Full Year Net Income of $0.04 per Diluted Share

Achieved High End of Full Year FFO Guidance Range of $1.99 per Diluted Share (Excluding Specified Items)

Signed in aggregate over 1.8 million square feet of office leases

Achieved full-year GAAP and cash office rent growth of 14.0% and 7.1%, respectively

Same-store office and studio cash NOI increased 4.9% and 11.3%, respectively

Fourth Quarter Net Income of $0.05 per Diluted Share

Fourth Quarter FFO of $0.52 per Diluted Share (Excluding Specified Items)

Signed over 448,000 square feet of office leases

Achieved GAAP and cash office rent growth of 16.2% and 11.2%, respectively

Stabilized and in-service office leased percentages increased to 93.8% and 92.8%, respectively

Provided Full-Year 2022 FFO Guidance

$2.01 to $2.09 per diluted share (excluding specified items)

LOS ANGELES--(BUSINESS WIRE)-- Hudson Pacific Properties, Inc. (the "Company" or "Hudson Pacific") (NYSE: HPP) today announced financial results for the fourth quarter 2021.

Management Comments & Industry Outlook

Victor Coleman, Hudson Pacific Properties' Chairman and CEO, said:

"We ended 2021 by reaching the high end of our outlook in another pandemic-challenged year as we benefited from our ongoing diversification of owning studio and office properties," stated Victor Coleman, Hudson Pacific Properties' Chairman and CEO. "As the demand for content continues to expand, we are well positioned to benefit in the coming years. During the quarter, we continued to execute effectively, leasing nearly half a million square feet of office space and ending the year 92.8% leased. We remain highly committed to the ongoing expansion of our studio portfolio, and accelerating leasing in the coming year across our assets in efforts to enhance long-term shareholder value."

Consolidated Financial & Operating Results

For fourth quarter 2021 compared to fourth quarter 2020:

• Net income attributable to common stockholders of $8.1 million, or $0.05 per diluted share, compared to net loss of $8.5 million, or $0.05 per diluted share;
• FFO of $78.7 million, or $0.51 per diluted share, compared to $62.0 million, or $0.41 per diluted share;
• FFO, excluding specified items, of $79.6 million, or $0.52 per diluted share, compared to $66.8 million, or $0.44 per diluted share;
  • Specified items consisting of transaction-related expenses of $1.5 million, or $0.01 per diluted share, and one-time, prior-period supplemental property tax reimbursements of $0.7 million, or $0.00 per diluted share, compared to a one-time tax reassessment management cost of $5.5 million, or $0.04 per diluted share, and a one-time net property tax savings for periods prior to the fourth quarter of 2020 of $0.7 million, or $0.00 per diluted share;
• Total revenue grew 18.0% to $240.5 million;
• Total operating expenses were $198.0 million compared to $178.9 million; and
• Interest expense was $30.1 million compared to $29.6 million.

Office Segment Results

Financial & operating

Fourth quarter 2021 compared to fourth quarter 2020:

• Total revenue increased 11.5% to $205.7 million;
• Operating expenses were $72.8 million compared to $67.7 million; and
• Net operating income and cash net operating income for the 42 consolidated same-store office properties increased 4.6% and 2.8%, respectively.

Leasing

• In-service office portfolio was 91.8% occupied and 92.8% leased; and
• Executed 74 new and renewal leases totaling 448,121 square feet with GAAP and cash rent growth of 16.2% and 11.2%, respectively.

Studio Segment Results

Financial & operating

Fourth quarter 2021 compared to fourth quarter 2020:

• Total revenue grew 79.7% to $34.8 million;
• Total operating expenses were $19.6 million compared to $9.9 million, including a $2.2 million one-time supplemental property tax savings on Sunset Gower in fourth quarter 2020; and
• Net operating income and cash net operating income for the three same-store studio properties decreased 9.5% and 17.3%, respectively. Adjusted for the one-time supplemental property tax savings on Sunset Gower occurring in fourth quarter 2020, net operating income and cash net operating income for the three same-store studio properties would have increased 17.7% and 6.9%, respectively.

