Hudson Pacific Properties, Inc.

Previous wording

Through our interest in Hudson Pacific Properties, L.P. (our operating partnership) and its subsidiaries, at September 30, 2024, our portfolio of owned real estate included office properties comprising approximately 14.7 million square feet, studio properties comprising approximately 45 sound stages and 1.7 million square feet and land properties comprising approximately 3.2 million square feet of undeveloped density rights. Our production services assets include vehicles, lighting and grip, production supplies and other equipment and the lease rights to 27 sound stages.

Current wording

Through our interest in Hudson Pacific Properties, L.P. (our operating partnership) and its subsidiaries, at March 31, 2025, our portfolio of owned real estate included office properties comprising approximately 14.3 million square feet, studio properties comprising approximately 45 sound stages and 1.7 million square feet and land properties comprising approximately 3.2 million square feet of undeveloped density rights. Our production services assets include vehicles, lighting and grip, production supplies and other equipment and the lease rights to 20 sound stages.

Previous wording

As of September 30, 2024, our in-service office portfolio was 80.0% leased (including leases not yet commenced). Our same-store studio properties were 73.8% leased for the average percent leased for the 12 months ended September 30, 2024.

Current wording

As of March 31, 2025, our in-service office portfolio was 76.5% leased (including leases not yet commenced). Our same-store studio properties were 73.8% leased for the average percent leased for the 12 months ended March 31, 2025.

Previous wording

Annualized base rent per square foot for office properties iscalculated by multiplying (i) cash base rents under commenced leases excluding tenant reimbursements as of September 30, 2024 by (ii) 12. On a per square foot basis, ABR is divided by square footage under commenced leases as of September 30, 2024. For all expiration years, ABR is calculated as (i) cash base rents at expiration under commenced leases divided by (ii) square footage under commenced leases as of September 30, 2024. The methodology is the same when calculating ABR per square foot either in place or at expiration for uncommenced leases. Rent data is presented without regard to cancellation options. Where applicable, rental rates converted to USD using the foreign currency exchange rate as of September 30, 2024. Annualized base rent per square foot for studio properties reflects actual base rent for the 12 months ended September 30, 2024, excluding tenant reimbursements. ABR per leased square foot calculated as (i) annual base rent divided by (ii) square footage under lease as of September 30, 2024.

Current wording

Annualized base rent (“ABR”) per square foot for office properties iscalculated by multiplying (i) cash base rents under commenced leases excluding tenant reimbursements as of March 31, 2025 by (ii) 12. On a per square foot basis, ABR is divided by square footage under commenced leases as of March 31, 2025. For all expiration years, ABR is calculated as (i) cash base rents at expiration under commenced leases divided by (ii) square footage under commenced leases as of March 31, 2025. The methodology is the same when calculating ABR per square foot either in place or at expiration for uncommenced leases. Rent data is presented without regard to cancellation options. Where applicable, rental rates converted to USD using the foreign currency exchange rate as of March 31, 2025. Annualized base rent per square foot for studio properties reflects actual base rent for the 12 months ended March 31, 2025, excluding tenant reimbursements. ABR per leased square foot calculated as (i) annual base rent divided by (ii) square footage under lease as of March 31, 2025.

Previous wording

We had no business acquisitions during the nine months ended September 30, 2024.

Current wording

We had no business acquisitions during the three months ended March 31, 2025.

Previous wording

We had no property acquisitions during the nine months ended September 30, 2024.

Current wording

We had no property acquisitions during the three months ended March 31, 2025.

Previous wording

As of September 30, 2024, the Company had one property classified as held for sale—Foothill Research Center—as this property was considered non-strategic to the Company’s portfolio. See Part I, Item 1 “Note 3 to the Consolidated Financial Statements—Investment in Real Estate” for more detail.

Current wording

As of March 31, 2025, the Company had one property classified as held for sale—625 Second—as this property was considered non-strategic to the Company’s portfolio. See Part I, Item 1 “Note 3 to the Consolidated Financial Statements—Investment in Real Estate” for more detail.

Previous wording

Properties are selected for repositioning when an asset or portions of an asset are taken offline for a change of use or if the asset requires significant base building improvements resulting in substantial down time in occupancy. Subsequently, when the square footage offline for a full building reaches 92.0% occupancy, it would be included in our in-service population.

Current wording

Properties are selected for repositioning when an asset or portions of an asset are taken offline for a change of use or if the asset requires significant base building improvements resulting in substantial down time in occupancy. Studio development properties are incorporated into the in-service portfolio on the earlier of the one year anniversary of completion or the project’s estimated stabilization date. Office development properties are incorporated into the in-service portfolio on the earlier of reaching 92% occupancy or the project’s estimated stabilization date.

