Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 30, 2018 | |
Entity Information [Line Items] | ||
Entity Registrant Name | Hudson Pacific Properties, Inc. | |
Entity Central Index Key | 1,482,512 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 156,702,662 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Hudson Pacific Partners L.P. | ||
Entity Information [Line Items] | ||
Entity Registrant Name | Hudson Pacific Properties, L.P. | |
Entity Central Index Key | 1,496,264 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
ASSETS | ||
Investment in real estate, at cost | $ 6,690,374 | $ 6,219,361 |
Accumulated depreciation and amortization | (649,624) | (521,370) |
Investment in real estate, net | 6,040,750 | 5,697,991 |
Cash and cash equivalents | 52,456 | 78,922 |
Restricted cash | 10,782 | 22,358 |
Accounts receivable, net | 12,125 | 4,234 |
Straight-line rent receivables, net | 131,713 | 106,466 |
Deferred leasing costs and lease intangible assets, net | 256,100 | 239,029 |
U.S. Government securities | 148,315 | 0 |
Prepaid expenses and other assets, net | 92,609 | 61,139 |
Assets associated with real estate held for sale | 0 | 411,931 |
TOTAL ASSETS | 6,744,850 | 6,622,070 |
LIABILITIES AND EQUITY | ||
Accounts payable, accrued liabilities and other | 193,941 | 162,346 |
Lease intangible liabilities, net | 43,289 | 49,540 |
Security deposits and prepaid rent | 64,169 | 62,760 |
Liabilities associated with real estate held for sale | 0 | 4,903 |
TOTAL LIABILITIES | 2,773,197 | 2,700,929 |
Redeemable preferred units of the operating partnership | 9,815 | 10,177 |
Redeemable non-controlling interest in consolidated real estate entity | 50,092 | 0 |
Hudson Pacific Properties, Inc. stockholders’ equity: | ||
Common stock, $0.01 par value, 490,000,000 authorized, 155,649,125 shares and 155,602,508 shares outstanding at September 30, 2018 and December 31, 2017, respectively | 1,556 | 1,556 |
Additional paid-in capital | 3,597,904 | 3,622,988 |
Accumulated other comprehensive income | 27,834 | 13,227 |
Total Hudson Pacific Properties, Inc. stockholders’ equity | 3,627,294 | 3,637,771 |
Hudson Pacific Properties, L.P. partners’ capital: | ||
TOTAL EQUITY | 3,911,746 | 3,910,964 |
TOTAL LIABILITIES AND EQUITY | 6,744,850 | 6,622,070 |
Hudson Pacific Partners L.P. | ||
ASSETS | ||
Investment in real estate, at cost | 6,690,374 | 6,219,361 |
Accumulated depreciation and amortization | (649,624) | (521,370) |
Investment in real estate, net | 6,040,750 | 5,697,991 |
Cash and cash equivalents | 52,456 | 78,922 |
Restricted cash | 10,782 | 22,358 |
Accounts receivable, net | 12,125 | 4,234 |
Straight-line rent receivables, net | 131,713 | 106,466 |
Deferred leasing costs and lease intangible assets, net | 256,100 | 239,029 |
U.S. Government securities | 148,315 | 0 |
Prepaid expenses and other assets, net | 92,609 | 61,139 |
Assets associated with real estate held for sale | 0 | 411,931 |
TOTAL ASSETS | 6,744,850 | 6,622,070 |
LIABILITIES AND EQUITY | ||
Accounts payable, accrued liabilities and other | 193,941 | 162,346 |
Lease intangible liabilities, net | 43,289 | 49,540 |
Security deposits and prepaid rent | 64,169 | 62,760 |
Liabilities associated with real estate held for sale | 0 | 4,903 |
TOTAL LIABILITIES | 2,773,197 | 2,700,929 |
Redeemable preferred units of the operating partnership | 9,815 | 10,177 |
Redeemable non-controlling interest in consolidated real estate entity | 50,092 | 0 |
Hudson Pacific Properties, Inc. stockholders’ equity: | ||
Accumulated other comprehensive income | 27,936 | 13,276 |
Hudson Pacific Properties, L.P. partners’ capital: | ||
Common units, 156,218,170 and 156,171,553 issued and outstanding at September 30, 2018 and December 31, 2017, respectively. | 3,616,824 | 3,639,086 |
Total Hudson Pacific Properties, L.P. partners’ capital | 3,644,760 | 3,652,362 |
Non-controlling interest—members in consolidated entities | 266,986 | 258,602 |
TOTAL CAPITAL | 3,911,746 | 3,910,964 |
TOTAL LIABILITIES AND EQUITY | 6,744,850 | 6,622,070 |
Non-controlling interest—members in consolidated entities | ||
Hudson Pacific Properties, L.P. partners’ capital: | ||
Non-controlling interest—members in Consolidated Entities and Non-controlling units in the Operating Partnership | 266,986 | 258,602 |
Non-controlling interest—units in the operating partnership | ||
Hudson Pacific Properties, L.P. partners’ capital: | ||
Non-controlling interest—members in Consolidated Entities and Non-controlling units in the Operating Partnership | 17,466 | 14,591 |
TOTAL EQUITY | 17,466 | 14,591 |
Notes Payable, Excluding Defeased Debt | ||
LIABILITIES AND EQUITY | ||
Notes payable, net | 2,332,795 | 2,421,380 |
Notes Payable, Excluding Defeased Debt | Hudson Pacific Partners L.P. | ||
LIABILITIES AND EQUITY | ||
Notes payable, net | 2,332,795 | 2,421,380 |
In-Substance Defeased Debt | ||
LIABILITIES AND EQUITY | ||
Notes payable, net | 139,003 | 0 |
In-Substance Defeased Debt | Hudson Pacific Partners L.P. | ||
LIABILITIES AND EQUITY | ||
Notes payable, net | $ 139,003 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Common Stock: | ||
Common Stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 490,000,000 | 490,000,000 |
Common Units, shares outstanding (in shares) | 155,649,125 | 155,602,508 |
Common Units | Hudson Pacific Partners L.P. | ||
Common Stock: | ||
Common Units, shares outstanding (in shares) | 156,218,170 | 156,171,553 |
Common Units, shares issued (in shares) | 156,218,170 | 156,171,553 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
REVENUES | ||||
Revenues | $ 180,698 | $ 190,021 | $ 529,985 | $ 538,806 |
OPERATING EXPENSES | ||||
General and administrative | 14,280 | 13,013 | 46,047 | 41,329 |
Depreciation and amortization | 62,224 | 71,158 | 183,483 | 217,340 |
Total operating expense | 144,310 | 153,861 | 422,719 | 446,035 |
Operating Income | 36,388 | 36,160 | 107,266 | 92,771 |
OTHER EXPENSE (INCOME) | ||||
Interest expense | 20,131 | 22,461 | 59,965 | 66,086 |
Interest income | (418) | (44) | (493) | (90) |
Unrealized gain on non-real estate investment | 0 | 0 | (928) | 0 |
Unrealized loss on ineffective portion of derivative instrument | 0 | 37 | 0 | 82 |
Transaction-related expenses | 165 | 598 | 283 | 598 |
Other income | (25) | (1,402) | (748) | (2,656) |
Total other expenses | 19,853 | 21,650 | 58,079 | 64,020 |
Income before gains on sale of real estate | 16,535 | 14,510 | 49,187 | 28,751 |
Gains on sale of real estate | 3,735 | 0 | 43,337 | 16,866 |
Net Income | 20,270 | 14,510 | 92,524 | 45,617 |
Net income attributable to preferred units | (153) | (159) | (465) | (477) |
Net income attributable to participating securities | (118) | (255) | (555) | (750) |
Net income attributable to non-controlling interest in consolidated entities | (2,569) | (2,991) | (9,059) | (9,002) |
Net income attributable to non-controlling interest in the operating partnership | (63) | (41) | (299) | (256) |
Net income attributable to Hudson Pacific Properties, Inc. common stockholders | $ 17,367 | $ 11,064 | $ 82,146 | $ 35,132 |
Basic and diluted per share/unit amounts: | ||||
Net income attributable to common stockholders - basic (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.53 | $ 0.23 |
Net income attributable to common stockholders - diluted (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.52 | $ 0.23 |
Weighted average shares of common stock outstanding—basic (in shares) | 155,649,110 | 155,302,800 | 155,637,351 | 152,874,952 |
Weighted average shares of common stock outstanding - diluted (in shares) | 156,669,247 | 156,093,736 | 156,628,488 | 153,648,888 |
Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | $ 180,698 | $ 190,021 | $ 529,985 | $ 538,806 |
OPERATING EXPENSES | ||||
General and administrative | 14,280 | 13,013 | 46,047 | 41,329 |
Depreciation and amortization | 62,224 | 71,158 | 183,483 | 217,340 |
Total operating expense | 144,310 | 153,861 | 422,719 | 446,035 |
Operating Income | 36,388 | 36,160 | 107,266 | 92,771 |
OTHER EXPENSE (INCOME) | ||||
Interest expense | 20,131 | 22,461 | 59,965 | 66,086 |
Interest income | (418) | (44) | (493) | (90) |
Unrealized gain on non-real estate investment | 0 | 0 | (928) | 0 |
Unrealized loss on ineffective portion of derivative instrument | 0 | 37 | 0 | 82 |
Transaction-related expenses | 165 | 598 | 283 | 598 |
Other income | (25) | (1,402) | (748) | (2,656) |
Total other expenses | 19,853 | 21,650 | 58,079 | 64,020 |
Income before gains on sale of real estate | 16,535 | 14,510 | 49,187 | 28,751 |
Gains on sale of real estate | 3,735 | 0 | 43,337 | 16,866 |
Net Income | 20,270 | 14,510 | 92,524 | 45,617 |
Net income attributable to participating securities | (118) | (255) | (555) | (750) |
Net income attributable to non-controlling interest in consolidated entities | (2,569) | (2,991) | (9,059) | (9,002) |
Net income attributable to Hudson Pacific Properties, Inc. common stockholders | 17,430 | 11,105 | 82,445 | 35,388 |
Comprehensive income attributable to preferred units | (153) | (159) | (465) | (477) |
Net income attributable to Hudson Pacific Properties, L.P. | $ 17,701 | $ 11,519 | $ 83,465 | $ 36,615 |
Basic and diluted per share/unit amounts: | ||||
Net income attributable to common unitholders —basic (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.53 | $ 0.23 |
Net income attributable to common unitholders —diluted (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.52 | $ 0.23 |
Weighted average shares of common units outstanding—basic (in shares) | 156,218,155 | 155,871,845 | 156,206,396 | 153,736,796 |
Weighted average shares of common units outstanding—diluted (in shares) | 157,238,292 | 156,662,781 | 157,197,533 | 154,510,732 |
Office | ||||
REVENUES | ||||
Revenues | $ 161,446 | $ 172,174 | $ 476,528 | $ 495,842 |
OPERATING EXPENSES | ||||
Operating expenses | 57,295 | 59,102 | 164,475 | 162,524 |
Office | Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | 161,446 | 172,174 | 476,528 | 495,842 |
OPERATING EXPENSES | ||||
Operating expenses | 57,295 | 59,102 | 164,475 | 162,524 |
Office | Rental | ||||
REVENUES | ||||
Revenues | 129,963 | 139,157 | 389,777 | 406,275 |
Office | Rental | Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | 129,963 | 139,157 | 389,777 | 406,275 |
Office | Tenant recoveries | ||||
REVENUES | ||||
Revenues | 24,615 | 24,982 | 67,479 | 67,421 |
Office | Tenant recoveries | Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | 24,615 | 24,982 | 67,479 | 67,421 |
Office | Parking and other | ||||
REVENUES | ||||
Revenues | 6,868 | 8,035 | 19,272 | 22,146 |
Office | Parking and other | Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | 6,868 | 8,035 | 19,272 | 22,146 |
Studio | ||||
REVENUES | ||||
Revenues | 19,252 | 17,847 | 53,457 | 42,964 |
OPERATING EXPENSES | ||||
Operating expenses | 10,511 | 10,588 | 28,714 | 24,842 |
Studio | Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | 19,252 | 17,847 | 53,457 | 42,964 |
OPERATING EXPENSES | ||||
Operating expenses | 10,511 | 10,588 | 28,714 | 24,842 |
Studio | Rental | ||||
REVENUES | ||||
Revenues | 11,731 | 11,012 | 32,822 | 26,802 |
Studio | Rental | Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | 11,731 | 11,012 | 32,822 | 26,802 |
Studio | Tenant recoveries | ||||
REVENUES | ||||
Revenues | 299 | 133 | 1,153 | 927 |
Studio | Tenant recoveries | Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | 299 | 133 | 1,153 | 927 |
Studio | Other property-related revenue | ||||
REVENUES | ||||
Revenues | 6,988 | 6,561 | 18,724 | 14,964 |
Studio | Other property-related revenue | Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | 6,988 | 6,561 | 18,724 | 14,964 |
Studio | Other | ||||
REVENUES | ||||
Revenues | 234 | 141 | 758 | 271 |
Studio | Other | Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | $ 234 | $ 141 | $ 758 | $ 271 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net Income | $ 20,270 | $ 14,510 | $ 92,524 | $ 45,617 |
Other comprehensive income: change in fair value of derivatives | 1,432 | 507 | 14,429 | 611 |
Comprehensive income | 21,702 | 15,017 | 106,953 | 46,228 |
Comprehensive income attributable to preferred units | (153) | (159) | (465) | (477) |
Comprehensive income attributable to participating securities | (128) | (255) | (652) | (750) |
Comprehensive income attributable to non-controlling interest in consolidated entities | (2,569) | (2,991) | (9,059) | (9,002) |
Comprehensive income attributable to non-controlling interest in the operating partnership | (68) | (43) | (351) | (276) |
Comprehensive income attributable to Hudson Pacific Properties, Inc. common stockholders or Hudson Pacific Properties, L.P. partners' capital | 18,784 | 11,569 | 96,426 | 35,723 |
Hudson Pacific Partners L.P. | ||||
Net Income | 20,270 | 14,510 | 92,524 | 45,617 |
Other comprehensive income: change in fair value of derivatives | 1,432 | 507 | 14,429 | 611 |
Comprehensive income | 21,702 | 15,017 | 106,953 | 46,228 |
Comprehensive income attributable to preferred units | (153) | (159) | (465) | (477) |
Comprehensive income attributable to participating securities | (128) | (255) | (652) | (750) |
Comprehensive income attributable to non-controlling interest in consolidated entities | (2,569) | (2,991) | (9,059) | (9,002) |
Comprehensive income attributable to Hudson Pacific Properties, Inc. common stockholders or Hudson Pacific Properties, L.P. partners' capital | $ 18,852 | $ 11,612 | $ 96,777 | $ 35,999 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income | Non-controlling interest—units in the operating partnership | Non-controlling Interest Members In Consolidated Entities |
Beginning Balance at Dec. 31, 2016 | $ 3,702,750 | $ 1,364 | $ 3,109,394 | $ (16,971) | $ 9,496 | $ 294,859 | $ 304,608 |
Beginning balance (in shares) at Dec. 31, 2016 | 136,492,235 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Contributions | 3,870 | 3,870 | |||||
Distributions | (74,836) | (74,836) | |||||
Proceeds from sale of common stock, net of underwriters’ discount and transaction costs | 647,382 | $ 187 | 647,195 | ||||
Proceeds from sale of common stock, net of underwriters' discount and transaction costs (in shares) | 18,656,575 | ||||||
Issuance of unrestricted stock | 0 | $ 9 | (9) | ||||
Issuance of unrestricted stock (in shares) | 917,086 | ||||||
Shares withheld to satisfy tax withholding | (16,041) | $ (4) | (16,037) | ||||
Shares withheld to satisfy tax withholding (in shares) | (463,388) | ||||||
Declared dividend | (158,544) | (106,269) | (51,619) | (656) | |||
Amortization of stock-based compensation | 15,915 | 13,249 | 2,666 | ||||
Net income | 93,925 | 68,590 | 375 | 24,960 | |||
Change in fair value of derivatives | 7,398 | 7,353 | 45 | ||||
Redemption of series A | (310,855) | (24,535) | (3,622) | (282,698) | |||
Ending Balance at Dec. 31, 2017 | $ 3,910,964 | $ 1,556 | 3,622,988 | 0 | 13,227 | 14,591 | 258,602 |
Ending balance (in shares) at Dec. 31, 2017 | 155,602,508 | 155,602,508 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative adjustment related to adoption of ASU 2017-12 | $ 0 | (231) | 230 | 1 | |||
Contributions | 2,486 | 2,486 | |||||
Distributions | (3,112) | (3,112) | |||||
Issuance of unrestricted stock | 0 | ||||||
Issuance of unrestricted stock (in shares) | 66,970 | ||||||
Shares withheld to satisfy tax withholding | (693) | $ 0 | (693) | ||||
Shares withheld to satisfy tax withholding (in shares) | (20,353) | ||||||
Declared dividend | (118,059) | (35,055) | (82,470) | (534) | |||
Amortization of stock-based compensation | 13,721 | 10,664 | 3,057 | ||||
Net income | 92,010 | 82,701 | 299 | 9,010 | |||
Change in fair value of derivatives | 14,429 | 14,377 | 52 | ||||
Ending Balance at Sep. 30, 2018 | $ 3,911,746 | $ 1,556 | $ 3,597,904 | $ 0 | $ 27,834 | $ 17,466 | $ 266,986 |
Ending balance (in shares) at Sep. 30, 2018 | 155,649,125 | 155,649,125 |
CONSOLIDATED STATEMENTS OF CAPI
CONSOLIDATED STATEMENTS OF CAPITAL - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Beginning balance (in shares) | 155,602,508 | ||||
Cumulative adjustment related to adoption of ASU 2017-12 | $ 0 | ||||
Contributions | $ 2,486 | 3,870 | |||
Distributions | (3,112) | (74,836) | |||
Proceeds from sale of common units, net of underwriters’ discount and transaction costs | 647,382 | ||||
Issuance of unrestricted units | 0 | 0 | |||
Units withheld to satisfy tax withholding | (693) | (16,041) | |||
Declared distributions | (118,059) | (158,544) | |||
Amortization of unit-based compensation | 13,721 | 15,915 | |||
Net income | 92,010 | 93,925 | |||
Change in fair value of derivatives | $ 1,432 | $ 507 | $ 14,429 | $ 611 | 7,398 |
Redemption of common units | $ (310,855) | ||||
Ending balance (in shares) | 155,649,125 | 155,649,125 | 155,602,508 | ||
Hudson Pacific Partners L.P. | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Beginning balance | $ 3,910,964 | 3,702,750 | $ 3,702,750 | ||
Cumulative adjustment related to adoption of ASU 2017-12 | 0 | ||||
Contributions | 2,486 | 3,870 | |||
Distributions | (3,112) | (74,836) | |||
Proceeds from sale of common units, net of underwriters’ discount and transaction costs | 0 | 647,382 | |||
Issuance of unrestricted units | 0 | 0 | |||
Units withheld to satisfy tax withholding | (693) | (16,041) | |||
Declared distributions | (118,059) | (158,544) | |||
Amortization of unit-based compensation | 13,721 | 15,915 | |||
Net income | 92,010 | 93,925 | |||
Change in fair value of derivatives | $ 1,432 | $ 507 | 14,429 | 611 | 7,398 |
Redemption of common units | (310,855) | ||||
Ending balance | 3,911,746 | 3,911,746 | 3,910,964 | ||
Hudson Pacific Partners L.P. | Total Partners’ Capital | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Beginning balance | 3,652,362 | 3,398,142 | 3,398,142 | ||
Contributions | 0 | ||||
Distributions | 0 | ||||
Proceeds from sale of common units, net of underwriters’ discount and transaction costs | 0 | 647,382 | |||
Units withheld to satisfy tax withholding | (693) | (16,041) | |||
Declared distributions | (118,059) | (158,544) | |||
Amortization of unit-based compensation | 13,721 | 15,915 | |||
Net income | 83,000 | 68,965 | |||
Change in fair value of derivatives | 14,429 | 7,398 | |||
Redemption of common units | (310,855) | ||||
Ending balance | 3,644,760 | 3,644,760 | 3,652,362 | ||
Hudson Pacific Partners L.P. | Common Units | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Beginning balance | $ 3,639,086 | $ 3,392,264 | $ 3,392,264 | ||
Beginning balance (in shares) | 156,171,553 | 145,942,855 | 145,942,855 | ||
Cumulative adjustment related to adoption of ASU 2017-12 | $ (231) | ||||
Proceeds from sale of common units, net of underwriters’ discount and transaction costs | $ 0 | $ 647,382 | |||
Proceeds from sale of common stock, net of underwriters' discount and transaction costs (in shares) | 18,656,575 | ||||
Issuance of unrestricted units | $ 0 | ||||
Issuance of unrestricted stock (in shares) | 66,970 | 917,086 | |||
Units withheld to satisfy tax withholding | $ (693) | $ (16,041) | |||
Units withheld to satisfy tax withholding (in shares) | (20,353) | (463,388) | |||
Declared distributions | $ (118,059) | $ (158,544) | |||
Amortization of unit-based compensation | 13,721 | 15,915 | |||
Net income | 83,000 | 68,965 | |||
Redemption of common units | $ (310,855) | ||||
Redemption of common units (in shares) | (8,881,575) | ||||
Ending balance | $ 3,616,824 | $ 3,616,824 | $ 3,639,086 | ||
Ending balance (in shares) | 156,218,170 | 156,218,170 | 156,171,553 | ||
Hudson Pacific Partners L.P. | Accumulated Other Comprehensive Income | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Beginning balance | $ 13,276 | $ 5,878 | $ 5,878 | ||
Cumulative adjustment related to adoption of ASU 2017-12 | 231 | ||||
Change in fair value of derivatives | 14,429 | 7,398 | |||
Ending balance | $ 27,936 | 27,936 | 13,276 | ||
Hudson Pacific Partners L.P. | Non-controlling Interest Members In Consolidated Entities | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Beginning balance | 258,602 | $ 304,608 | 304,608 | ||
Contributions | 2,486 | 3,870 | |||
Distributions | (3,112) | (74,836) | |||
Net income | 9,010 | 24,960 | |||
Ending balance | $ 266,986 | $ 266,986 | $ 258,602 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $ 92,524 | $ 45,617 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 183,483 | 217,340 | |
Non-cash portion of interest expense | 4,527 | 3,558 | |
Amortization of stock-based/unit-based compensation | 12,919 | 11,237 | |
Straight-line rents | (25,546) | (15,174) | |
Straight-line rent expenses | 368 | 296 | |
Amortization of above- and below-market leases, net | (10,271) | (14,326) | |
Amortization of above- and below-market ground lease, net | 1,807 | 2,088 | |
Amortization of lease incentive costs | 1,035 | 1,140 | |
Other non-cash adjustments | [1] | 49 | 598 |
Gains on sale of real estate | (43,337) | (16,866) | |
Change in operating assets and liabilities: | |||
Accounts receivable | (8,655) | 1,649 | |
Deferred leasing costs and lease intangibles | (32,640) | (23,270) | |
Prepaid expenses and other assets | (630) | (3,000) | |
Accounts payable and accrued liabilities | 23,448 | 34,660 | |
Security deposits and prepaid rent | (1,201) | (5,943) | |
Net cash provided by operating activities | 197,880 | 239,604 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Additions to investment property | (278,004) | (224,797) | |
Property acquisitions | (71,152) | (257,734) | |
Payments for U.S. Government securities | 149,176 | 0 | |
Proceeds from sale of real estate | 454,542 | 81,707 | |
Distributions from unconsolidated entity | 14,036 | 17,416 | |
Contributions to unconsolidated entity | 0 | (1,071) | |
Deposits for property acquisitions | (27,500) | 0 | |
Net cash used in investing activities | (57,254) | (384,479) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from debt | 360,000 | 270,000 | |
Payments of debt | (448,792) | (321,892) | |
Proceeds from issuance of common stock/units, net | 0 | 647,524 | |
Payment for redemption of common units in the operating partnership | 0 | (310,855) | |
Redemption of series A preferred units | (362) | 0 | |
Distributions paid to common stock and unitholders | (118,059) | (118,408) | |
Distributions paid to preferred unitholders | (465) | (477) | |
Contributions from redeemable non-controlling member in consolidated entity | 37,294 | 0 | |
Contributions from non-controlling member in consolidated real estate entities | 2,486 | 3,870 | |
Distributions to non-controlling member in consolidated entities | (3,112) | (15,369) | |
Payments to satisfy tax withholding | (693) | (4,203) | |
Payments of loan costs | (6,965) | 0 | |
Net cash (used in) provided by financing activities | (178,668) | 150,190 | |
Net (decrease) increase in cash and cash equivalents and restricted cash | (38,042) | 5,315 | |
Cash and cash equivalents and restricted cash—beginning of period | 101,280 | 108,192 | |
Cash and cash equivalents and restricted cash—end of period | 63,238 | 113,507 | |
Hudson Pacific Partners L.P. | |||
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | 92,524 | 45,617 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 183,483 | 217,340 | |
Non-cash portion of interest expense | 4,527 | 3,558 | |
Amortization of stock-based/unit-based compensation | 12,919 | 11,237 | |
Straight-line rents | (25,546) | (15,174) | |
Straight-line rent expenses | 368 | 296 | |
Amortization of above- and below-market leases, net | (10,271) | (14,326) | |
Amortization of above- and below-market ground lease, net | 1,807 | 2,088 | |
Amortization of lease incentive costs | 1,035 | 1,140 | |
Other non-cash adjustments | 49 | 598 | |
Gains on sale of real estate | (43,337) | (16,866) | |
Change in operating assets and liabilities: | |||
Accounts receivable | (8,655) | 1,649 | |
Deferred leasing costs and lease intangibles | (32,640) | (23,270) | |
Prepaid expenses and other assets | (630) | (3,000) | |
Accounts payable and accrued liabilities | 23,448 | 34,660 | |
Security deposits and prepaid rent | (1,201) | (5,943) | |
Net cash provided by operating activities | 197,880 | 239,604 | |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Additions to investment property | (278,004) | (224,797) | |
Property acquisitions | (71,152) | (257,734) | |
Payments for U.S. Government securities | 149,176 | 0 | |
Proceeds from sale of real estate | 454,542 | 81,707 | |
Distributions from unconsolidated entity | 14,036 | 17,416 | |
Contributions to unconsolidated entity | 0 | (1,071) | |
Deposits for property acquisitions | (27,500) | 0 | |
Net cash used in investing activities | (57,254) | (384,479) | |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Proceeds from debt | 360,000 | 270,000 | |
Payments of debt | (448,792) | (321,892) | |
Proceeds from issuance of common stock/units, net | 0 | 647,524 | |
Payment for redemption of common units in the operating partnership | 0 | (310,855) | |
Redemption of series A preferred units | (362) | 0 | |
Distributions paid to common stock and unitholders | (118,059) | (118,408) | |
Distributions paid to preferred unitholders | (465) | (477) | |
Contributions from redeemable non-controlling member in consolidated entity | 37,294 | 0 | |
Contributions from non-controlling member in consolidated real estate entities | 2,486 | 3,870 | |
Distributions to non-controlling member in consolidated entities | (3,112) | (15,369) | |
Payments to satisfy tax withholding | (693) | (4,203) | |
Payments of loan costs | (6,965) | 0 | |
Net cash (used in) provided by financing activities | (178,668) | 150,190 | |
Net (decrease) increase in cash and cash equivalents and restricted cash | (38,042) | 5,315 | |
Cash and cash equivalents and restricted cash—beginning of period | 101,280 | 108,192 | |
Cash and cash equivalents and restricted cash—end of period | $ 63,238 | $ 113,507 | |
[1] | 1. Represents bad debt expense/recovery, unrealized loss/gain on ineffective portion of derivatives and unrealized loss/gain on non-real estate investment. |
Organization
