Hudson Pacific Properties, Inc.
For the period ended Mar 31, 2026. Filed May 8, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 8, 2026
HPP$8.49-3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-06.
0001482512-25-000150
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-08.
0001482512-26-000050
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 260 previous paragraphs and 189 current paragraphs.
135 unchanged; 38 reworded; 15 added; 70 removed; 17 previous and 1 current paragraphs rearranged.
Tables are not compared: 22 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
Nutanix expirations: (i) 215,857 square feet at 1740 Technology on May 31, 2030 and (ii) 13,898 square feet at Metro Plaza on July 31, 2030.
Current report
Weil, Gotshal & Manges, LLP expirations at Towers at Shore Center: (i) 29,846 square feet on August 31, 2026 and (ii) 59,403 square feet on February 28, 2038.
Current report
We had no property acquisitions or dispositions during the three months ended March 31, 2026. No properties were classified as held for sale as of March 31, 2026.
Current report
•a decrease in office NOI of $5.9 million primarily due to:
Current report
•a $3.5 million decrease in rental revenues driven by the 2025 lease terminations and downsizes at our 1455 Market, Hill7, and Concourse properties; and
Current report
•a $1.5 million decrease in service and other revenues due to a tenant move out at our Shorebreeze property in 2025; partially offset by
Current report
•a $0.9 million increase in office operating expenses primarily due to higher ground lease expense at our Palo Alto Square property and higher engineering, cleaning, security and owner’s expenses at various properties, partially offset by capitalization of expenses at our 901 Market property that is undergoing repositioning, as well as a prior year property tax refund received at our Skyport Plaza property during the first quarter of 2026;
Current report
Includes interest on the Company’s debt and hedging activities.
Current report
Includes the amortization of deferred financing costs and fair market value adjustments for our mark-to-market interest rate derivatives.
Current report
Non-cash interest expense decreased by $3.0 million, or 66.5%, to $1.5 million for the three months ended March 31, 2026 compared to $4.5 million for the three months ended March 31, 2025. The decrease was primarily related to changes in the fair value of our derivative instruments.
Current report
Depreciation and amortization expense decreased by $12.4 million, or 13.3%, to $80.7 million for the three months ended March 31, 2026 compared to $93.1 million for the three months ended March 31, 2025. The decrease was primarily driven by Quixote impairment adjustment during the fourth quarter of 2025, resulting in a lower depreciable basis, and the accelerated depreciation of tenant improvements related to early lease terminations at our 6040 Sunset and Hill 7 properties in 2025 with no comparable activity in 2026. The decrease was partially offset due to commencement of depreciation and amortization on Washington 1000, which became operational in 2026.
Current report
Total borrowing capacity includes an original borrowing capacity of $50.3 million and accrued payment-in-kind interest of $1.8 million as of March 31, 2026 (amounts at HPP’s share).
Current report
Net cash provided by operating activities increased by $13.8 million, or 45.0%, to $44.3 million for the three months ended March 31, 2026 compared to $30.5 million for the three months ended March 31, 2025. The increase primarily resulted from favorable working capital movements during the three months ended March 31, 2026, including the timing of cash receipts and payments, which more than offset a reduction in net operating income during the same period as compared to the three months ended March 31, 2025, mainly driven by the 2025 tenant move-outs and asset sales.
Current report
Net cash used in financing activities decreased by $2.1 million, or 17.6%, to $9.7 million for the three months ended March 31, 2026 compared to $11.7 million for the three months ended March 31, 2025. The decrease primarily resulted from a $494.0 million decrease in proceeds from unsecured and secured debt, largely offset by a $482.2 million decrease in payments of unsecured and secured debt during the three months ended March 31, 2025. The change was further offset by the $12.1 million payment of loan costs, net of loan premium during the three months ended March 31, 2025 that did not recur during the three months ended March 31, 2026.
Current report
(3)Amount drawn includes principal of $100.6 million and accrued payment-in-kind interest of $3.6 million as of March 31, 2026.
Removed paragraphs (70)
Previous report
As of September 30, 2025, our in-service office portfolio was 76.5% leased (including leases not yet commenced). Our same-store studio properties were 75.9% leased for the average percent leased for the 12 months ended September 30, 2025.