Previous wording

The following table summarizes the lease expirations for leases in place as of September 30, 2024, plus available space, beginning January 1, 2024 at the properties in our office portfolio. Unless otherwise stated in the footnotes, the information set forth in the table assumes that tenants did not exercise any renewal options.

Current wording

The following table summarizes the lease expirations for leases in place as of March 31, 2025, plus available space, beginning January 1, 2025 at the properties in our office portfolio. We believe lower quarterly expirations starting in the second half of 2025 will provide an opportunity to stabilize occupancy with growth thereafter. Unless otherwise stated in the footnotes, the information set forth in the table assumes that tenants did not exercise any renewal options.

Previous wording

Does not include 22 month-to-month leases.

Current wording

Does not include 34 month-to-month leases.

Previous wording

During the nine months ended September 30, 2024, there were $103.0 million of borrowings on the unsecured revolving credit facility, net of repayments. The Company generally uses the unsecured revolving credit facility to finance the acquisition of properties and businesses, to provide funds for tenant improvements and capital expenditures and to provide for working capital and other corporate purposes.

Current wording

During the three months ended March 31, 2025, there were $297.0 million of repayments on the unsecured revolving credit facility, net of borrowings. The Company generally uses the unsecured revolving credit facility to finance the acquisition of properties and businesses, to provide funds for tenant improvements and capital expenditures and to provide for working capital and other corporate purposes.

Previous wording

Net loss increased $71.3 million, or 199.3%, to $107.0 million for the three months ended September 30, 2024 compared to $35.8 million for the three months ended September 30, 2023. The reasons for the change are discussed below with respect to the decrease in net operating income for the same period.

Current wording

Net loss increased $26.9 million, or 50.5%, to $80.3 million for the three months ended March 31, 2025 compared to $53.4 million for the three months ended March 31, 2024. The reasons for the change are discussed below with respect to the decrease in net operating income for the same period.

Previous wording

We evaluate performance based upon property net operating income (“NOI”). NOI is not a measure of operating results or cash flows from operating activities or cash flows as measured by GAAP and should not be considered an alternative to net income, as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make distributions. All companies may not calculate NOI in the same manner. We consider NOI to be a useful performance measure to investors and management because when compared across periods, NOI reflects the revenues and expenses directly associated with owning and operating our properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing a perspective not immediately apparent from net income. We calculate NOI as net income excluding corporate general and administrative expenses, depreciation and amortization, impairments, gains/losses on sales of real estate, interest expense, interest income, transaction-related expenses and other non-operating items. We define NOI as operating revenues (including rental revenues, other property-related revenue, tenant recoveries and other operating revenues), less property-level operating expenses (which includes external management fees, if any, and property-level general and administrative expenses). NOI on a cash basis is NOI adjusted to exclude the effect of straight-line rent and other non-cash adjustments required by GAAP. We believe that NOI on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent and other non-cash adjustments to revenue and expenses.

Current wording

We evaluate performance based upon net operating income (“NOI”). NOI is not a measure of operating results or cash flows from operating activities or cash flows as measured by GAAP and should not be considered an alternative to net income, as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make distributions. All companies may not calculate NOI in the same manner. We consider NOI to be a useful performance measure to investors and management because when compared across periods, NOI reflects the revenues and expenses directly associated with owning and operating our properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing a perspective not immediately apparent from net income. We calculate NOI as net income (loss) excluding corporate general and administrative expenses, depreciation and amortization, impairments, gains/losses on sales of real estate, interest expense, interest income, transaction-related expenses and other non-operating items. We define NOI as operating revenues (including rental revenues, other property-related revenue, tenant recoveries and other operating revenues), less property-level operating expenses (which includes external management fees, if any, and property-level general and administrative expenses). NOI on a cash basis is NOI adjusted to exclude the effect of straight-line rent and other non-cash adjustments required by GAAP. We believe that NOI on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent and other non-cash adjustments to revenue and expenses.

Previous wording

NOI decreased $33.7 million, or 28.3%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily resulting from:

Current wording

NOI decreased $18.8 million, or 18.0%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily resulting from:

Previous wording

•an increase in studio NOI of $2.3 million driven by increased activity at Quixote during the three months ended September 30, 2024.

Current wording

•a decrease in studio NOI of $7.8 million driven by

Previous wording

•a $60.2 million decrease in same-store NOI driven by:

Current wording

•a $7.9 million decrease in same-store NOI driven by

Previous wording

•a $1.3 million increase in operating expenses predominantly due to higher tax and utility expenses at several properties in 2024.

