Hudson Pacific Properties Reports Fourth Quarter and Full Year 2020 Financial Results

Full 12 months Internet Revenue of $0.00 per Diluted Share

Full 12 months FFO of $1.91 per Diluted Share (Excluding Specified Objects)

Signed in combination over 800,000 sq. ft of workplace leases

Achieved full-year GAAP and money workplace lease development of 21.5% and 14.3%, respectively

Fourth Quarter Internet Lack of $0.05 per Diluted Share

Fourth Quarter FFO of $0.44 per Diluted Share (Excluding Specified Objects)

Signed over 279,000 sq. ft of workplace leases

Maintained in-service workplace portfolio at 93.5% leased

Collected 97% of complete rents, together with 98% of workplace and 100% of studio rents

Grew same-store workplace money NOI by 4.2%

Offered Q1 2021 FFO Steerage of $0.45 to $0.47 per Diluted Share (Excluding Specified Objects)

Hudson Pacific Properties, Inc. (the “Firm” or “Hudson Pacific”) (NYSE: HPP) as we speak introduced monetary outcomes for the fourth quarter 2020.

Administration Feedback & Business Outlook

Victor Coleman, Hudson Pacific Properties’ Chairman and CEO, stated:

“Our markets are as soon as once more reopening as COVID-19 instances decline, and the event and roll out of a number of vaccines, albeit slower than we might all like, are key milestones in getting our tenants again to the workplace. We noticed renewed tenant curiosity within the fourth quarter, which resulted in our signing almost 280,000 sq. ft of workplace leases—our greatest quarter for the 12 months when it comes to quantity. This optimistic development is extending into the primary few months of 2021. Our tenants proceed to pay lease, and within the fourth quarter, we collected 97% of complete rents, together with 98% of workplace and 100% of studio rents. Our storefront retail stays most challenged by the pandemic.

“We proceed to strategically deploy capital. Within the fourth quarter, we acquired a 668,000-square-foot Class A workplace tower in Seattle by way of a JV, and opportunistically repurchased further shares of our inventory. Even so, we nonetheless have $1.0 billion of liquidity to fund our developments and/or acquisitions, and to in any other case function our enterprise as wanted. We’re actively evaluating potential workplace and studio acquisitions, and we’ve over 1.0 million sq. ft of growth initiatives absolutely entitled and able to construct as market situations warrant.

Story continues

“I’m additionally terribly proud that by way of our Higher Blueprint we’ve strengthened our dedication to our communities throughout these very difficult instances. In December, we launched our Vibrant Cities Arts Grant to profit artists in Los Angeles impacted by the pandemic. Final week, we introduced our five-year, $20 million pledge to deal with homelessness in our core markets. Now greater than ever, we’ve each an ethical and enterprise crucial to present again and work diligently to make sure that our cities proceed to thrive post-COVID and past.”

Consolidated Monetary & Working Outcomes

For fourth quarter 2020 in comparison with fourth quarter 2019:

• Internet loss attributable to widespread stockholders of $8.5 million, or $0.05 per diluted share, in comparison with web earnings of $13.6 million, or $0.09 per diluted share;

• FFO, excluding specified gadgets, of $66.8 million, or $0.44 per diluted share, in comparison with $85.4 million, or $0.55 per diluted share;

  • Specified gadgets consisting of a one-time tax reassessment administration value of $5.5 million, or $0.04 per diluted share, and a one-time web property tax financial savings for intervals previous to the fourth quarter of 2020 of $0.7 million, or $0.00 per diluted share, in comparison with transaction-related bills of $0.2 million, or $0.00 per diluted share and one-time debt extinguishment prices of $0.6 million, or $0.00 per diluted share;

  • Fourth quarter 2020 FFO, excluding specified gadgets, consists of roughly $0.02 per diluted share of uncollected money rents and roughly $0.01 per diluted share of expenses to revenue-related write-offs of straight-line lease receivables, some or all of which can finally be collected;

  • Fourth quarter 2020 FFO additionally displays roughly $0.02 per diluted share lower in parking income, some or all of which can resume with tenant reintegration;

• FFO, together with specified gadgets, of $62.0 million, or $0.41 per diluted share, in comparison with $84.6 million, or $0.54 per diluted share;

• Whole income decreased 6.0% to $203.8 million;

• Whole working bills elevated 3.5% to $178.9 million; and

• Curiosity expense elevated 4.5% to $29.6 million.

Workplace Section Outcomes

Monetary & working

For fourth quarter 2020 in comparison with fourth quarter 2019:

• Internet working earnings and money web working earnings for the 43 consolidated same-store workplace properties decreased 8.9% and elevated 4.2%, respectively. Adjusted for the $1.6 million one-time supplemental property tax expense on ICON and CUE for prior intervals, web working earnings and money web working earnings for the same-store workplace properties would have decreased by 7.5% and elevated by 5.7%, respectively.