Organization | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Hudson Pacific Properties, Inc. is a Maryland corporation formed on November 9, 2009 as a fully integrated, self-administered and self-managed real estate investment trust (“REIT”). Through its controlling interest in the operating partnership and its subsidiaries, Hudson Pacific Properties, Inc. owns, manages, leases, acquires and develops real estate, consisting primarily of office and studio properties. Unless otherwise indicated or unless the context requires otherwise, all references in these financial statements to “the Company” refer to Hudson Pacific Properties, Inc. together with its consolidated subsidiaries, including Hudson Pacific Properties, L.P. Unless otherwise indicated or unless the context requires otherwise, all references to “our operating partnership” or “the operating partnership” refer to Hudson Pacific Properties, L.P. together with its consolidated subsidiaries. On April 1, 2015, the Company completed the acquisition of the EOP Northern California Portfolio (“EOP Acquisition”) from Blackstone Real Estate Partners V and VI (“Blackstone”). The EOP Acquisition consisted of 26 high-quality office assets totaling approximately 8.2 million square feet and two development parcels located throughout Northern California. The total consideration paid for the EOP Acquisition before certain credits, prorations and closing costs included a cash payment of $1.75 billion and an aggregate of 63,474,791 shares of common stock of Hudson Pacific Properties, Inc. and common units in the operating partnership. The Company’s portfolio consists of properties located throughout Northern and Southern California and the Pacific Northwest. The following table summarizes the Company’s portfolio as of September 30, 2018: Segments Number of Properties Square Feet (unaudited) Office 51 13,498,837 Studio 3 1,246,423 TOTAL (1) 54 14,745,260 _________________ 1. Includes redevelopment and development properties. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements of the Company and the operating partnership are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to the Securities and Exchange Commission (“SEC”) rules and regulations. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented. References to number of properties and square-feet are not covered by the auditor’s review procedures. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2018. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in the 2017 Annual Report on Form 10-K of Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. and the notes thereto. Certain amounts in the consolidated financial statements for the prior period have been reclassified to conform to the current period presentation. Included in the reclassified amounts are properties held for sale. These amounts relate to our Peninsula Office Park property, which was sold on July 27, 2018. Principles of Consolidation The unaudited interim consolidated financial statements of the Company include the accounts of the Company, the operating partnership and all wholly owned and controlled subsidiaries. The consolidated financial statements of the operating partnership include the accounts of the operating partnership and all wholly owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in the consolidated financial statements. Under the consolidation guidance, the Company first evaluates an entity using the variable interest model, then the voting model. The Company ultimately consolidates all entities that the Company controls through either majority ownership or voting rights, including all variable interest entities (“VIEs”) of which the Company is considered the primary beneficiary. The Company accounts for all other unconsolidated joint ventures using the cost or equity method of accounting. In addition, the Company continually evaluates each legal entity that is not wholly owned for reconsideration based on changing circumstances. VIEs are defined as entities in which equity investors do not have: • the characteristics of a controlling financial interest; • sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties; and/or • the entity is structured with non-substantive voting rights. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with both the power to direct the activities that most significantly affect the VIE’s economic performance and the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. As of September 30, 2018, the Company has determined that four joint ventures and our operating partnership met the definition of a VIE. Three of the joint ventures are consolidated entities and one joint venture is a non-consolidated entity. Consolidated Entities As of September 30, 2018, the operating partnership has determined that three of its joint ventures met the definition of a VIE and are consolidated: Entity Property Ownership Interest Hudson 1455 Market, L.P. 1455 Market 55.0 % Hudson 1099 Stewart, L.P. Hill7 55.0 % HPP-MAC WSP, LLC One Westside and 10850 Pico 75.0 % On March 1, 2018, the Company entered into a joint venture agreement with Macerich WSP, LLC (“Macerich”) to form HPP-MAC WSP, LLC (“HPP-MAC JV”). On August 31, 2018, Macerich contributed Westside Pavilion to the HPP-MAC JV. The Company intends to redevelop Westside Pavilion into approximately 500,000 square feet of state-of-the-art creative office space called One Westside, while maintaining approximately 95,987 square feet of retail and entertainment space at 10850 Pico. The HPP-MAC JV is held 75% by the Company and 25% by Macerich, with the Company serving as the managing member and developer. The joint venture agreement lacks substantive participating or kick-out rights and is therefore a VIE. The Company, through its subsidiaries, has the right to (i) receive benefits and absorb losses and (ii) has the power to direct the activities that most significantly affect the joint venture and, as a result, is the primary beneficiary and consolidates the joint venture. As of September 30, 2018, the Company has determined that its operating partnership met the definition of a VIE and is consolidated. Substantially all of the assets and liabilities of the Company are related to VIEs. On October 9, 2018, the Company entered into a joint venture with Allianz U.S. Private REIT LP (“Allianz”) to purchase the Ferry Building property located in San Francisco, California. The Company owns 55% of the joint venture. See Note 19 for details. Non-consolidated Entities On June 16, 2016, the Company entered into a joint venture to co-originate a loan secured by land in Santa Clara, California. The assets of the joint venture consist of notes receivable. As of September 30, 2018, the Company has determined it is not the primary beneficiary of the joint venture that meets the definition of a VIE. Due to its significant influence over the non-consolidated entity, the Company accounts for it using the equity method of accounting. Under the equity method, the Company initially records the investment at cost and subsequently adjusts for equity in earnings or losses and cash contributions and distributions. On July 10, 2018, the Company received a return of capital related to its share of the repayment of the notes receivable. The Company’s net equity investment is reflected within prepaid expenses and other assets on the Consolidated Balance Sheets, which represents the Company’s maximum exposure for loss. As of September 30, 2018, the net equity investment was $92 thousand. The Company’s share of net income or loss from the entity is included within other income on the Consolidated Statements of Operations. The Company owns 21% of the non-consolidated entity. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate properties, its accrued liabilities and its performance-based equity compensation awards. The Company bases its estimates on historical experience, current market conditions and various other assumptions that are believed to be reasonable under the circumstances. Actual results could materially differ from these estimates. Revenue Recognition The Company has compiled an inventory of its sources of revenues and has identified the following material revenue streams: (i) rental revenues (ii) tenant recoveries (iii) ancillary revenues (iv) guest parking revenues and (v) sale of real estate. Revenue Stream Components Financial Statement Location Rental revenues Office rentals, stage rentals and storage rentals Office and studio segments: rental Tenant recoveries Reimbursement of real estate taxes, insurance, repairs and maintenance, other operating expenses and monthly parking revenues Office segment: tenant recoveries and parking and other Studio segment: tenant recoveries and other property-related revenue Ancillary revenues Revenues derived from tenants’ use of lighting, equipment rental, power, HVAC and telecommunications (i.e., telephone and internet) Studio segment: other property-related revenue Guest parking revenues Parking revenue that is not associated with lease agreements Office segment: parking and other Sale of real estate Gains on sales derived from cash consideration less cost basis Gains on sale of real estate Currently, rental revenues are accounted for under ASC 840, Leases . Rental revenues will be accounted for under ASC 842, Leases (“ASC 842”), which the Company plans to adopt on January 1, 2019. Currently tenant recoveries are accounted for under ASC 605, Revenue Recognition (“ASC 605”). Tenant recoveries will be accounted for under ASC 606, Revenue from Contracts with Customers (“ASC 606”), beginning on January 1, 2019, when the Company adopts ASC 842. Under the current ASC 842 guidance, the Company would be required to classify its tenant recoveries into lease and non-lease components. On March 28, 2018, the FASB agreed to issue an amendment to ASC 842, which, if elected, permits the Company to classify tenant recoveries as a single lease component and account for tenant recoveries with rental revenues in the Consolidated Statement of Operations. Please refer to our Update on ASC 842 implementation section below for details. Ancillary revenues and guest parking revenues have been accounted for under ASC 606 since the Company adopted this standard on January 1, 2018. This standard requires the Company to recognize revenues based on a five-step model and will result in the consideration being recognized once all performance obligations are satisfied. The timing and pattern of revenue recognition as it relates to ancillary revenues and guest parking revenues have not changed from those under ASC 605. Sale of real estate has been accounted for under ASC 610, Other Income , since the Company adopted this standard on January 1, 2018. This standard requires the Company to apply certain recognition and measurement principles in accordance with ASC 606 when it de-recognizes nonfinancial assets and in-substance nonfinancial assets, and the counterparty is not a customer. This is the case for the Company’s sales of real estate, and as a result the Company is required to evaluate the sales of real estate based on transfer of control. If a real estate sale contract includes ongoing involvement by the seller with the sold property, the seller must evaluate each promised good or service under the contract to determine whether it represents a performance obligation, constitutes a guarantee or prevents the transfer of control. The timing and pattern of revenue recognition might change as it relates to gains of sale of real estate if the sale includes continued involvement that represents a separate performance obligation. Recently Issued Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of Accounting Standards Update (“ASU”). The following ASUs were adopted by the Company in 2018: Standard Description Effect on the Financial Statements or Other Significant Matters ASU 2018-09, Codification Improvements The amendment, among other things, clarifies when excess tax benefits should be recognized for share-based compensation awards, removes inconsistent guidance in income tax accounting for business combinations, clarifies the circumstances when derivatives may be offset, and the measurement of liability or equity-classified financial instruments when an identical asset is held as an asset, and allows portfolios of financial instruments and nonfinancial instruments accounted for as derivatives to use the portfolio exception to valuation. The Company adopted this guidance during Q2 2018 using the prospective approach. The adoption did not have an impact on the Consolidated Financial Statements. ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting This amendment expands the scope of ASC 718 to include all share-based payment arrangements. It simplifies the accounting for share-based payments granted to non-employees for goods and services by aligning the accounting with the requirements for share-based payments granted to employees. The Company adopted this guidance during Q2 2018 using the prospective approach. The adoption did not have an impact on the Consolidated Financial Statements. Standard Description Effect on the Financial Statements or Other Significant Matters ASU 2018-04, Investments—Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 (SEC Update) The guidance no longer allows the use of cost method of accounting for equity instruments that do not have a readily determinable fair value, and companies are now required to measure equity investments at fair value through net income. Companies are permitted to elect a measurement alternative that allows for measuring equity instruments at cost, less any impairment, plus or minus changes resulting from observable price changes, adjusted as of the date that an observable transaction takes place, rather than the report date. For equity investments that do not have a readily determinable fair value, this guidance is adopted prospectively for all investments that exist as of the date of adoption. The guidance allows entities to use a prospective transition approach only for securities they elect to measure using the measurement alternative. The Company adopted this guidance during Q1 2018 using the prospective approach. The Company has elected to measure our equity instruments using the measurement alternative. Please see Note 6 for details. ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. Therefore, a cumulative effect adjustment related to elimination of ineffectiveness measurement is required to be recorded to the opening balance of retained earnings as of the beginning of the fiscal year of adoption for a cash flow hedge. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. This guidance must be applied using a modified retrospective approach. The Company adopted this guidance during Q1 2018 using the modified retrospective approach. As a result of the adoption, the concept of ineffectiveness from an accounting perspective is eliminated. Subsequent changes in fair value for a hedging instrument that has been designated and qualifies as a cash flow hedge will be recognized as a component in other comprehensive income. Additionally, the Company eliminated any previously recorded ineffectiveness with a cumulative effect adjustment. Please see Note 8 for details. ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting The guidance clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. This guidance must be applied prospectively. The Company adopted this guidance during Q1 2018 on a prospective basis. The adoption did not have an impact on the Consolidated Financial Statements. ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets The guidance updates the definition of an in-substance nonfinancial asset and clarifies the scope of ASC 610-20 on the sale or transfer of nonfinancial assets to non-customers, including partial sales. It also clarifies the de-recognition guidance for nonfinancial assets to conform with the new revenue recognition standard. Either a full or modified retrospective approach can be applied. The Company adopted this guidance during Q1 2018 using the modified retrospective approach. The Company has not had variable consideration in our sale of real estate, or partial sales of nonfinancial assets or contribution of a nonfinancial asset to form a joint venture with retained non-controlling interest. The adoption did not have an impact on the Consolidated Financial Statements. Standard Description Effect on the Financial Statements or Other Significant Matters ASU 2014-09, Revenue from Contracts with Customers amended by ASU 2016-08, Revenue from Contracts with Customers—Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Issued on May 28, 2014, ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and specifically notes that lease contracts with customers are a scope exception. Issued on March 17, 2016, ASU 2016-08 clarifies certain aspects of the principal-versus-agent guidance in its new revenue recognition standard related to the determination of whether an entity is a principal or agent and the determination of the nature of each specified good or service. The guidance provides for practical expedients associated with the determination of whether a significant financing component exists and the expedient for recording an immediate expense for certain incremental costs of obtaining a contract with a customer. The Company adopted this guidance during Q1 2018 using the modified retrospective approach and is using the practical expedients associated with expensing incremental costs of obtaining a contract with a customer with terms of one year or less. The adoption of this ASU did not result in any changes with respect to the timing and pattern of revenue recognition. Please refer to the revenue recognition policy note above for the additional disclosures. In August 2018, the SEC adopted a Disclosure Update and Simplification release, which outlines Regulation S-X amendments to eliminate outdated or duplicative disclosure requirements. The final rule also amends the interim financial statement requirements to require a reconciliation of changes in stockholders’ equity and capital in the notes or as a separate statements. These amendments are effective for all filings made 30 days after the amendments are published in the Federal Register, which was on October 4, 2018. The SEC announced that it would not object if the first presentation of the changes in stockholders’ equity and capital for a December 31st filer were made in the Company’s March 31, 2019 Form 10-Q. The Company plans to use the new presentation beginning in 2019. Update on ASC 842 implementation On February 25, 2016, the FASB issued ASU 2016-02, Leases , to amend the accounting guidance for leases and set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). This ASU is effective for annual reporting periods (including interim periods) beginning after December 15, 2018. Issuers have two options for adoption: • a modified retrospective approach that must be applied for leases that exist or are entered into after January 1, 2017, the beginning of the earliest comparative period presented in the 2019 consolidated financial statements, with a cumulative adjustment to the opening balance of retained earnings (accumulated deficit) on January 1, 2017, and restatement of the amounts presented prior to January 1, 2019. • a modified retrospective transition method that, if the transition method is elected, must be applied for leases that existed or are entered into after January 1, 2019, the effective date of the ASU, with a cumulative adjustment to the opening balance of retained earnings (accumulated deficit) on January 1, 2019. Additional disclosures for the periods prior to adoption would follow ASC 840 disclosure requirements. This guidance requires all lessees to record a lease liability at lease inception, with a corresponding right-of-use asset, except for short-term leases. Lessor accounting will not be fundamentally changed. ASC 842 provides practical expedients that allow entities to not (i) reassess whether any expired or existing contracts are considered or contain leases; (ii) reassess the lease classification for any expired or existing leases; and (iii) reassess initial direct costs for any existing leases. The Company plans to adopt the standard on January 1, 2019 and expects to elect the use of practical expedients. The Company plans to elect the transition method for adoption as described above. Lessor Accounting For the three months ended September 30, 2018 and September 30, 2017, the Company recognized rental revenues and tenant recoveries of $166.6 million and $175.3 million, respectively. For the nine months ended September 30, 2018 and September 30, 2017, the Company recognized $491.2 million and $501.4 million, respectively. Under current accounting standards, the Company recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset. Tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance and other operating expenses are recognized as revenue in the period during which the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Company, which is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. ASC 842 requires companies to identify lease and non-lease components of a lease agreement. Lease components relate to the right to use the leased asset whereas non-lease components relate to payments for goods or services that are transferred separately from the right to use the underlying asset. Total lease consideration is allocated to lease and non-lease components on a relative standalone basis. The recognition of revenues related to lease components will be governed by ASC 842, while revenue related to non-lease components will be subject to ASC 606. For lessors, the guidance provides for a practical expedient to elect a combined single lease component presentation if (i) the timing and pattern of the transfer of the combined single lease component is the same, and (ii) the related lease component, if accounted for separately, would be classified as an operating lease. The Company plans to elect the practical expedient for non-lease components that qualify to be combined under a single lease component presentation. ASC 842 also requires lessors to capitalize only those costs that are defined as initial direct costs. Under the current accounting standards, the Company capitalizes initial direct and indirect leasing costs. During the three months ended September 30, 2018 and September 30, 2017, the Company capitalized $1.7 million and $1.8 million of indirect leasing costs, respectively. During the nine months ended September 30, 2018 and September 30, 2017, the Company capitalized $5.5 million and $5.0 million of indirect leasing costs, respectively. Under ASC 842, and based on our current policies and processes, these costs will be expensed as incurred. Lessee Accounting As of September 30, 2018, the future undiscounted minimum lease payments under the Company’s ground leases totaled $505.1 million. This guidance requires lessees to record a lease liability at lease inception, with a corresponding right-of-use asset, except for short-term leases. The Company continues to evaluate the amount of right-of-use asset and lease liability that will ultimately be recorded with respect to its ground lease agreements. The Company has not completed its analysis of ASC 842. Other recently issued ASUs The Company considers the applicability and impact of all ASUs. The following table lists the recently issued ASUs that have not been disclosed in the Company’s 2017 Annual Report on Form 10-K and have not been adopted by the Company. The list excludes those ASUs that are not expected to have a material impact on the Company’s consolidated financial statements. Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes The amendment permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under ASC 815. Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the impact of this update. ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) The amendment allows for capitalizing implementation costs incurred in a hosting arrangement that is a service contract. Effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted including adoption in any interim period. The Company is currently evaluating the impact of this update. ASU 2018-11, Leases (Topic 842): Targeted Improvements The amendment provides (i) a transition option to adopt ASC 842 using the modified retrospective transition provision and (ii) a practical expedient for lessors to elect a combined single lease component presentation. The effective date and transition requirements are the same as that in Update 2016-02 (Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.) The Company expects to elect to use the transition method and practical expedient as described above in the Update on ASC 842 Implementation section. ASU 2018-10, Codification Improvements to Topic 842, Leases The amendments make 16 technical corrections to the lease standard, which include clarification of the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. The effective date and transition requirements are the same as that in Update 2016-02 (Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.) The Company does not expect this update to have an impact on the Consolidated Financial Statements. ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 The amendments in this update permit an entity to elect an optional transition practical expedient to not evaluate under ASC 842 land easements that exist or expired before the entity’s adoption of ASC 842 and that were not previously accounted for as leases under ASC 840. An entity that elects this practical expedient should apply the practical expedient consistently to all of its existing or expired land easements that were not previously accounted for as leases under ASC 840. Once an entity adopts ASC 842, it should apply it prospectively to all new (or modified) land easements to determine whether the arrangement should be accounted for as a lease. The effective date and transition requirements are the same as that in Update 2016-02 (Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.) The Company expects to elect the transition practical expedient for land easements. |
Investment in Real Estate
Investment in Real Estate | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
