and declining vacancy rates in key areas like San Francisco and Silicon Valley [1][4][5] - Hudson Pacific Properties is positioned to capitalize on this recovery, reporting strong leasing performance and a favorable lease expiration profile, which allows for growth opportunities [4][13][25] - The company has a robust financial position with $1 billion in liquidity and 100% of its debt fixed or capped, providing stability and flexibility for future growth [2][21][26] Leasing and Occupancy Trends - Hudson Pacific Properties achieved over 1.7 million square feet of leasing year-to-date, with a strong third quarter contributing to the best leasing year since 2019 [4][10] - The company reported a sequential increase in occupancy to 75.9%, with positive absorption trends indicating a recovery in the West Coast office market [10][12] - The leasing pipeline is strong, with 2.2 million square feet in proposals, reflecting growing confidence among tenants, particularly in the tech sector [12][13] Financial Performance - Total revenues for the third quarter were $180.6 million, down from $200.4 million year-over-year, primarily due to asset sales and lower occupancy [18] - Funds from Operations (FFO) excluding specified items increased by 17% year-over-year to $16.7 million, driven by improved G&A and studio NOI [19] - The company successfully refinanced significant assets and amended its credit facility, enhancing its capital structure and financial flexibility [20][21] Studio Operations - Demand for studio space remains strong, with California's expanded film and television tax credits driving production activity [6][16] - The company reported a sequential increase in studio occupancy, with Hollywood studios nearing full occupancy [14][15] - The development of new studio facilities, such as Sunset Pier 94, is on track, with strong interest from high-quality productions [16][17] Market Dynamics - Venture capital investment in the U.S. remains robust, with AI accounting for nearly two-thirds of deal value year-to-date, particularly benefiting the San Francisco Bay Area [2][5] - The overall production environment is improving, with a notable increase in inquiries and proposals for available studio space [8][12] - The company is strategically positioned to benefit from the ongoing recovery in both the office and studio markets, with a focus on high-quality assets in innovation hubs [25][26]

Financial Data and Key Metrics Changes - Total revenues for Q3 2025 were $186.6 million, down from $200.4 million in the prior year, primarily due to asset sales and lower occupancy [18] - General and administrative expenses improved to $13.7 million from $19.5 million, a 30% reduction reflecting organizational efficiency measures [18] - Funds from operations (FFO) excluding specified items increased by 17% year-over-year to $16.7 million, or $0.04 per diluted share, compared to $14.3 million, or $0.10 per diluted share in the prior year [18][19] - Same-store cash net operating income (NOI) was $89.3 million, down from $100 million in the prior year, mainly due to lower office occupancy [19] Business Line Data and Key Metrics Changes - The office portfolio ended Q3 2025 at 75.9% occupied, up 80 basis points sequentially, and 76.5% leased, up 30 basis points sequentially [11] - The studio operations saw a trailing 12-month occupancy of 65.8%, a sequential increase of 220 basis points, while Coyote stages were 48.3% leased, up 90 basis points [15] - 75 office leases were executed in Q3, totaling 515,000 sq ft, with 67% being new deals [11] Market Data and Key Metrics Changes - U.S. venture capital investment in Q3 2025 was strong, tracking about 15% above full-year 2024 levels, with AI accounting for nearly two-thirds of the deal value [4][5] - In San Francisco and the Peninsula, leasing accelerated sharply, particularly from tech and AI tenants [5] - Seattle recorded its first decline in availability in nearly four years, driven by AI investments surpassing $1.5 billion [5] Company Strategy and Development Direction - The company is focused on leasing, with a strong emphasis on capturing growth opportunities in the AI and technology sectors [4][24] - The acquisition of a 45% interest in the Hill 7 office property in Seattle is aimed at unlocking value through restructuring and increasing occupancy [9] - The company is evaluating options for the redevelopment of its Washington office property into a mixed-use project, indicating a strategic shift towards residential development [17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the West Coast office market, particularly due to the expansion of AI companies [3][24] - The company anticipates FFO for Q4 2025 to be between $0.01 and $0.05 per diluted share, reflecting expected lower studio NOI due to seasonality [21][22] - Management noted that the current funding environment is one of the strongest since the 2021 peak, which is expected to support future growth [5] Other Important Information - The company has $1 billion in liquidity, with 100% of its debt fixed or capped, providing financial flexibility [20] - The studio business is expected to benefit from California's expanded film and television tax credit, which has already allocated funds to 74 new productions since July [7][8] Q&A Session Summary Question: Update on occupancy trends over the next 12-36 months - Management indicated that they expect to see positive net absorption and improved occupancy trends, with 50% coverage on next year's expirations already in place [29][31] Question: Key milestones for studio recovery - Management highlighted that content spending is increasing, and the new tax credits are expected to drive production growth, particularly in California [34][36] Question: Rents trends across the portfolio - Rents are stabilizing across the portfolio, with improvements noted in San Francisco and Seattle, driven by strong AI demand [40][41] Question: Plans for non-core asset sales - Management confirmed that while there is no immediate pressure to sell, they are evaluating opportunities to dispose of non-core assets as market conditions improve [43][44] Question: Impact of AI on leasing strategies - AI tenants are focused on growth and are seeking high-quality, flexible spaces, which is influencing leasing strategies [59][62]

