UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________ FORM 10-Q ______________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number: 001-34789 (Hudson Pacific Properties, Inc.) Commis ...

Financial Data and Key Metrics Changes - The first quarter 2024 revenue was $214 million, down from $252.3 million in the same quarter last year, primarily due to asset sales and lower occupancy in studio stages [34][36] - First quarter FFO, excluding specified items, was $24.2 million or $0.17 per diluted share, compared to $49.7 million or $0.35 per diluted share in the prior year [34][35] - First quarter AFFO was $28.5 million or $0.19 per diluted share, down from $35 million or $0.24 per diluted share year-over-year [36] Business Line Data and Key Metrics Changes - Office leasing activity accelerated, with over 500,000 square feet of leases signed in Q1, 65% of which were in San Francisco Peninsula and Silicon Valley [21][22] - GAAP rents grew by 6.2%, while cash rents decreased by 5.4% due to competitive rent structures [23] - Studio revenue increased by 36% quarter-over-quarter, driven primarily by Quixote, although overall revenue remains about 30% below pre-strike levels [30][31] Market Data and Key Metrics Changes - Vacancy and negative net absorption in office markets remain high, but demand for new requirements is recovering [6][7] - In Los Angeles, shoot days were down 9% year-over-year, indicating a slower recovery in the film and television industry [13] - The current leasing pipeline includes 1.9 million square feet, with an average requirement size of around 20,000 square feet [25] Company Strategy and Development Direction - The company is focused on opportunistic asset sales to deleverage and strengthen its balance sheet, including the sale of three office assets totaling approximately 900,000 square feet [16] - The company aims to adapt its portfolio to meet the needs of the evolving workforce, with over 70% of its in-service portfolio built or substantially renovated after 2010 [10] - The company is exploring strategic options, including potential spin-offs or roll-ups, to address the volatility in the studio business [63][64] Management's Comments on Operating Environment and Future Outlook - Management noted macroeconomic pressures and the potential for prolonged high interest rates, impacting the office leasing environment [6] - There is limited visibility on production normalization due to upcoming contract expirations, which could affect the Quixote business [39][40] - Management remains optimistic about long-term demand drivers for office space in San Francisco despite current challenges [17] Other Important Information - The company was included in the S&P Sustainability Yearbook and published its sixth annual corporate responsibility report, achieving a 36% reduction in Scope 1 and 2 carbon emissions from the 2018 baseline [18][19] - The company has a total liquidity of $734 million, with $114 million in unrestricted cash and $620 million in undrawn capacity on its credit facility [37] Q&A Session Summary Question: Clarification on full-year guidance withdrawal - Management clarified that they provided Q2 guidance but did not reiterate full-year guidance due to uncertainty in the Quixote business, which is affecting overall performance [51][52] Question: Expectations for Quixote business performance - Management indicated that while the Quixote business is not performing as expected, they still believe in its long-term potential, but normalization is needed for accurate projections [56][57] Question: Impact of upcoming contract negotiations on guidance - Management expressed optimism about the resolution of contract negotiations, which could lead to improved production levels and better visibility for future guidance [66][67] Question: Update on leasing pipeline and occupancy expectations - Management reported that the leasing pipeline remains robust at 1.9 million square feet, with expectations for occupancy to improve in the latter half of the year [80][82]

Hudson Pacific Properties (HPP) reported $214.02 million in revenue for the quarter ended March 2024, representing a year-over-year decline of 15.2%. EPS of $0.17 for the same period compares to -$0.14 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $220.61 million, representing a surprise of -2.98%. The company delivered an EPS surprise of +6.25%, with the consensus EPS estimate being $0.16.While investors closely watch year-over-year changes in headline numbers -- revenue and e ...

Hudson Pacific Properties, Inc. Press Release Hudson Pacific Properties Reports First Quarter 2024 Financial Results – 509,000 Square Feet of Leasing Activity – – Purchased Partner's 45% Interest in 1455 Market – – Provides Second Quarter FFO Outlook and Updates Full-Year Assumptions – LOS ANGELES (May 1, 2024)—Hudson Pacific Properties, Inc. (NYSE: HPP) (the "Company," "Hudson Pacific," or "HPP"), a unique provider of end-to-end real estate solutions for dynamic tech and media tenants, today announced fina ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or For the transition period from_____to_____ Commission file number 001-34789 (Hudson Pacific Properties, Inc.) Commission file number 333-202799-01 (Hudson Pacific Properties, L.P.) Hudson Pacific Properties, Inc. Hudson Pacific Properties, L.P. (Exact name of registrant as specified i ...

EXPLANATORY NOTE [Explanatory Note Summary](index=3&type=section&id=Explanatory%20Note%20Summary) This report consolidates the Form 10-Q filings for Hudson Pacific Properties, Inc. (REIT) and its operating partnership, Hudson Pacific Properties, L.P., to enhance investor understanding and efficiency - The report combines Form 10-Q for **Hudson Pacific Properties, Inc. (REIT)** and **Hudson Pacific Properties, L.P. (operating partnership)** for the period ended **September 30, 2023**[13](index=13&type=chunk) - **Hudson Pacific Properties, Inc.** owned **approximately 97.2%** of the ownership interest in the **operating partnership** as of **September 30, 2023**, and serves as its **sole general partner**[14](index=14&type=chunk) - **Combining the reports offers benefits such as enhancing investor understanding, eliminating duplicative disclosure, and creating time and cost efficiencies**[18](index=18&type=chunk) - **Main differences between the Company and the operating partnership's consolidated financial statements are in non-controlling interest, stockholders' equity, and partners' capital**[16](index=16&type=chunk) PART I—FINANCIAL INFORMATION [ITEM 1. Financial Statements of Hudson Pacific Properties, Inc.](index=5&type=section&id=ITEM%201.