Previous report
Property Dispositions
Previous report
During the nine months ended September 30, 2025, the Company sold its Maxwell, Foothill Research Center and 625 Second properties for $46.0 million, $23.0 million and $28.0 million, respectively. See Part I, Item 1 “Note 3 to the Consolidated Financial Statements—Investment in Real Estate” for details. A portion of the net proceeds from these sales was used to repay outstanding amounts on the unsecured revolving credit facility.
Previous report
We own 25.6% of the ownership interest in the unconsolidated joint venture that owns Sunset Pier 94 Studios.
Previous report
During the nine months ended September 30, 2025, the Company secured the Office Portfolio CMBS loan with an aggregate principal amount of $475.0 million. The loan is secured by six office properties, bears interest at SOFR + 3.76% and matures on April 9, 2027, with three optional one-year extensions permitting certain financial and other covenants are met. The Company used the proceeds from the loan to repay $259.0 million on its unsecured revolving credit facility and to repay the $168.0 million loan secured by the Element LA property.
Previous report
During the nine months ended September 30, 2025, the Company amended its unsecured revolving credit facility agreement to adjust certain definitions and covenant calculations beginning with the period ending December 31, 2024. The amendment also resulted in a decrease in the total capacity from $900.0 million to $775.0 million. The Company then amended the agreement a second time, which resulted in an increase in the total capacity to $795.3 million and extended the maturity date for $462.0 million of the total commitments to December 31, 2028, with two optional six-month extensions at the sole discretion of the Company.
Previous report
During the nine months ended September 30, 2025, the Company fully repaid its Series B, Series C and Series D notes.
Previous report
During the nine months ended September 30, 2025, the Company issued in an underwritten public offering 237,553,442 shares of common stock and pre-funded warrants to purchase 71,863,597 shares of common stock. The gross proceeds from the offering amounted to $689.3 million.
Previous report
During the nine months ended September 30, 2025, the Company refinanced its 1918 Eighth loan with a CMBS loan secured by the 1918 Eighth property with an aggregate principal balance of $285.0 million. The refinanced loan bears interest at a weighted average rate of 6.16% and matures on September 11, 2030.
Previous report
•a decrease in office NOI of $1.2 million primarily due to:
Previous report
•a $7.0 million decrease in rental revenues driven by lease terminations at our 1455 Market, Met Park North, Hill7, Concourse and 83 King properties, partially offset by a prior year non-recurring straight-line rent reserve related to transitioning a tenant to cash basis reporting; partially offset by
Previous report
•a $3.2 million decrease in office operating expenses primarily due to employee retention credit tax refunds received in 2025; and
Previous report
•a $2.5 million increase in service and other revenues due to a lease termination fee received at our Fourth & Traction property.
Previous report
Non-cash interest expense increased by $0.6 million, or 29.4%, to $2.6 million for the three months ended September 30, 2025 compared to $2.0 million for the three months ended September 30, 2024. The increase was primarily related to an increase in the amortization of deferred financing costs driven by the Office Portfolio CMBS loan, which was obtained in March 2025.
Previous report
Transaction-related expenses
Previous report
During the three months ended September 30, 2025, we recorded transaction-related expenses of $0.1 million primarily related to legal expenses incurred in connection with early lease terminations at Quixote. During the three months ended September 30, 2024, we recognized transaction-related expenses of $0.3 million primarily related to dead deals.
Previous report
Loss on deconsolidation of real estate entity
Previous report
During the three months ended September 30, 2025, we recognized a $77.9 million loss related to the deconsolidation of our Sunset Glenoaks Studios property. The loss was calculated as the difference between 1) the sum of the fair value of the Company’s retained noncontrolling investment in the joint venture and the carrying amount of the noncontrolling interest in the joint venture at the date of the deconsolidation; and 2) the carrying amount of the joint venture’s net assets at the date of the deconsolidation. No gain or loss on deconsolidation was recognized during the three months ended September 30, 2024.
Previous report
Other income (expense)
Previous report
During the three months ended September 30, 2025, we recognized other income of $0.6 million, which was primarily related to a gain on insurance proceeds received for damaged property. During the three months ended September 30, 2024 we recognized other expense of $28 thousand.