Leasing

• Trailing 12-month occupancy for the three same-store studio properties was 85.7%.

Leasing Activity

Executed significant leases across the portfolio during fourth quarter 2021

• Amazon leased an additional 52,588 square feet at 1918 Eighth in Seattle beginning May 2022 through September 2030, coterminous with its existing 606,562-square-foot lease.
• Tipalti signed a 26,986-square-foot lease commencing January 2022 through September 2028 at Bentall Centre in Downtown Vancouver.
• Hopkins & Carley signed a 15,805-square-foot lease commencing December 2021 through July 2032 at 555 Twin Dolphin in Redwood Shores.

Capital Transactions

Purchased office tower in Seattle's Denny Triangle

Hudson Pacific acquired the leasehold interest in 5th & Bell, a 197,000-square-foot office building in Seattle's vibrant Denny Triangle submarket for $119 million before closing costs and prorations. The immediately accretive transaction further expanded Hudson Pacific's Downtown Seattle portfolio to 2.7 million square feet, and deepened its relationship with Amazon, which leases the entirety of the property's 192,000-square-foot office component.

Repurchased 1.3 million shares of common stock

The Company repurchased 1.3 million shares of common stock at an average price of $24.07 per share, bringing total shares repurchased in 2021 to 1.9 million at an average price of $23.82 per share.

Raised over $400 million through preferred stock offering

Hudson Pacific completed a public offering of 16 million shares, as well as the exercise of the underwriters' over-allotment option to purchase another 1 million shares, of 4.750% Series C Cumulative Redeemable Preferred Stock, generating total proceeds, after underwriters’ discount and offering expenses, of approximately $413 million. The Company contributed the net proceeds to its operating partnership, which in turn used a portion of the net proceeds to repay amounts outstanding under its credit facility and other indebtedness, inclusive of the $25.2 million loan secured by 10950 Washington maturing in March 2022.

Development

Commenced construction on Los Angeles-area studio facility

The Company began construction on its 241,000-square-foot, seven-stage Sunset Glenoaks studio development in Sun Valley, with delivery anticipated in third quarter 2023. The project, owned 50/50% by Hudson Pacific and Blackstone, expands the partnership's Los Angeles-area studio portfolio to 42 stages across four facilities, and will offer content creators a unique production environment as the first large-scale, purpose-built facility built in the city in more than 20 years.

Delivered One Westside mall-to-office conversion to Google

The Company delivered its 584,000-square-foot, award-winning One Westside mall-to-creative office adaptive-reuse project fully leased to Google for tenant improvements on-budget and nearly two months ahead of schedule.

Progressed pipeline of near-term (re)development projects

The Company has finalized designs for its fully entitled 538,000-square-foot Washington 1000 office development in Seattle's Denny Triangle, and could commence construction within 12 months from the podium's delivery as part of the Washington State Convention Center Addition. Hudson Pacific continues to make progress on planning approvals for its 20-25 stage Sunset Waltham Cross studio development in the UK and its 450,000-square-foot Burrard Exchange hybrid-mass-timber office development at Bentall Centre in Vancouver. Sunset Waltham Cross and Burrard Exchange are jointly owned by Hudson Pacific/Blackstone 35/65% and 20/80%, respectively.

Financings

Recast $1 billion unsecured revolving credit facility

Hudson Pacific amended and restated its unsecured revolving credit facility to, among other adjustments, increase availability from $600 million to $1 billion and extend the maturity date to December 21, 2025 with two options to extend for additional six-month periods.

Secured $94 million construction loan for Sunset Glenoaks

Hudson Pacific and Blackstone secured a $94 million construction loan to finance a portion of its Sunset Glenoaks studio development, with total estimated projects costs of $180-200 million.