Current wording

•a $1.2 million increase in operating expenses predominantly due to higher tax, utilities and insurance expenses at several properties in 2025.

Previous wording

•a decrease in studio NOI of $3.4 million primarily due to a lease expiration at our Sunset Las Palmas Studios property, partially offset by increased production activity at our Sunset Gower Studios property during the nine months ended September 30, 2024.

Current wording

•a decrease in studio NOI of $1.7 million primarily due to lower production activity at Sunset Gower Studios, partially offset by higher production activity at Sunset Las Palmas Studios during the three months ended March 31, 2025 as compared to the prior period.

Previous wording

We recorded a $3.2 million loss from unconsolidated real estate entities for the three months ended September 30, 2024 compared to a loss of $0.8 million for the three months ended September 30, 2023. The change was primarily driven by higher interest expense at the unconsolidated entities due to an increase in the average reference rates for variable rate debt and a mark-to-market adjustment for an interest rate swap that does not qualify for hedge accounting.

Current wording

We recorded a $1.3 million loss from unconsolidated real estate entities for the three months ended March 31, 2025 compared to a loss of $0.7 million for the three months ended March 31, 2024. The change was primarily driven by mark-to-market adjustments for an interest rate swap that does not qualify for hedge accounting.

Previous wording

We recognized fee income of $1.4 million for the three months ended September 30, 2024 compared to $0.3 million for the three months ended September 30, 2023. Fee income represents the management fee income earned from our unconsolidated real estate entities. The increase in fee income is primarily driven by an increase in construction activity at the Sunset Pier 94 Studios development during the three months ended September 30, 2024.

Current wording

We recognized fee income of $1.4 million for the three months ended March 31, 2025 compared to $1.1 million for the three months ended March 31, 2024. Fee income represents the management fee income earned from our unconsolidated real estate entities. The increase in fee income is primarily driven by an increase in construction activity at the Sunset Pier 94 Studios development during the three months ended March 31, 2025.

Previous wording

Capitalized interest increased by $1.9 million or 22.3%, to $10.5 million for the three months ended September 30, 2024 compared to $8.6 million for the three months ended September 30, 2023. The increase was primarily driven by capitalized interest for the Sunset Glenoaks Studios and Washington 1000 development projects.

Current wording

Capitalized interest increased by $1.6 million or 18.8%, to $10.1 million for the three months ended March 31, 2025 compared to $8.5 million for the three months ended March 31, 2024. The increase was primarily driven by capitalized interest at Sunset Glenoaks Studios, which was not a consolidated property during the three months ended March 31, 2024 but was a consolidated property during the three months ended March 31, 2025.

Previous wording

Non-cash interest expense decreased by $2.5 million, or 55.7%, to $2.0 million for the three months ended September 30, 2024 compared to $4.5 million for the three months ended September 30, 2023. The decrease in non-cash interest expense was primarily due to the amortization of mark-to-market gains related to the interest rate cap on our Hollywood Media Portfolio loan during the three months ended September 30, 2023. The cap expired in August 2023 and was accounted for under the mark-to-market approach until it was designated as a cash flow hedge in December 2022. Additionally, there was a decrease in deferred financing cost amortization due to the deferred financing costs related to the Hollywood Media Portfolio debt and the One Westside and Westside Two construction loan being fully amortized as of August 2023 and December 2023, respectively.

Current wording

Non-cash interest expense increased by $2.5 million, or 132.8%, to $4.5 million for the three months ended March 31, 2025 compared to $1.9 million for the three months ended March 31, 2024. The increase in non-cash interest expense was primarily related to the amortization of an interest rate cap premium during the three months ended March 31, 2024.

Previous wording

Transaction-related expenses increased $3.7 million, or 271.6%, to $2.3 million of expense for the nine months ended September 30, 2024 compared to $1.3 million of income for the nine months ended September 30, 2023. The increase was primarily related to dead deal costs incurred during the nine months ended September 30, 2024 and the remeasurement of the Zio earnout liability to fair value during the nine months ended September 30, 2023.

Current wording

Transaction-related expenses decreased by $2.2 million, or 100.0%, to $0 for the three months ended March 31, 2025 compared to $2.2 million for the three months ended March 31, 2024.The decrease was primarily related to dead deal costs incurred during the three months ended March 31, 2024.

Previous wording

We recognized an unrealized loss on non-real estate investments of $1.1 million for the three months ended September 30, 2024 compared to an unrealized loss of $2.3 million for the three months ended September 30, 2023, which were due to the observable changes in the fair value of the investments.