Previous report
Income tax provision
Previous report
We recorded an income tax provision of $24 thousand for the three months ended September 30, 2025 compared to $2.2 million for the three months ended September 30, 2024. The amount recorded for the three months ended September 30, 2024 related to a valuation allowance recorded against certain deferred tax assets. As of September 30, 2025, the Company has recorded a valuation allowance against substantially all of its deferred tax assets
Previous report
Depreciation and amortization expense increased by $7.4 million, or 8.6%, to $94.1 million for the three months ended September 30, 2025 compared to $86.7 million for the three months ended September 30, 2024. The increase was driven by accelerated depreciation related to the demolition of an unused building structure at our Sunset Las Palmas Studios property for its conversion to a parking lot and the accelerated depreciation of tenant improvements related to an early lease termination at our Fourth & Traction property. The increase was partially offset by the effect of the sales of our 3176 Porter property in 2024 and our Foothill Research, Maxwell and 625 Second properties in 2025.
Previous report
Comparison of the Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024
Previous report
Net Loss
Previous report
Net loss increased $104.2 million, or 50.1%, to $312.1 million for the nine months ended September 30, 2025 compared to $207.9 million for the nine months ended September 30, 2024. The reasons for the change are discussed below with respect to the decrease in net operating income for the same period.
Previous report
Net Operating Income
Previous report
•Non-same-store, which includes:
Previous report
•Stabilized non-same-store properties
Previous report
•Lease-up properties
Previous report
•Repositioning properties
Previous report
•Development properties
Previous report
•Redevelopment properties
Previous report
•Held for sale properties
Previous report
NOI decreased $44.5 million, or 15.1%, for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, primarily resulting from:
Previous report
•a decrease in office NOI of $19.0 million primarily due to:
Previous report
•a $29.0 million decrease in rental revenues driven by lease terminations at our Met Park North, Concourse, 1455 Market, 83 King, 901 Market, Towers at Shore Center and 857 Howard properties; partially offset by
Previous report
•a $7.7 million increase in service and other revenues due to lease termination fees received at our 6040 Sunset, Fourth & Traction, Shorebreeze and Rincon Center properties; and
Previous report
•a $2.3 million decrease in operating expenses due to an employee retention credit tax refund received in 2025.
Previous report
•a decrease in studio NOI of $4.0 million primarily due to lower production activity at our Sunset Gower Studios property, partially offset by higher production activity at our Sunset Las Palmas Studios property.
Showing the first 40 of 70 passages. Open the source sections for the rest.
Reworded paragraphs (38)
Previous wording
Through our interest in Hudson Pacific Properties, L.P. (our operating partnership) and its subsidiaries, at September 30, 2025, our portfolio of owned real estate included office properties comprising approximately 14.2 million square feet, studio properties comprising approximately 45 sound stages and 1.7 million square feet and land properties comprising approximately 3.7 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.
Current wording
Through our interest in Hudson Pacific Properties, L.P. (our operating partnership) and its subsidiaries, at March 31, 2026, our portfolio of owned real estate included office properties comprising approximately 13.9 million square feet, studio properties comprising approximately 45 sound stages and 1.7 million square feet and land properties comprising approximately 3.7 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
Percent occupied for office properties is calculated as (i) square footage under commenced leases as of September 30, 2025, divided by (ii) total square feet, expressed as a percentage. Percent leased for office properties includes uncommenced leases. Percent leased for studio properties is calculated as (i) average square footage under commenced leases for the 12 months ended September 30, 2025, divided by (ii) total square feet, expressed as a percentage.
Current wording
Percent occupied for office properties is calculated as (i) square footage under commenced leases as of March 31, 2026, divided by (ii) total square feet, expressed as a percentage. Percent leased for office properties includes uncommenced leases. Percent leased for studio properties is calculated as (i) average square footage under commenced leases for the 12 months ended March 31, 2026, divided by (ii) total square feet, expressed as a percentage. Percent occupied/leased for studio properties is calculated based on the average percent occupied during the three months ended March 31, 2026.
Previous wording
Includes 546,000 square feet related to the office development Washington 1000 and 232,000 square feet related to Sunset Pier 94 Studios.
Current wording
Includes 231,784 square feet related to recently completed development Sunset Pier 94 studios and 243,300 square feet related to Sunset Glenoaks Studios.