Investment in Real Estate | Investment in Real Estate Real estate held for investment The following table summarizes the Company’s investment in real estate, at cost as of: September 30, 2018 December 31, 2017 Land $ 1,365,387 $ 1,204,700 Building and improvements 4,593,702 4,389,846 Tenant improvements 469,556 397,012 Furniture and fixtures 8,965 8,576 Property under development 252,764 219,227 INVESTMENT IN REAL ESTATE, AT COST (1) $ 6,690,374 $ 6,219,361 _____________ 1. Excludes balances related to properties that have been classified as held for sale. Acquisitions The Company’s acquisitions are accounted for using the acquisition method. The results of operations for each of these acquisitions are included in the Company’s Consolidated Statements of Operations from the date of acquisition. The Company evaluates each acquisition to determine if the integrated set of assets and activities acquired meet the definition of a business and need to be accounted for as a business combination in accordance with ASC 805, Business Combinations . An integrated set of assets and activities would fail to qualify as a business if either (i) substantially all of the fair value of the gross assets acquired is concentrated in either a single identifiable asset or a group of similar identifiable assets or (ii) the integrated set of assets and activities is lacking, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs (i.e., revenue generated before and after the transaction). An acquired process is considered substantive if (i) the process includes an organized workforce (or includes an acquired contract that provides access to an organized workforce) that is skilled, knowledgeable and experienced in performing the process, (ii) the process cannot be replaced without significant cost, effort, or delay or (iii) the process is considered unique or scarce. The Company assesses fair value based on Level 2 and Level 3 inputs within the fair value framework, which includes estimated cash flow projections that utilize appropriate discount, capitalization rates, renewal probability and available market information, which includes market rental rate and market rent growth rates. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it were vacant. The fair value of acquired “above- and below-” market leases are based on the estimated cash flow projections utilizing discount rates that reflect the risks associated with the leases acquired. The amount recorded is based on the present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the extended below-market term for any leases with below-market renewal options. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes estimates of lost rents at market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related costs. The fair value of any favorable/unfavorable mark-to-market adjustment of debt assumed is based on the estimated cash flow projections utilizing interest rates available for the issuance of debt with similar terms and remaining maturities. The amount recorded is based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the assumed debt terms (ii) management’s estimate of fair market, measured over a period equal to the remaining term of the debt. The following table summarizes the information on the acquisitions completed during the nine months ended September 30, 2018: Property Submarket Segment Date of Acquisition Square Feet (unaudited) Purchase Price (1) (in millions) 6605 Eleanor Avenue ( 2 ) Hollywood Studio 6/7/2018 22,823 $ 18.0 1034 Seward Street ( 2 ) Hollywood Studio 6/7/2018 18,673 12.0 One Westside and 10850 Pico ( 3 ) West Los Angeles Office 8/31/2018 595,987 190.0 TOTAL ACQUISITIONS 637,483 $ 220.0 _____________ 1. Represents purchase price before certain credits, prorations and closing costs. 2. The properties are adjacent to, and now form part of, the Sunset Las Palmas Studios property and consist of sound stages, production office and support space. 3. The Company purchased the property through a joint venture with Macerich. The Company owns 75% of the ownership interest in the consolidated joint venture. The Company’s acquisitions did not meet the definition of a business and were therefore accounted for as asset acquisitions. In accordance with asset acquisitions, the purchase price includes capitalized acquisition costs. The following table represents the Company’s final aggregate purchase price accounting, as of the respective acquisition dates, for each of the Company’s acquisitions completed in the nine months ended September 30, 2018: 6605 Eleanor Avenue 1034 Seward Street One Westside and 10850 Pico Total Total consideration Cash consideration for real estate investments $ 18,071 $ 12,095 $ 40,986 $ 71,152 Cash consideration for U.S. Government securities — — 149,176 149,176 Debt assumed — — 139,003 139,003 Redeemable non-controlling interest in consolidated real estate entity — — 12,749 12,749 TOTAL CONSIDERATION $ 18,071 $ 12,095 $ 341,914 $ 372,080 Allocation of consideration Investment in real estate $ 18,071 $ 12,095 $ 196,444 $ 226,610 U.S. Government securities — — 149,176 149,176 Deferred leasing costs and in-place lease intangibles ( 1 ) — — 826 826 Above-market leases ( 2 ) — — 605 605 Below-market leases ( 3 ) — — (5,137) (5,137) TOTAL $ 18,071 $ 12,095 $ 341,914 $ 372,080 _____________ 1. Represents weighted-average amortization period of 4.22 years. 2. Represents weighted-average amortization period of 5.42 years. 3. Represents weighted-average amortization period of 17.19 years. On October 9, 2018, the Company purchased, through a joint venture with Allianz, the Ferry Building property located in San Francisco, California. On October 23, 2018, the Company purchased the 6660 Santa Monica property located in Hollywood, California. See Note 19 for details. Dispositions The following table summarizes the properties sold during the nine months ended September 30, 2018. These properties were non-strategic assets to the Company’s portfolio: Property Date of Disposal Approximate Square Feet Sales Price (1) (in millions) Embarcadero Place 1/25/2018 197,402 $ 136.0 2600 Campus Drive (building 6 of Peninsula Office Park) 1/31/2018 63,050 22.5 2180 Sand Hill 3/1/2018 45,613 82.5 9300 Wilshire 4/10/2018 61,422 13.8 Peninsula Office Park 7/27/2018 447,739 210.0 TOTAL DISPOSITIONS 815,226 $ 464.8 _________________ 1. Represents gross sales price before certain credits, prorations and closing costs. These dispositions met the criteria in ASC 610 for recognizing gains of $3.7 million and $43.3 million for the three and nine months ended September 30, 2018, which is included in the gains on sale of real estate line item in the Consolidated Statements of Operations. Held for Sale The Company had five properties classified as held for sale as of December 31, 2017. All five properties have been disposed of during 2018. The Company had no properties classified as held for sale as of September 30, 2018. The following table summarizes the components of assets and liabilities associated with real estate held for sale as of: September 30, 2018 December 31, 2017 ASSETS Investment in real estate, net $ — $ 396,846 Accounts receivable, net — 213 Straight-line rent receivables, net — 5,225 Deferred leasing costs and lease intangible assets, net — 9,589 Prepaid expenses and other assets, net — 58 ASSETS ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ — $ 411,931 LIABILITIES Accounts payable, accrued liabilities and other $ — $ 1,808 Lease intangible liabilities, net — 485 Security deposits and prepaid rent — 2,610 LIABILITIES ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ — $ 4,903 Impairment of Long-Lived Assets No impairment indicators have been noted and the Company recorded no impairment charges for the nine months ended September 30, 2018. |
Deferred Leasing Costs and Leas
Deferred Leasing Costs and Lease Intangibles, net | 9 Months Ended |
Sep. 30, 2018 | |
Leases [Abstract] | |
Deferred Leasing Costs and Lease Intangibles, net | Deferred Leasing Costs and Lease Intangibles, net The following summarizes the Company’s deferred leasing costs and lease intangibles as of: September 30, 2018 December 31, 2017 Above-market leases $ 9,600 $ 18,028 Accumulated amortization (7,222) (15,131) Above-market leases, net 2,378 2,897 Deferred leasing costs and in-place lease intangibles 315,232 301,945 Accumulated amortization (121,592) (127,703) Deferred leasing costs and in-place lease intangibles, net 193,640 174,242 Below-market ground leases 68,388 68,388 Accumulated amortization (8,306) (6,498) Below-market ground leases, net 60,082 61,890 DEFERRED LEASING COSTS AND LEASE INTANGIBLE ASSETS, NET ( 1) $ 256,100 $ 239,029 Below-market leases $ 95,533 $ 103,597 Accumulated amortization (53,173) (55,019) Below-market leases, net 42,360 48,578 Above-market ground leases 1,095 1,095 Accumulated amortization (166) (133) Above-market ground leases, net 929 962 LEASE INTANGIBLE LIABILITIES, NET (1 ) $ 43,289 $ 49,540 __________________ 1. Excludes balances related to properties that have been classified as held for sale. On October 9, 2018, the Company entered into a joint venture with Allianz to purchase the Ferry Building property located in San Francisco, California. The deferred leasing costs and lease intangibles related to this acquisition are excluded from the table above. See Note 19 for details. The Company recognized the following amortization related to deferred leasing costs and lease intangibles: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Above-market leases (1) $ (355) $ (1,855) $ (1,238) $ (5,122) Deferred leasing costs and in-place lease intangibles (2) $ (11,038) $ (17,376) $ (34,157) $ (57,813) Below-market ground leases (3) $ (602) $ (629) $ (1,840) $ (2,121) Below-market leases (1) $ 3,584 $ 5,776 $ 11,509 $ 19,448 Above-market ground leases (3) $ 11 $ 11 $ 33 $ 33 __________________ 1. Amortization is recorded in revenues in the Consolidated Statements of Operations. 2. Amortization is recorded in depreciation and amortization expenses and office rental revenues in the Consolidated Statements of Operations. 3. Amortization is recorded in office operating expenses in the Consolidated Statements of Operations. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Receivables | ReceivablesThe Company’s accounting policy and methodology used to estimate the allowance for doubtful accounts is discussed in the Company’s 2017 Annual Report on Form 10-K. Accounts receivable The following table summarizes the Company’s accounts receivable, net of allowance for doubtful accounts as of: September 30, 2018 December 31, 2017 Accounts receivable $ 14,383 $ 6,706 Allowance for doubtful accounts (2,258) (2,472) ACCOUNTS RECEIVABLE, NET (1) $ 12,125 $ 4,234 _____________ 1. Excludes balances related to properties that have been classified as held for sale. Straight-line rent receivable The following table represents the Company’s straight-line rent receivables, net of allowance for doubtful accounts as of: September 30, 2018 December 31, 2017 Straight-line rent receivables $ 131,713 $ 106,466 Allowance for doubtful accounts — — STRAIGHT-LINE RENT RECEIVABLES, NET (1) $ 131,713 $ 106,466 _____________ |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets, net | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses and Other Assets, net | Prepaid Expenses and Other Assets, net The following table summarizes the Company’s prepaid expenses and other assets, net as of: September 30, 2018 December 31, 2017 Derivative assets $ 26,988 $ 12,586 Goodwill 8,754 8,754 Non-real estate investment 2,713 1,785 Investment in unconsolidated entities 92 14,240 Other 54,062 23,774 PREPAID EXPENSES AND OTHER ASSETS, NET ( 1 ) $ 92,609 $ 61,139 _____________ 1. Excludes balances related to properties that have been classified as held for sale. Goodwill No goodwill impairment indicators have been noted during the nine months ended September 30, 2018. Non-real estate investment In September 2016, the Company entered into an agreement to receive shares of a non-public company in lieu of rental revenues and tenant recoveries. The shares were accounted for under the cost method of accounting as there was no readily determinable fair value. The investment in the shares has been accounted for under ASC 825-10, Recognition and Measurement of Financial Assets and Financial Liabilities |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table sets forth information with respect to our outstanding indebtedness: September 30, 2018 December 31, 2017 Interest Rate (1) Contractual Maturity Date UNSECURED AND SECURED DEBT Unsecured debt Unsecured revolving credit facility (2)(3) $ 110,000 $ 100,000 LIBOR + 1.05% to 1.50% 3/13/2022 ( 4 ) Term loan A (2)(5) 300,000 300,000 LIBOR + 1.20% to 1.70% 4/1/2020 (6) Term loan C (2) 75,000 75,000 LIBOR + 1.30% to 2.20% 11/17/2020 Term loan B (2)(7) 350,000 350,000 LIBOR + 1.20% to 1.70% 4/1/2022 Term loan D (2)(8) 125,000 125,000 LIBOR + 1.20% to 1.70% 11/17/2022 Series A notes 110,000 110,000 4.34% 1/2/2023 Series E notes 50,000 50,000 3.66% 9/15/2023 Series B notes 259,000 259,000 4.69% 12/16/2025 Series D notes 150,000 150,000 3.98% 7/6/2026 Registered senior notes 400,000 400,000 3.95% 11/1/2027 Series C notes 56,000 56,000 4.79% 12/16/2027 Total unsecured debt 1,985,000 1,975,000 Secured debt Sunset Gower Studios/Sunset Bronson Studios ( 9 ) 5,001 5,001 LIBOR + 2.25% 3/4/2019 ( 4 ) Met Park North (1 0 ) 64,500 64,500 LIBOR + 1.55% 8/1/2020 10950 Washington (1 1 ) 27,018 27,418 5.32% 3/11/2022 Element LA 168,000 168,000 4.59% 11/6/2025 Hill7 (1 2 ) 101,000 101,000 3.38% 11/6/2028 Rincon Center — 98,392 5.13% N/A Total secured debt 365,519 464,311 Total unsecured and secured debt 2,350,519 2,439,311 Unamortized deferred financing costs and loan discounts (1 3 ) (17,724) (17,931) TOTAL UNSECURED AND SECURED DEBT, NET $ 2,332,795 $ 2,421,380 IN-SUBSTANCE DEFEASED DEBT (14) $ 139,003 $ — 4.47% 10/1/2022 _________________ 1. Interest rate with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed. Interest rates are as of September 30, 2018, which may be different than the interest rates as of December 31, 2017 for corresponding indebtedness. 2. The Company has an option to make an irrevocable election to change the interest rate depending on the Company’s credit rating or a specified base rate plus an applicable margin. As of September 30, 2018, no such election had been made. 3. The Company has a total capacity of $600.0 million under its unsecured revolving credit facility. 4. The maturity date may be extended once for an additional one-year term. 5. The interest rate on the outstanding balance of the term loan was effectively fixed at 2.56% to 3.06% per annum through the use of two interest rate swaps. See Note 8 for details. 6. The maturity date may be extended twice, each time for an additional one-year term. 7. The interest rate on the outstanding balance of the term loan was effectively fixed at 2.96% to 3.46% per annum through the use of two interest rate swaps. See Note 8 for details. 8. The interest rate on the outstanding balance of the term loan was effectively fixed at 2.63% to 3.13% per annum through the use of an interest rate swap. See Note 8 for details. 9. The Company has the ability to draw up to $257.0 million under its construction loan, subject to lender required submissions. This loan is also secured by the Company’s ICON and CUE properties. 10. This loan bears interest only. The interest rate on the full loan amount has been effectively fixed at 3.71% per annum through the use of an interest rate swap. See Note 8 for details. 11. Monthly debt service includes annual debt amortization payments based on a 30-year amortization schedule with a balloon payment at maturity. 12. The Company owns 55% of the ownership interest in the consolidated joint venture that owns the Hill7 property. The full amount of the loan is shown. This loan bears interest only at 3.38% until November 6, 2026, at which time the interest rate will increase and monthly debt service will include principal payments with a balloon payment at maturity. 13. Excludes deferred financing costs related to establishing the Company’s unsecured revolving credit facility. 14. On August 31, 2018, the Company assumed the debt held by a trust subsidiary of the consolidated joint venture that owns the One Westside and 10850 Pico properties. While the Company owns 75% of the ownership interest in the joint venture, the full amount of the loan is shown. The joint venture has, in-substance, defeased the debt by purchasing U.S. Government securities, which are intended to generate cash flows to fund loan obligations through the early prepayment date of the debt. Monthly debt service includes annual debt amortization payments based on a 10-year amortization schedule with a balloon payment at maturity. Current year activity During the nine months ended September 30, 2018, the outstanding borrowings on the unsecured revolving credit facility increased by $10.0 million, net of paydowns. The Company uses the unsecured revolving credit facility to finance the acquisition of other properties, to provide funds for tenant improvements and capital expenditures and to provide for working capital and other corporate purposes. On February 1, 2018, the Company paid in full the debt secured by its Rincon Center property, which was due to mature in May 2018. On March 13, 2018, the operating partnership entered into the amended and restated credit agreement with various financial institutions. The amended and restated credit agreement modifies the operating partnership’s unsecured revolving credit facility and its term loans as discussed under the Term Loan and Credit Facility section below. On August 31, 2018, a trust subsidiary of the consolidated joint venture that owns One Westside and 10850 Pico purchased $149.2 million of government-backed securities and assumed $139.0 million of debt. The securities are intended to generate cash flows to fund loan obligations through the early prepayment date of the loan. This transaction does not qualify as an extinguishment of debt, since the Company will be responsible if there is a shortfall in the assets deposited into the trust. The securities are investments held to maturity and are carried at amortized cost on our Consolidated Balance Sheets. Indebtedness The Company presents its financial statements on a consolidated basis. Notwithstanding such presentation, except to the extent expressly indicated, such as in the case of the project financing for Sunset Gower Studios and Sunset Bronson Studios, the Company’s separate property-owning subsidiaries are not obligors of the debt of their respective affiliates and each property-owning subsidiary’s separate liabilities do not constitute obligations of its respective affiliates. Loan agreements include events of default that the Company believes are usual for loans and transactions of this type. As of the date of this filing, there have been no events of default associated with the Company’s loans. The following table summarizes the minimum future principal payments due (before the impact of extension options, if applicable) on the Company's debt as of September 30, 2018: Year In-substance Defeased Debt Unsecured and Secured Debt Remaining 2018 $ 780 $ 138 2019 3,193 5,569 2020 3,323 440,095 2021 3,494 632 2022 128,213 610,085 Thereafter — 1,294,000 TOTAL $ 139,003 $ 2,350,519 Term Loan and Credit Facility On March 13, 2018, the operating partnership entered into a third amended and restated credit agreement (the “Amended and Restated Credit Agreement”) with various financial institutions. The Amended and Restated Credit Agreement amends and restates and replaces (i) the operating partnership’s existing second amended and restated credit agreement, entered into on March 31, 2015 (the “Prior Credit Agreement”), which governed its $400.0 million unsecured revolving credit facility, $300.0 million unsecured 5-year term loan facility and $350.0 million unsecured 7-year term loan facility, and (ii) the operating partnership’s Term Loan Credit Agreement, entered into on November 17, 2015 (together with the Prior Credit Agreement, the “Existing Credit Agreements”), which governed its $75.0 million unsecured 5-year term loan facility and $125.0 million unsecured 7-year term loan facility. The Amended and Restated Credit Agreement provides for (i) the increase of the operating partnership’s unsecured revolving credit facility to $600.0 million and the extension of the term to March 13, 2022 and (ii) term loans in amount and tenor equal to the term loans outstanding under the Existing Credit Agreements ($300.0 million term loan A maturing April 1, 2020, $350.0 million term loan B maturing April 1, 2022, $75.0 million term loan C maturing November 17, 2020 and $125.0 million term loan D maturing November 17, 2022). The following table summarizes the balance and key terms of the unsecured revolving credit facility as of: September 30, 2018 December 31, 2017 Outstanding borrowings $ 110,000 $ 100,000 Remaining borrowing capacity 490,000 300,000 TOTAL BORROWING CAPACITY $ 600,000 $ 400,000 Interest rate (1)(2) LIBOR + 1.05% to 1.50% LIBOR + 1.15% to 1.85% Annual facility fee rate (1) 0.15% or 0.30% 0.20% or 0.35% Contractual maturity date ( 3) 3/13/2022 4/1/2019 _________________ 1. The rate is based on the operating partnership’s leverage ratio. The Company has the option to make an irrevocable election to change the interest rate depending on the Company’s credit rating. As of September 30, 2018, no such election had been made. 2. The Company has the option to make an irrevocable election to change the interest rate depending on the Company’s specified base rate plus an applicable margin. As of September 30, 2018, no such election had been made. 3. The maturity date may be extended once for an additional one-year term. Debt Covenants The operating partnership’s ability to borrow under its unsecured loan arrangements remains subject to ongoing compliance with financial and other covenants as defined in the respective agreements. Certain financial covenant ratios are subject to change in the occurrence of material acquisitions as defined in the respective agreements. Other covenants include certain limitations on dividend payouts and distributions, limits on certain types of investments outside of the operating partnership’s primary business and other customary affirmative and negative covenants. The following table summarizes existing covenants and their covenant levels related to our unsecured revolving credit facility, term loans, and series A, B, C, D and E notes, when considering the most restrictive terms: Covenant Ratio Covenant Level Total liabilities to total asset value ≤ 60% Unsecured indebtedness to unencumbered asset value ≤ 60% Adjusted EBITDA to fixed charges ≥ 1.5x Secured indebtedness to total asset value ≤ 45% Unencumbered NOI to unsecured interest expense ≥ 2.0x The following table summarizes existing covenants and their covenant levels related to our registered senior notes: Covenant Ratio Covenant Level Debt to total assets ≤ 60% Total unencumbered assets to unsecured debt ≥ 150% Consolidated income available for debt service to annual debt service charge ≥ 1.5x Secured debt to total assets ≤ 45% The operating partnership was in compliance with its financial covenants as of September 30, 2018. Repayment Guarantees Registered Senior Notes The Company has fully and unconditionally guaranteed the operating partnership’s $400.0 million registered senior notes due November 1, 2027. Sunset Gower Studios and Sunset Bronson Studios Loan In connection with the loan secured by the Sunset Gower Studios and Sunset Bronson Studios properties, the Company has guaranteed in favor of and promised to pay to the lender 19.5% of the principal payable under the loan in the event the borrower, a wholly-owned entity of the operating partnership, does not do so. As of September 30, 2018, the outstanding balance of the construction loan was $5.0 million, which results in a maximum guarantee amount for the principal under this loan of $1.0 million. The Company has the ability to draw up to $257.0 million under the construction loan, subject to lender required submissions. Furthermore, the Company agreed to guarantee the completion of the construction improvements, including tenant improvements, as defined in the agreement, in the event of any default of the borrower. If the borrower fails to complete the remaining required work, the guarantor agrees to perform timely all of the completion obligations, as defined in the agreement. As of the date of this filing, there has been no event of default associated with this loan. Other Loans Although the rest of the operating partnership’s loans are secured and non-recourse, the operating partnership provides limited customary secured debt guarantees for items such as voluntary bankruptcy, fraud, misapplication of payments and environmental liabilities. Interest Expense The following table represents a reconciliation from gross interest expense to the interest expense line item in the Consolidated Statements of Operations: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Gross interest expense (1) $ 22,136 $ 24,107 $ 66,081 $ 70,345 Capitalized interest (3,439) (2,831) (10,643) (7,817) Amortization of deferred financing costs and loan discount 1,434 1,185 4,527 3,558 INTEREST EXPENSE $ 20,131 $ 22,461 $ 59,965 $ 66,086 _________________ 1. Includes interest on the Company’s debt and hedging activities. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | DerivativesThe Company enters into derivatives in order to hedge interest rate risk. The Company had six interest rate swaps with aggregate notional amounts of $839.5 million as of September 30, 2018 and December 31, 2017. These derivatives were designated as effective cash flow hedges for accounting purposes. There is no impact on the Company’s Consolidated Statements of Cash Flows. The Company has agreements with its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness. The Company’s derivatives are classified as Level 2 and their fair values are derived from estimated values obtained from observable market data for similar instruments. The fair market value of derivatives is presented on a gross basis on the Consolidated Balance Sheets. The following table summarizes the Company’s derivative instruments as of September 30, 2018: Strike Rate Range (1) Underlying Debt Instrument Number of Hedges Notional Amount Effective Date Maturity Date Low High Fair Value Met Park North 1 $ 64,500 August 2013 August 2020 2.16% 2.16% $ 731 Term loan A (2) 2 300,000 July 2016 April 2020 2.56% 3.06% 5,748 Term loan B (3) 2 350,000 July 2016 April 2022 2.96% 3.46% 13,267 Term loan D (4) 1 125,000 June 2016 November 2022 2.63% 3.13% 7,242 TOTAL 6 $ 839,500 $ 26,988 _____________ 1. The rate is based on the operating partnership’s leverage ratio. 2. On March 13, 2018, the underlying debt instrument that was hedged was amended. Prior to the amendment, the interest rate was effectively fixed at 2.75% to 3.65%. 3. On March 13, 2018, the underlying debt instrument that was hedged was amended. Prior to the amendment, the interest rate was effectively fixed at 3.36% to 4.31%. 4. On March 13, 2018, the underlying debt instrument that was hedged was amended. Prior to the amendment, the interest rate was effectively fixed at 3.03% to 3.98%. On January 1, 2018, the Company early adopted ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). As a result of the adoption, the Company is no longer recognizing unrealized gains or losses related to ineffective portions of its derivatives. The Company recognized a $231 thousand cumulative-effect adjustment to other comprehensive income, with a corresponding adjustment to the opening balance of retained earnings (accumulated deficit). For the three and nine months ended September 30, 2017, the Company recognized an unrealized loss of $37 thousand and $82 thousand, respectively, reflected in the unrealized loss on ineffective portion of derivatives line item on the Consolidated Statements of Operations. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Hudson Pacific Properties, Inc. has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (“the Code”), commencing with its taxable year ended December 31, 2010. Provided it continues to qualify for taxation as a REIT, Hudson Pacific Properties, Inc. is generally not subject to corporate level income tax on the earnings distributed currently to its stockholders. The Company has elected, together with one of its subsidiaries, to treat such subsidiary as a taxable REIT subsidiary (“TRS”) for federal income tax purposes. The Company’s property-owning subsidiaries are limited liability companies and treated as pass-through entities or disregarded entities (or, in the case of the entities that own the 1455 Market and Hill7 properties, REITs) for federal income tax purposes. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements for the activities of these entities. The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of September 30, 2018, the Company has not established a liability for uncertain tax positions. The Company and its TRS file income tax returns with the U.S. federal government and various state and local jurisdictions. The Company and its TRS are no longer subject to tax examinations by tax authorities for years prior to 2013. The Company has assessed its tax positions for all open years, which include 2013 to 2017, and concluded that there are no material uncertainties to be recognized. |
