For the quarter ended June 2024, Hudson Pacific Properties (HPP) reported revenue of $218 million, down 11.1% over the same period last year. EPS came in at $0.17, compared to -$0.26 in the year-ago quarter. The reported revenue represents a surprise of +1.19% over the Zacks Consensus Estimate of $215.43 million. With the consensus EPS estimate being $0.17, the company has not delivered EPS surprise. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how ...

Core Insights - Hudson Pacific Properties (HPP) reported quarterly funds from operations (FFO) of $0.17 per share, matching the Zacks Consensus Estimate, but down from $0.24 per share a year ago [1] - The company posted revenues of $218 million for the quarter ended June 2024, exceeding the Zacks Consensus Estimate by 1.19%, but down from $245.17 million year-over-year [2] - The stock has underperformed significantly, losing about 41.3% since the beginning of the year compared to the S&P 500's gain of 9.9% [3] Financial Performance - Over the last four quarters, Hudson Pacific has surpassed consensus FFO estimates only once [2] - The current consensus FFO estimate for the upcoming quarter is $0.22 on revenues of $223.09 million, and for the current fiscal year, it is $0.83 on revenues of $884.29 million [7] Market Outlook - The estimate revisions trend for Hudson Pacific is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] - The outlook for the REIT and Equity Trust - Other industry is currently in the top 40% of Zacks industries, suggesting a favorable environment for stocks in this sector [8]

Office Sector Trends - Tenant requirements increased by 28% in 1Q24 compared to 1Q23[3] - Gross leasing activity accelerated by 14% in 1Q24 compared to 1Q23[3] - Sublease additions decreased by 67% from March 2024 compared to the December 2022 peak[3] - The development pipeline shrank by 62% from 2023 compared to 2019[3] - Remote job postings on LinkedIn declined by 12 percentage points from February 2022 to December 2023[3] HPP Market Performance - Tenant demand increased in West Los Angeles, San Francisco, and Silicon Valley[4] - Sublease availability decreased in West Los Angeles, San Francisco (by 400K sq ft), and Silicon Valley (by 500K sq ft)[4] - Under construction as a percentage of inventory decreased in West Los Angeles (~130 bps YOY), Silicon Valley (~290 bps YOY), and Seattle (~370 bps YOY)[4] - AI companies in San Francisco leased 228K sq ft YTD, with another 825K sq ft of requirements in the market[9] - Bay Area received 78% of approximately $10 billion in US AI VC funding in 1Q24[10] HPP Leasing Activity - HPP executed 305K sq ft of leases in April-May, with 83% being new leases[12] - HPP's current pipeline increased 10% to 2.0M sq ft compared to 1Q24[13] - HPP signed 91K sq ft of leases at 411 First, increasing occupancy from 57% to 93% between 2Q22 and 1Q24[18]

Investors in Hudson Pacific Properties, Inc. (HPP) need to pay close attention to the stock based on moves in the options market lately. That is because the Jun 21, 2024 $2.50 Call had some of the highest implied volatility of all equity options today. What is Implied Volatility? Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other ...

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)