Previous wording
Google, Inc. expirations: (i) 208,843 square feet at Rincon Center on February 29, 2028, (ii) 207,857 square feet at 3400 Hillview on November 30, 2028 (early termination right between December 2026-February 2027) and (iii) 41,354 square feet at Ferry Building on October 31, 2029.
Current wording
Google, Inc. expirations: (i) 208,843 square feet at Rincon Center on February 29, 2028, (ii) 207,857 square feet at 3400 Hillview on November 30, 2028 and (iii) 41,354 square feet at Ferry Building on October 31, 2029.
Previous wording
Salesforce.com expirations at Rincon Center: (i) 83,372 square feet on April 30, 2027 and (ii) 93,028 square feet on October 31, 2028. Salesforce.com currently subleases 182,378 feet at Rincon Center to Twilio Inc. and pays us 50% of cash rents received pursuant to the sublease at a current average of $280,000 per month with annual growth thereafter, in addition to contractual base rent.
Current wording
Salesforce.com expirations at Rincon Center: (i) 83,372 square feet on April 30, 2027 and (ii) 93,028 square feet on October 31, 2028. Salesforce.com subleases to Twilio Inc. and pays base rent plus 50% of sublease rent (currently an additional $290,000 per month).
Previous wording
Does not include 37 month-to-month leases.
Current wording
Does not include 33 month-to-month leases.
Previous wording
Assumes all tenant improvement and leasing commissions are paid in the calendar year in which the lease is executed, which may be different than the year in which they were actually paid.
Current wording
Assumes all tenant improvement costs and leasing commissions are paid in the calendar year in which the lease is executed, which may be different than the year in which they were actually paid.
Previous wording
During the nine months ended September 30, 2025, there were $320.0 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.
Current wording
During the three months ended March 31, 2026, there were no repayments or borrowings on the unsecured revolving credit facility. 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 $37.1 million, or 34.6%, to $144.1 million for the three months ended September 30, 2025 compared to $107.0 million for the three months ended September 30, 2024. 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 decreased $29.4 million, or 36.6%, to $50.9 million for the three months ended March 31, 2026 compared to $80.3 million for the three months ended March 31, 2025. The reasons for the change are discussed below with respect to the decrease in net operating income during the three months ended March 31, 2026, offset by the decrease in depreciation and amortization, general and administrative expenses and the change in other income and expenses.
Previous wording
•Same-store, which includes all of the properties owned and included in our stabilized portfolio as of July 1, 2024 and still owned and included in the stabilized portfolio as of September 30, 2025; and
Current wording
•Same-store properties, which include all of the properties owned and included in our stabilized portfolio as of January 1, 2025 and still owned and included in the stabilized portfolio as of March 31, 2026; and
Previous wording
The following table reconciles net loss to NOI:
Current wording
The following table reconciles net loss to NOI (in thousands, except percentage change):
Previous wording
The following table gives further detail on our NOI:
Current wording
The following table gives further detail on our NOI (in thousands):
Previous wording
The following table gives further detail on our change in NOI:
Current wording
The following table gives further detail on our change in NOI (in thousands, except percentage change):
Previous wording
NOI decreased $2.9 million, or 3.4%, for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, primarily resulting from:
Current wording
NOI decreased $4.9 million, or 5.7%, for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025, primarily resulting from:
Previous wording
•a $0.8 million decrease in same-store NOI driven by:
Current wording
•a $4.5 million decrease in same-store NOI driven by:
Previous wording
•partially offset by an increase in studio NOI of $0.4 million driven by higher production activity at our Sunset Las Palmas Studios property.
Current wording
•further offset by an increase in studio NOI of $1.4 million driven by higher production activity at our Sunset Gower Studios and Sunset Las Palmas Studios properties during the first quarter of 2026;
Previous wording
•a $2.1 million decrease in non-same-store NOI driven by:
Current wording
•a $0.4 million decrease in non-same-store NOI driven by:
Previous wording
•a decrease in office NOI of $3.2 million resulting from the sales of our 3176 Porter property in 2024 and our Foothill Research Center and Maxwell properties in 2025, partially offset by an increase due to the sale of 625 Second in 2025; further offset by
Current wording
•a decrease in office NOI of $8.2 million primarily resulting from the sales of our Element LA and Foothill Research Center properties in 2025 and increased operating expenses at Washington 1000 that became operational during the first quarter of 2026, partially offset by a reduction of expenses due to the sale of 625 Second in 2025; further offset by
Previous wording
•an increase in studio NOI of $1.1 million due to cost savings initiatives at Quixote.