%20Financial%20Statements%20of%20Hudson%20Pacific%20Properties%2C%20Inc.) This section provides the unaudited consolidated financial statements for Hudson Pacific Properties, Inc., detailing its balance sheets, operations, comprehensive loss, equity, and cash flows [Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022](index=5&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20September%2030%2C%202023%20%28unaudited%29%20and%20December%2031%2C%202022) This presents the unaudited consolidated balance sheets for the specified periods | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | **Assets** | | | | Investment in real estate, net | $7,096,199 | $7,175,301 | | Cash and cash equivalents | $75,040 | $255,761 | | Total Assets | $8,986,802 | $9,319,140 | | **Liabilities** | | | | Unsecured and secured debt, net | $4,417,020 | $4,585,862 | | Total Liabilities | $5,260,582 | $5,434,450 | | **Equity** | | | | Total Hudson Pacific Properties, Inc. stockholders' equity | $3,178,890 | $3,305,104 | | Total Equity | $3,600,825 | $3,749,831 | - **Total assets decreased by $332.3 million** from **$9,319,140 thousand** at December 31, 2022, to **$8,986,802 thousand** at September 30, 2023[22](index=22&type=chunk) - **Cash and cash equivalents saw a significant decrease from $255,761 thousand to $75,040 thousand**[22](index=22&type=chunk) [Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2023 and 2022](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20%28unaudited%29%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202023%20and%202022) This outlines the unaudited consolidated statements of operations for the specified periods | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total revenues | $231,443 | $260,354 | $728,874 | $756,297 | | Total operating expenses | $228,268 | $217,893 | $684,751 | $635,765 | | Net loss | $(35,752) | $(6,792) | $(82,046) | $(10,861) | | Net loss attributable to common stockholders | $(37,597) | $(17,286) | $(94,188) | $(44,515) | | Basic and Diluted EPS | $(0.27) | $(0.12) | $(0.67) | $(0.31) | - **Total revenues decreased by 11.1%** for the three months ended **September 30, 2023**, and by **3.6%** for the nine months ended **September 30, 2023**, compared to the same periods in **2022**[24](index=24&type=chunk) - **Net loss attributable to common stockholders significantly increased from $(17,286) thousand to $(37,597) thousand** for the three months, and from **$(44,515) thousand to $(94,188) thousand** for the nine months ended **September 30, 2023**[24](index=24&type=chunk) [Consolidated Statements of Comprehensive Loss (unaudited) for the three and nine months ended September 30, 2023 and 2022](index=7&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss%20%28unaudited%29%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202023%20and%202022) This details the unaudited consolidated statements of comprehensive loss for the specified periods | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss | $(35,752) | $(6,792) | $(82,046) | $(10,861) | | Currency translation adjustments | $(5,571) | $(10,052) | $203 | $(18,501) | | Total net unrealized gains (losses) on derivative instruments | $2,958 | $(142) | $15,743 | $2,923 | | Total other comprehensive (loss) income | $(2,613) | $(10,194) | $15,946 | $(15,578) | | Comprehensive loss | $(38,365) | $(16,986) | $(66,100) | $(26,439) | | Comprehensive loss attributable to common stockholders | $(39,832) | $(27,301) | $(78,738) | $(59,820) | - **Comprehensive loss attributable to common stockholders increased significantly from $(27,301) thousand to $(39,832) thousand** for the three months ended **September 30, 2023**, and from **$(59,820) thousand to $(78,738) thousand** for the nine months ended **September 30, 2023**[26](index=26&type=chunk) - **Net unrealized gains on derivative instruments improved from a loss of $(142) thousand to a gain of $2,958 thousand** for the three months, and from a gain of **$2,923 thousand to $15,743 thousand** for the nine months ended **September 30, 2023**[26](index=26&type=chunk) [Consolidated Statements of Equity (unaudited) for the three and nine months ended September 30, 2023 and 2022](index=8&type=section&id=Consolidated%20Statements%20of%20Equity%20%28unaudited%29%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202023%20and%202022) This provides the unaudited consolidated statements of equity or capital for the specified periods | Metric (in thousands) | Balance, Dec 31, 2022 | Balance, Sep 30, 2023 | | :-------------------------------- | :-------------------- | :-------------------- | | Series C Cumulative Redeemable Preferred Stock | $425,000 | $425,000 | | Common Stock Amount | $1,409 | $1,403 | | Additional Paid-in Capital | $2,889,967 | $2,748,309 | | Accumulated Other Comprehensive Income (Loss) | $(11,272) | $4,178 | | Total Hudson Pacific Properties, Inc. Stockholders' Equity | $3,305,104 | $3,178,890 | | Non-controlling Interest—Units in the Operating Partnership | $66,971 | $76,877 | | Total Equity | $3,749,831 | $3,600,825 | - **Total Hudson Pacific Properties, Inc. stockholders' equity decreased by $126,214 thousand** from December 31, 2022, to **September 30, 2023**[29](index=29&type=chunk) - **Accumulated other comprehensive income (loss) shifted from a loss of $(11,272) thousand to an income of $4,178 thousand**, indicating an improvement in comprehensive income components[29](index=29&type=chunk) [Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2023 and 2022](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20%28unaudited%29%20for%20the%20nine%20months%20ended%20September%2030%2C%202023%20and%202022) This presents the unaudited consolidated statements of cash flows for the specified periods | Metric (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $223,038 | $328,549 | | Net cash used in investing activities | $(124,505) | $(335,427) | | Net cash (used in) provided by financing activities | $(290,170) | $14,070 | | Net (decrease) increase in cash and cash equivalents and restricted cash | $(191,637) | $7,192 | | Cash and cash equivalents and restricted cash—end of period | $94,094 | $204,068 | - **Net cash provided by operating activities decreased by $105,511 thousand (32.1%)** for the nine months ended **September 30, 2023**, compared to the same period in **2022**[35](index=35&type=chunk)[37](index=37&type=chunk) - **Net cash used in investing activities decreased by $210,922 thousand (62.9%)**, primarily due to the **Quixote acquisition in 2022 and increased proceeds from real estate sales in 2023**[35](index=35&type=chunk)[37](index=37&type=chunk) - **Net cash from financing activities shifted from a $14,070 thousand inflow in 2022 to a $(290,170) thousand outflow in 2023**, a **significant decrease of $304,240 thousand (2,162.3%)**[35](index=35&type=chunk)[37](index=37&type=chunk) [ITEM 1. Financial Statements of Hudson Pacific Properties, L.P.](index=12&type=section&id=ITEM%201.%20Financial%20Statements%20of%20Hudson%20Pacific%20Properties%2C%20L.P.) This section provides the unaudited consolidated financial statements for Hudson Pacific Properties, L.P., the operating partnership, reflecting its financial performance and position [Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022](index=14&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20September%2030%2C%202023%20%28unaudited%29%20and%20December%2031%2C%202022) This presents the unaudited consolidated balance sheets for the specified periods | Metric | Sep 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | | :--------------------------------- | :-------------------------- | :-------------------------- | | **Assets** | | | | Investment in real estate, net | $7,096,199 | $7,175,301 | | Cash and cash equivalents | $75,040 | $255,761 | | Total Assets | $8,986,802 | $9,319,140 | | **Liabilities** | | | | Unsecured and secured debt, net | $4,417,020 | $4,585,862 | | Total Liabilities | $5,260,582 | $5,434,450 | | **Capital** | | | | Total Hudson Pacific Properties, L.P. partners' capital | $3,255,767 | $3,372,075 | | Total Capital | $3,600,825 | $3,749,831 | - **Total assets for Hudson Pacific Properties, L.P. decreased by $332.3 million** from **$9,319,140 thousand** at December 31, 2022, to **$8,986,802 thousand** at September 30, 2023[41](index=41&type=chunk) - **Total partners' capital decreased by $116,308 thousand** from **$3,372,075 thousand to $3,255,767 thousand** over the nine-month period[41](index=41&type=chunk) [Consolidated