Core Insights - Hudson Pacific Properties (HPP) reported a revenue of $186.62 million for the quarter ended September 2025, which is a decrease of 6.9% compared to the same period last year [1] - The earnings per share (EPS) for the quarter was $0.04, a significant improvement from -$0.69 in the year-ago quarter, indicating a 100% surprise against the consensus estimate of $0.02 [1] Revenue Breakdown - Office Rental revenues were $148.29 million, falling short of the average estimate of $151.05 million, representing a year-over-year decline of 9% [4] - Office Service and other revenues reached $6.29 million, exceeding the average estimate of $4.65 million, marking a year-over-year increase of 55.9% [4] - Total Studio revenues were $32.04 million, below the average estimate of $34.32 million, reflecting a decrease of 4.2% year over year [4] - Studio Service and other revenues were $18.47 million, compared to the estimated $21.85 million, showing a decline of 6.4% from the previous year [4] - Total Office revenues amounted to $154.58 million, slightly below the average estimate of $155.7 million, with a year-over-year decrease of 7.4% [4] - Studio Rental revenues were reported at $13.57 million, surpassing the average estimate of $12.48 million, with a year-over-year change of -1.1% [4] Stock Performance - Over the past month, Hudson Pacific shares have returned -16.7%, contrasting with the Zacks S&P 500 composite's increase of +1% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Performance - Total revenue decreased to $186.6 million compared to $200.4 million primarily due to asset sales and lower office occupancy[14] - Net loss attributable to common stockholders was $136.5 million or $0.30 per diluted share compared to a net loss of $97.9 million or $0.69 per diluted share mostly attributable to a loss on the deconsolidation of Sunset Glenoaks[14] - Same-store cash NOI decreased by 10.7% to $89.3 million compared to $100.0 million primarily due to lower office occupancy[7] - FFO excluding specified items was $16.7 million or $0.04 per diluted share compared to $14.3 million or $0.10 per diluted share mostly due to general and administrative and interest expense savings and higher studio NOI[14] - AFFO was $12.3 million or $0.03 per diluted share compared to $15.8 million or $0.11 per diluted share mostly due to lower GAAP non-cash revenue partially offset by the items affecting FFO as well as lower recurring capital expenditures[7] Portfolio & Leasing - In-service office portfolio ended the quarter at 75.9% occupied and 76.5% leased up sequentially from 75.1% occupied and 76.2% leased in the second quarter this year[14] - In-service studio portfolio and stages were 64.6% and 65.8% leased respectively over the trailing 12 months up sequentially from 63.0% and 63.6% for the same metrics in the second quarter this year[14] - Executed 75 new and renewal leases totaling 515450 square feet including a 106000-square-foot new lease with an AI company at Page Mill Center in Palo Alto[14] - GAAP and cash rents on new leases signed were 6.3% and 10.0% lower respectively compared to prior levels primarily attributable to several small leases signed in Palo Alto rolling from peak market rents to still healthy rents of approximately $80 per square foot NNN[14] Balance Sheet & Capital Structure - The company has $1 billion of total liquidity comprised of $190.4 million of unrestricted cash and cash equivalents and $795.3 million of undrawn capacity under the unsecured revolving credit facility[7] - HPP's share of net debt to HPP's share of undepreciated book value was 32.2% with 100.0% of debt fixed or capped with a weighted average interest rate of 5.0% and no debt maturities until third quarter 2026[7]

分组1 - Hudson Pacific Properties (HPP) reported quarterly funds from operations (FFO) of $0.04 per share, exceeding the Zacks Consensus Estimate of $0.02 per share, but down from $0.1 per share a year ago, resulting in an FFO surprise of +100.00% [1] - The company posted revenues of $186.62 million for the quarter ended September 2025, missing the Zacks Consensus Estimate by 1.8%, compared to year-ago revenues of $200.39 million [2] - Hudson Pacific has surpassed consensus FFO estimates in all four of the last quarters, while it has only topped consensus revenue estimates once in the same period [2] 分组2 - The stock has underperformed the market, losing about 25.7% since the beginning of the year, while the S&P 500 has gained 15.1% [3] - The company's future stock performance will largely depend on management's commentary during the earnings call and the outlook for FFO [4][6] - The current consensus FFO estimate for the coming quarter is $0.02 on revenues of $191.71 million, and for the current fiscal year, it is $0.15 on revenues of $751.54 million [7] 分组3 - The Zacks Industry Rank indicates that the REIT and Equity Trust - Other industry is currently in the top 34% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Empirical research shows a strong correlation between near-term stock movements and trends in estimate revisions, which can be tracked by investors [5]