Future Minimum Lease Payments
Future Minimum Lease Payments | 9 Months Ended |
Sep. 30, 2018 | |
Future Minimum Lease Payments [Abstract] | |
Future Minimum Lease Payments | Future Minimum Lease Payments Contingent rental expense is recorded in the period in which the contingent event becomes probable. The following table summarizes rent expense for ground leases as follows: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Contingent rental expense $ 2,149 $ 2,191 $ 7,697 $ 6,025 Minimum rental expense $ 4,344 $ 2,952 $ 11,817 $ 9,203 The following table provides information regarding the Company’s future minimum lease payments for its ground leases (before the impact of extension options, if applicable) as of September 30, 2018: Year Ground Leases (1) Remaining 2018 $ 3,967 2019 15,866 2020 15,866 2021 15,866 2022 15,866 Thereafter 437,646 TOTAL $ 505,077 _________________ 1. In situations where ground lease obligation adjustments are based on third-party appraisals of fair market land value, CPI adjustments and/or percentage of gross income that exceeds the minimum annual rent, the future minimum lease amounts above include the lease rental obligations in effect as of September 30, 2018. On October 9, 2018, the Company entered into a joint venture with Allianz to purchase the Ferry Building property located in San Francisco, California. The land on which the Ferry Building is located is subject to long-term non-cancellable ground lease agreements. The future minimum lease payments are excluded from the table above. See Note 19 for details. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The GAAP fair value framework uses a three-tiered approach. Fair value measurements are classified and disclosed in one of the following three categories: • Level 1: unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; • Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and • Level 3: prices or valuation techniques where little or no market data is available that require inputs that are both significant to the fair value measurement and unobservable. The Company’s financial assets and liabilities measured and reported at fair value on a recurring basis include the following as of: September 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative assets (1) $ — $ 26,988 $ — $ 26,988 $ — $ 12,586 $ — $ 12,586 Derivative liabilities ( 2 ) $ — $ — $ — $ — $ — $ 265 $ — $ 265 Non-real estate investment (1)( 3 ) $ — $ 2,713 $ — $ 2,713 $ — $ — $ — $ — _____________ 1. Included in the prepaid expenses and other assets line item on the Consolidated Balance Sheets. 2. Included in the accounts payable, accrued liabilities and other line item on the Consolidated Balance Sheets. 3. Related to our investment in shares in a non-public company. Pursuant to our adoption of ASU 2016-01 during 2018, the Company marked the investment to fair value during the second quarter of 2018. The investment was not fair valued in 2017 and was accounted for under the cost method. Other Financial Instruments The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities are reasonable estimates of fair value, using Level 1 inputs, because of the short-term nature of these instruments. Fair value for investment in securities are estimates based on Level 1 inputs. Fair values for debt are estimates based on rates currently prevailing for similar instruments of similar maturities using Level 2 inputs. The table below represents the carrying value and fair value of the Company’s investment in securities and debt as of: September 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value U.S. Government securities $ 148,315 $ 148,328 $ — $ — Unsecured debt (1)(2) $ 1,984,333 $ 1,928,411 $ 1,974,278 $ 1,960,560 Secured debt (1) $ 365,519 $ 353,810 $ 464,311 $ 458,441 In-substance defeased debt $ 139,003 $ 136,515 $ — $ — _________________ 1. Amounts represent debt excluding net deferred financing costs. 2. The $400.0 million registered senior notes were issued at a discount. The discount, net of amortization, was $667 thousand and $722 thousand at September 30, 2018 and December 31, 2017, respectively, and is included within unsecured debt. The One Westside and 10850 Pico acquisition included the assumption of debt which was, in-substance, defeased through the purchase of government-backed securities. As of September 30, 2018, the Company had $42 thousand of gross unrealized gains and $28 thousand of gross unrealized losses. The following table summarizes the carrying value and fair value of our securities by the contractual maturity date: Carrying Value Fair Value Due in 1 year $ 6,107 $ 6,120 Due in 1 year through 5 years 142,208 142,208 Total $ 148,315 $ 148,328 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company has various stock compensation arrangements, which are more fully described in the 2017 Annual Report on Form 10-K. Under the 2010 Incentive Plan, as amended (the “2010 Plan”), the Company’s board of directors (the “Board”) has the ability to grant, among other things, restricted stock, restricted stock units and performance-based awards. The Board awards restricted shares to non-employee Board members on an annual basis as part of such Board members’ annual compensation and to newly elected non-employee Board members in accordance with the Non-Employee Director Compensation Program. The time-based awards are generally issued in the second quarter, in conjunction with the director’s election to the Board, and the individual share awards vest in equal annual installments over the applicable service vesting period, which is three years. The Board awards time-based restricted shares to employees on an annual basis as part of the employees’ annual compensation. The time-based awards are generally issued in the fourth quarter and the individual share awards vest in equal annual installments over the applicable service vesting period, which is generally three years. Additionally, certain restricted share awards are subject to a mandatory holding period upon vesting if the grantee is a named executive officer. In December 2015, the compensation committee of the Board (the “Compensation Committee”) awarded a one-time special retention award to certain executives. The grants consist of time-based awards and performance-based awards. The time-based awards vest in equal 25% installments over a four-year period, subject to the participant’s continued employment. The performance-based awards vest over a four-year period, subject to the achievement of applicable performance goals and the participant’s continued employment. The Compensation Committee annually adopts a Hudson Pacific Properties, Inc. Outperformance Program (“OPP Plan”) under the 2010 Plan. An award under the OPP Plan is ultimately earned to the extent the Company outperforms a predetermined total shareholder return (“TSR”) goal and/or achieves goals with respect to the outperformance of its peers in a particular REIT index. The ultimate aggregate award cannot exceed the predetermined maximum bonus pool. OPP Plan awards granted are settled in common stock and in the case of certain executives, in performance units in our operating partnership. With respect to OPP Plan awards granted prior to 2017, to the extent an award is earned following the completion of a three-year performance period, 50% of the earned award will vest in full at the end of the three-year performance period and 25% of the earned award will vest in equal annual installments over the two years thereafter, subject to the participant’s continued employment. Commencing with the 2017 OPP Plan, the two-year post-performance vesting period was replaced with a two-year mandatory holding period upon vesting. In February 2018, the Compensation Committee adopted the 2018 OPP Plan. The 2018 OPP Plan is substantially similar to the 2017 OPP Plans except for (i) the performance period beginning on January 1, 2018 and ending on December 31, 2020, (ii) the maximum bonus pool is $25.0 million, (iii) the relative comparison index is the SNL US Office REIT index, (iv) the absolute TSR hurdle will be 21% (or 7% per annum) and (v) adjusted the sliding scale low return factor so that relative TSR pool can only be reduced by 75% under this feature. The per unit fair value of the grants from the 2018 OPP Plan was estimated on the date of grant using the following assumptions in the Monte Carlo valuation: Assumption Expected price volatility for the Company 20.00% Expected price volatility for the particular REIT index 18.00% Risk-free rate 2.37% Dividend yield 2.90% The following table presents the classification and amount recognized for stock-based compensation related to the Company’s awards: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Expensed stock compensation (1) $ 4,292 $ 3,449 $ 12,919 $ 11,237 Capitalized stock compensation (2) 282 217 802 635 TOTAL STOCK COMPENSATION (3) $ 4,574 $ 3,666 $ 13,721 $ 11,872 _________________ 1. Amounts are recorded in general and administrative expenses in the Consolidated Statements of Operations. 2. Amounts are recorded in deferred leasing costs and lease intangible assets, net and investment in real estate, at cost in the Consolidated Balance Sheets. 3. Amounts are recorded in additional paid-in capital and non-controlling interest—units in the operating partnership in the Consolidated Balance Sheets. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Hudson Pacific Properties, Inc. Hudson Pacific Properties, Inc. calculates basic earnings per share by dividing the net income available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Hudson Pacific Properties, Inc. calculates diluted earnings per share by dividing the diluted net income available to common stockholders for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method or the if-converted method, whichever is more dilutive. Unvested time-based RSUs and unvested OPP awards that contain nonforfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The following table reconciles the numerator and denominator in computing Hudson Pacific Properties, Inc.’s basic and diluted earnings per share for net income available to common stockholders: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Basic and diluted net income available to common stockholders $ 17,367 $ 11,064 $ 82,146 $ 35,132 Denominator: Basic weighted average common shares outstanding 155,649,110 155,302,800 155,637,351 152,874,952 Effect of dilutive instruments (1) 1,020,137 790,936 991,137 773,936 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 156,669,247 156,093,736 156,628,488 153,648,888 Basic earnings per common share $ 0.11 $ 0.07 $ 0.53 $ 0.23 Diluted earnings per common share $ 0.11 $ 0.07 $ 0.52 $ 0.23 ________________ 1. The Company includes unvested awards and convertible common units as contingently issuable shares in the computation of diluted earnings per share once the market criteria are met, assuming that the end of the reporting period is the end of the contingency period. Any anti-dilutive securities are excluded from the diluted earnings per share calculation. Hudson Pacific Properties, L.P. Hudson Pacific Properties, L.P. calculates basic earnings per share by dividing the net income available to common unitholders for the period by the weighted average number of common units outstanding during the period. Hudson Pacific Properties, L.P. calculates diluted earnings per share by dividing the diluted net income available to common unitholders for the period by the weighted average number of common units and dilutive instruments outstanding during the period using the treasury stock method or the if-converted method, whichever is more dilutive. Unvested time-based RSUs and unvested OPP awards that contain nonforfeitable rights to dividends are participating securities and are included in the computation of earnings per unit pursuant to the two-class method. The following table reconciles the numerator and denominator in computing Hudson Pacific Properties, L.P.’s basic and diluted earnings per unit for net income available to common unitholders: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Basic and diluted net income available to common unitholders $ 17,430 $ 11,105 $ 82,445 $ 35,388 Denominator: Basic weighted average common units outstanding 156,218,155 155,871,845 156,206,396 153,736,796 Effect of dilutive instruments (1) 1,020,137 790,936 991,137 773,936 DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING 157,238,292 156,662,781 157,197,533 154,510,732 Basic earnings per common unit $ 0.11 $ 0.07 $ 0.53 $ 0.23 Diluted earnings per common unit $ 0.11 $ 0.07 $ 0.52 $ 0.23 ________________ |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interest | 9 Months Ended |
Sep. 30, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Non-Controlling Interest | Redeemable Non-Controlling Interest Redeemable preferred units of the operating partnership As of December 31, 2017, there were 407,066 series A preferred units of partnership interest in the operating partnership, or series A preferred units, which are not owned by the Company. On April 16, 2018, 14,468 series A preferred units of partnership interest were redeemed for cash at a redemption price of $25.00 per share, plus accrued and unpaid dividends to, but not including, the date of redemption. These series A preferred units are entitled to preferential distributions at a rate of 6.25% per annum on the liquidation preference of $25.00 per unit and became convertible at the option of the holder into common units or redeemable into cash or, at the Company’s election, exchangeable for registered shares of common stock after June 29, 2013. For a description of the conversion and redemption rights of the series A preferred units, please see “Description of the Partnership Agreement of Hudson Pacific Properties, L.P. — Material Terms of Our Series A Preferred Units” in the Company’s June 23, 2010 Prospectus. Redeemable non-controlling interest in consolidated real estate entity The Company has a 75% interest in the joint venture that owns the One Westside and 10850 Pico properties. The Company has a put right, after a specified time, to sell its interest at fair market value. Macerich has a put right, after a specified time, to sell its interest at fair market value, which is a redemption right that is not solely within the control of the Company. The put right is not currently redeemable. Therefore, the non-controlling interest related to this joint venture is included as temporary equity. Once the redemption is probable, the carrying amount will be marked to market with the change in value reflected in additional paid-in capital. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Equity | EquityThe table below presents the effect of the Company’s derivatives on accumulated other comprehensive income (“OCI”): Hudson Pacific Properties, Inc. Stockholders ’ Equity Non-controlling Interests Total Equity Balance at January 1, 2018 $ 13,227 $ 49 $ 13,276 Unrealized gain recognized in OCI due to change in fair value 16,159 58 16,217 Income reclassified from OCI into income (as interest expense) (1,782) (6) (1,788) Net change in OCI 14,377 52 14,429 Cumulative adjustment related to adoption of ASU 2017-12 230 1 231 BALANCE AT SEPTEMBER 30, 2018 $ 27,834 $ 102 $ 27,936 Non-controlling Interests Common units in the operating partnership Common units of the operating partnership and shares of common stock of the Company have essentially the same economic characteristics, as they share equally in the total net income or loss distributions of the operating partnership. Investors who own common units have the right to cause the operating partnership to repurchase any or all of their common units for cash equal to the then-current market value of one share of common stock or, at the Company’s election, issue shares of the Company’s common stock in exchange for common units on a one-for-one basis. The following table summarizes the ownership of common units, excluding unvested restricted units as of: September 30, 2018 December 31, 2017 Company-owned common units in the operating partnership 155,649,125 155,602,508 Company’s ownership interest percentage 99.6 % 99.6 % Non-controlling common units in the operating partnership (1) 569,045 569,045 Non-controlling ownership interest percentage (1) 0.4 % 0.4 % _________________ 1. Represents common units held by certain of the Company’s executive officers and directors, certain of their affiliates and other outside investors. Performance units in the operating partnership Performance units are partnership interests in the operating partnership. Each performance unit awarded will be deemed equivalent to an award of one share of common stock under the 2010 Plan, reducing the availability for other equity awards on a one-for-one basis. Under the terms of the performance units, the operating partnership will revalue its assets for tax purposes upon the occurrence of certain specified events and any increase in valuation from the time of grant until such event will be allocated first to the holders of performance units to equalize the capital accounts of such holders with the capital accounts of common unitholders. Subject to any agreed upon exceptions, once vested and having achieved parity with common unitholders, performance units are convertible into common units in the operating partnership on a one-for-one basis. Common Stock Activity The Company has not completed any common stock offerings in 2018. The Company’s at-the-market, or ATM, program permits sales of up to $125.0 million of common stock. The Company did not utilize the ATM program during the nine months ended September 30, 2018. A cumulative total of $20.1 million has been sold as of September 30, 2018. Share repurchase program On January 20, 2016, the Board authorized a share repurchase program to buy up to $100.0 million of the outstanding common stock of Hudson Pacific Properties, Inc., which the Board increased to a total of $250.0 million on March 8, 2018. The Company may determine to commence repurchases under the program at any time in its discretion, subject to market conditions, applicable legal requirements and other factors. No share repurchases have been made as of September 30, 2018. Dividends The Board declared dividends on a quarterly basis and the Company paid the dividends during the quarters in which the dividends were declared. The following table summarizes dividends declared and paid for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Common stock (1) $ 0.25 $ 0.25 $ 0.75 $ 0.75 Common units (1) $ 0.25 $ 0.25 $ 0.75 $ 0.75 Series A preferred units (1) $ 0.3906 $ 0.3906 $ 1.1718 $ 1.1718 _________________ 1. The third quarter dividends were paid on September 28, 2018 to shareholders and unitholders of record on September 18, 2018. Taxability of Dividends Earnings and profits, which determine the taxability of distributions to stockholders, may differ from income reported for financial reporting purposes due to the differences for federal income tax purposes in the treatment of loss on extinguishment of debt, revenue recognition, compensation expense and the basis of depreciable assets and estimated useful lives used to compute depreciation. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Employment Agreements The Company has entered into employment agreements with certain executive officers, effective January 1, 2016, that provide for various severance and change in control benefits and other terms and conditions of employment. Ferry Building Acquisition from an Affiliate of Blackstone On October 9, 2018, the Company entered into a joint venture with Allianz to purchase the Ferry Building from certain affiliates of Blackstone for $291.0 million before prorations, credits and closing costs. Michael Nash, a director on the Board, is a senior managing director of an affiliate of Blackstone. Disposal of Pinnacle I and Pinnacle II to certain affiliates of Blackstone On November 16, 2017, the consolidated joint venture that owned Pinnacle I and Pinnacle II sold the properties to certain affiliates of Blackstone for $350.0 million, before credits, prorations and closing costs, including the assumption of $216.0 million of secured debt. Michael Nash, a director on the Board, is a senior managing director of an affiliate of Blackstone. Disposal of 222 Kearny to certain affiliates of Farallon Funds On February 14, 2017, the Company sold its 222 Kearny property to a joint venture, a partner of which is an affiliate of the Farallon Funds. Richard B. Fried, a director on the Board, is a managing member of the Farallon Funds. JMG Capital Lease at 11601 Wilshire JMG Capital Management LLC leases approximately 6,638 square feet at the Company’s 11601 Wilshire property pursuant to an eight-year lease at an aggregate rate of approximately $279 thousand annualized rent per year. Jonathan M. Glaser, a director on the Board, is the founder and managing member of JMG Capital Management LLC. JMG Capital Management LLC was a tenant of the property at the time it was purchased by the Company in 2016. During 2017, JMG Capital Management LLC assigned the lease to a third party and as a result is no longer a lessee at our 11601 Wilshire property as of December 31, 2017. Agreement Related to EOP Acquisition On April 1, 2015, the Company completed the EOP Acquisition from certain affiliates of Blackstone, which consisted of 26 high-quality office assets totaling approximately 8.2 million square feet and two development parcels located throughout the Northern California region. The total consideration paid for the EOP Acquisition before certain credits, prorations and closing costs, included a cash payment of $1.75 billion and an aggregate of 63,474,791 shares of common stock of Hudson Pacific Properties, Inc. and common units in the operating partnership. In connection with the EOP Acquisition, the Company, the operating partnership and Blackstone entered into a stockholders agreement, which conferred Blackstone certain rights, including the right to nominate up to three of the Company’s directors. Additionally, the Company entered into a registration rights agreement with Blackstone providing for customary registration rights with respect to the equity consideration paid in the EOP Acquisition. Following a common stock offering and common unit repurchase on January 10, 2017, the stockholders agreement and the registration rights agreement automatically terminated on that date. Common Stock Offerings and Common Unit Redemptions On January 10, 2017, the Company, Blackstone and the Farallon Funds completed a public offering of 18,673,808 shares of common stock, consisting of 8,881,575 shares offered by the Company and 9,792,233 shares offered by the selling stockholders. The offering generated net proceeds for the Company and the selling stockholders of approximately $310.9 million and $342.7 million, respectively, before expenses. The Company used the net proceeds that it received from the offering to redeem 8,881,575 common units held by Blackstone and the Farallon Funds. The Company did not receive any proceeds from the sale of the common stock by the selling stockholders in the offerings described above but it paid approximately half of the expenses of the offerings with respect to the shares of common stock sold by the Farallon Funds and all of the expenses with respect to the shares of common stock sold by Blackstone, in each case, other than underwriting discounts, which were borne by the selling stockholders. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal From time to time, the Company is party to various lawsuits, claims and other legal proceedings arising out of, or incident to, the ordinary course of business. Management believes, based in part upon consultation with legal counsel, that the ultimate resolution of all such claims will not have a material adverse effect on the Company’s results of operations, financial position or cash flows. As of September 30, 2018, the risk of material loss from such legal actions impacting the Company’s financial condition or results from operations has been assessed as remote. Letters of Credit |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information is included as follows: Nine Months Ended September 30, 2018 2017 Cash paid for interest, net of capitalized interest $ 50,692 $ 47,852 Non-cash investing and financing activities Accounts payable and accrued liabilities for real estate investments $ 12,624 $ (6,740) Reclassification of investment in unconsolidated entities for real estate investments $ — $ 7,835 Assumption of debt in connection with property acquisitions $ 139,003 $ — Redeemable non-controlling interest in consolidated real estate entity $ 12,749 $ — Restricted cash primarily consists of amounts held by lenders to fund reserves such as capital improvements, taxes, insurance, debt service and operating expenditures. Pursuant to the adoption of ASU 2016-18, the Company included restricted cash with cash and cash equivalents in the Consolidated Statements of Cash Flows. The following table provides a reconciliation of cash and cash equivalents and restricted cash at the beginning and end of the periods presented: Nine Months Ended September 30, 2018 2017 Beginning of period: Cash and cash equivalents $ 78,922 $ 83,015 Restricted cash 22,358 25,177 TOTAL $ 101,280 $ 108,192 End of period: Cash and cash equivalents $ 52,456 $ 87,723 Restricted cash 10,782 25,784 TOTAL $ 63,238 $ 113,507 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 5, 2018, the Company entered into an agreement to invest in a real estate technology venture capital fund. The Company is committed to funding up to $20.0 million. On October 9, 2018, the Company purchased, through a joint venture with Allianz, the Ferry Building property for $291.0 million (before credits, prorations and closing costs). The Company has a 55% interest in the joint venture. The Ferry Building property, which includes 192,532 square feet of Class A office and 75,486 square feet of retail, is located in San Francisco, California. The land on which the Ferry Building is located is subject to long-term non-cancellable ground lease agreements. The Company is currently in the process of determining the purchase price accounting. On October 23, 2018, the Company purchased the 6660 Santa Monica property located in Hollywood, California for $10.0 million (before credits, prorations and closings costs). The 11,200-square-foot property is adjacent to, and now forms part of, the Sunset Las Palmas Studios property. The Company is currently in the process of determining the purchase price accounting. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying consolidated financial statements of the Company and the operating partnership are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to the Securities and Exchange Commission (“SEC”) rules and regulations. Accordingly, the interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying interim financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented. References to number of properties and square-feet are not covered by the auditor’s review procedures. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2018. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in the 2017 Annual Report on Form 10-K of Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. and the notes thereto. Certain amounts in the consolidated financial statements for the prior period have been reclassified to conform to the current period presentation. Included in the reclassified amounts are properties held for sale. These amounts relate to our Peninsula Office Park property, which was sold on July 27, 2018. |