Statements of Operations (unaudited) for the three and nine months ended September 30, 2023 and 2022](index=15&type=section&id=Consolidated%20Statements%20of%20Operations%20%28unaudited%29%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202023%20and%202022) This outlines the unaudited consolidated statements of operations for the specified periods | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total revenues | $231,443 | $260,354 | $728,874 | $756,297 | | Total operating expenses | $228,268 | $217,893 | $684,751 | $635,765 | | Net loss | $(35,752) | $(6,792) | $(82,046) | $(10,861) | | Net loss available to common unitholders | $(38,269) | $(17,511) | $(95,788) | $(45,063) | | Basic and Diluted EPS | $(0.27) | $(0.12) | $(0.67) | $(0.31) | - **Total revenues for Hudson Pacific Properties, L.P. decreased by 11.1%** for the three months and **3.6%** for the nine months ended **September 30, 2023**, compared to the prior year periods[44](index=44&type=chunk) - **Net loss available to common unitholders increased from $(17,511) thousand to $(38,269) thousand** for the three months, and from **$(45,063) thousand to $(95,788) thousand** for the nine months ended **September 30, 2023**[44](index=44&type=chunk) [Consolidated Statements of Comprehensive Loss (unaudited) for the three and nine months ended September 30, 2023 and 2022](index=16&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Loss%20%28unaudited%29%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202023%20and%202022) This details the unaudited consolidated statements of comprehensive loss for the specified periods | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss | $(35,752) | $(6,792) | $(82,046) | $(10,861) | | Currency translation adjustments | $(5,571) | $(10,052) | $203 | $(18,501) | | Total net unrealized gains (losses) on derivative instruments | $2,958 | $(142) | $15,743 | $2,923 | | Total other comprehensive (loss) income | $(2,613) | $(10,194) | $15,946 | $(15,578) | | Comprehensive loss | $(38,365) | $(16,986) | $(66,100) | $(26,439) | | Comprehensive loss attributable to partners' capital | $(40,567) | $(27,705) | $(79,898) | $(60,641) | - **Comprehensive loss attributable to partners' capital increased from $(27,705) thousand to $(40,567) thousand** for the three months ended **September 30, 2023**, and from **$(60,641) thousand to $(79,898) thousand** for the nine months ended **September 30, 2023**[46](index=46&type=chunk) - **Total other comprehensive income (loss) improved from a loss of $(10,194) thousand to a loss of $(2,613) thousand** for the three months, and from a loss of **$(15,578) thousand to an income of $15,946 thousand** for the nine months ended **September 30, 2023**[46](index=46&type=chunk) [Consolidated Statements of Capital (unaudited) for the three and nine months ended September 30, 2023 and 2022](index=18&type=section&id=Consolidated%20Statements%20of%20Capital%20%28unaudited%29%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202023%20and%202022) This provides the unaudited consolidated statements of equity or capital for the specified periods | Metric (in thousands) | Balance, Dec 31, 2022 | Balance, Sep 30, 2023 | | :-------------------------------- | :-------------------- | :-------------------- | | Preferred Units | $425,000 | $425,000 | | Common Units | $2,958,535 | $2,826,337 | | Accumulated Other Comprehensive (Loss) Income | $(11,460) | $4,430 | | Total Partners' Capital | $3,372,075 | $3,255,767 | | Non-controlling Interest—Members in Consolidated Real Estate Entities | $377,756 | $345,058 | | Total Capital | $3,749,831 | $3,600,825 | - **Total partners' capital decreased by $116,308 thousand** from **$3,372,075 thousand** at December 31, 2022, to **$3,255,767 thousand** at September 30, 2023[49](index=49&type=chunk)[50](index=50&type=chunk) - **Accumulated other comprehensive income (loss) for the operating partnership shifted from a loss of $(11,460) thousand to an income of $4,430 thousand**[49](index=49&type=chunk)[50](index=50&type=chunk) [Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2023 and 2022](index=20&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20%28unaudited%29%20for%20the%20nine%20months%20ended%20September%2030%2C%202023%20and%202022) This presents the unaudited consolidated statements of cash flows for the specified periods | Metric (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash provided by operating activities | $223,038 | $328,549 | | Net cash used in investing activities | $(124,505) | $(335,427) | | Net cash (used in) provided by financing activities | $(290,170) | $14,070 | | Net (decrease) increase in cash and cash equivalents and restricted cash | $(191,637) | $7,192 | | Cash and cash equivalents and restricted cash—end of period | $94,094 | $204,068 | - **Net cash provided by operating activities decreased by $105,511 thousand (32.1%)** for the nine months ended **September 30, 2023**, compared to the same period in **2022**[55](index=55&type=chunk)[57](index=57&type=chunk) - **Net cash used in investing activities decreased by $210,922 thousand (62.9%)**, primarily due to the **Quixote acquisition in 2022 and increased proceeds from real estate sales in 2023**[55](index=55&type=chunk)[57](index=57&type=chunk) - **Net cash from financing activities shifted from a $14,070 thousand inflow in 2022 to a $(290,170) thousand outflow in 2023**, a **significant decrease of $304,240 thousand (2,162.3%)**[55](index=55&type=chunk)[57](index=57&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=19&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited consolidated financial statements, clarifying reporting basis and key assumptions [1. Organization](index=23&type=section&id=1.%20Organization) This section describes the Company's corporate structure and its real estate portfolio - **Hudson Pacific Properties, Inc. is a Maryland corporation and a fully integrated, self-administered and self-managed real estate investment trust (REIT)**[59](index=59&type=chunk) - The Company's portfolio as of **September 30, 2023**, includes **47 office properties (13.8M sq ft)**, **3 studio properties (1.3M sq ft)**, and **6 future development properties (2.0M sq ft)** in its consolidated portfolio, totaling **56 properties** and **17.0M sq ft**[60](index=60&type=chunk) - The total portfolio, including unconsolidated joint ventures, consists of **61 properties** totaling **approximately 20.6 million square feet** across the United States, Western Canada, and Greater London, United Kingdom[60](index=60&type=chunk) [2. Summary of Significant Accounting Policies](index=23&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This outlines the significant accounting policies used in preparing the financial statements - The **financial statements are prepared in accordance with GAAP** for interim financial information, with certain disclosures condensed or excluded[62](index=62&type=chunk) - The **Company consolidates entities it controls through majority ownership or voting rights**, including **13 out of 20** identified **Variable Interest Entities (VIEs)** as of **September 30, 2023**[68](index=68&type=chunk)[69](index=69&type=chunk) - **Revenue streams include rental revenues, tenant recoveries, ancillary revenues, other revenues, sale of real estate, management fee income, and management services reimbursement income**[82](index=82&type=chunk) - **Goodwill is tested for impairment at least annually**, or more frequently if indicators arise, with **no impairment identified** during the three and nine months ended **September 30, 2023**[91](index=91&type=chunk)[94](index=94&type=chunk) [3. Business Combinations](index=29&type=section&id=3.