Leasing

• Stabilized and in-service workplace portfolios have been 94.5% and 93.5% leased, respectively; and

• Executed 39 new and renewal leases totaling 279,392 sq. ft with GAAP and money lease development of 4.9% and 4.7%, respectively. Word GAAP and money lease development excluding the 45,180-square-foot renewal with 24 Hour Health and 25,053 sq. ft of COVID-related, short-term lease extensions (i.e. 12 months or much less) are 9.9% and 9.2%, respectively.

Studio Section Outcomes

Monetary & working

For fourth quarter 2020 in comparison with fourth quarter 2019:

• Whole working bills decreased 24.8% to $9.9 million, primarily as a result of a $2.2 million one-time supplemental property tax financial savings on Sundown Gower Studios for prior intervals; and

• Internet working earnings and money web working earnings for the three same-store studio properties decreased 4.5% and 0.8%, respectively.

Leasing

Leasing Exercise

Executed important leases all through the portfolio

• 24 Hour Health renewed its 45,180-square-foot lease by way of February 2026 at Met Park North in Seattle.

• CIBC World Markets Inc. renewed its 36,978-square-foot lease by way of July 2026 at Bentall Centre in Vancouver.

• Rivian signed a 36,630-square-foot lease, commencing January 2021, by way of June 2026 at Clocktower Sq. in Palo Alto.

• Frank, Rimerman & Co., LLP renewed its 24,968-square-foot lease by way of December 2022 at Web page Mill Hill in Palo Alto.

Steadiness Sheet

As of the top of the fourth quarter 2020:

• $2.8 billion of the Firm’s share of unsecured and secured debt and most well-liked models (web of money and money equivalents) leading to a leverage ratio of 42.3%.

• Roughly $1.0 billion of complete liquidity comprised of:

  • $113.7 million of unrestricted money and money equivalents;

  • $600.0 million of undrawn capability beneath the unsecured revolving credit score facility; and

  • $308.5 million of undrawn capability beneath the development mortgage secured by One Westside and 10850 Pico.

Dividend

Paid widespread dividend

Capital Transactions

Bought workplace tower in Seattle’s Denny Triangle with CPP Investments

On December 18, Hudson Pacific and Canada Pension Plan Funding Board (“CPP Investments”) accomplished their acquisition of 1918 Eighth, a 668,000-square-foot Class A workplace constructing anchored by Amazon in Seattle’s Denny Triangle neighborhood for $625.0 million (earlier than closing changes). Via the three way partnership, CPP Investments owns a forty five% curiosity and Hudson Pacific owns 55% and acts as common accomplice and as property, leasing and building supervisor. Along with closing the transaction, the three way partnership closed a $314.3 million mortgage mortgage secured by the property. This mortgage has an preliminary rate of interest of LIBOR plus 1.70% each year and is curiosity solely by way of the five-year time period.

Repurchased 0.9 million shares of widespread inventory

The Firm repurchased 0.9 million shares of widespread inventory at a mean value of $20.41 per share utilizing liquidity generated from recapitalization of the Hollywood Media Portfolio. In complete in 2020, Hudson Pacific repurchased 3.5 million shares of widespread inventory beneath the beforehand famous $250.0 million share repurchase plan at a mean value of $23.00.

COVID-19 Replace

Continued robust lease collections

Throughout the fourth quarter, the Firm collected roughly 97% of its mixed contractual rents, comprised of 98% from workplace tenants, 100% from studio tenants and 51% from storefront retail tenants. In January, the Firm collected 97% of its mixed contractual rents, comprised of 98% from workplace tenants, 99% from studio tenants and 48% from storefront retail tenants. The Firm carried out a lease reduction program for the preponderance of uncollected rents, and the aforementioned assortment percentages exclude rents deferred or abated in accordance with COVID-related lease amendments.

Together with rents deferred or abated in accordance with COVID-related lease amendments, the Firm collected 97% of its fourth quarter mixed contractual rents, comprised of 99% from workplace tenants, 102% from studio tenants and 43% from storefront retail tenants. The Firm collected 96% of its January mixed contractual rents, comprised of 98% from workplace tenants, 100% from studio tenants and 44% from storefront retail tenants.

Offered group assist by way of the Vibrant Cities Arts Grant

In affiliation with One Westside, the Firm and three way partnership accomplice, Macerich, fast-tracked greater than $650,000 to COVID-19 impacted artists in Los Angeles by way of the Vibrant Cities Arts Grant. In line with the three way partnership construction, Hudson Pacific funded the vast majority of the grant, which helped particular person artists and artist teams recoup misplaced funds from canceled packages and assist ongoing creative endeavors. Particular consideration was given to feminine and LGBTQ+ artists and artists of coloration in addition to these presenting work on social justice, civil rights, the bodily surroundings and different modern social points.

Actions Subsequent to Fourth Quarter 2020

Pledged $20 million to deal with homelessness

Hudson Pacific pledged $20 million over the following 5 years to extend reasonably priced housing and assist people and households experiencing homelessness. The great program will embrace each influence investments and philanthropic donations within the Firm’s core markets of Los Angeles, Silicon Valley, San Francisco, Seattle and Vancouver. As a part of this dedication, Hudson Pacific is investing $3 million with SDS Capital Group’s Supportive Housing Fund, which in flip invests within the growth of everlasting, supportive housing throughout Los Angeles and the San Francisco Bay Space.