Balance Sheet

At the end of the fourth quarter 2021:

• $3.0 billion of the Company's share of unsecured and secured debt and Series A preferred units (net of cash and cash equivalents) resulting in a leverage ratio of 41.0%.
• Approximately $1.0 billion of total liquidity comprised of:
  • $96.6 million of unrestricted cash and cash equivalents; and
  • $875.0 million of undrawn capacity under the unsecured revolving credit facility.
• Access to another $173.2 million of undrawn capacity under the construction loan secured by One Westside and 10850 Pico as well as $90.7 million of undrawn capacity under the construction loan secured by its Sunset Glenoaks studio development.
• Investment grade credit rated with 66.5% unsecured and 81.1% fixed-rate debt and a weighted average maturity of 4.8 years.

Dividend

• The Company's Board of Directors declared a dividend on its common stock of $0.25 per share, equivalent to an annual rate of $1.00 per share, payable on December 30, 2021 to stockholders of record on December 20, 2021.

ESG Leadership

Earned top honors in 2021 GRESB Real Estate Assessment

In addition to achieving Green Star and highest 5-Star ratings for the third consecutive year, Hudson Pacific was recognized by the Global Real Estate Sustainability Benchmark (GRESB) as an Office Sector Leader for the Americas, ranking first among the 22 companies in this category in the Development Benchmark. The Company also received an "A" Public Disclosure score, ranking first among U.S. office companies.

Pledged $1 million to support veteran housing

Hudson Pacific pledged a $500,000 monetary donation and another $500,000 in pro bono work to support The Veterans Fund, a $10 million launch fund for the capital campaign to build the nation’s largest veteran housing community at the West Los Angeles VA Campus across the street from the Company's headquarters.

2022 Outlook

The Company is providing 2022 full-year FFO guidance in the range of $2.01 to $2.09 per diluted share, excluding specified items. There are no specified items in connection with this guidance.

The FFO outlook reflects management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of events referenced in this press release and in earlier announcements. It otherwise excludes any impact from new acquisitions, dispositions, debt financings or repayments, recapitalizations, capital markets activity or similar matters. There can be no assurance that actual results will not differ materially from this estimate.

Below are some of the assumptions the Company used in providing this guidance (dollars and share data in thousands):

The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, including the information under "FFO Guidance" above, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact net income attributable to common stockholders per diluted share, which is the most directly comparable forward-looking GAAP financial measure. This includes, for example, acquisition costs and other non-core items that have not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

Supplemental Information

Supplemental financial information regarding Hudson Pacific's fourth quarter 2021 results may be found on the Investors section of the Company's website at HudsonPacificProperties.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.

Conference Call

The Company will hold a conference call to discuss fourth quarter 2021 financial results at 11:00 a.m. PT / 2:00 p.m. ET on February 17, 2022. Please dial (844) 200-6205 and enter passcode 967644 to access the call. International callers should dial (929) 526-1599 and enter the same passcode. A live, listen-only webcast and replay can be accessed via the Investors section of the Company's website at HudsonPacificProperties.com.

About Hudson Pacific Properties

Hudson Pacific is a real estate investment trust with a portfolio of office and studio properties totaling over 20 million square feet, including land for development. Focused on global epicenters of innovation, media and technology, its anchor tenants include Fortune 500 and leading growth companies such as Google, Netflix, Riot Games, Square, Uber and more. Hudson Pacific is publicly traded on the NYSE under the symbol HPP and listed as a component of the S&P MidCap 400 Index. For more information visit HudsonPacificProperties.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," or "potential" or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events, or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company's control, which may cause actual results to differ significantly from those expressed in any forward-looking statement. All forward-looking statements reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company's future results to differ materially from any forward-looking statements, see the section entitled "Risk Factors" in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, and other risks described in documents subsequently filed by the Company from time to time with the SEC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220216006117/en/

Investor Contact

Laura Campbell

Executive Vice President, Investor Relations & Marketing

(310) 622-1702

[email protected]

Media Contact

Laura Murray

Director, Communications

(310) 622-1781

[email protected]

Source: Hudson Pacific Properties, Inc.