%20Business%20Combinations) This details the Company's business acquisition activities, including consideration and goodwill recognition - On **August 31, 2022**, the **Company acquired 100% of Quixote**, a media content production equipment rental business, for a total consideration of **$359,098 thousand**[97](index=97&type=chunk) | Quixote Acquisition Date Fair Value (in thousands) | Amount | | :--------------------------------- | :----- | | Cash | $199,098 | | Seller note payable | $160,000 | | Total consideration | $359,098 | - **Goodwill of $153,409 thousand was recognized from the Quixote acquisition**, allocated to the studio reporting unit, attributable to expected synergies and the assembled workforce[100](index=100&type=chunk) [4. Investment in Real Estate](index=31&type=section&id=4.%20Investment%20in%20Real%20Estate) This provides a breakdown of the Company's real estate investments and related activities | Investment in Real Estate (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------------- | :----------- | :----------- | | Land | $1,377,970 | $1,397,714 | | Building and improvements | $6,370,018 | $6,342,851 | | Tenant improvements | $894,595 | $868,193 | | Property under development | $179,890 | $98,175 | | Total Investment in Real Estate, at cost | $8,831,914 | $8,716,572 | - The **Company had no acquisitions of real estate** during the three and nine months ended **September 30, 2023**[103](index=103&type=chunk) - During the nine months ended **September 30, 2023**, the **Company disposed of Skyway Landing, 604 Arizona, and 3401 Exposition properties for total sales proceeds of $174.5 million**, recognizing a **gain on sale of $23.154 million**[109](index=109&type=chunk)[277](index=277&type=chunk)[305](index=305&type=chunk) [5. Non-Real Estate Property, Plant and Equipment, net](index=32&type=section&id=5.%20Non-Real%20Estate%20Property%2C%20Plant%20and%20Equipment%2C%20net) This details the Company's non-real estate property, plant, and equipment, net of depreciation | Non-Real Estate Property, Plant and Equipment (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :----------------------------------------------------------- | :----------- | :----------- | | Trailers | $71,746 | $68,973 | | Production equipment | $36,960 | $36,019 | | Trucks and other vehicles | $20,921 | $20,306 | | Total Non-real estate property, plant and equipment, net | $115,903 | $130,289 | - **Non-real estate property, plant and equipment, net, decreased by $14,386 thousand** from **$130,289 thousand** at December 31, 2022, to **$115,903 thousand** at September 30, 2023[111](index=111&type=chunk) - **No impairment charges were recognized for non-real estate property, plant and equipment** during the three and nine months ended **September 30, 2023 and 2022**[111](index=111&type=chunk) [6. Investment in Unconsolidated Real Estate Entities](index=33&type=section&id=6.%20Investment%20in%20Unconsolidated%20Real%20Estate%20Entities) This outlines the Company's investments in unconsolidated joint ventures and related financial information - The **Company holds ownership interests in unconsolidated joint ventures including Sunset Waltham Cross Studios (35%)**, Sunset Glenoaks Studios (**50%**), Bentall Centre (**20%**), and Sunset Pier **94 Studios (25.6% economic interest)**[112](index=112&type=chunk)[115](index=115&type=chunk) - The **Company's maximum exposure to these joint ventures is limited to its investment and guarantees provided for their indebtedness**, such as **$98.4 million** at Bentall Centre and **$26 thousand** at Sunset Pier **94 Studios**[114](index=114&type=chunk)[116](index=116&type=chunk) | Combined Unconsolidated Joint Ventures (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :---------------------------------------------------- | :----------- | :----------- | | Total Assets | $1,315,554 | $1,156,318 | | Total Liabilities | $637,612 | $577,012 | | Total Capital | $677,942 | $579,306 | | Combined Unconsolidated Joint Ventures (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :---------------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenues | $18,478 | $18,515 | $56,220 | $64,962 | | Net (Loss) Income | $(3,949) | $(1,636) | $(10,884) | $9,160 | [7. Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net](index=34&type=section&id=7.%20Deferred%20Leasing%20Costs%20and%20Intangible%20Assets%2C%20net%20and%20Intangible%20Liabilities%2C%20net) This details the Company's deferred leasing costs, intangible assets, and intangible liabilities | Deferred Leasing Costs and Intangible Assets, net (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :--------------------------------------------------------------- | :----------- | :----------- | | Deferred leasing costs and in-place lease intangibles, net | $167,183 | $187,264 | | Customer relationships, net | $75,041 | $85,554 | | Trade name | $37,200 | $37,200 | | Total Deferred Leasing Costs and Intangible Assets, net | $359,870 | $393,842 | | Intangible Liabilities, net | $29,247 | $34,091 | - **Deferred leasing costs and intangible assets, net, decreased by $33,972 thousand** from December 31, 2022, to **September 30, 2023**[120](index=120&type=chunk) - The **Company recognized amortization related to deferred leasing costs and intangibles**, with total amortization for customer relationships being **$(10,512) thousand** for the nine months ended **September 30, 2023**[121](index=121&type=chunk) - During the nine months ended **September 30, 2022**, the **Company recognized an $8.5 million impairment of the Zio trade name due to rebranding**[124](index=124&type=chunk) [8. Receivables](index=35&type=section&id=8.%20Receivables) This provides a breakdown of the Company's various receivable balances - **Accounts receivable, net, was $19.330 million** as of **September 30, 2023**, compared to **$16.820 million** as of December 31, 2022[22](index=22&type=chunk) - **Straight-line rent receivables, net, increased to $290.938 million** as of **September 30, 2023**, from **$279.910 million** as of December 31, 2022[22](index=22&type=chunk) [9. Prepaid Expenses and Other Assets, net](index=36&type=section&id=9.%20Prepaid%20Expenses%20and%20Other%20Assets%2C%20net) This details the Company's prepaid expenses and other assets | Prepaid Expenses and Other Assets, net (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :---------------------------------------------------- | :----------- | :----------- | | Non-real estate investments | $48,833 | $47,329 | | Interest rate derivative assets | $19,559 | $9,292 | | Prepaid insurance | $17,422 | $6,530 | | Total Prepaid Expenses and Other Assets, net | $119,494 | $98,837 | - **Prepaid expenses and other assets, net, increased by $20,657 thousand** from December 31, 2022, to **September 30, 2023**[129](index=129&type=chunk) - The **Company recognized an unrealized loss of $2.2 million** on non-real estate investments and **$0.1 million** on stock purchase warrants for the three and nine months ended **September 30, 2023**[130](index=130&type=chunk)[131](index=131&type=chunk) [10. Debt](index=37&type=section&id=10.