Hudson Pacific Properties, Inc. (HPP): A Bull Case Theory

Core Thesis - Hudson Pacific Properties, Inc. (HPP) is viewed as undervalued due to a disconnect between its intrinsic value and market price, primarily because of a constrained balance sheet despite owning valuable assets like Hollywood studios and office towers [2][5] Investment and Recapitalization - In mid-2025, Cohen & Steers (C&S) invested $300 million in HPP as part of a $690 million recapitalization, acquiring approximately 43% of the raise, which represents about 17-18% of the fully diluted company [3][5] - The investment was made without board representation or activist intentions, indicating confidence in the management's strategy and the potential to unlock the value of HPP's assets over time [4] Market Perception and Future Outlook - The C&S investment is seen as a validation of the deep value in HPP, suggesting that with a strengthened balance sheet and a credible recapitalization roadmap, the company is positioned to realize the intrinsic value of its properties [5] - The market may begin to reprice HPP, offering significant upside potential as investors recognize the structural and financial improvements that support the company's turnaround [5] Historical Context - A previous bearish thesis highlighted concerns over HPP's over-leveraged balance sheet and declining occupancy, leading to a stock price depreciation of approximately 62.28% since September 2024 [6]