Principles of Consolidation | The unaudited interim consolidated financial statements of the Company include the accounts of the Company, the operating partnership and all wholly owned and controlled subsidiaries. The consolidated financial statements of the operating partnership include the accounts of the operating partnership and all wholly owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in the consolidated financial statements. Under the consolidation guidance, the Company first evaluates an entity using the variable interest model, then the voting model. The Company ultimately consolidates all entities that the Company controls through either majority ownership or voting rights, including all variable interest entities (“VIEs”) of which the Company is considered the primary beneficiary. The Company accounts for all other unconsolidated joint ventures using the cost or equity method of accounting. In addition, the Company continually evaluates each legal entity that is not wholly owned for reconsideration based on changing circumstances. VIEs are defined as entities in which equity investors do not have: • the characteristics of a controlling financial interest; • sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties; and/or • the entity is structured with non-substantive voting rights. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with both the power to direct the activities that most significantly affect the VIE’s economic performance and the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. As of September 30, 2018, the Company has determined that four joint ventures and our operating partnership met the definition of a VIE. Three of the joint ventures are consolidated entities and one joint venture is a non-consolidated entity. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate properties, its accrued liabilities and its performance-based equity compensation awards. The Company bases its estimates on historical experience, current market conditions and various other assumptions that are believed to be reasonable under the circumstances. Actual results could materially differ from these estimates. |
Revenue Recognition | The Company has compiled an inventory of its sources of revenues and has identified the following material revenue streams: (i) rental revenues (ii) tenant recoveries (iii) ancillary revenues (iv) guest parking revenues and (v) sale of real estate. Revenue Stream Components Financial Statement Location Rental revenues Office rentals, stage rentals and storage rentals Office and studio segments: rental Tenant recoveries Reimbursement of real estate taxes, insurance, repairs and maintenance, other operating expenses and monthly parking revenues Office segment: tenant recoveries and parking and other Studio segment: tenant recoveries and other property-related revenue Ancillary revenues Revenues derived from tenants’ use of lighting, equipment rental, power, HVAC and telecommunications (i.e., telephone and internet) Studio segment: other property-related revenue Guest parking revenues Parking revenue that is not associated with lease agreements Office segment: parking and other Sale of real estate Gains on sales derived from cash consideration less cost basis Gains on sale of real estate Currently, rental revenues are accounted for under ASC 840, Leases . Rental revenues will be accounted for under ASC 842, Leases (“ASC 842”), which the Company plans to adopt on January 1, 2019. Currently tenant recoveries are accounted for under ASC 605, Revenue Recognition (“ASC 605”). Tenant recoveries will be accounted for under ASC 606, Revenue from Contracts with Customers (“ASC 606”), beginning on January 1, 2019, when the Company adopts ASC 842. Under the current ASC 842 guidance, the Company would be required to classify its tenant recoveries into lease and non-lease components. On March 28, 2018, the FASB agreed to issue an amendment to ASC 842, which, if elected, permits the Company to classify tenant recoveries as a single lease component and account for tenant recoveries with rental revenues in the Consolidated Statement of Operations. Please refer to our Update on ASC 842 implementation section below for details. Ancillary revenues and guest parking revenues have been accounted for under ASC 606 since the Company adopted this standard on January 1, 2018. This standard requires the Company to recognize revenues based on a five-step model and will result in the consideration being recognized once all performance obligations are satisfied. The timing and pattern of revenue recognition as it relates to ancillary revenues and guest parking revenues have not changed from those under ASC 605. Sale of real estate has been accounted for under ASC 610, Other Income |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of Accounting Standards Update (“ASU”). The following ASUs were adopted by the Company in 2018: Standard Description Effect on the Financial Statements or Other Significant Matters ASU 2018-09, Codification Improvements The amendment, among other things, clarifies when excess tax benefits should be recognized for share-based compensation awards, removes inconsistent guidance in income tax accounting for business combinations, clarifies the circumstances when derivatives may be offset, and the measurement of liability or equity-classified financial instruments when an identical asset is held as an asset, and allows portfolios of financial instruments and nonfinancial instruments accounted for as derivatives to use the portfolio exception to valuation. The Company adopted this guidance during Q2 2018 using the prospective approach. The adoption did not have an impact on the Consolidated Financial Statements. ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting This amendment expands the scope of ASC 718 to include all share-based payment arrangements. It simplifies the accounting for share-based payments granted to non-employees for goods and services by aligning the accounting with the requirements for share-based payments granted to employees. The Company adopted this guidance during Q2 2018 using the prospective approach. The adoption did not have an impact on the Consolidated Financial Statements. Standard Description Effect on the Financial Statements or Other Significant Matters ASU 2018-04, Investments—Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 (SEC Update) The guidance no longer allows the use of cost method of accounting for equity instruments that do not have a readily determinable fair value, and companies are now required to measure equity investments at fair value through net income. Companies are permitted to elect a measurement alternative that allows for measuring equity instruments at cost, less any impairment, plus or minus changes resulting from observable price changes, adjusted as of the date that an observable transaction takes place, rather than the report date. For equity investments that do not have a readily determinable fair value, this guidance is adopted prospectively for all investments that exist as of the date of adoption. The guidance allows entities to use a prospective transition approach only for securities they elect to measure using the measurement alternative. The Company adopted this guidance during Q1 2018 using the prospective approach. The Company has elected to measure our equity instruments using the measurement alternative. Please see Note 6 for details. ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. Therefore, a cumulative effect adjustment related to elimination of ineffectiveness measurement is required to be recorded to the opening balance of retained earnings as of the beginning of the fiscal year of adoption for a cash flow hedge. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. This guidance must be applied using a modified retrospective approach. The Company adopted this guidance during Q1 2018 using the modified retrospective approach. As a result of the adoption, the concept of ineffectiveness from an accounting perspective is eliminated. Subsequent changes in fair value for a hedging instrument that has been designated and qualifies as a cash flow hedge will be recognized as a component in other comprehensive income. Additionally, the Company eliminated any previously recorded ineffectiveness with a cumulative effect adjustment. Please see Note 8 for details. ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting The guidance clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. This guidance must be applied prospectively. The Company adopted this guidance during Q1 2018 on a prospective basis. The adoption did not have an impact on the Consolidated Financial Statements. ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets The guidance updates the definition of an in-substance nonfinancial asset and clarifies the scope of ASC 610-20 on the sale or transfer of nonfinancial assets to non-customers, including partial sales. It also clarifies the de-recognition guidance for nonfinancial assets to conform with the new revenue recognition standard. Either a full or modified retrospective approach can be applied. The Company adopted this guidance during Q1 2018 using the modified retrospective approach. The Company has not had variable consideration in our sale of real estate, or partial sales of nonfinancial assets or contribution of a nonfinancial asset to form a joint venture with retained non-controlling interest. The adoption did not have an impact on the Consolidated Financial Statements. Standard Description Effect on the Financial Statements or Other Significant Matters ASU 2014-09, Revenue from Contracts with Customers amended by ASU 2016-08, Revenue from Contracts with Customers—Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Issued on May 28, 2014, ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and specifically notes that lease contracts with customers are a scope exception. Issued on March 17, 2016, ASU 2016-08 clarifies certain aspects of the principal-versus-agent guidance in its new revenue recognition standard related to the determination of whether an entity is a principal or agent and the determination of the nature of each specified good or service. The guidance provides for practical expedients associated with the determination of whether a significant financing component exists and the expedient for recording an immediate expense for certain incremental costs of obtaining a contract with a customer. The Company adopted this guidance during Q1 2018 using the modified retrospective approach and is using the practical expedients associated with expensing incremental costs of obtaining a contract with a customer with terms of one year or less. The adoption of this ASU did not result in any changes with respect to the timing and pattern of revenue recognition. Please refer to the revenue recognition policy note above for the additional disclosures. In August 2018, the SEC adopted a Disclosure Update and Simplification release, which outlines Regulation S-X amendments to eliminate outdated or duplicative disclosure requirements. The final rule also amends the interim financial statement requirements to require a reconciliation of changes in stockholders’ equity and capital in the notes or as a separate statements. These amendments are effective for all filings made 30 days after the amendments are published in the Federal Register, which was on October 4, 2018. The SEC announced that it would not object if the first presentation of the changes in stockholders’ equity and capital for a December 31st filer were made in the Company’s March 31, 2019 Form 10-Q. The Company plans to use the new presentation beginning in 2019. Update on ASC 842 implementation On February 25, 2016, the FASB issued ASU 2016-02, Leases , to amend the accounting guidance for leases and set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). This ASU is effective for annual reporting periods (including interim periods) beginning after December 15, 2018. Issuers have two options for adoption: • a modified retrospective approach that must be applied for leases that exist or are entered into after January 1, 2017, the beginning of the earliest comparative period presented in the 2019 consolidated financial statements, with a cumulative adjustment to the opening balance of retained earnings (accumulated deficit) on January 1, 2017, and restatement of the amounts presented prior to January 1, 2019. • a modified retrospective transition method that, if the transition method is elected, must be applied for leases that existed or are entered into after January 1, 2019, the effective date of the ASU, with a cumulative adjustment to the opening balance of retained earnings (accumulated deficit) on January 1, 2019. Additional disclosures for the periods prior to adoption would follow ASC 840 disclosure requirements. This guidance requires all lessees to record a lease liability at lease inception, with a corresponding right-of-use asset, except for short-term leases. Lessor accounting will not be fundamentally changed. ASC 842 provides practical expedients that allow entities to not (i) reassess whether any expired or existing contracts are considered or contain leases; (ii) reassess the lease classification for any expired or existing leases; and (iii) reassess initial direct costs for any existing leases. The Company plans to adopt the standard on January 1, 2019 and expects to elect the use of practical expedients. The Company plans to elect the transition method for adoption as described above. Lessor Accounting For the three months ended September 30, 2018 and September 30, 2017, the Company recognized rental revenues and tenant recoveries of $166.6 million and $175.3 million, respectively. For the nine months ended September 30, 2018 and September 30, 2017, the Company recognized $491.2 million and $501.4 million, respectively. Under current accounting standards, the Company recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of the leased asset. Tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance and other operating expenses are recognized as revenue in the period during which the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Company, which is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. ASC 842 requires companies to identify lease and non-lease components of a lease agreement. Lease components relate to the right to use the leased asset whereas non-lease components relate to payments for goods or services that are transferred separately from the right to use the underlying asset. Total lease consideration is allocated to lease and non-lease components on a relative standalone basis. The recognition of revenues related to lease components will be governed by ASC 842, while revenue related to non-lease components will be subject to ASC 606. For lessors, the guidance provides for a practical expedient to elect a combined single lease component presentation if (i) the timing and pattern of the transfer of the combined single lease component is the same, and (ii) the related lease component, if accounted for separately, would be classified as an operating lease. The Company plans to elect the practical expedient for non-lease components that qualify to be combined under a single lease component presentation. ASC 842 also requires lessors to capitalize only those costs that are defined as initial direct costs. Under the current accounting standards, the Company capitalizes initial direct and indirect leasing costs. During the three months ended September 30, 2018 and September 30, 2017, the Company capitalized $1.7 million and $1.8 million of indirect leasing costs, respectively. During the nine months ended September 30, 2018 and September 30, 2017, the Company capitalized $5.5 million and $5.0 million of indirect leasing costs, respectively. Under ASC 842, and based on our current policies and processes, these costs will be expensed as incurred. Lessee Accounting As of September 30, 2018, the future undiscounted minimum lease payments under the Company’s ground leases totaled $505.1 million. This guidance requires lessees to record a lease liability at lease inception, with a corresponding right-of-use asset, except for short-term leases. The Company continues to evaluate the amount of right-of-use asset and lease liability that will ultimately be recorded with respect to its ground lease agreements. The Company has not completed its analysis of ASC 842. Other recently issued ASUs The Company considers the applicability and impact of all ASUs. The following table lists the recently issued ASUs that have not been disclosed in the Company’s 2017 Annual Report on Form 10-K and have not been adopted by the Company. The list excludes those ASUs that are not expected to have a material impact on the Company’s consolidated financial statements. Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes The amendment permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under ASC 815. Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the impact of this update. ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) The amendment allows for capitalizing implementation costs incurred in a hosting arrangement that is a service contract. Effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted including adoption in any interim period. The Company is currently evaluating the impact of this update. ASU 2018-11, Leases (Topic 842): Targeted Improvements The amendment provides (i) a transition option to adopt ASC 842 using the modified retrospective transition provision and (ii) a practical expedient for lessors to elect a combined single lease component presentation. The effective date and transition requirements are the same as that in Update 2016-02 (Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.) The Company expects to elect to use the transition method and practical expedient as described above in the Update on ASC 842 Implementation section. ASU 2018-10, Codification Improvements to Topic 842, Leases The amendments make 16 technical corrections to the lease standard, which include clarification of the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. The effective date and transition requirements are the same as that in Update 2016-02 (Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.) The Company does not expect this update to have an impact on the Consolidated Financial Statements. ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 The amendments in this update permit an entity to elect an optional transition practical expedient to not evaluate under ASC 842 land easements that exist or expired before the entity’s adoption of ASC 842 and that were not previously accounted for as leases under ASC 840. An entity that elects this practical expedient should apply the practical expedient consistently to all of its existing or expired land easements that were not previously accounted for as leases under ASC 840. Once an entity adopts ASC 842, it should apply it prospectively to all new (or modified) land easements to determine whether the arrangement should be accounted for as a lease. The effective date and transition requirements are the same as that in Update 2016-02 (Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.) The Company expects to elect the transition practical expedient for land easements. |
Organization (Tables)
Organization (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Portfolio of properties | The Company’s portfolio consists of properties located throughout Northern and Southern California and the Pacific Northwest. The following table summarizes the Company’s portfolio as of September 30, 2018: Segments Number of Properties Square Feet (unaudited) Office 51 13,498,837 Studio 3 1,246,423 TOTAL (1) 54 14,745,260 _________________ 1. Includes redevelopment and development properties. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of consolidated entities | As of September 30, 2018, the operating partnership has determined that three of its joint ventures met the definition of a VIE and are consolidated: Entity Property Ownership Interest Hudson 1455 Market, L.P. 1455 Market 55.0 % Hudson 1099 Stewart, L.P. Hill7 55.0 % HPP-MAC WSP, LLC One Westside and 10850 Pico 75.0 % |
Schedule of sources of revenues | The Company has compiled an inventory of its sources of revenues and has identified the following material revenue streams: (i) rental revenues (ii) tenant recoveries (iii) ancillary revenues (iv) guest parking revenues and (v) sale of real estate. Revenue Stream Components Financial Statement Location Rental revenues Office rentals, stage rentals and storage rentals Office and studio segments: rental Tenant recoveries Reimbursement of real estate taxes, insurance, repairs and maintenance, other operating expenses and monthly parking revenues Office segment: tenant recoveries and parking and other Studio segment: tenant recoveries and other property-related revenue Ancillary revenues Revenues derived from tenants’ use of lighting, equipment rental, power, HVAC and telecommunications (i.e., telephone and internet) Studio segment: other property-related revenue Guest parking revenues Parking revenue that is not associated with lease agreements Office segment: parking and other Sale of real estate Gains on sales derived from cash consideration less cost basis Gains on sale of real estate |