Current wording

We recognized an unrealized loss on non-real estate investments of $0.4 million for the three months ended March 31, 2025 compared to an unrealized loss of $0.9 million for the three months ended March 31, 2024, which were due to the observable changes in the fair value of the investments.

Previous wording

Gain on sale of real estate

Current wording

Gain on sale of real estate, net

Previous wording

During the three months ended September 30, 2023, we recognized a gain on sale of $16.1 million attributable to the sales of our 604 Arizona and 3401 Exposition properties in August 2023. No gain or loss on sale was recognized during the three months ended September 30, 2024.

Current wording

During the three months ended March 31, 2025, we recognized a net gain on sale of $10.0 million attributable to the sales of our Foothill Research and Maxwell properties. No gain or loss on sale was recognized during the three months ended March 31, 2024.

Previous wording

During the three months ended September 30, 2024, we recorded an impairment loss of $36.5 million due to a reduction in the estimated holding periods for certain office properties. We did not record any impairment charges during the three months ended September 30, 2023.

Current wording

During the three months ended March 31, 2025, we recorded an impairment loss of $18.5 million due to a reduction in the estimated holding period for our 625 Second property. We did not record any impairment charges during the three months ended March 31, 2024.

Previous wording

General and administrative expenses increased by $2.0 million, or 11.6%, to $19.5 million for the three months ended September 30, 2024 compared to $17.5 million for the three months ended September 30, 2023. The increase was primarily driven by lower capitalization of expenses during the three months ended September 30, 2024 due to less development activity as compared to the prior period, as well as an increase in information technology-related expenses and professional fees. The increase was partially offset by lower travel and entertainment expenses during the three months ended September 30, 2024.

Current wording

General and administrative expenses decreased by $1.2 million, or 6.2%, to $18.5 million for the three months ended March 31, 2025 compared to $19.7 million for the three months ended March 31, 2024. The decrease was primarily driven by lower travel and entertainment, information technology and shareholder relations during the three months ended March 31, 2025 as compared to the prior period.

Previous wording

•proceeds from the Sunset Glenoaks Studios construction loan (consolidated joint venture), Sunset Pier 94 Studios construction loan (unconsolidated joint venture) and Bentall Centre loan (unconsolidated joint venture); and

Current wording

•proceeds from the Sunset Pier 94 Studios construction loan (unconsolidated joint venture) and Bentall Centre loan (unconsolidated joint venture); and

Previous wording

We had approximately $90.7 million of cash and cash equivalents at September 30, 2024. Our principal source of operating cash flow is related to leasing and operating the properties in our portfolio. Our properties provide a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service and fund quarterly dividend and distribution requirements.

Current wording

We had approximately $86.5 million of cash and cash equivalents at March 31, 2025. Our principal source of operating cash flow is related to leasing and operating the properties in our portfolio. Our properties provide a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service and fund quarterly dividend and distribution requirements.

Previous wording

Our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. If we incur additional debt, the risks associated with our leverage, including our ability to service our debt, would increase. In addition, our ability to incur additional debt may be affected by our senior unsecured debt ratings as provided by the major credit rating agencies in the United States. Certain of the major U.S. credit rating agencies have previously downgraded our senior unsecured debt rating to non-investment grade. These and any further ratings downgrades could adversely impact our ability to access debt markets in the future and increase the cost of future debt. As of September 30, 2024, the credit ratings for our senior unsecured debt were Ba3, BB- and BB- from Moody’s, Standard and Poor’s and Fitch, respectively.

Current wording

Our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders. If we incur additional debt, the risks associated with our leverage, including our ability to service our debt, would increase. In addition, our ability to incur additional debt may be affected by our senior unsecured debt ratings as provided by the major credit rating agencies in the United States. Certain of the major U.S. credit rating agencies have previously downgraded our senior unsecured debt rating to non-investment grade. These and any further ratings downgrades could adversely impact our ability to access debt markets in the future and increase the cost of future debt. As of March 31, 2025, the credit ratings for our senior unsecured debt were B2, BB- and BB- from Moody’s, Standard and Poor’s and Fitch, respectively.

Previous wording

Equity capitalization represents the shares of common stock outstanding (including unvested restricted shares), OP and LTIP units outstanding, restricted performance units and dilutive shares multiplied by the closing price of $4.78, as reported by the NYSE, on September 30, 2024 as well as the aggregate value of the Series C preferred stock liquidation preference as of September 30, 2024.

Current wording

Equity capitalization represents the shares of common stock outstanding (including unvested restricted shares), OP and LTIP units outstanding, restricted performance units and dilutive shares multiplied by the closing price of $2.95, as reported by the NYSE, on March 31, 2025, as well as the aggregate value of the Series C preferred stock liquidation preference as of March 31, 2025.