Financial Performance - Total revenue for Q3 2025 was $186.6 million, down from $200.4 million in Q3 2024, primarily due to asset sales and lower office occupancy[4] - Net loss attributable to common stockholders was $136.5 million, or $0.30 per diluted share, compared to a net loss of $97.9 million, or $0.69 per diluted share in Q3 2024[4] - Total revenues for the three months ended September 30, 2025, were $186,617, a decrease of 6.9% compared to $200,393 for the same period in 2024[25] - Net loss attributable to common stockholders for the three months ended September 30, 2025, was $136,467, compared to a net loss of $97,918 for the same period in 2024, reflecting an increase in losses of approximately 39.2%[25] - Net loss for the three months ended September 30, 2025, was $144,086, compared to a net loss of $107,013 for the same period in 2024, representing a 34.6% increase in loss year-over-year[26] Funds from Operations (FFO) - FFO, excluding specified items, was $16.7 million, or $0.04 per diluted share, compared to $14.3 million, or $0.10 per diluted share in the same quarter last year[4] - The fourth quarter FFO outlook is projected to be between $0.01 and $0.05 per diluted share[12] - Funds from Operations (FFO) attributable to common stock/unit holders for the three months ended September 30, 2025, was $14,624, up 115.5% from $6,791 in the same period of 2024[26] - FFO per common stock/unit—diluted for the three months ended September 30, 2025, was $0.03, down from $0.05 in the same period of 2024[31] Expenses and Liabilities - General and administrative expenses improved by 30% to $13.7 million compared to $19.5 million in the previous year[4] - Total operating expenses for the three months ended September 30, 2025, were $211,753, a decrease of 4.2% compared to $221,057 for the same period in 2024[25] - Total liabilities decreased to $4,310,391 from $4,954,508, indicating a reduction of about 13.0%[24] - Operating lease liabilities decreased to $350,736 from $380,004, a decline of approximately 7.7%[24] Cash and Liquidity - The company has $1.0 billion of liquidity, consisting of $190.4 million in unrestricted cash and $795.3 million in undrawn capacity under its revolving credit facility[11] - Cash and cash equivalents increased significantly to $190,436 from $63,256, marking a growth of approximately 201.5%[24] Real Estate and Leasing - The company executed 75 new and renewal leases totaling 515,450 square feet, including a significant 106,000-square-foot lease with an AI company[10] - The in-service office portfolio ended the quarter at 75.9% occupied and 76.5% leased, an increase from 75.1% occupied and 76.2% leased in Q2 2025[10] - The company has a leasing pipeline of 2.2 million square feet, with the lowest lease expiration profile in four years, positioning it well for future growth[3] - Rental revenues from office properties for the three months ended September 30, 2025, were $148,290, down 9.0% from $162,908 in the same period last year[25] Asset Management - Total assets decreased to $7,795,790, down from $8,132,239 as of December 31, 2024, representing a decline of approximately 4.1%[24] - The company acquired a 45% ownership interest in the Hill7 office property in Seattle, assuming $45.5 million of the joint venture's debt[6] Operating Metrics - Same-store cash Net Operating Income (NOI) for the three months ended September 30, 2025, was $89,300, down 10.7% from $99,952 in the same period of 2024[32] - Total cash NOI for the three months ended September 30, 2025, was $84,601, compared to $97,463 for the same period in 2024, reflecting a decrease of 13.2%[32] - The company reported a loss from unconsolidated real estate entities of $744 for the three months ended September 30, 2025, compared to a loss of $3,219 in the same period last year[25] Depreciation and Amortization - Depreciation and amortization for the three months ended September 30, 2025, totaled $94,085, compared to $86,672 for the same period in 2024, indicating an increase of 8.1%[32] Stock and Shares - The weighted average shares of common stock outstanding for the three months ended September 30, 2025, were 451,031, compared to 141,232 for the same period in 2024, indicating a significant increase in shares outstanding[25] - The weighted average common stock/units outstanding—diluted for the three months ended September 30, 2025, was 457,085, significantly higher than 145,640 for the same period in 2024[31] Performance Evaluation - Hudson Pacific Properties evaluates performance based on property Net Operating Income (NOI) from continuing operations, which is not a GAAP measure[33] - NOI is calculated as operating revenues minus property-level operating expenses, providing insights into occupancy rates, rental rates, and operating costs[33] - The company believes that cash basis NOI, which excludes straight-line rent and non-cash adjustments, is a useful measure of operating performance for investors[33]

Group 1 - Hudson Pacific Properties Inc. (NYSE:HPP) is considered one of the best stocks under $3 to invest in [1] - Jefferies lowered the price target for Hudson Pacific to $2.40 from $2.50 while maintaining a Hold rating [1][2] - Jefferies identified AI as a key theme influencing future office demand [1][3] Group 2 - Cantor Fitzgerald initiated coverage of Hudson Pacific with an Overweight rating and a price target of $3.50 [3] - The sentiment from Cantor Fitzgerald is part of a broader coverage initiation of US REITs, indicating a lack of enthusiasm for a REIT recovery in 2026 [3] - Cantor Fitzgerald believes the REIT industry is well-positioned over the next 12 to 24 months [3]