Schedule of recently issued accounting pronouncements | Changes to GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of Accounting Standards Update (“ASU”). The following ASUs were adopted by the Company in 2018: Standard Description Effect on the Financial Statements or Other Significant Matters ASU 2018-09, Codification Improvements The amendment, among other things, clarifies when excess tax benefits should be recognized for share-based compensation awards, removes inconsistent guidance in income tax accounting for business combinations, clarifies the circumstances when derivatives may be offset, and the measurement of liability or equity-classified financial instruments when an identical asset is held as an asset, and allows portfolios of financial instruments and nonfinancial instruments accounted for as derivatives to use the portfolio exception to valuation. The Company adopted this guidance during Q2 2018 using the prospective approach. The adoption did not have an impact on the Consolidated Financial Statements. ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Non-employee Share-Based Payment Accounting This amendment expands the scope of ASC 718 to include all share-based payment arrangements. It simplifies the accounting for share-based payments granted to non-employees for goods and services by aligning the accounting with the requirements for share-based payments granted to employees. The Company adopted this guidance during Q2 2018 using the prospective approach. The adoption did not have an impact on the Consolidated Financial Statements. Standard Description Effect on the Financial Statements or Other Significant Matters ASU 2018-04, Investments—Debt Securities (Topic 320) and Regulated Operations (Topic 980): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 117 and SEC Release No. 33-9273 (SEC Update) The guidance no longer allows the use of cost method of accounting for equity instruments that do not have a readily determinable fair value, and companies are now required to measure equity investments at fair value through net income. Companies are permitted to elect a measurement alternative that allows for measuring equity instruments at cost, less any impairment, plus or minus changes resulting from observable price changes, adjusted as of the date that an observable transaction takes place, rather than the report date. For equity investments that do not have a readily determinable fair value, this guidance is adopted prospectively for all investments that exist as of the date of adoption. The guidance allows entities to use a prospective transition approach only for securities they elect to measure using the measurement alternative. The Company adopted this guidance during Q1 2018 using the prospective approach. The Company has elected to measure our equity instruments using the measurement alternative. Please see Note 6 for details. ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities The guidance eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. Therefore, a cumulative effect adjustment related to elimination of ineffectiveness measurement is required to be recorded to the opening balance of retained earnings as of the beginning of the fiscal year of adoption for a cash flow hedge. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. This guidance must be applied using a modified retrospective approach. The Company adopted this guidance during Q1 2018 using the modified retrospective approach. As a result of the adoption, the concept of ineffectiveness from an accounting perspective is eliminated. Subsequent changes in fair value for a hedging instrument that has been designated and qualifies as a cash flow hedge will be recognized as a component in other comprehensive income. Additionally, the Company eliminated any previously recorded ineffectiveness with a cumulative effect adjustment. Please see Note 8 for details. ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting The guidance clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. This guidance must be applied prospectively. The Company adopted this guidance during Q1 2018 on a prospective basis. The adoption did not have an impact on the Consolidated Financial Statements. ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets The guidance updates the definition of an in-substance nonfinancial asset and clarifies the scope of ASC 610-20 on the sale or transfer of nonfinancial assets to non-customers, including partial sales. It also clarifies the de-recognition guidance for nonfinancial assets to conform with the new revenue recognition standard. Either a full or modified retrospective approach can be applied. The Company adopted this guidance during Q1 2018 using the modified retrospective approach. The Company has not had variable consideration in our sale of real estate, or partial sales of nonfinancial assets or contribution of a nonfinancial asset to form a joint venture with retained non-controlling interest. The adoption did not have an impact on the Consolidated Financial Statements. Standard Description Effect on the Financial Statements or Other Significant Matters ASU 2014-09, Revenue from Contracts with Customers amended by ASU 2016-08, Revenue from Contracts with Customers—Principal versus Agent Considerations (Reporting Revenue Gross versus Net) Issued on May 28, 2014, ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and specifically notes that lease contracts with customers are a scope exception. Issued on March 17, 2016, ASU 2016-08 clarifies certain aspects of the principal-versus-agent guidance in its new revenue recognition standard related to the determination of whether an entity is a principal or agent and the determination of the nature of each specified good or service. The guidance provides for practical expedients associated with the determination of whether a significant financing component exists and the expedient for recording an immediate expense for certain incremental costs of obtaining a contract with a customer. The Company adopted this guidance during Q1 2018 using the modified retrospective approach and is using the practical expedients associated with expensing incremental costs of obtaining a contract with a customer with terms of one year or less. The adoption of this ASU did not result in any changes with respect to the timing and pattern of revenue recognition. Please refer to the revenue recognition policy note above for the additional disclosures. |
Schedule of new accounting pronouncements | The following table lists the recently issued ASUs that have not been disclosed in the Company’s 2017 Annual Report on Form 10-K and have not been adopted by the Company. The list excludes those ASUs that are not expected to have a material impact on the Company’s consolidated financial statements. Standard Description Effective Date Effect on the Financial Statements or Other Significant Matters ASU 2018-16, Derivatives and Hedging (Topic 815): Inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index Swap (“OIS”) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes The amendment permit use of the OIS rate based on SOFR as a U.S. benchmark interest rate for hedge accounting purposes under ASC 815. Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company is currently evaluating the impact of this update. ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of the FASB Emerging Issues Task Force) The amendment allows for capitalizing implementation costs incurred in a hosting arrangement that is a service contract. Effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted including adoption in any interim period. The Company is currently evaluating the impact of this update. ASU 2018-11, Leases (Topic 842): Targeted Improvements The amendment provides (i) a transition option to adopt ASC 842 using the modified retrospective transition provision and (ii) a practical expedient for lessors to elect a combined single lease component presentation. The effective date and transition requirements are the same as that in Update 2016-02 (Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.) The Company expects to elect to use the transition method and practical expedient as described above in the Update on ASC 842 Implementation section. ASU 2018-10, Codification Improvements to Topic 842, Leases The amendments make 16 technical corrections to the lease standard, which include clarification of the rate implicit in the lease, impairment of the net investment in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase options, variable payments that depend on an index or rate and certain transition adjustments. The effective date and transition requirements are the same as that in Update 2016-02 (Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.) The Company does not expect this update to have an impact on the Consolidated Financial Statements. ASU 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842 The amendments in this update permit an entity to elect an optional transition practical expedient to not evaluate under ASC 842 land easements that exist or expired before the entity’s adoption of ASC 842 and that were not previously accounted for as leases under ASC 840. An entity that elects this practical expedient should apply the practical expedient consistently to all of its existing or expired land easements that were not previously accounted for as leases under ASC 840. Once an entity adopts ASC 842, it should apply it prospectively to all new (or modified) land easements to determine whether the arrangement should be accounted for as a lease. The effective date and transition requirements are the same as that in Update 2016-02 (Effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years.) The Company expects to elect the transition practical expedient for land easements. |
Investment in Real Estate (Tabl
Investment in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Real Estate [Abstract] | |
Summary of investment in real estate | The following table summarizes the Company’s investment in real estate, at cost as of: September 30, 2018 December 31, 2017 Land $ 1,365,387 $ 1,204,700 Building and improvements 4,593,702 4,389,846 Tenant improvements 469,556 397,012 Furniture and fixtures 8,965 8,576 Property under development 252,764 219,227 INVESTMENT IN REAL ESTATE, AT COST (1) $ 6,690,374 $ 6,219,361 _____________ |
Summary of acquisitions | The following table summarizes the information on the acquisitions completed during the nine months ended September 30, 2018: Property Submarket Segment Date of Acquisition Square Feet (unaudited) Purchase Price (1) (in millions) 6605 Eleanor Avenue ( 2 ) Hollywood Studio 6/7/2018 22,823 $ 18.0 1034 Seward Street ( 2 ) Hollywood Studio 6/7/2018 18,673 12.0 One Westside and 10850 Pico ( 3 ) West Los Angeles Office 8/31/2018 595,987 190.0 TOTAL ACQUISITIONS 637,483 $ 220.0 _____________ 1. Represents purchase price before certain credits, prorations and closing costs. 2. The properties are adjacent to, and now form part of, the Sunset Las Palmas Studios property and consist of sound stages, production office and support space. 3. The Company purchased the property through a joint venture with Macerich. The Company owns 75% of the ownership interest in the consolidated joint venture. |
Summary of acqusitions, purchase price allocation | The following table represents the Company’s final aggregate purchase price accounting, as of the respective acquisition dates, for each of the Company’s acquisitions completed in the nine months ended September 30, 2018: 6605 Eleanor Avenue 1034 Seward Street One Westside and 10850 Pico Total Total consideration Cash consideration for real estate investments $ 18,071 $ 12,095 $ 40,986 $ 71,152 Cash consideration for U.S. Government securities — — 149,176 149,176 Debt assumed — — 139,003 139,003 Redeemable non-controlling interest in consolidated real estate entity — — 12,749 12,749 TOTAL CONSIDERATION $ 18,071 $ 12,095 $ 341,914 $ 372,080 Allocation of consideration Investment in real estate $ 18,071 $ 12,095 $ 196,444 $ 226,610 U.S. Government securities — — 149,176 149,176 Deferred leasing costs and in-place lease intangibles ( 1 ) — — 826 826 Above-market leases ( 2 ) — — 605 605 Below-market leases ( 3 ) — — (5,137) (5,137) TOTAL $ 18,071 $ 12,095 $ 341,914 $ 372,080 _____________ 1. Represents weighted-average amortization period of 4.22 years. 2. Represents weighted-average amortization period of 5.42 years. 3. Represents weighted-average amortization period of 17.19 years. |
Schedule of dispositions | The following table summarizes the properties sold during the nine months ended September 30, 2018. These properties were non-strategic assets to the Company’s portfolio: Property Date of Disposal Approximate Square Feet Sales Price (1) (in millions) Embarcadero Place 1/25/2018 197,402 $ 136.0 2600 Campus Drive (building 6 of Peninsula Office Park) 1/31/2018 63,050 22.5 2180 Sand Hill 3/1/2018 45,613 82.5 9300 Wilshire 4/10/2018 61,422 13.8 Peninsula Office Park 7/27/2018 447,739 210.0 TOTAL DISPOSITIONS 815,226 $ 464.8 _________________ 1. Represents gross sales price before certain credits, prorations and closing costs. |
Schedule of components of assets and liabilities associated with real estate held for sale | The following table summarizes the components of assets and liabilities associated with real estate held for sale as of: September 30, 2018 December 31, 2017 ASSETS Investment in real estate, net $ — $ 396,846 Accounts receivable, net — 213 Straight-line rent receivables, net — 5,225 Deferred leasing costs and lease intangible assets, net — 9,589 Prepaid expenses and other assets, net — 58 ASSETS ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ — $ 411,931 LIABILITIES Accounts payable, accrued liabilities and other $ — $ 1,808 Lease intangible liabilities, net — 485 Security deposits and prepaid rent — 2,610 LIABILITIES ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ — $ 4,903 |
Deferred Leasing Costs and Le_2
Deferred Leasing Costs and Lease Intangibles, net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Leases [Abstract] | |
Schedule of deferred leasing cost and lease intangibles | The following summarizes the Company’s deferred leasing costs and lease intangibles as of: September 30, 2018 December 31, 2017 Above-market leases $ 9,600 $ 18,028 Accumulated amortization (7,222) (15,131) Above-market leases, net 2,378 2,897 Deferred leasing costs and in-place lease intangibles 315,232 301,945 Accumulated amortization (121,592) (127,703) Deferred leasing costs and in-place lease intangibles, net 193,640 174,242 Below-market ground leases 68,388 68,388 Accumulated amortization (8,306) (6,498) Below-market ground leases, net 60,082 61,890 DEFERRED LEASING COSTS AND LEASE INTANGIBLE ASSETS, NET ( 1) $ 256,100 $ 239,029 Below-market leases $ 95,533 $ 103,597 Accumulated amortization (53,173) (55,019) Below-market leases, net 42,360 48,578 Above-market ground leases 1,095 1,095 Accumulated amortization (166) (133) Above-market ground leases, net 929 962 LEASE INTANGIBLE LIABILITIES, NET (1 ) $ 43,289 $ 49,540 __________________ |
Schedule of amortization during period | The Company recognized the following amortization related to deferred leasing costs and lease intangibles: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Above-market leases (1) $ (355) $ (1,855) $ (1,238) $ (5,122) Deferred leasing costs and in-place lease intangibles (2) $ (11,038) $ (17,376) $ (34,157) $ (57,813) Below-market ground leases (3) $ (602) $ (629) $ (1,840) $ (2,121) Below-market leases (1) $ 3,584 $ 5,776 $ 11,509 $ 19,448 Above-market ground leases (3) $ 11 $ 11 $ 33 $ 33 __________________ 1. Amortization is recorded in revenues in the Consolidated Statements of Operations. 2. Amortization is recorded in depreciation and amortization expenses and office rental revenues in the Consolidated Statements of Operations. 3. Amortization is recorded in office operating expenses in the Consolidated Statements of Operations. |
Receivables (Tables)
Receivables (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Schedule of accounts receivable and straight-line receivable, net | Accounts receivable The following table summarizes the Company’s accounts receivable, net of allowance for doubtful accounts as of: September 30, 2018 December 31, 2017 Accounts receivable $ 14,383 $ 6,706 Allowance for doubtful accounts (2,258) (2,472) ACCOUNTS RECEIVABLE, NET (1) $ 12,125 $ 4,234 _____________ 1. Excludes balances related to properties that have been classified as held for sale. Straight-line rent receivable The following table represents the Company’s straight-line rent receivables, net of allowance for doubtful accounts as of: September 30, 2018 December 31, 2017 Straight-line rent receivables $ 131,713 $ 106,466 Allowance for doubtful accounts — — STRAIGHT-LINE RENT RECEIVABLES, NET (1) $ 131,713 $ 106,466 _____________ |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Summary of prepaid expenses and other assets, net | The following table summarizes the Company’s prepaid expenses and other assets, net as of: September 30, 2018 December 31, 2017 Derivative assets $ 26,988 $ 12,586 Goodwill 8,754 8,754 Non-real estate investment 2,713 1,785 Investment in unconsolidated entities 92 14,240 Other 54,062 23,774 PREPAID EXPENSES AND OTHER ASSETS, NET ( 1 ) $ 92,609 $ 61,139 _____________ |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | The following table sets forth information with respect to our outstanding indebtedness: September 30, 2018 December 31, 2017 Interest Rate (1) Contractual Maturity Date UNSECURED AND SECURED DEBT Unsecured debt Unsecured revolving credit facility (2)(3) $ 110,000 $ 100,000 LIBOR + 1.05% to 1.50% 3/13/2022 ( 4 ) Term loan A (2)(5) 300,000 300,000 LIBOR + 1.20% to 1.70% 4/1/2020 (6) Term loan C (2) 75,000 75,000 LIBOR + 1.30% to 2.20% 11/17/2020 Term loan B (2)(7) 350,000 350,000 LIBOR + 1.20% to 1.70% 4/1/2022 Term loan D (2)(8) 125,000 125,000 LIBOR + 1.20% to 1.70% 11/17/2022 Series A notes 110,000 110,000 4.34% 1/2/2023 Series E notes 50,000 50,000 3.66% 9/15/2023 Series B notes 259,000 259,000 4.69% 12/16/2025 Series D notes 150,000 150,000 3.98% 7/6/2026 Registered senior notes 400,000 400,000 3.95% 11/1/2027 Series C notes 56,000 56,000 4.79% 12/16/2027 Total unsecured debt 1,985,000 1,975,000 Secured debt Sunset Gower Studios/Sunset Bronson Studios ( 9 ) 5,001 5,001 LIBOR + 2.25% 3/4/2019 ( 4 ) Met Park North (1 0 ) 64,500 64,500 LIBOR + 1.55% 8/1/2020 10950 Washington (1 1 ) 27,018 27,418 5.32% 3/11/2022 Element LA 168,000 168,000 4.59% 11/6/2025 Hill7 (1 2 ) 101,000 101,000 3.38% 11/6/2028 Rincon Center — 98,392 5.13% N/A Total secured debt 365,519 464,311 Total unsecured and secured debt 2,350,519 2,439,311 Unamortized deferred financing costs and loan discounts (1 3 ) (17,724) (17,931) TOTAL UNSECURED AND SECURED DEBT, NET $ 2,332,795 $ 2,421,380 IN-SUBSTANCE DEFEASED DEBT (14) $ 139,003 $ — 4.47% 10/1/2022 _________________ 1. Interest rate with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed. Interest rates are as of September 30, 2018, which may be different than the interest rates as of December 31, 2017 for corresponding indebtedness. 2. The Company has an option to make an irrevocable election to change the interest rate depending on the Company’s credit rating or a specified base rate plus an applicable margin. As of September 30, 2018, no such election had been made. 3. The Company has a total capacity of $600.0 million under its unsecured revolving credit facility. 4. The maturity date may be extended once for an additional one-year term. 5. The interest rate on the outstanding balance of the term loan was effectively fixed at 2.56% to 3.06% per annum through the use of two interest rate swaps. See Note 8 for details. 6. The maturity date may be extended twice, each time for an additional one-year term. 7. The interest rate on the outstanding balance of the term loan was effectively fixed at 2.96% to 3.46% per annum through the use of two interest rate swaps. See Note 8 for details. 8. The interest rate on the outstanding balance of the term loan was effectively fixed at 2.63% to 3.13% per annum through the use of an interest rate swap. See Note 8 for details. 9. The Company has the ability to draw up to $257.0 million under its construction loan, subject to lender required submissions. This loan is also secured by the Company’s ICON and CUE properties. 10. This loan bears interest only. The interest rate on the full loan amount has been effectively fixed at 3.71% per annum through the use of an interest rate swap. See Note 8 for details. 11. Monthly debt service includes annual debt amortization payments based on a 30-year amortization schedule with a balloon payment at maturity. 12. The Company owns 55% of the ownership interest in the consolidated joint venture that owns the Hill7 property. The full amount of the loan is shown. This loan bears interest only at 3.38% until November 6, 2026, at which time the interest rate will increase and monthly debt service will include principal payments with a balloon payment at maturity. 13. Excludes deferred financing costs related to establishing the Company’s unsecured revolving credit facility. 14. On August 31, 2018, the Company assumed the debt held by a trust subsidiary of the consolidated joint venture that owns the One Westside and 10850 Pico properties. While the Company owns 75% of the ownership interest in the joint venture, the full amount of the loan is shown. The joint venture has, in-substance, defeased the debt by purchasing U.S. Government securities, which are intended to generate cash flows to fund loan obligations through the early prepayment date of the debt. Monthly debt service includes annual debt amortization payments based on a 10-year amortization schedule with a balloon payment at maturity. |
Schedule of maturities of long-term debt | The following table summarizes the minimum future principal payments due (before the impact of extension options, if applicable) on the Company's debt as of September 30, 2018: Year In-substance Defeased Debt Unsecured and Secured Debt Remaining 2018 $ 780 $ 138 2019 3,193 5,569 2020 3,323 440,095 2021 3,494 632 2022 128,213 610,085 Thereafter — 1,294,000 TOTAL $ 139,003 $ 2,350,519 |
Summary of balance and key terms of the unsecured revolving credit facility | The following table summarizes the balance and key terms of the unsecured revolving credit facility as of: September 30, 2018 December 31, 2017 Outstanding borrowings $ 110,000 $ 100,000 Remaining borrowing capacity 490,000 300,000 TOTAL BORROWING CAPACITY $ 600,000 $ 400,000 Interest rate (1)(2) LIBOR + 1.05% to 1.50% LIBOR + 1.15% to 1.85% Annual facility fee rate (1) 0.15% or 0.30% 0.20% or 0.35% Contractual maturity date ( 3) 3/13/2022 4/1/2019 _________________ 1. The rate is based on the operating partnership’s leverage ratio. The Company has the option to make an irrevocable election to change the interest rate depending on the Company’s credit rating. As of September 30, 2018, no such election had been made. 2. The Company has the option to make an irrevocable election to change the interest rate depending on the Company’s specified base rate plus an applicable margin. As of September 30, 2018, no such election had been made. 3. The maturity date may be extended once for an additional one-year term. |
Summary of existing covenants and their covenant levels | The following table summarizes existing covenants and their covenant levels related to our unsecured revolving credit facility, term loans, and series A, B, C, D and E notes, when considering the most restrictive terms: Covenant Ratio Covenant Level Total liabilities to total asset value ≤ 60% Unsecured indebtedness to unencumbered asset value ≤ 60% Adjusted EBITDA to fixed charges ≥ 1.5x Secured indebtedness to total asset value ≤ 45% Unencumbered NOI to unsecured interest expense ≥ 2.0x The following table summarizes existing covenants and their covenant levels related to our registered senior notes: Covenant Ratio Covenant Level Debt to total assets ≤ 60% Total unencumbered assets to unsecured debt ≥ 150% Consolidated income available for debt service to annual debt service charge ≥ 1.5x Secured debt to total assets ≤ 45% |
Schedule of interest costs incurred | The following table represents a reconciliation from gross interest expense to the interest expense line item in the Consolidated Statements of Operations: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Gross interest expense (1) $ 22,136 $ 24,107 $ 66,081 $ 70,345 Capitalized interest (3,439) (2,831) (10,643) (7,817) Amortization of deferred financing costs and loan discount 1,434 1,185 4,527 3,558 INTEREST EXPENSE $ 20,131 $ 22,461 $ 59,965 $ 66,086 _________________ 1. Includes interest on the Company’s debt and hedging activities. |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments | The following table summarizes the Company’s derivative instruments as of September 30, 2018: Strike Rate Range (1) Underlying Debt Instrument Number of Hedges Notional Amount Effective Date Maturity Date Low High Fair Value Met Park North 1 $ 64,500 August 2013 August 2020 2.16% 2.16% $ 731 Term loan A (2) 2 300,000 July 2016 April 2020 2.56% 3.06% 5,748 Term loan B (3) 2 350,000 July 2016 April 2022 2.96% 3.46% 13,267 Term loan D (4) 1 125,000 June 2016 November 2022 2.63% 3.13% 7,242 TOTAL 6 $ 839,500 $ 26,988 _____________ 1. The rate is based on the operating partnership’s leverage ratio. 2. On March 13, 2018, the underlying debt instrument that was hedged was amended. Prior to the amendment, the interest rate was effectively fixed at 2.75% to 3.65%. 3. On March 13, 2018, the underlying debt instrument that was hedged was amended. Prior to the amendment, the interest rate was effectively fixed at 3.36% to 4.31%. 4. On March 13, 2018, the underlying debt instrument that was hedged was amended. Prior to the amendment, the interest rate was effectively fixed at 3.03% to 3.98%. |
Future Minimum Lease Payments (
Future Minimum Lease Payments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Future Minimum Lease Payments [Abstract] | |
Schedule of rent expense | The following table summarizes rent expense for ground leases as follows: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Contingent rental expense $ 2,149 $ 2,191 $ 7,697 $ 6,025 Minimum rental expense $ 4,344 $ 2,952 $ 11,817 $ 9,203 |
Schedule of future minimum lease payments | The following table provides information regarding the Company’s future minimum lease payments for its ground leases (before the impact of extension options, if applicable) as of September 30, 2018: Year Ground Leases (1) Remaining 2018 $ 3,967 2019 15,866 2020 15,866 2021 15,866 2022 15,866 Thereafter 437,646 TOTAL $ 505,077 _________________ 1. In situations where ground lease obligation adjustments are based on third-party appraisals of fair market land value, CPI adjustments and/or percentage of gross income that exceeds the minimum annual rent, the future minimum lease amounts above include the lease rental obligations in effect as of September 30, 2018. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of estimated fair value of derivatives measured by level of fair value hierarchy | The Company’s financial assets and liabilities measured and reported at fair value on a recurring basis include the following as of: September 30, 2018 December 31, 2017 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative assets (1) $ — $ 26,988 $ — $ 26,988 $ — $ 12,586 $ — $ 12,586 Derivative liabilities ( 2 ) $ — $ — $ — $ — $ — $ 265 $ — $ 265 Non-real estate investment (1)( 3 ) $ — $ 2,713 $ — $ 2,713 $ — $ — $ — $ — _____________ 1. Included in the prepaid expenses and other assets line item on the Consolidated Balance Sheets. 2. Included in the accounts payable, accrued liabilities and other line item on the Consolidated Balance Sheets. 3. Related to our investment in shares in a non-public company. Pursuant to our adoption of ASU 2016-01 during 2018, the Company marked the investment to fair value during the second quarter of 2018. The investment was not fair valued in 2017 and was accounted for under the cost method. |