Previous wording

During the nine months ended September 30, 2024, there were no material changes outside the ordinary course of business in the information regarding specified contractual obligations contained in our 2023 Annual Report on Form 10-K. Refer to Part I, Item 1 “Note 9 to the Consolidated Financial Statements—Debt” for information regarding our future minimum principal payments due on our outstanding debt. Refer to Part I, Item 1 “Note 12 to the Consolidated Financial Statements—Future Minimum Rents and Lease Payments” for information regarding our future minimum operating lease payments. Refer to Part I, Item 1 “Note 20 to the Consolidated Financial Statements—Commitments and Contingencies” for more detail.

Current wording

During the three months ended March 31, 2025, there were no material changes outside the ordinary course of business in the information regarding specified contractual obligations contained in our 2024 Annual Report on Form 10-K. Refer to Part I, Item 1 “Note 9 to the Consolidated Financial Statements—Debt” for information regarding our future minimum principal payments due on our outstanding debt. Refer to Part I, Item 1 “Note 12 to the Consolidated Financial Statements—Future Minimum Rents and Lease Payments” for information regarding our future minimum operating lease payments. Refer to Part I, Item 1 “Note 20 to the Consolidated Financial Statements—Commitments and Contingencies” for more detail.

Previous wording

Comparison of the cash flow activity for the nine months ended September 30, 2023 is as follows (in thousands, except percentage change):

Current wording

Comparison of the cash flow activity for the three months ended March 31, 2024 is as follows (in thousands, except percentage change):

Previous wording

Cash and cash equivalents and restricted cash were $113.9 million and $119.2 million at September 30, 2024 and December 31, 2023, respectively.

Current wording

Cash and cash equivalents and restricted cash were $133.9 million and $99.2 million at March 31, 2025 and December 31, 2024, respectively.

Previous wording

Net cash provided by operating activities decreased by $58.5 million, or 26.2%, to $164.5 million for the nine months ended September 30, 2024 compared to $223.0 million for the nine months ended September 30, 2023. The decrease primarily resulted from the property dispositions throughout 2023 and a significant tenant move-out at our 1455 Market property in the third quarter of 2023.

Current wording

Net cash provided by operating activities decreased by $34.6 million, or 53.1%, to $30.5 million for the three months ended March 31, 2025 compared to $65.1 million for the three months ended March 31, 2024. The decrease primarily resulted from the dispositions of Foothill Research and Maxwell in the first quarter of 2025 and 3176 Porter in the fourth quarter of 2024, significant tenant move-outs in 2024, lower production activity at Quixote in 2025 and lease termination fees paid in 2025 to exit several operating leases at Quixote.

Previous wording

Net cash used in investing activities increased by $71.3 million, or 57.2%, to $195.8 million for the nine months ended September 30, 2024 compared to $124.5 million for the nine months ended September 30, 2023. The change primarily resulted from $167.0 million of proceeds from sales of real estate during the nine months ended September 30, 2023. There were no sales of real estate during the nine months ended September 30, 2024. The change was partially offset by a $92.6 million decrease in additions to investment in real estate during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.

Current wording

Net cash provided by investing activities for the three months ended March 31, 2025 was $15.9 million compared to $71.4 million of net cash used in investing activities for the three months ended March 31, 2024. The change primarily resulted from $63.2 million of proceeds from sales of real estate during the three months ended March 31, 2025. There were no sales of real estate during the three months ended March 31, 2024. The change was additionally driven by a $16.4 million decrease in contributions to unconsolidated entities and a $7.7 million decrease in additions to investment in real estate during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2024 was $26.0 million compared to $290.2 million of net cash used in financing activities for the nine months ended September 30, 2023. The change primarily resulted from a $487.0 million decrease in payments of unsecured and secured debt, a $39.6 million decrease in dividends paid to common stock and unitholders and a $29.9 million decrease in distributions to non-controlling members in consolidated real estate entities during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. The change was partially offset by a $201.6 million decrease in proceeds from unsecured and secured debt during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 and $40.9 million spent to purchase our partner’s interest in our 1455 Market property during the nine months ended September 30, 2024.

Current wording

Net cash used in financing activities for the three months ended March 31, 2025 was $11.7 million compared to $20.6 million of net cash provided by financing activities for the three months ended March 31, 2024. The change primarily resulted from a $78.7 million decrease in net borrowings during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, partially offset by the $40.9 million purchase of our partner’s interest in the 1455 Market property during the three months ended March 31, 2024.