Current wording
•an increase in studio NOI of $7.8 million mainly due to cost savings initiatives at Quixote.
Previous wording
We recorded a $0.7 million loss from unconsolidated real estate entities for the three months ended September 30, 2025 compared to a loss of $3.2 million for the three months ended September 30, 2024. The change was primarily driven by mark-to- market adjustments for an interest rate swap that does not qualify for hedge accounting.
Current wording
We recorded a $0.4 million loss from unconsolidated real estate entities for the three months ended March 31, 2026 compared to a loss of $1.3 million for the three months ended March 31, 2025. The change was primarily driven by mark-to-market adjustments for an interest rate swap that does not qualify for hedge accounting.
Previous wording
Gross interest expense decreased by $6.3 million, or 4.0%, to $151.0 million for the nine months ended September 30, 2025 compared to $157.3 million for the nine months ended September 30, 2024. The decrease was primarily related to lower outstanding borrowings on the unsecured line of credit, the 2025 repayments of the Element LA loan and Series B, C and D notes and as lower reference rates on our floating rate debt. The decrease was partially offset by the interest expense related to the Office Portfolio CMBS loan, which was obtained in March 2025.
Current wording
Gross interest expense decreased by $6.9 million or 14.1%, to $42.2 million for the three months ended March 31, 2026 compared to $49.1 million for the three months ended March 31, 2025. The decrease was primarily related to a lower outstanding balance on the unsecured line of credit and lower reference rates on our floating rate debt during the first quarter of 2026, as well as the 2025 repayments of the Element LA loan and Series B, C and D notes. The decrease was partially offset by the interest expense related to the Office Portfolio CMBS loan, which was obtained in March 2025.
Previous wording
Capitalized interest decreased by $0.9 million or 8.9%, to $9.6 million for the three months ended September 30, 2025 compared to $10.5 million for the three months ended September 30, 2024 primarily due to the completion of our Sunset Glenoaks Studios development during 2024. The decrease was partially offset by an increase in development activity at our Washington 1000 and 10900-10950 Washington properties.
Current wording
Capitalized interest decreased by $4.4 million or 43.6%, to $5.7 million for the three months ended March 31, 2026 compared to $10.1 million for the three months ended March 31, 2025 primarily due to Washington 1000 becoming operational in 2026 and completion of Sunset Glenoaks Studios development in 2025. The decrease was partially offset by an increase in development activity at our 6040 Sunset property.
Previous wording
Interest income increased by $1.7 million, or 308.1%, to $2.2 million for the three months ended September 30, 2025 compared to $0.5 million for the three months ended September 30, 2024. The increase was driven by an increase in cash deposits in interest-bearing accounts.
Current wording
Interest income increased by $1.2 million, or 279.1%, to $1.6 million for the three months ended March 31, 2026 compared to $0.4 million for the three months ended March 31, 2025. The change was driven by an increase in cash deposits in interest-bearing accounts and interest earned on a refundable payroll tax credit.
Previous wording
We recognized an unrealized loss on non-real estate investments of $2.1 million for the three months ended September 30, 2025 compared to an unrealized loss of $1.1 million for the three months ended September 30, 2024, 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 $2.0 million for the three months ended March 31, 2026 compared to an unrealized loss of $0.4 million for the three months ended March 31, 2025, which were due to the observable changes in the fair value of the investments.
Previous wording
During the nine months ended September 30, 2025, we recognized a net gain on sale of real estate 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 nine 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, 2026.
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 our Maxwell, Foothill Research Center and 3176 Porter properties, which were subsequently sold. We did not record any impairment charges during the three months ended September 30, 2025.
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, 2026.
Previous wording
During the three months ended September 30, 2025, we recognized a loss on extinguishment of debt of $0.2 million related to the refinancing of the loan secured by our 1918 Eighth property. No gain or loss on extinguishment of debt was recognized during the three months ended September 30, 2024.