Schedule of carrying value and fair value of notes payable | The table below represents the carrying value and fair value of the Company’s investment in securities and debt as of: September 30, 2018 December 31, 2017 Carrying Value Fair Value Carrying Value Fair Value U.S. Government securities $ 148,315 $ 148,328 $ — $ — Unsecured debt (1)(2) $ 1,984,333 $ 1,928,411 $ 1,974,278 $ 1,960,560 Secured debt (1) $ 365,519 $ 353,810 $ 464,311 $ 458,441 In-substance defeased debt $ 139,003 $ 136,515 $ — $ — _________________ 1. Amounts represent debt excluding net deferred financing costs. 2. The $400.0 million registered senior notes were issued at a discount. The discount, net of amortization, was $667 thousand and $722 thousand at September 30, 2018 and December 31, 2017, respectively, and is included within unsecured debt. |
Summary of the carrying value and fair value of securities | The following table summarizes the carrying value and fair value of our securities by the contractual maturity date: Carrying Value Fair Value Due in 1 year $ 6,107 $ 6,120 Due in 1 year through 5 years 142,208 142,208 Total $ 148,315 $ 148,328 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value assumptions | The per unit fair value of the grants from the 2018 OPP Plan was estimated on the date of grant using the following assumptions in the Monte Carlo valuation: Assumption Expected price volatility for the Company 20.00% Expected price volatility for the particular REIT index 18.00% Risk-free rate 2.37% Dividend yield 2.90% |
Schedule of classification and amount recognized for stock-based compensation | The following table presents the classification and amount recognized for stock-based compensation related to the Company’s awards: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Expensed stock compensation (1) $ 4,292 $ 3,449 $ 12,919 $ 11,237 Capitalized stock compensation (2) 282 217 802 635 TOTAL STOCK COMPENSATION (3) $ 4,574 $ 3,666 $ 13,721 $ 11,872 _________________ 1. Amounts are recorded in general and administrative expenses in the Consolidated Statements of Operations. 2. Amounts are recorded in deferred leasing costs and lease intangible assets, net and investment in real estate, at cost in the Consolidated Balance Sheets. 3. Amounts are recorded in additional paid-in capital and non-controlling interest—units in the operating partnership in the Consolidated Balance Sheets. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Schedule of earnings per share | The following table reconciles the numerator and denominator in computing Hudson Pacific Properties, Inc.’s basic and diluted earnings per share for net income available to common stockholders: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Basic and diluted net income available to common stockholders $ 17,367 $ 11,064 $ 82,146 $ 35,132 Denominator: Basic weighted average common shares outstanding 155,649,110 155,302,800 155,637,351 152,874,952 Effect of dilutive instruments (1) 1,020,137 790,936 991,137 773,936 DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 156,669,247 156,093,736 156,628,488 153,648,888 Basic earnings per common share $ 0.11 $ 0.07 $ 0.53 $ 0.23 Diluted earnings per common share $ 0.11 $ 0.07 $ 0.52 $ 0.23 ________________ 1. The Company includes unvested awards and convertible common units as contingently issuable shares in the computation of diluted earnings per share once the market criteria are met, assuming that the end of the reporting period is the end of the contingency period. Any anti-dilutive securities are excluded from the diluted earnings per share calculation. |
Hudson Pacific Partners L.P. | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |
Schedule of earnings per share | The following table reconciles the numerator and denominator in computing Hudson Pacific Properties, L.P.’s basic and diluted earnings per unit for net income available to common unitholders: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Basic and diluted net income available to common unitholders $ 17,430 $ 11,105 $ 82,445 $ 35,388 Denominator: Basic weighted average common units outstanding 156,218,155 155,871,845 156,206,396 153,736,796 Effect of dilutive instruments (1) 1,020,137 790,936 991,137 773,936 DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING 157,238,292 156,662,781 157,197,533 154,510,732 Basic earnings per common unit $ 0.11 $ 0.07 $ 0.53 $ 0.23 Diluted earnings per common unit $ 0.11 $ 0.07 $ 0.52 $ 0.23 ________________ |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Comprehensive income (loss) | The table below presents the effect of the Company’s derivatives on accumulated other comprehensive income (“OCI”): Hudson Pacific Properties, Inc. Stockholders ’ Equity Non-controlling Interests Total Equity Balance at January 1, 2018 $ 13,227 $ 49 $ 13,276 Unrealized gain recognized in OCI due to change in fair value 16,159 58 16,217 Income reclassified from OCI into income (as interest expense) (1,782) (6) (1,788) Net change in OCI 14,377 52 14,429 Cumulative adjustment related to adoption of ASU 2017-12 230 1 231 BALANCE AT SEPTEMBER 30, 2018 $ 27,834 $ 102 $ 27,936 |
Schedule of ownership of common units including unvested restricted units | The following table summarizes the ownership of common units, excluding unvested restricted units as of: September 30, 2018 December 31, 2017 Company-owned common units in the operating partnership 155,649,125 155,602,508 Company’s ownership interest percentage 99.6 % 99.6 % Non-controlling common units in the operating partnership (1) 569,045 569,045 Non-controlling ownership interest percentage (1) 0.4 % 0.4 % _________________ |
Schedule of dividends payable | The following table summarizes dividends declared and paid for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Common stock (1) $ 0.25 $ 0.25 $ 0.75 $ 0.75 Common units (1) $ 0.25 $ 0.25 $ 0.75 $ 0.75 Series A preferred units (1) $ 0.3906 $ 0.3906 $ 1.1718 $ 1.1718 _________________ 1. The third quarter dividends were paid on September 28, 2018 to shareholders and unitholders of record on September 18, 2018. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash flow, supplemental information | Supplemental cash flow information is included as follows: Nine Months Ended September 30, 2018 2017 Cash paid for interest, net of capitalized interest $ 50,692 $ 47,852 Non-cash investing and financing activities Accounts payable and accrued liabilities for real estate investments $ 12,624 $ (6,740) Reclassification of investment in unconsolidated entities for real estate investments $ — $ 7,835 Assumption of debt in connection with property acquisitions $ 139,003 $ — Redeemable non-controlling interest in consolidated real estate entity $ 12,749 $ — |
Schedule of cash and cash equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash at the beginning and end of the periods presented: Nine Months Ended September 30, 2018 2017 Beginning of period: Cash and cash equivalents $ 78,922 $ 83,015 Restricted cash 22,358 25,177 TOTAL $ 101,280 $ 108,192 End of period: Cash and cash equivalents $ 52,456 $ 87,723 Restricted cash 10,782 25,784 TOTAL $ 63,238 $ 113,507 |
Restrictions on cash and cash equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash at the beginning and end of the periods presented: Nine Months Ended September 30, 2018 2017 Beginning of period: Cash and cash equivalents $ 78,922 $ 83,015 Restricted cash 22,358 25,177 TOTAL $ 101,280 $ 108,192 End of period: Cash and cash equivalents $ 52,456 $ 87,723 Restricted cash 10,782 25,784 TOTAL $ 63,238 $ 113,507 |
Organization (Details)
Organization (Details) $ in Millions | Apr. 01, 2015USD ($)ft²propertyprojectshares | Sep. 30, 2018ft²property |
Business Acquisition [Line Items] | ||
Area of real estate property (in square feet) | ft² | 14,745,260 | |
Number of real estate properties (in properties) | property | 54 | |
Office | ||
Business Acquisition [Line Items] | ||
Area of real estate property (in square feet) | ft² | 13,498,837 | |
Number of real estate properties (in properties) | property | 51 | |
Studio | ||
Business Acquisition [Line Items] | ||
Area of real estate property (in square feet) | ft² | 1,246,423 | |
Number of real estate properties (in properties) | property | 3 | |
EOP Northern California Portfolio | ||
Business Acquisition [Line Items] | ||
Area of real estate property (in square feet) | ft² | 8,200,000 | |
Gross payments to acquire business | $ | $ 1,750 | |
Consideration transferred, common units (in shares) | shares | 63,474,791 | |
EOP Northern California Portfolio | Office Building | ||
Business Acquisition [Line Items] | ||
Number of real estate properties acquired (in properties) | property | 26 | |
EOP Northern California Portfolio | Development Parcel | ||
Business Acquisition [Line Items] | ||
Number of development projects acquired (in projects) | project | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | Oct. 09, 2018 | Mar. 01, 2018ft² | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)joint_venture | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Variable Interest Entity [Line Items] | |||||||
Investment in unconsolidated entities | $ 92 | $ 92 | $ 14,240 | ||||
Rental revenue and tenant recoveries | 166,600 | $ 175,300 | 491,200 | $ 501,400 | |||
Indirect leasing costs capitalized during period | 1,700 | $ 1,800 | 5,500 | $ 5,000 | |||
Future undiscounted minimum lease payments on ground leases | $ 505,077 | $ 505,077 | |||||
Ferry Building Property | Subsequent Event | |||||||
Variable Interest Entity [Line Items] | |||||||
Ownership Interest | 55.00% | ||||||
VIE, Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Number of joint ventures meeting VIE definition | joint_venture | 4 | ||||||
Number of joint ventures consolidated | joint_venture | 3 | ||||||
VIE, Primary Beneficiary | HPP-MAC WSP, LLC | |||||||
Variable Interest Entity [Line Items] | |||||||
Ownership Interest | 75.00% | 75.00% | |||||
VIE, Primary Beneficiary | HPP-MAC WSP, LLC | Macerich, WSP, LLC | |||||||
Variable Interest Entity [Line Items] | |||||||
Ownership Interest | 25.00% | ||||||
VIE, Primary Beneficiary | One Westside | |||||||
Variable Interest Entity [Line Items] | |||||||
Area of real estate property, retail and entertainment space (in square feet) | ft² | 500,000 | ||||||
VIE, Primary Beneficiary | 10850 Pico | |||||||
Variable Interest Entity [Line Items] | |||||||
Area of real estate property, retail and entertainment space (in square feet) | ft² | 95,987 | ||||||
VIE, Not Primary Beneficiary | |||||||
Variable Interest Entity [Line Items] | |||||||
Number of joint ventures not consolidated | joint_venture | 1 | ||||||
Ownership Interest | 21.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Consolidated Entities (Details) - VIE, Primary Beneficiary | Mar. 01, 2018 | Sep. 30, 2018 |
1455 Market | ||
Variable Interest Entity [Line Items] | ||
Ownership Interest | 55.00% | |
Hill7 | ||
Variable Interest Entity [Line Items] | ||
Ownership Interest | 55.00% | |
HPP-MAC WSP, LLC | ||
Variable Interest Entity [Line Items] | ||
Ownership Interest | 75.00% | 75.00% |
Investment in Real Estate - Sum
Investment in Real Estate - Summary of Real Estate Held for Investment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Real Estate [Abstract] | ||
Land | $ 1,365,387 | $ 1,204,700 |
Building and improvements | 4,593,702 | 4,389,846 |
Tenant improvements | 469,556 | 397,012 |
Furniture and fixtures | 8,965 | 8,576 |
Property under development | 252,764 | 219,227 |
Investment in real estate, at cost | $ 6,690,374 | $ 6,219,361 |
Investment in Real Estate - Pro
Investment in Real Estate - Properties Acquired (Details) $ in Thousands | Aug. 31, 2018USD ($)ft² | Jun. 07, 2018USD ($)ft² | Mar. 01, 2018 | Sep. 30, 2018USD ($)ft² |
Real Estate [Line Items] | ||||
Square feet of assets acquired | ft² | 637,483 | |||
Purchase price of assets acquired | $ 220,000 | |||
Total Consideration | ||||
Cash consideration | 71,152 | |||
Cash consideration for U.S. Government securities | 149,176 | |||
Debt assumed | 139,003 | |||
Redeemable non-controlling interest in consolidated real estate entity | 12,749 | |||
Total Consideration | 372,080 | |||
Allocation of consideration | ||||
Investment in real estate | 226,610 | |||
U.S. Government securities | 149,176 | |||
Deferred leasing costs and in-place lease intangibles | 826 | |||
Above-market leases | 605 | |||
Below-market leases | (5,137) | |||
Net asset and liabilities assumed | $ 372,080 | |||
Deferred Leasing Costs and In-Place Lease Intangibles | ||||
Allocation of consideration | ||||
Weighted-average amortization period | 4 years 2 months 19 days | |||
Above-market leases | ||||
Allocation of consideration | ||||
Weighted-average amortization period | 5 years 5 months 1 day | |||
Below-Market Leases | ||||
Allocation of consideration | ||||
Weighted-average amortization period | 17 years 2 months 8 days | |||
6605 Eleanor Avenue | ||||
Real Estate [Line Items] | ||||
Square feet of assets acquired | ft² | 22,823 | |||
Purchase price of assets acquired | $ 18,000 | |||
Total Consideration | ||||
Cash consideration | 18,071 | |||
Cash consideration for U.S. Government securities | 0 | |||
Debt assumed | 0 | |||
Redeemable non-controlling interest in consolidated real estate entity | 0 | |||
Total Consideration | 18,071 | |||
Allocation of consideration | ||||
Investment in real estate | 18,071 | |||
U.S. Government securities | 0 | |||
Deferred leasing costs and in-place lease intangibles | 0 | |||
Above-market leases | 0 | |||
Below-market leases | 0 | |||
Net asset and liabilities assumed | $ 18,071 | |||
1034 Seward Street | ||||
Real Estate [Line Items] | ||||
Square feet of assets acquired | ft² | 18,673 | |||
Purchase price of assets acquired | $ 12,000 | |||
Total Consideration | ||||
Cash consideration | 12,095 | |||
Cash consideration for U.S. Government securities | 0 | |||
Debt assumed | 0 | |||
Redeemable non-controlling interest in consolidated real estate entity | 0 | |||
Total Consideration | 12,095 | |||
Allocation of consideration | ||||
Investment in real estate | 12,095 | |||
U.S. Government securities | 0 | |||
Deferred leasing costs and in-place lease intangibles | 0 | |||
Above-market leases | 0 | |||
Below-market leases | 0 | |||
Net asset and liabilities assumed | $ 12,095 | |||
One Westside and 10850 Pico | ||||
Real Estate [Line Items] | ||||
Square feet of assets acquired | ft² | 595,987 | |||
Purchase price of assets acquired | $ 190,000 | |||
Total Consideration | ||||
Cash consideration | 40,986 | |||
Cash consideration for U.S. Government securities | 149,176 | |||
Debt assumed | 139,003 | |||
Redeemable non-controlling interest in consolidated real estate entity | 12,749 | |||
Total Consideration | 341,914 | |||
Allocation of consideration | ||||
Investment in real estate | 196,444 | |||
U.S. Government securities | 149,176 | |||
Deferred leasing costs and in-place lease intangibles | 826 | |||
Above-market leases | 605 | |||
Below-market leases | (5,137) | |||
Net asset and liabilities assumed | $ 341,914 | |||
HPP-MAC WSP, LLC | VIE, Primary Beneficiary | ||||
Real Estate [Line Items] | ||||
Ownership Interest | 75.00% | 75.00% |
Investment in Real Estate - P_2
Investment in Real Estate - Properties Disposed (Details) $ in Thousands | Jul. 27, 2018USD ($)ft² | Apr. 10, 2018USD ($)ft² | Mar. 01, 2018USD ($)ft² | Jan. 31, 2018USD ($)ft² | Jan. 25, 2018USD ($)ft² | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)ft² | Sep. 30, 2017USD ($) |
Real Estate [Line Items] | |||||||||
Square feet of real estate disposed | ft² | 815,226 | ||||||||
Sales Price | $ 464,800 | ||||||||
Gains on sale of real estate | $ 3,735 | $ 0 | $ 43,337 | $ 16,866 | |||||
Embarcadero Place | |||||||||
Real Estate [Line Items] | |||||||||
Square feet of real estate disposed | ft² | 197,402 | ||||||||
Sales Price | $ 136,000 | ||||||||
2600 Campus Drive (building 6 of Peninsula Office Park) | |||||||||
Real Estate [Line Items] | |||||||||
Square feet of real estate disposed | ft² | 63,050 | ||||||||
Sales Price | $ 22,500 | ||||||||
2180 Sand Hill | |||||||||
Real Estate [Line Items] | |||||||||
Square feet of real estate disposed | ft² | 45,613 | ||||||||
Sales Price | $ 82,500 | ||||||||
9300 Wilshire | |||||||||
Real Estate [Line Items] | |||||||||
Square feet of real estate disposed | ft² | 61,422 | ||||||||
Sales Price | $ 13,800 | ||||||||
Peninsula Office Park | |||||||||
Real Estate [Line Items] | |||||||||
Square feet of real estate disposed | ft² | 447,739 | ||||||||
Sales Price | $ 210,000 |
Investment in Real Estate - Rea
Investment in Real Estate - Real Estate Held For Sale (Details) | 9 Months Ended | |
Sep. 30, 2018USD ($)property | Dec. 31, 2017USD ($)property | |
Real Estate [Abstract] | ||
Number of properties held for sale | property | 0 | 5 |
ASSETS | ||
Investment in real estate, net | $ 0 | $ 396,846,000 |
Accounts receivable, net | 0 | 213,000 |
Straight-line rent receivables, net | 0 | 5,225,000 |
Deferred leasing costs and lease intangible assets, net | 0 | 9,589,000 |
Prepaid expenses and other assets, net | 0 | 58,000 |
Assets associated with real estate held for sale | 0 | 411,931,000 |
LIABILITIES | ||
Accounts payable, accrued liabilities and other | 0 | 1,808,000 |
Lease intangible liabilities, net | 0 | 485,000 |
Security deposits and prepaid rent | 0 | 2,610,000 |
Liabilities associated with real estate held for sale | 0 | $ 4,903,000 |
Long-lived asset impairment charges | $ 0 |
Deferred Leasing Costs and Le_3
Deferred Leasing Costs and Lease Intangibles, net - Schedule of Finite-Lived Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Deferred leasing costs and lease intangibles, net | $ 256,100 | $ 256,100 | $ 239,029 | ||
Other Liabilities, Unclassified [Abstract] | |||||
Below and above market ground leases, net | 43,289 | 43,289 | 49,540 | ||
Amortization of above- and below-market leases, net | (10,271) | $ (14,326) | |||
Below-Market Leases | |||||
Other Liabilities, Unclassified [Abstract] | |||||
Below and above market ground leases | 95,533 | 95,533 | 103,597 | ||
Below and above market ground leases, accumulated amortization | (53,173) | (53,173) | (55,019) | ||
Below and above market ground leases, net | 42,360 | 42,360 | 48,578 | ||
Amortization of above- and below-market leases, net | 3,584 | $ 5,776 | 11,509 | 19,448 | |
Above-Market Ground Leases | |||||
Other Liabilities, Unclassified [Abstract] | |||||
Below and above market ground leases | 1,095 | 1,095 | 1,095 | ||
Below and above market ground leases, accumulated amortization | (166) | (166) | (133) | ||
Below and above market ground leases, net | 929 | 929 | 962 | ||
Amortization of above- and below-market leases, net | 11 | 11 | 33 | 33 | |
Above-market leases | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Deferred leasing costs and lease intangibles | 9,600 | 9,600 | 18,028 | ||
Accumulated amortization | (7,222) | (7,222) | (15,131) | ||
Deferred leasing costs and lease intangibles, net | 2,378 | 2,378 | 2,897 | ||
Other Liabilities, Unclassified [Abstract] | |||||
Amortization of above- and below-market leases, net | (355) | (1,855) | (1,238) | (5,122) | |
Deferred leasing costs and in-place lease intangibles | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Deferred leasing costs and lease intangibles | 315,232 | 315,232 | 301,945 | ||
Accumulated amortization | (121,592) | (121,592) | (127,703) | ||
Deferred leasing costs and lease intangibles, net | 193,640 | 193,640 | 174,242 | ||
Other Liabilities, Unclassified [Abstract] | |||||
Amortization of above- and below-market leases, net | (11,038) | (17,376) | (34,157) | (57,813) | |
Below-market ground leases | |||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||
Deferred leasing costs and lease intangibles | 68,388 | 68,388 | 68,388 | ||
Accumulated amortization | (8,306) | (8,306) | (6,498) | ||
Deferred leasing costs and lease intangibles, net | 60,082 | 60,082 | $ 61,890 | ||
Other Liabilities, Unclassified [Abstract] | |||||
Amortization of above- and below-market leases, net | $ (602) | $ (629) | $ (1,840) | $ (2,121) |
Receivables (Details)
Receivables (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Accounts receivable | $ 14,383 | $ 6,706 |
Allowance for doubtful accounts | (2,258) | (2,472) |
Accounts receivable, net | 12,125 | 4,234 |
Straight-line rent receivables | 131,713 | 106,466 |
Allowance for doubtful accounts | 0 | 0 |
Straight-line rent receivables, net | $ 131,713 | $ 106,466 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets, net (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Derivative assets | $ 26,988 | $ 12,586 |
Goodwill | 8,754 | 8,754 |
Non-real estate investment | 2,713 | 1,785 |
Investment in unconsolidated entities | 92 | 14,240 |
Other | 54,062 | 23,774 |
Prepaid expenses and other assets, net | $ 92,609 | $ 61,139 |
Debt - Summary of Outstanding I
Debt - Summary of Outstanding Indebtedness (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | Oct. 02, 2017 | |
Notes Payable, Excluding Defeased Debt | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 2,350,519 | $ 2,439,311 | |
Unamortized deferred financing costs and loan discounts | (17,724) | (17,931) | |
TOTAL NOTES PAYABLE, NET | 2,332,795 | 2,421,380 | |
Unsecured Debt | |||
Debt Instrument [Line Items] | |||
Principal Amounts | 1,985,000 | 1,975,000 | |
Unsecured Debt | Term Loan A | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 300,000 | 300,000 | |
Unsecured Debt | Term Loan A | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.20% | ||
Unsecured Debt | Term Loan A | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.70% | ||
Unsecured Debt | Term Loan C | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 75,000 | 75,000 | |
Unsecured Debt | Term Loan C | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.30% | ||
Unsecured Debt | Term Loan C | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.20% | ||
Unsecured Debt | Term Loan B | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 350,000 | 350,000 | |
Unsecured Debt | Term Loan B | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.20% | ||
Unsecured Debt | Term Loan B | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.70% | ||
Unsecured Debt | Term Loan D | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 125,000 | 125,000 | |
Unsecured Debt | Term Loan D | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.20% | ||
Unsecured Debt | Term Loan D | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.70% | ||
Unsecured Debt | Series A Notes | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 110,000 | 110,000 | |
Interest rate | 4.34% | ||
Unsecured Debt | Series E Notes | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 50,000 | 50,000 | |
Interest rate | 3.66% | ||
Unsecured Debt | Series B Notes | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 259,000 | 259,000 | |
Interest rate | 4.69% | ||
Unsecured Debt | Series D Notes | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 150,000 | 150,000 | |
Interest rate | 3.98% | ||
Unsecured Debt | Registered Senior Notes | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 400,000 | 400,000 | $ 400,000 |
Interest rate | 3.95% | ||
Unsecured Debt | Series C Notes | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 56,000 | 56,000 | |
Interest rate | 4.79% | ||
Unsecured Debt | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 110,000 | $ 100,000 | |
Unsecured Debt | Revolving Credit Facility | LIBOR | Minimum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.05% | 1.15% | |
Unsecured Debt | Revolving Credit Facility | LIBOR | Maximum | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.50% | 1.85% | |
Secured Debt | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 365,519 | $ 464,311 | |
Secured Debt | Sunset Gower/Sunset Bronson | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 5,001 | 5,001 | |
Secured Debt | Sunset Gower/Sunset Bronson | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 2.25% | ||
Secured Debt | Met Park North | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 64,500 | 64,500 | |
Secured Debt | Met Park North | LIBOR | |||
Debt Instrument [Line Items] | |||
Basis spread on variable rate | 1.55% | ||
Secured Debt | 10950 Washington | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 27,018 | 27,418 | |
Interest rate | 5.32% | ||
Secured Debt | Element LA | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 168,000 | 168,000 | |
Interest rate | 4.59% | ||
Secured Debt | Hill7 | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 101,000 | 101,000 | |
Interest rate | 3.38% | ||
Secured Debt | Rincon Center | |||
Debt Instrument [Line Items] | |||
Principal Amounts | $ 0 | 98,392 | |
Interest rate | 5.13% | ||
In-Substance Defeased Debt | |||
Debt Instrument [Line Items] | |||
TOTAL NOTES PAYABLE, NET | $ 139,003 | $ 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Aug. 31, 2018USD ($) | Mar. 12, 2018USD ($) | Mar. 01, 2018 | Sep. 30, 2018USD ($)instrumentderivative | Mar. 13, 2018USD ($) | Dec. 31, 2017USD ($)derivative | Oct. 02, 2017USD ($) |
Debt Instrument [Line Items] | |||||||
Duration used in interest rate calculation (in days) | 360 days | ||||||
Debt assumed as consideration | $ 139,003,000 | ||||||
Hill7 | |||||||
Debt Instrument [Line Items] | |||||||
Real estate property, ownership | 55.00% | ||||||
Westside Pavilion | |||||||
Debt Instrument [Line Items] | |||||||
Payments for US governmental securities | $ 149,200,000 | ||||||
Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Number of derivative instruments held | derivative | 6 | 6 | |||||
Term Loan A | Interest Rate Swap | |||||||
Debt Instrument [Line Items] | |||||||
Number of derivative instruments held | derivative | 2 | ||||||
Term Loan A | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Number of derivative instruments held | instrument | 2 | ||||||