%20Debt) This outlines the Company's debt structure, including unsecured and secured borrowings and compliance with covenants | Debt (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------------- | :----------- | :----------- | | Unsecured debt | $2,635,000 | $2,660,000 | | Secured debt | $1,798,118 | $1,950,088 | | Joint venture partner debt | $66,136 | $66,136 | | Total Unsecured and Secured Debt, net | $4,417,020 | $4,585,862 | - **Total unsecured and secured debt, net, decreased by $168,842 thousand** from December 31, 2022, to **September 30, 2023**[132](index=132&type=chunk) - The **Company repaid $110.0 million Series A notes** in January 2023, **settled the Quixote note for $150.0 million (a $10.0 million discount)** in April 2023, and **repaid $50.0 million Series E notes** in September 2023[139](index=139&type=chunk)[141](index=141&type=chunk) - The **operating partnership was in compliance with its financial covenants as of September 30, 2023**, with **key ratios like Total liabilities to total asset value at 49.0% (covenant ≤ 60%)**[145](index=145&type=chunk)[146](index=146&type=chunk) [11. Derivatives](index=40&type=section&id=11.%20Derivatives) This describes the Company's use of derivative instruments for hedging interest rate risk - The **Company uses derivatives (interest rate caps and swaps) to hedge interest rate risk, classified as Level 2 in the fair value hierarchy**[150](index=150&type=chunk)[151](index=151&type=chunk) | Derivative Instrument | Type | Notional Amount (in thousands) | Fair Value Assets (Liabilities) Sep 30, 2023 | | :-------------------- | :-------- | :----------------------------- | :------------------------------------------- | | Hollywood Media Portfolio | Cap | $1,100,000 | $1,010 | | 1918 Eighth | Swap | $172,865 | $3,706 | | Hollywood Media Portfolio | Swap | $351,186 | $11,754 | | Total | | | $17,338 | - As of **September 30, 2023**, the **Company expects $8.6 million** of unrealized gain from cash flow hedges to be **reclassified as a reduction to interest expense** in the next **12 months**[154](index=154&type=chunk) [12. Income Taxes](index=40&type=section&id=12.%20Income%20Taxes) This details the Company's income tax position, including REIT status and deferred tax assets - **Hudson Pacific Properties, Inc. has elected to be taxed as a REIT, generally exempting it from corporate-level income tax on distributed earnings**[155](index=155&type=chunk) - The **Company recognized an income tax benefit of $0.4 million** for the three months ended **September 30, 2023**, and a provision of **$0.7 million** for the nine months ended **September 30, 2023**[158](index=158&type=chunk) - As of **September 30, 2023**, the **Company had a net deferred tax asset of $4.8 million**, net of valuation allowance, and **no liability for uncertain tax positions**[159](index=159&type=chunk)[160](index=160&type=chunk) [13. Future Minimum Rents and Lease Payments](index=41&type=section&id=13.%20Future%20Minimum%20Rents%20and%20Lease%20Payments) This presents the Company's future minimum base rents and lease payment obligations | Year Ended | Future Minimum Base Rents (in thousands) | | :----------- | :--------------------------------------- | | Remaining 2023 | $157,835 | | 2024 | $608,532 | | 2025 | $515,865 | | Thereafter | $1,390,474 | | TOTAL | $3,540,683 | | Year | Future Minimum Lease Payments (in thousands) | | :--- | :------------------------------------------- | | Remaining 2023 | $10,115 | | 2024 | $41,275 | | 2025 | $40,514 | | Thereafter | $558,138 | | Total operating lease payments | $725,252 | | Present Value of Operating Lease Liabilities | $393,773 | - The **weighted average remaining lease term for the Company's operating leases as a lessee was 22 years** as of **September 30, 2023**[80](index=80&type=chunk) [14. Fair Value of Financial Instruments](index=42&type=section&id=14.%20Fair%20Value%20of%20Financial%20Instruments) This provides fair value measurements for the Company's financial instruments, categorized by valuation levels - The **Company classifies fair value measurements into Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)**[167](index=167&type=chunk) | Financial Instrument (in thousands) | Fair Value Sep 30, 2023 | Fair Value Dec 31, 2022 | | :---------------------------------- | :---------------------- | :---------------------- | | Interest rate derivative assets | $19,559 | $9,292 | | Interest rate derivative liabilities | $(2,221) | $0 | | Earnout liability | $(6,283) | $(9,300) | - The **earnout liability, a Level 3 item, decreased from $(9,300) thousand to $(6,283) thousand**, resulting in a **remeasurement gain of $3.0 million** for the nine months ended **September 30, 2023**[171](index=171&type=chunk) | Debt (in thousands) | Carrying Value Sep 30, 2023 | Fair Value Sep 30, 2023 | Carrying Value Dec 31, 2022 | Fair Value Dec 31, 2022 | | :------------------ | :-------------------------- | :---------------------- | :-------------------------- | :---------------------- | | Unsecured debt | $2,635,000 | $2,200,793 | $2,660,000 | $2,364,871 | | Secured debt | $1,798,118 | $1,776,417 | $1,950,088 | $1,927,297 | [15. Stock-Based Compensation](index=44&type=section&id=15.%20Stock-Based%20Compensation) This details the Company's stock-based compensation plans and related expenses - The **Company's 2010 Incentive Plan and PSU Plan allow for grants of restricted stock, restricted stock units, and operating partnership performance units to employees and non-employee directors**[175](index=175&type=chunk)[178](index=178&type=chunk) | Stock Compensation (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Expensed stock compensation | $5,540 | $6,494 | $17,087 | $17,816 | | Capitalized stock compensation | $712 | $894 | $2,066 | $2,683 | | Total Stock Compensation | $6,252 | $7,388 | $19,153 | $20,499 | - **Total stock compensation decreased by $1,136 thousand** for the three months and **$1,346 thousand** for the nine months ended **September 30, 2023**, compared to the same periods in **2022**[179](index=179&type=chunk) [16. Earnings Per Share](index=45&type=section&id=16.%20Earnings%20Per%20Share) This outlines the calculation of basic and diluted earnings per share for the Company and its operating partnership - **Basic and diluted earnings per share for Hudson Pacific Properties, Inc. were $(0.27)** for the three months and **$(0.67)** for the nine months ended **September 30, 2023**[182](index=182&type=chunk) - **Basic and diluted earnings per unit for Hudson Pacific Properties, L.P. were $(0.27)** for the three months and **$(0.67)** for the nine months ended **September 30, 2023**[184](index=184&type=chunk) - **Both basic and diluted EPS/EPU calculations yielded the same amounts** for the periods presented, indicating **no dilutive effect from outstanding instruments**[181](index=181&type=chunk)[183](index=183&type=chunk) [17. Redeemable Non-controlling Interest](index=46&type=section&id=17.%20Redeemable%20Non-controlling%20Interest) This details the Company's redeemable non-controlling interests in its operating partnership and consolidated entities - As of **September 30, 2023**, there were **392,598 Series A preferred units** of the operating partnership not owned by the Company, entitled to **6.25% preferential distributions**[185](index=185&type=chunk)[186](index=186&type=chunk) - **Redeemable non-controlling interests in consolidated real estate entities include interests in the HPP-MAC JV (75% Company interest) and the Ferry Building property JV (55% Company interest), both with put rights that are not currently redeemable**[187](index=187&type=chunk)[188](index=188&type=chunk) | Redeemable Non-controlling Interests (in thousands) | Beginning of Period Dec 31, 2022 | End of Period Sep 30, 2023 | | :-------------------------------------------------- | :------------------------------- | :------------------------- | | Series A Redeemable Preferred Units | $9,815 | $9,815 | | Consolidated Real Estate Entities | $125,044 | $115,580 | [18. Equity](index=47&type=section&id=18.