Current wording
During the three months ended March 31, 2025, we recognized a loss on extinguishment of debt of $1.9 million related to repaying the loan secured by our Element LA property. No gain or loss on extinguishment of debt was recognized during the three months ended March 31, 2026.
Previous wording
General and administrative expenses decreased by $5.8 million, or 29.9%, to $13.7 million for the three months ended September 30, 2025 compared to $19.5 million for the three months ended September 30, 2024. The decrease was primarily due to a reduction in bonus and stock-based compensation expense during the three months ended September 30, 2025.
Current wording
General and administrative expenses decreased by $5.9 million, or 32.0%, to $12.6 million for the three months ended March 31, 2026 compared to $18.5 million for the three months ended March 31, 2025. The decrease was primarily due to a reduction in payroll, bonus, stock-based compensation expense and professional fees during the three months ended March 31, 2026.
Previous wording
We had approximately $190.4 million of cash and cash equivalents at September 30, 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.
Current wording
We had approximately $138.0 million of cash and cash equivalents at March 31, 2026. 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, 2025, the credit ratings for our senior unsecured debt were B2, B and B+ 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. As of March 31, 2026, the credit ratings for our senior unsecured debt were B2, B and B+ 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), pre-funded warrants, OP and LTIP units outstanding, restricted performance units and dilutive shares multiplied by the closing price of $2.76, as reported by the NYSE, on September 30, 2025, as well as the aggregate value of the Series C preferred stock liquidation preference as of September 30, 2025.
Current wording
Equity capitalization represents the shares of common stock outstanding (including unvested restricted shares), pre-funded warrants, OP and LTIP units outstanding, restricted performance units and dilutive shares multiplied by the closing price of $5.91, as reported by the NYSE, on March 31, 2026, as well as the aggregate value of the Series C preferred stock liquidation preference as of March 31, 2026.
Previous wording
The operating partnership was in compliance with its financial covenants as of September 30, 2025, although there can be no assurance that it will continue to be in compliance with these financial covenants. Our ability to maintain compliance with our debt covenants is subject to numerous risks and uncertainties, many of which are outside of our control, including general economic conditions; fluctuations in interest rates and increased operating costs; our failure to obtain necessary outside financing, including as a result of further downgrades in the credit ratings of our unsecured indebtedness; our failure to generate sufficient cash flows to service our outstanding indebtedness, repay indebtedness when due and maintain dividend payments; and strikes or work stoppages. Failure to meet any of these covenants could cause an event of default under the agreements governing our indebtedness and/or accelerate some or all of our indebtedness. In addition, certain of our indebtedness contain specific cross-default provisions with respect to specified other indebtedness, giving the lenders the right to declare a default if we are in default under other loans in some circumstances.
Current wording
The operating partnership was in compliance with its financial covenants as of March 31, 2026.
Previous wording
During the nine months ended September 30, 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.
Current wording
During the three months ended March 31, 2026, there were no material changes outside the ordinary course of business in the information regarding specified contractual obligations contained in our 2025 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, 2025 to the nine months ended September 30, 2024 is as follows (in thousands, except percentage change):
Current wording
Comparison of the cash flow activity for the three months ended March 31, 2026 to the three months ended March 31, 2025 is as follows (in thousands, except percentage change):
Previous wording
Cash and cash equivalents and restricted cash were $214.4 million and $99.2 million at September 30, 2025 and December 31, 2024, respectively.
Current wording
Cash and cash equivalents and restricted cash were $162.4 million and $162.1 million as of March 31, 2026 and December 31, 2025, respectively.
Previous wording
Net cash used in investing activities decreased by $131.7 million, or 67.3%, to $64.1 million for the nine months ended September 30, 2025 compared to $195.8 million for the nine months ended September 30, 2024. The decrease primarily resulted from an $88.3 million increase in proceeds from sales of real estate, a $27.6 million decrease in additions to investment in real estate and a $26.9 million decrease in contributions to unconsolidated entities during the nine months ended September 30, 2025.