Term Loan A | Minimum | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Adjusted interest rate | 2.75% | 2.56% | |||||
Term Loan A | Maximum | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Adjusted interest rate | 3.65% | 3.06% | |||||
Term Loan B | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Number of derivative instruments held | instrument | 2 | ||||||
Term Loan B | Minimum | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Adjusted interest rate | 3.36% | 2.96% | |||||
Term Loan B | Maximum | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Adjusted interest rate | 4.31% | 3.46% | |||||
Term Loan D | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Number of derivative instruments held | instrument | 1 | ||||||
Term Loan D | Minimum | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Adjusted interest rate | 3.03% | 2.63% | |||||
Term Loan D | Maximum | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Adjusted interest rate | 3.98% | 3.13% | |||||
Sunset Gower/Sunset Bronson | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount guaranteed | 19.50% | ||||||
Maximum exposure for guarantee | $ 1,000,000 | ||||||
Met Park North | |||||||
Debt Instrument [Line Items] | |||||||
Adjusted interest rate | 3.71% | ||||||
Met Park North | Interest Rate Swap | Designated as Hedging Instrument | |||||||
Debt Instrument [Line Items] | |||||||
Number of derivative instruments held | instrument | 1 | ||||||
10950 Washington | |||||||
Debt Instrument [Line Items] | |||||||
Service payment term (in years) | 30 years | ||||||
HPP-MAC WSP, LLC | VIE, Primary Beneficiary | |||||||
Debt Instrument [Line Items] | |||||||
Ownership Interest | 75.00% | 75.00% | |||||
Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Increase in maximum borrowing capacity | $ 10,000,000 | ||||||
Unsecured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | 1,985,000,000 | $ 1,975,000,000 | |||||
Unsecured Debt | Term Loan A | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | 300,000,000 | 300,000,000 | |||||
Unsecured Debt | Term Loan B | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | $ 350,000,000 | 350,000,000 | |||||
Unsecured Debt | Term Loan B | Interest Rate Swap | |||||||
Debt Instrument [Line Items] | |||||||
Number of derivative instruments held | derivative | 2 | ||||||
Unsecured Debt | Term Loan D | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | $ 125,000,000 | 125,000,000 | |||||
Unsecured Debt | Term Loan C | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | $ 75,000,000 | 75,000,000 | |||||
Unsecured Debt | Registered Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 3.95% | ||||||
Notes payable | $ 400,000,000 | 400,000,000 | $ 400,000,000 | ||||
Unsecured Debt | Hudson Pacific Partners L.P. | Term Loan A | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | $ 300,000,000 | ||||||
Unsecured Debt | Hudson Pacific Partners L.P. | Term Loan B | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | 350,000,000 | ||||||
Unsecured Debt | Hudson Pacific Partners L.P. | Term Loan D | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | 125,000,000 | ||||||
Unsecured Debt | Hudson Pacific Partners L.P. | Revolving Credit Facility 2014 | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | $ 400,000,000 | ||||||
Unsecured Debt | Hudson Pacific Partners L.P. | 5-Year Term Loan due April 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | $ 300,000,000 | ||||||
Debt instrument, term (in years) | 5 years | ||||||
Unsecured Debt | Hudson Pacific Partners L.P. | 7-Year Term Loan due April 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | $ 350,000,000 | ||||||
Debt instrument, term (in years) | 7 years | ||||||
Unsecured Debt | Hudson Pacific Partners L.P. | 5-Year Term Loan due November 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | $ 75,000,000 | ||||||
Debt instrument, term (in years) | 5 years | ||||||
Unsecured Debt | Hudson Pacific Partners L.P. | 7-Year Term Loan due November 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | $ 125,000,000 | ||||||
Debt instrument, term (in years) | 7 years | ||||||
Unsecured Debt | Hudson Pacific Partners L.P. | Term Loan C | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | 75,000,000 | ||||||
Unsecured Debt | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | 600,000,000 | 400,000,000 | |||||
Remaining borrowing capacity | 490,000,000 | 300,000,000 | |||||
Notes payable | 110,000,000 | 100,000,000 | |||||
Unsecured Debt | Revolving Credit Facility | Hudson Pacific Partners L.P. | |||||||
Debt Instrument [Line Items] | |||||||
Total borrowing capacity | 600,000,000 | $ 600,000,000 | |||||
Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | 365,519,000 | 464,311,000 | |||||
Secured Debt | Sunset Gower/Sunset Bronson | |||||||
Debt Instrument [Line Items] | |||||||
Remaining borrowing capacity | 257,000,000 | ||||||
Notes payable | 5,001,000 | 5,001,000 | |||||
Secured Debt | Met Park North | |||||||
Debt Instrument [Line Items] | |||||||
Notes payable | $ 64,500,000 | 64,500,000 | |||||
Secured Debt | 10950 Washington | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 5.32% | ||||||
Notes payable | $ 27,018,000 | 27,418,000 | |||||
In-Substance Defeased Debt | Westside Pavilion | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate | 447.00% | ||||||
Notes payable | $ 139,000,000 | $ 139,003,000 | $ 0 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) $ in Thousands | Sep. 30, 2018USD ($) |
In-Substance Defeased Debt | |
Debt Instrument [Line Items] | |
Remaining 2,018 | $ 780 |
2,019 | 3,193 |
2,020 | 3,323 |
2,021 | 3,494 |
2,022 | 128,213 |
Thereafter | 0 |
Total | 139,003 |
Notes Payable, Excluding Defeased Debt | |
Debt Instrument [Line Items] | |
Remaining 2,018 | 138 |
2,019 | 5,569 |
2,020 | 440,095 |
2,021 | 632 |
2,022 | 610,085 |
Thereafter | 1,294,000 |
Total | $ 2,350,519 |
Debt - Unsecured Revolving Cred
Debt - Unsecured Revolving Credit Facility (Details) - Unsecured Debt - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Line of Credit Facility [Line Items] | ||
Outstanding borrowings | $ 1,985,000,000 | $ 1,975,000,000 |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Outstanding borrowings | 110,000,000 | 100,000,000 |
Remaining borrowing capacity | 490,000,000 | 300,000,000 |
Total borrowing capacity | $ 600,000,000 | $ 400,000,000 |
Revolving Credit Facility | Minimum | ||
Line of Credit Facility [Line Items] | ||
Annual facility fee rate | 0.15% | 0.20% |
Revolving Credit Facility | Maximum | ||
Line of Credit Facility [Line Items] | ||
Annual facility fee rate | 0.30% | 0.35% |
Revolving Credit Facility | LIBOR | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.05% | 1.15% |
Revolving Credit Facility | LIBOR | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.50% | 1.85% |
Debt - Covenant Summaries (Deta
Debt - Covenant Summaries (Details) | 9 Months Ended |
Sep. 30, 2018 | |
Unsecured Debt | Registered Senior Notes | |
Debt Instrument [Line Items] | |
Debt to total assets | 60.00% |
Total unencumbered assets to unsecured debt | 150.00% |
Consolidated income available for debt service to annual debt service charge | 150.00% |
Secured debt to total assets | 45.00% |
Hudson Pacific Partners L.P. | |
Debt Instrument [Line Items] | |
Total liabilities to total asset value | 0.60 |
Unsecured indebtedness to unencumbered asset value | 0.60 |
Adjusted EBITDA to fixed charges | 1.50 |
Secured indebtedness to total asset value | 0.45 |
Unencumbered NOI to unsecured interest expense | 2 |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Debt Disclosure [Abstract] | ||||
Gross interest expense | $ 22,136 | $ 24,107 | $ 66,081 | $ 70,345 |
Capitalized interest | (3,439) | (2,831) | (10,643) | (7,817) |
Amortization of deferred financing costs and loan discount | 1,434 | 1,185 | 4,527 | 3,558 |
Interest Expense | $ 20,131 | $ 22,461 | $ 59,965 | $ 66,086 |
Derivatives (Details)
Derivatives (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)instrumentderivative | Sep. 30, 2017USD ($) | Mar. 12, 2018 | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($)derivative | Oct. 02, 2017 | |
Derivative | |||||||
Adjustment to due to change in accounting principal | $ 0 | ||||||
Change in fair value of derivative instruments | $ 8,600,000 | ||||||
Retained Earnings (Accumulated Deficit) | |||||||
Derivative | |||||||
Adjustment to due to change in accounting principal | $ (231,000) | ||||||
Retained Earnings (Accumulated Deficit) | ASU 2017-12 | |||||||
Derivative | |||||||
Adjustment to due to change in accounting principal | $ (231,000) | ||||||
Met Park North | |||||||
Derivative | |||||||
Adjusted interest rate | 3.71% | ||||||
Interest Rate Swap | Term Loan A | |||||||
Derivative | |||||||
Number of derivative instruments held | derivative | 2 | ||||||
Interest Rate Contract | 7 Year Term Loan Facility 2015 | |||||||
Derivative | |||||||
Unrealized gain (loss) on derivative, ineffective portion | $ (37,000) | $ (82,000) | |||||
Designated as Hedging Instrument | Interest Rate Swap | |||||||
Derivative | |||||||
Number of derivative instruments held | derivative | 6 | 6 | |||||
Notional amount of interest rate cash flow hedge derivatives | $ 839,500,000 | $ 839,500,000 | |||||
Fair Value | $ 26,988,000 | ||||||
Designated as Hedging Instrument | Interest Rate Swap | Met Park North | |||||||
Derivative | |||||||
Number of derivative instruments held | instrument | 1 | ||||||
Notional amount of interest rate cash flow hedge derivatives | $ 64,500,000 | ||||||
Fair Value | $ 731,000 | ||||||
Designated as Hedging Instrument | Interest Rate Swap | Met Park North | Minimum | |||||||
Derivative | |||||||
Strike Rate Range | 2.16% | ||||||
Designated as Hedging Instrument | Interest Rate Swap | Met Park North | Maximum | |||||||
Derivative | |||||||
Strike Rate Range | 2.16% | ||||||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan A | |||||||
Derivative | |||||||
Number of derivative instruments held | instrument | 2 | ||||||
Notional amount of interest rate cash flow hedge derivatives | $ 300,000,000 | ||||||
Fair Value | $ 5,748,000 | ||||||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan A | Minimum | |||||||
Derivative | |||||||
Adjusted interest rate | 2.56% | 2.75% | |||||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan A | Maximum | |||||||
Derivative | |||||||
Adjusted interest rate | 3.06% | 3.65% | |||||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan B | |||||||
Derivative | |||||||
Number of derivative instruments held | instrument | 2 | ||||||
Notional amount of interest rate cash flow hedge derivatives | $ 350,000,000 | ||||||
Fair Value | $ 13,267,000 | ||||||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan B | Minimum | |||||||
Derivative | |||||||
Adjusted interest rate | 2.96% | 3.36% | |||||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan B | Maximum | |||||||
Derivative | |||||||
Adjusted interest rate | 3.46% | 4.31% | |||||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan D | |||||||
Derivative | |||||||
Number of derivative instruments held | instrument | 1 | ||||||
Notional amount of interest rate cash flow hedge derivatives | $ 125,000,000 | ||||||
Fair Value | $ 7,242,000 | ||||||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan D | Minimum | |||||||
Derivative | |||||||
Adjusted interest rate | 2.63% | 3.03% | |||||
Designated as Hedging Instrument | Interest Rate Swap | Term Loan D | Maximum | |||||||
Derivative | |||||||
Adjusted interest rate | 3.13% | 3.98% |
Future Minimum Lease Payments -
Future Minimum Lease Payments - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Future Minimum Lease Payments [Abstract] | ||||
Contingent rental expense | $ 2,149 | $ 2,191 | $ 7,697 | $ 6,025 |
Minimum rental expense | 4,344 | $ 2,952 | 11,817 | $ 9,203 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||||
Remaining 2,018 | 3,967 | 3,967 | ||
2,019 | 15,866 | 15,866 | ||
2,020 | 15,866 | 15,866 | ||
2,021 | 15,866 | 15,866 | ||
2,022 | 15,866 | 15,866 | ||
Thereafter | 437,646 | 437,646 | ||
Total | $ 505,077 | $ 505,077 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Fair Value, Recurring and Nonrecurring (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative assets | $ 26,988,000 | $ 12,586,000 |
Derivative liabilities | 0 | 265,000 |
Gross unrealized gain | 42,000 | |
Gross unrealized losses | 28,000 | |
Unsecured Debt | Registered Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Face amount | 400,000,000 | |
Amortization of discount | 667,000 | 722,000 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
U.S. Government securities | 148,315,000 | 0 |
Due in 1 year | 6,107,000 | |
Due in 1 year through 5 years | 142,208,000 | |
Total | 148,315,000 | |
Carrying Value | Unsecured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 1,984,333,000 | 1,974,278,000 |
Carrying Value | Secured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 365,519,000 | 464,311,000 |
Carrying Value | In-Substance Defeased Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 139,003,000 | 0 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
U.S. Government securities | 148,328,000 | 0 |
Due in 1 year | 6,120,000 | |
Due in 1 year through 5 years | 142,208,000 | |
Total | 148,328,000 | |
Fair Value | Unsecured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 1,928,411,000 | 1,960,560,000 |
Fair Value | Secured Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 353,810,000 | 458,441,000 |
Fair Value | In-Substance Defeased Debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 136,515,000 | 0 |
Non-Real Estate Investment | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
U.S. Government securities | 2,713,000 | 0 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 1 | Non-Real Estate Investment | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
U.S. Government securities | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative assets | 26,988,000 | 12,586,000 |
Derivative liabilities | 0 | 265,000 |
Level 2 | Non-Real Estate Investment | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
U.S. Government securities | 2,713,000 | 0 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 3 | Non-Real Estate Investment | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
U.S. Government securities | $ 0 | $ 0 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Dec. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Additional paid-in capital and non-controlling interest—units in the operating partnership | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 4,574,000 | $ 3,666,000 | $ 13,721,000 | $ 11,872,000 | |
General and administrative expenses | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 4,292,000 | 3,449,000 | 12,919,000 | 11,237,000 | |
Deferred leasing costs and lease intangibles assets, net | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | 282,000 | $ 217,000 | $ 802,000 | $ 635,000 | |
Existing and Newly Elected Board Member | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period (in years) | 3 years | ||||
Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period (in years) | 3 years | ||||
Employees | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period (in years) | 4 years | ||||
One-Time Retention Awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting rights | 25.00% | 25.00% | |||
Outperformance Program | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance period (in years) | 3 years | ||||
Outperformance Plan Prior To 2017 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage after initial performance period (in years) | 50.00% | ||||
Outperformance Plan Prior To 2017 | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period following performance period | 2 years | ||||
Award mandatory holding period | 2 years | ||||
Outperformance Program, 2017 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Maximum bonus pool | $ 25,000,000 | $ 25,000,000 | |||
TSR, absolute hurdle rate | 21.00% | 21.00% | |||
TSR, annualized hurdle rate | 7.00% | 7.00% | |||
TSR, maximum reduction percentage | 75.00% | ||||
Risk-free rate | 2.37% | ||||
Dividend yield | 2.90% | ||||
Outperformance Program, 2017 | The Company | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected volatility rate | 20.00% | ||||
Outperformance Program, 2017 | Particular REIT Index | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected volatility rate | 18.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Basic and diluted net income available to common stockholders/unitholders | $ 17,367 | $ 11,064 | $ 82,146 | $ 35,132 |
Denominator: | ||||
Basic weighted average common shares outstanding (in shares) | 155,649,110 | 155,302,800 | 155,637,351 | 152,874,952 |
Effect of dilutive instruments (in shares) | 1,020,137 | 790,936 | 991,137 | 773,936 |
Diluted weighted average common shares outstanding (in shares) | 156,669,247 | 156,093,736 | 156,628,488 | 153,648,888 |
Basic earnings per common share (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.53 | $ 0.23 |
Diluted earnings per common share (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.52 | $ 0.23 |
Hudson Pacific Partners L.P. | ||||
Numerator: | ||||
Basic and diluted net income available to common stockholders/unitholders | $ 17,430 | $ 11,105 | $ 82,445 | $ 35,388 |
Denominator: | ||||
Basic weighted average common units outstanding (in shares) | 156,218,155 | 155,871,845 | 156,206,396 | 153,736,796 |
Effect of dilutive instruments (in shares) | 1,020,137 | 790,936 | 991,137 | 773,936 |
Diluted weighted average common units outstanding (in shares) | 157,238,292 | 156,662,781 | 157,197,533 | 154,510,732 |
Basic earnings per common unit (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.53 | $ 0.23 |
Diluted earnings per common unit (in dollars per share) | $ 0.11 | $ 0.07 | $ 0.52 | $ 0.23 |
Redeemable Non-Controlling In_2
Redeemable Non-Controlling Interest (Details) - $ / shares | Apr. 16, 2018 | Mar. 01, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Temporary Equity [Line Items] | ||||
Interest rate of preferred stock | 6.25% | |||
VIE, Primary Beneficiary | HPP-MAC WSP, LLC | ||||
Temporary Equity [Line Items] | ||||
Ownership Interest | 75.00% | 75.00% | ||
Preferred Class A | ||||
Temporary Equity [Line Items] | ||||
Preferred A shares outstanding (in shares) | 407,066 | |||
Shares redeemed during period (in shares) | 14,468 | |||
Redemption price (in dollars per share) | $ 25 | |||
Redeemable non-controlling interest, liquidation preference (in dollars per share) | $ 25 |
Equity - Schedule of Other Comp
Equity - Schedule of Other Comprehensive Income (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | $ 3,910,964 | |
Cumulative adjustment related to adoption of ASU 2017-12 | $ 0 | |
Ending Balance | 3,911,746 | |
Total Equity | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | 13,276 | |
Unrealized gain recognized in OCI due to change in fair value | 16,217 | |
Income reclassified from OCI into income (as interest expense) | (1,788) | |
Net change in OCI | 14,429 | |
Cumulative adjustment related to adoption of ASU 2017-12 | 231 | |
Ending Balance | 27,936 | |
Hudson Pacific Properties, Inc. Stockholders' Equity | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | 13,227 | |
Unrealized gain recognized in OCI due to change in fair value | 16,159 | |
Income reclassified from OCI into income (as interest expense) | (1,782) | |
Net change in OCI | 14,377 | |
Cumulative adjustment related to adoption of ASU 2017-12 | 230 | |
Ending Balance | 27,834 | |
Non-controlling Interests | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning Balance | 49 | |
Unrealized gain recognized in OCI due to change in fair value | 58 | |
Income reclassified from OCI into income (as interest expense) | (6) | |
Net change in OCI | 52 | |
Cumulative adjustment related to adoption of ASU 2017-12 | $ 1 | |
Ending Balance | $ 102 |
Equity - Narrative (Details)
Equity - Narrative (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018$ / sharesshares | Sep. 30, 2017$ / shares | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / shares | Mar. 08, 2018USD ($) | Dec. 31, 2017shares | Jan. 20, 2016USD ($) | |
Class of Stock [Line Items] | |||||||
Company-owned common units in the operating partnership (in shares) | shares | 155,649,125 | 155,649,125 | 155,602,508 | ||||
Non-controlling ownership interest percentage | 0.40% | 0.40% | 0.40% | ||||
Proceeds from issuance of common stock/units, net | $ 0 | $ 647,524,000 | |||||
Stock repurchase program authorized | $ 250,000,000 | $ 100,000,000 | |||||
Common stock (in dollars per share) | $ / shares | $ 0.25 | $ 0.25 | $ 0.75 | $ 0.75 | |||
Common units (in dollars per share) | $ / shares | 0.25 | 0.25 | 0.75 | 0.75 | |||
Series A preferred units (in dollars per share) | $ / shares | $ 0.3906 | $ 0.3906 | $ 1.1718 | $ 1.1718 | |||
Hudson Pacific Partners L.P. | |||||||
Class of Stock [Line Items] | |||||||
Company's ownership interest percentage | 99.60% | 99.60% | 99.60% | ||||
At-the-Market | |||||||
Class of Stock [Line Items] | |||||||
Maximum shares authorized, value | $ 125,000,000 | ||||||
Proceeds from issuance of common stock/units, net | $ 20,100,000 | ||||||
Performance units | |||||||
Class of Stock [Line Items] | |||||||
Conversion ratio | 1 | ||||||
Common Stock/Units | |||||||
Class of Stock [Line Items] | |||||||
Non-controlling common units in the operating partnership (in shares) | shares | 569,045 | 569,045 | 569,045 | ||||
Partnership Interest | |||||||
Class of Stock [Line Items] | |||||||
Company-owned common units in the operating partnership (in shares) | shares | 155,649,125 | 155,649,125 | 155,602,508 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) $ in Thousands | Oct. 09, 2018USD ($) | Jan. 10, 2017USD ($)shares | Apr. 01, 2015USD ($)ft²directorpropertyprojectshares | Sep. 30, 2018USD ($)ft² | Sep. 30, 2017USD ($) | Nov. 16, 2017USD ($) |
Related Party Transaction [Line Items] | ||||||
Payments to acquire new property | $ 372,080 | |||||
Area of real estate property (in square feet) | ft² | 14,745,260 | |||||
Shares issued during period (in shares) | shares | 18,673,808 | |||||
Proceeds from issuance of common stock/units, net | $ 0 | $ 647,524 | ||||
Common Stock | ||||||
Related Party Transaction [Line Items] | ||||||
Common units redeemed (in shares) | shares | 8,881,575 | |||||
Blackstone Real Estate Partners | ||||||
Related Party Transaction [Line Items] | ||||||
Number of director nominees to the board (in directors) | director | 3 | |||||
Hudson Pacific Properties, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Shares issued during period (in shares) | shares | 8,881,575 | |||||
Proceeds from issuance of common stock/units, net | $ 310,900 | |||||
Blackstone And Farallon Funds | ||||||
Related Party Transaction [Line Items] | ||||||
Shares issued during period (in shares) | shares | 9,792,233 | |||||
Proceeds from issuance of common stock/units, net | $ 342,700 | |||||
EOP Northern California Portfolio | ||||||
Related Party Transaction [Line Items] | ||||||
Area of real estate property (in square feet) | ft² | 8,200,000 | |||||
Gross payments to acquire business | $ 1,750,000 | |||||
Consideration transferred, common units (in shares) | shares | 63,474,791 | |||||
EOP Northern California Portfolio | Office Building | ||||||
Related Party Transaction [Line Items] | ||||||
Number of real estate properties acquired (in properties) | property | 26 | |||||
EOP Northern California Portfolio | Development Parcel | ||||||
Related Party Transaction [Line Items] | ||||||
Number of development projects acquired (in projects) | project | 2 | |||||
Ferry Building Property | Subsequent Event | ||||||
Related Party Transaction [Line Items] | ||||||
Payments to acquire new property | $ 291,000 | |||||
Joint Venture That Owns Pinnacle I and II | Not Discontinued Operations | ||||||
Related Party Transaction [Line Items] | ||||||
Disposal group, consideration | $ 350,000 | |||||
Principal Amount of debt included in held-for-sale balances | $ 216,000 | |||||
11601 Wilshire Boulevard Office Building | ||||||
Related Party Transaction [Line Items] | ||||||
Area of leased property (in square feet) | ft² | 6,638 | |||||
Operating leases, term of contract (in years) | 8 years | |||||
Annual rent cost per year | $ 279 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | Sep. 30, 2018USD ($) |
Unsecured Debt | Revolving Credit Facility | |
Loss Contingencies | |
Letters of credit, amount outstanding | $ 2.6 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||
Cash paid for interest, net of capitalized interest | $ 50,692 | $ 47,852 | ||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||||
Accounts payable and accrued liabilities for investment in property | 12,624 | (6,740) | ||
Reclassification of investment in unconsolidated entities for real estate investments | 0 | 7,835 | ||
Assumption of debt in connection with property acquisitions | 139,003 | 0 | ||
Asset Acquisition, Consideration Transferred, Other Assets Assumed | 12,749 | 0 | ||
Cash and cash equivalents | 52,456 | 87,723 | $ 78,922 | $ 83,015 |
Restricted cash | 10,782 | 25,784 | 22,358 | 25,177 |
Total | $ 63,238 | $ 113,507 | $ 101,280 | $ 108,192 |
Subsequent Events (Details)
Subsequent Events (Details) | Oct. 23, 2018USD ($)ft² | Oct. 09, 2018USD ($)ft² | Sep. 30, 2018USD ($) | Oct. 05, 2018USD ($) |
Subsequent Event [Line Items] | ||||
Payments to acquire new property | $ 372,080,000 | |||
Purchase price of assets acquired | $ 220,000,000 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Commitment to fund investments | $ 20,000,000 | |||
Subsequent Event | Ferry Building Property | ||||
Subsequent Event [Line Items] | ||||
Payments to acquire new property | $ 291,000,000 | |||
Ownership Interest | 55.00% | |||
Subsequent Event | Ferry Building Property, Class A Office | ||||
Subsequent Event [Line Items] | ||||
Area of real estate property, retail and entertainment space (in square feet) | ft² | 192,532 | |||
Subsequent Event | Ferry Building Property, Retail | ||||
Subsequent Event [Line Items] | ||||
Area of real estate property, retail and entertainment space (in square feet) | ft² | 75,486 | |||
Subsequent Event | 6660 Santa Monica | ||||
Subsequent Event [Line Items] | ||||
Area of real estate property, retail and entertainment space (in square feet) | ft² | 11,200 | |||
Purchase price of assets acquired | $ 10,000,000 |