%20Equity) This provides an overview of the Company's equity structure, including accumulated other comprehensive income | Accumulated Other Comprehensive (Loss) Income (AOCI) (in thousands) | Balance at Dec 31, 2022 | Balance at Sep 30, 2023 | | :------------------------------------------------------------------ | :---------------------- | :---------------------- | | Hudson Pacific Properties, Inc. AOCI | $(11,272) | $4,178 | | Hudson Pacific Properties, L.P. AOCI | $(11,460) | $4,430 | - The **Company's ownership interest in the operating partnership was 98.2%** as of **September 30, 2023**, down from **98.5%** at December 31, 2022[196](index=196&type=chunk) - The **Company temporarily suspended its quarterly common stock dividend in September 2023, affecting common unit and performance unit dividends as well**[203](index=203&type=chunk) - The **Company repurchased $1.4 million** of common stock during the nine months ended **September 30, 2023**, under its **$250.0 million share repurchase program**, with **$214.7 million repurchased cumulatively**[198](index=198&type=chunk) [19. Segment Reporting](index=49&type=section&id=19.%20Segment%20Reporting) This presents financial information by the Company's operating segments, office and studio properties - The **Company reports in two segments: office properties and studio properties, with performance evaluated based on Net Operating Income (NOI)**[206](index=206&type=chunk) | Segment Profit (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :---------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Office segment profit | $123,066 | $135,151 | $386,169 | $410,606 | | Studio segment (loss) profit | $(3,799) | $20,175 | $7,785 | $48,805 | | Total Segment Profit | $119,267 | $155,326 | $393,954 | $459,411 | - **Total segment profit decreased by $36,059 thousand (23.2%)** for the three months and **$65,457 thousand (14.2%)** for the nine months ended **September 30, 2023**, compared to the prior year periods[208](index=208&type=chunk) - **Studio NOI decreased significantly due to a slowdown in production rentals activity caused by the Writers Guild of America (WGA) and Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) strikes**[264](index=264&type=chunk)[292](index=292&type=chunk) [20. Related Party Transactions](index=51&type=section&id=20.%20Related%20Party%20Transactions) This details transactions between the Company and its related parties, including unconsolidated joint ventures - The **Company recognized $1.0 million and $3.1 million in management services reimbursement income** from unconsolidated real estate entities for the three and nine months ended **September 30, 2023**, respectively[210](index=210&type=chunk) - **Related rental expense from operating lease agreements with an unconsolidated joint venture was $0.3 million and $0.8 million** for the three and nine months ended **September 30, 2023**, respectively[211](index=211&type=chunk) [21. Commitments and Contingencies](index=51&type=section&id=21.%20Commitments%20and%20Contingencies) This outlines the Company's various financial commitments and potential contingent liabilities - The **Company has an aggregate commitment of $51.0 million** to non-real estate funds, with **$13.7 million remaining to be contributed** as of **September 30, 2023**[212](index=212&type=chunk) - As of **September 30, 2023**, the **Company had $3.1 million** in outstanding letters of credit and **$170.3 million** in commitments related to construction agreements for development activities[214](index=214&type=chunk)[215](index=215&type=chunk) - **Management believes the ultimate resolution of all legal proceedings will not have a material adverse effect on the Company's financial position or results of operations**[213](index=213&type=chunk) [22. Supplemental Cash Flow Information](index=52&type=section&id=22.%20Supplemental%20Cash%20Flow%20Information) This provides additional details on cash flow activities not fully captured in the main cash flow statement | Supplemental Cash Flow Information (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :------------------------------------------------ | :-------------------------- | :-------------------------- | | Cash paid for interest, net of capitalized interest | $134,478 | $68,821 | | Accounts payable and accrued liabilities for real estate investments | $116,478 | $181,689 | | Lease liabilities recorded in connection with right-of-use assets | $2,117 | $94,447 | - **Cash paid for interest, net of capitalized interest, increased by $65,657 thousand** for the nine months ended **September 30, 2023**, compared to the same period in **2022**[216](index=216&type=chunk) | Cash and Cash Equivalents and Restricted Cash (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------------------------------------------------- | :-------------------------- | :-------------------------- | | Beginning of Period | $285,731 | $196,876 | | End of Period | $94,094 | $204,068 | [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial performance, liquidity, and capital resources [Forward-looking Statements](index=53&type=section&id=Forward-looking%20Statements) This section contains cautionary statements regarding forward-looking information and associated risks - This section contains **cautionary statements regarding forward-looking statements**, emphasizing that **actual results may vary materially due to various risks and uncertainties**[218](index=218&type=chunk) - **Key risks include adverse economic or real estate developments, tenant defaults, interest rate fluctuations, financing difficulties, failure to maintain REIT status, loss of key personnel, and natural disasters**[219](index=219&type=chunk)[224](index=224&type=chunk) [Executive Summary](index=54&type=section&id=Executive%20Summary) This provides a high-level overview of the Company's portfolio, operational performance, and key financial highlights - As of **September 30, 2023**, the **Company's portfolio included 15.3 million square feet of office properties, 1.7 million square feet of studio properties, and 3.6 million developable square feet for future development**[222](index=222&type=chunk) - The **in-service office portfolio was 83.1% leased**, and **same-store studio properties were 83.5% leased** for the **12 months** ended **September 30, 2023**[223](index=223&type=chunk) | Portfolio Segment | Number of Properties | Rentable Square Feet | Percent Leased | | :---------------- | :------------------- | :------------------- | :------------- | | Total in-service office | 45 | 14,437,595 | 83.1% | | Same-store studio | 3 | 1,231,335 | 83.5% | | Total | 61 | 20,646,441 | | [Overview](index=55&type=section&id=Overview) This section provides an overview of the Company's property portfolio, development activities, and strategic initiatives - The **Company had no business or property acquisitions** during the three and nine months ended **September 30, 2023**[232](index=232&type=chunk)[233](index=233&type=chunk) - During the nine months ended **September 30, 2023**, the **Company sold Skyway Landing, 604 Arizona, and 3401 Exposition properties for total proceeds of $174.5 million**[234](index=234&type=chunk) | Project Type | Property | Estimated Square Feet | Estimated Completion Date | | :------------- | :---------------------- | :-------------------- | :------------------------ | | Under Construction | Sunset Glenoaks Studios | 241,000 | Q4-2023 | | Under Construction | Washington 1000 | 546,000 | Q1-2024 | | Under Construction | Sunset Pier 94 Studios | 232,000 | Q4-2025 | | Future Development | Sunset Las Palmas Studios—Development | 617,581 | TBD | | Future Development | Sunset Waltham Cross Studios | 1,167,347 | TBD | - **Total square footage under construction and future development is 4,602,589 square feet**[235](index=235&type=chunk) [Financings](index=59&type=section&id=Financings) This details the Company's financing activities, including debt borrowings, repayments, and credit facilities - During the nine months ended **September 30, 2023**, there were **$135.0 million of net borrowings on the unsecured revolving credit facility**[248](index=248&type=chunk) - The **Company repaid its $110.0 million Series A notes** in January 2023 and its **$50.0 million Series E notes** in September 2023[249](index=249&type=chunk)[251](index=251&type=chunk) - In April 2023, the **Quixote note was settled for $150.0 million**, resulting in a **$10.0 million discount and gain on extinguishment of debt**[249](index=249&type=chunk) [Historical Results of Operations](index=60&type=section&id=Historical%20Results%20of%20Operations) This provides a detailed analysis of the Company's revenues, expenses, and net income over historical periods - **Net loss increased by $28.960 million (426.4%)** for the three months and **$71.185 million (655.4%)** for the nine months ended **September 30, 2023**, compared to the same periods in **2022**[254](index=254&type=chunk)[285](index=285&type=chunk) | NOI (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :----------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total NOI | $119,267 | $155,326 | $393,954 | $459,411 | | Same-store NOI | $124,135 | $133,365 | $386,755 | $397,905 | | Non-same-store NOI | $(4,868) | $21,961 | $7,199 | $61,506 | - **Total NOI decreased by $36.059 million (23.2%)** for the three months and **$65.457 million (14.2%)** for the nine months ended **September 30, 2023**, primarily due to a **$26.8 million decrease in non-same-store NOI** and a **$9.2 million decrease in same-store NOI**[263](index=263&type=chunk)[291](index=291&type=chunk) - **Studio NOI decreased significantly due to a slowdown in production rentals activity caused by the Writers Guild of America (WGA) and Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA) strikes**[264](index=264&type=chunk)[292](index=292&type=chunk) [Liquidity and Capital Resources](index=74&type=section&id=Liquidity%20and%20Capital%20Resources) This discusses the Company's cash position, credit facilities, and ability to meet its financial obligations - The **Company had $75.0 million of cash and cash equivalents** at **September 30, 2023**[313](index=313&type=chunk) - As of **September 30, 2023**, the **Company had $520.0 million drawn on its $1.0 billion unsecured revolving credit facility** and **$324.6 million drawn on its $414.6 million construction loan for One Westside and Westside Two**[316](index=316&type=chunk) - **Net cash provided by operating activities decreased by $105.5 million (32.1%)** for the nine months ended **September 30, 2023**, primarily due to the **WGA and SAG-AFTRA strikes and property sales**[324](index=324&type=chunk) - **Net cash used in financing activities increased by $304.2 million (2,162.3%) to $290.2 million used**, primarily due to decreased debt proceeds and increased debt payments, partially offset by reduced share repurchases and dividends[326](index=326&type=chunk) [Off-Balance Sheet Arrangements](index=77&type=section&id=Off-Balance%20Sheet%20Arrangements) This outlines the Company's off-balance sheet obligations, primarily related to joint venture indebtedness | Joint Venture Indebtedness (in thousands) | Principal Amount | HPP's Share | | :---------------------------------------- | :--------------- | :---------- | | Bentall Centre | $491,763 | $98,353 | | Sunset Glenoaks Studios | $78,308 | $39,154 | | Sunset Pier 94 Studios | $100 | $26 | - The **Bentall Centre loan was amended subsequent to September 30, 2023, extending its maturity to July 1, 2027**, and modifying the interest rate[327](index=327&type=chunk) - **Sunset Glenoaks Studios has a construction loan with a total capacity of $100.6 million**, with **$22.3 million undrawn** as of **September 30, 2023**[328](index=328&type=chunk) [Critical Accounting Policies](index=77&type=section&id=Critical%20Accounting%20Policies) This describes the key accounting policies that require significant management judgment and estimates - The **Company's financial statements rely on estimates and judgments, such as property valuations and tax reassessments, which are inherently subjective and can materially impact reported amounts**[330](index=330&type=chunk) - **Further details on critical accounting policies are provided in Note 2 to the Consolidated Financial Statements**[331](index=331&type=chunk) [Non-GAAP Supplemental Financial Measure: Funds From Operations](index=78&type=section&id=Non-GAAP%20Supplemental%20Financial%20Measure%3A%20Funds%20From%20Operations) This defines and reconciles Funds From Operations (FFO), a key non-GAAP metric for REIT performance - **Funds From Operations (FFO) is calculated in accordance with NAREIT's White Paper, excluding gains/losses from sales of depreciable real estate and impairment write-downs, plus real estate-related depreciation and amortization**[332](index=332&type=chunk) - **FFO is considered a useful supplemental measure for evaluating operating performance and comparing to other REITs, but it does not reflect depreciation, amortization, or capital expenditures**[333](index=333&type=chunk)[335](index=335&type=chunk) | FFO (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss | $(35,752) | $(6,792) | $(82,046) | $(10,861) | | FFO to Common Stockholders and Unitholders | $26,141 | $64,423 | $116,851 | $203,862 | - **FFO attributable to common stockholders and unitholders decreased by $38,282 thousand (59.4%)** for the three months and **$87,011 thousand (42.7%)** for the nine months ended **September 30, 2023**[336](index=336&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to market risk disclosures from the annual report, noting no material changes - **No material changes to the quantitative and qualitative disclosures about market risk have occurred** for the nine months ended **September 30, 2023**, compared to the **2022 Annual Report on Form 10-K**[338](index=338&type=chunk) [ITEM 4. Controls and Procedures](index=79&type=section&id=ITEM%204.%20Controls%20and%20Procedures) This confirms the effectiveness of the Company's disclosure controls and internal control over financial reporting - The **Chief Executive Officer and Chief Financial Officer concluded that Hudson Pacific Properties, Inc.'s disclosure controls and procedures were effective** as of **September 30, 2023**[341](index=341&type=chunk) - Similarly, the **disclosure controls and procedures for Hudson Pacific Properties, L.P. were deemed effective** as of **September 30, 2023**[344](index=344&type=chunk) - **No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the Company's or the operating partnership's internal control over financial reporting** during the third quarter of **2023**[345](index=345&type=chunk)[346](index=346&type=chunk) PART II—OTHER INFORMATION [ITEM 1. Legal Proceedings](index=81&type=section&id=ITEM%201.