Repurchased 0.6 million shares of widespread inventory

The Firm repurchased 0.6 million shares of widespread inventory at a mean value of $23.32 per share utilizing liquidity generated from recapitalization of the Hollywood Media Portfolio.

FFO Steerage

The Firm is offering first quarter 2021 steerage within the vary of $0.45 to $0.47 per diluted share excluding specified gadgets. There aren’t any specified gadgets in reference to this steerage.

The FFO estimates replicate administration’s view of present and future market situations, together with assumptions with respect to rental charges, occupancy ranges and the earnings influence of occasions referenced on this press launch and in earlier bulletins. It in any other case excludes any influence from future unannounced or speculative acquisitions, tendencies, debt financings or repayments, recapitalizations, capital markets exercise or comparable issues. There might be no assurance that precise outcomes is not going to differ materially from this estimate.

The Firm doesn’t present a reconciliation for non-GAAP estimates on a forward-looking foundation, together with the data beneath “FFO Steerage” above, the place it’s unable to offer a significant or correct calculation or estimation of reconciling gadgets and the data shouldn’t be out there with out unreasonable effort. That is because of the inherent issue of forecasting the timing and/or quantity of varied gadgets that will influence web earnings attributable to widespread stockholders per diluted share, which is probably the most straight comparable forward-looking GAAP monetary measure. This consists of, for instance, acquisition prices and different non-core gadgets that haven’t but occurred, are out of the Firm’s management and/or can’t be moderately predicted. For a similar causes, the Firm is unable to deal with the possible significance of the unavailable info. Ahead-looking non-GAAP monetary measures supplied with out probably the most straight comparable GAAP monetary measures could fluctuate materially from the corresponding GAAP monetary measures.

Supplemental Data

Supplemental monetary info relating to Hudson Pacific’s fourth quarter 2020 outcomes could also be discovered on the Buyers part of the Firm’s web site at HudsonPacificProperties.com. This supplemental info supplies further element on gadgets akin to property occupancy, monetary efficiency by property and debt maturity schedules.

Convention Name

The Firm will maintain a convention name to debate fourth quarter 2020 monetary outcomes at 11:00 a.m. PT / 2:00 p.m. ET on February 18, 2021. Please dial (877) 407-0784 to entry the decision. Worldwide callers ought to dial (201) 689-8560. A dwell, listen-only webcast might be accessed through the Buyers part of the Firm’s web site at HudsonPacificProperties.com, the place a replay of the decision might be out there. A replay may also be out there starting February 18, 2021 at 2:00 p.m. PT / 5:00 p.m. ET, by way of March 4, 2021 at 8:59 p.m. PT / 11:59 p.m. ET, by dialing (844) 512-2921 and getting into the passcode 13715463. Worldwide callers ought to dial (412) 317-6671 and enter the identical passcode.

About Hudson Pacific

Hudson Pacific is an actual property funding belief with a portfolio of workplace and studio properties totaling over 19 million sq. ft, together with land for growth. Centered on premier West Coast epicenters of innovation, media and know-how, its anchor tenants embrace Fortune 500 and main development firms akin to Netflix, Google, Sq., Uber, NFL Enterprises and extra. Hudson Pacific is publicly traded on the NYSE beneath the image HPP, and listed as a part of the S&P MidCap 400 Index. For extra info go to HudsonPacificProperties.com.

Ahead-Trying Statements

This press launch could comprise forward-looking statements throughout the that means of the federal securities legal guidelines. Ahead-looking statements relate to expectations, beliefs, projections, future plans and techniques, anticipated occasions or traits and comparable expressions regarding issues that aren’t historic details. In some instances, you’ll be able to determine forward-looking statements by way of forward-looking terminology akin to “could,” “will,” “ought to,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the destructive of those phrases and phrases or comparable phrases or phrases which are predictions of or point out future occasions, or traits and that don’t relate solely to historic issues. Ahead-looking statements contain identified and unknown dangers, uncertainties, assumptions and contingencies, lots of that are past the Firm’s management that will trigger precise outcomes to vary considerably from these expressed in any forward-looking assertion. All forward-looking statements replicate the Firm’s good religion beliefs, assumptions and expectations, however they don’t seem to be ensures of future efficiency. Moreover, the Firm disclaims any obligation to publicly replace or revise any forward-looking assertion to replicate adjustments in underlying assumptions or components, new info, information or strategies, future occasions or different adjustments. For an additional dialogue of those and different components that would trigger the Firm’s future outcomes to vary materially from any forward-looking statements, see the part entitled “Danger Elements” within the Firm’s Annual Report on Type 10-Okay filed with the Securities and Change Fee, or SEC, and different dangers described in paperwork subsequently filed by the Firm now and again with the SEC.

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Contacts

Investor Contact
Laura Campbell
Senior Vice President, Investor Relations and Advertising
(310) 622-1702
lcampbell@hudsonppi.com

Media Contact
Laura Murray
Director, Communications
(310) 622-1781
lmurray@hudsonppi.com