Current wording
Net cash used in investing activities increased by $50.3 million, or 315.2%, to $34.3 million for the three months ended March 31, 2026 compared to $15.9 million of cash provided by investing activities for the three months ended March 31, 2025. The decrease primarily resulted from a $63.2 million decrease in proceeds from sales of real estate partially offset by a $12.7 million decrease in additions to investment in real estate during the three months ended March 31, 2026.
Previous wording
(2)This loan has an initial interest rate of SOFR + 3.10% per annum until the construction at Sunset Glenoaks Studios is complete and certain performance targets have been met, at which time the effective interest rate will decrease to SOFR + 2.50%. This loan is interest-only through its term. The maturity date includes the effect of extension options. The floating interest rate on the full principal amount has been effectively capped at 4.50% through the use of an interest rate cap.
Current wording
(2)This loan has an initial interest rate of SOFR + 3.10% per annum until certain performance targets have been met, at which time the effective interest rate will decrease to SOFR + 2.50%. This loan is interest-only through its term. The maturity date includes the effect of extension options.
Previous wording
(3)This loan has an initial interest rate of SOFR + 4.75% per annum until stabilization of the project, at which time the effective interest rate will decrease to SOFR + 4.00%. This loan is interest-only through its term. The maturity date includes the effect of extension options.
Current wording
(4)This loan has an initial interest rate of SOFR + 4.75% per annum until stabilization of the project, at which time the effective interest rate will decrease to SOFR + 4.00%. This loan is interest-only through its term. The maturity date includes the effect of extension options.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Includes 546,000 square feet related to the office development Washington 1000.
Rearranged previous paragraphs (17)
Previous report — wording carried elsewhere
Gross interest expense decreased by $4.8 million or 9.0%, to $48.7 million for the three months ended September 30, 2025 compared to $53.5 million for the three months ended September 30, 2024. The decrease was primarily related to a lower outstanding balance on the unsecured line of credit, the 2025 repayments of the Element LA loan and Series B, C and D notes, a decrease in both the principal amount and the interest rate on the 1918 Eighth loan as a result of its refinancing and lower reference rates on our floating rate debt. The decrease was partially offset by the interest expense related to the Office Portfolio CMBS loan, which was obtained in March 2025.
Previous report — wording carried elsewhere
Management further analyzes NOI by evaluating the performance from the following groups:
Previous report — wording carried elsewhere
•Same-store, which includes all of the properties owned and included in our stabilized portfolio as of January 1, 2024 and still owned and included in the stabilized portfolio as of September 30, 2025; and
Previous report — wording carried elsewhere
•Operating results from studio service-related businesses
Previous report — wording carried elsewhere
The following table reconciles net loss to NOI:
Previous report — wording carried elsewhere
The following table summarizes certain statistics of our same-store office and studio properties:
Previous report — wording carried elsewhere
Percent occupied for same-store studio is the average percent occupied for the 12 months ended.
Previous report — wording carried elsewhere
The following table gives further detail on our NOI:
Previous report — wording carried elsewhere
The following table gives further detail on our change in NOI:
Previous report — wording carried elsewhere
•a $23.0 million decrease in same-store NOI driven by:
Previous report — wording carried elsewhere
•a $21.5 million decrease in non-same-store NOI driven by:
Previous report — wording carried elsewhere
Loss from unconsolidated real estate entities
Previous report — wording carried elsewhere
We recorded a $2.2 million loss from unconsolidated real estate entities for the nine months ended September 30, 2025 compared to a loss of $6.4 million for the nine months ended September 30, 2024. The change was primarily driven by mark-to-market adjustments for an interest rate swap that does not qualify for hedge accounting.
Previous report — wording carried elsewhere
We recognized fee income of $3.9 million for the nine months ended September 30, 2025 compared to $3.9 million for the nine months ended September 30, 2024. Fee income represents the management fee income earned from our unconsolidated real estate entities.
Previous report — wording carried elsewhere
The following table presents a reconciliation from gross interest expense to the interest expense line item on the Consolidated Statements of Operations:
Previous report — wording carried elsewhere
Unrealized loss on non-real estate investments
Previous report — wording carried elsewhere
We recognized an unrealized loss on our non-real estate investments of $2.3 million for the nine months ended September 30, 2025 compared to a loss of $3.0 million for the nine months ended September 30, 2024, which were due to the observable changes in the fair value of the investments.