%20Legal%20Proceedings) This section addresses any material legal proceedings involving the Company - The **Company is not currently involved in any material legal proceedings that would significantly impact its financial condition or operations**[348](index=348&type=chunk) [ITEM 1A. Risk Factors](index=81&type=section&id=ITEM%201A.%20Risk%20Factors) This refers to the Company's risk factors as detailed in its annual report, with no material changes noted - **There have been no material changes to the risk factors previously disclosed in the Company's 2022 Annual Report on Form 10-K**[349](index=349&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=81&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This reports on any unregistered sales of equity securities or use of proceeds from registered securities - **No unregistered sales of equity securities occurred** during the period[353](index=353&type=chunk) - **No proceeds from registered securities were used** during the period[353](index=353&type=chunk) - The **issuer did not purchase any equity securities** during the period[353](index=353&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=81&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) This section confirms whether any defaults occurred on senior securities during the reporting period - **There were no defaults upon senior securities**[350](index=350&type=chunk) [ITEM 4. Mine Safety Disclosures](index=81&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This section confirms the absence of any mine safety disclosures - **There are no mine safety disclosures**[351](index=351&type=chunk) [ITEM 5. Other Information](index=81&type=section&id=ITEM%205.%20Other%20Information) This section provides other relevant information, including Rule 10b5-1 trading arrangements - **No officers or directors adopted or terminated any Rule 10b5-1 trading arrangements** during the nine months ended **September 30, 2023**[352](index=352&type=chunk) [ITEM 6. Exhibits](index=82&type=section&id=ITEM%206.%20Exhibits) This lists all exhibits filed with the Form 10-Q, including organizational documents and certifications - **Exhibits include Articles of Amendment and Restatement, Bylaws, Agreement of Limited Partnership, and various certifications (Section 302 and 906) for both Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P.**[354](index=354&type=chunk) - **Financial information formatted in iXBRL is included as Exhibit 101**[354](index=354&type=chunk) SIGNATURES [Signatures of Officers](index=83&type=section&id=Signatures%20of%20Officers) This section contains the official signatures of the Company's executive officers, certifying the report - The **report is signed by Victor J. Coleman, Chief Executive Officer, and Harout K. Diramerian, Chief Financial Officer, for both Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P.**[360](index=360&type=chunk)[361](index=361&type=chunk)[365](index=365&type=chunk)[366](index=366&type=chunk)

Investor Update | BofA Securities Global Real Estate Conference September 2023 Differentiated Tech & Media Focused REIT HPP is uniquely positioned to capitalize on TAMI sector investment and growth Focus on Tech & Media Epicenters West Coast Tech Hubs Global Media Markets Primary Locations for VC, AI Investment & Original Content Spend Modern, Amenitized Office Properties1 Premier-Quality Tenant Base 63% Public, 78% Credit Rated3 5 Yrs Remaining WALT3 Top 5 Tenants: Google, Amazon, Netflix, Riot Games, Sale ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________ FORM 10-Q ______________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or Commission File Number: 001-34789 (Hudson Pacific Properties, Inc.) Commission File Number: 333-202799-01 (Hudson Pacific Properties, L.P.) ______________________________________ Hudson Pacific Properties, Inc. Hud ...

Financial Data and Key Metrics Changes - Second quarter revenue was $245.2 million, down from $251.4 million year-over-year, primarily due to tenant move-outs and asset sales [23][24] - Funds from Operations (FFO) for the second quarter was $34.5 million or $0.24 per diluted share, compared to $74.6 million or $0.51 per diluted share a year ago [49] - Adjusted Funds from Operations (AFFO) was $31.1 million or $0.22 per diluted share, down from $60.3 million or $0.41 per diluted share [50] - Same-store cash Net Operating Income (NOI) grew to $127.6 million, up 4.7% from $121.9 million [50] - The company’s share of net debt to undepreciated book value was 38.7%, with 85.3% of debt fixed or capped [51] Business Line Data and Key Metrics Changes - The in-service portfolio ended the quarter at 87% leased, down about 170 basis points compared to the first quarter [17] - Approximately 50 office leases were signed, totaling over 400,000 square feet, with net effective rents up close to 9% to $44 per square foot [42][43] - Studio stages remained well-leased at 95.7% on a trailing 12-month basis [45] Market Data and Key Metrics Changes - Office demand increased quarter-over-quarter in Seattle (18%) and San Francisco (25%) [11] - VC funding for AI in San Francisco grew 650% in the first five months of the year, translating into office demand with nine requirements totaling 870,000 square feet [13] Company Strategy and Development Direction - The company is focused on occupancy preservation and expense reductions while proactively managing its balance sheet [10] - The strategy includes leveraging the growth in AI and tech sectors, with expectations of significant upside as the market recovers [38] - The company plans to limit capital improvements until there is certainty around demand [47] Management's Comments on Operating Environment and Future Outlook - Management noted that the macroeconomic environment remains challenging, with office fundamentals across West Coast markets under pressure [5] - There is optimism regarding a post-strike ramp-up in production, similar to the recovery following COVID [14] - The company expects to see vacancy rates begin to turn as new office deliveries slow and older office spaces are converted to non-office uses [12] Other Important Information - The company has $581.2 million in total liquidity, including $109.2 million in unrestricted cash [25] - The board reduced the quarterly common stock dividend to $0.125 per share, resulting in additional cash flow savings of $17.9 million [51] - The company is exploring asset sales, with three deals under contract that could generate over $100 million in gross proceeds [52] Q&A Session Questions and Answers Question: What is the impact of asset sales on NOI and cost structure? - The company is not providing specific NOI details yet due to uncertainty around sales, but they are constantly looking for ways to reduce costs [55][76] Question: Insights on the writers' and actors' strikes? - Management indicated that negotiations are ongoing, with hopes for a resolution by year-end, but the duration of the strike remains uncertain [62][63] Question: How will asset sales improve debt-to-EBITDA metrics? - While specific metrics are not disclosed, management emphasized that asset sales will improve long-term debt-to-EBITDA ratios [88][90]

Hudson Pacific Properties, Inc. (NYSE:HPP) Q1 2023 Earnings Conference Call May 9, 2023 12:00 PM ET Company Participants Laura Campbell - EVP, IR & Marketing Victor Coleman - CEO, Chairman Mark Lammas - President Harout Diramerian - CFO Art Suazo - EVP, Leasing Jeff Stotland - EVP, Global Studios Conference Call Participants Alexander Goldfarb - Piper Sandler Nick Joseph - Citi Nick Yulico - Scotiabank Dylan Burzinski - Green Street John Kim - BMO Capital Markets Blaine Heck - Wells Fargo Ronald Kamdem - Mo ...