Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 28, 2022 | |
Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-34789 | |
Entity Registrant Name | Hudson Pacific Properties, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 27-1430478 | |
Entity Address, Address Line One | 11601 Wilshire Blvd., Ninth Floor | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90025 | |
City Area Code | 310 | |
Local Phone Number | 445-5700 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | HPP | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 140,923,320 | |
Entity Central Index Key | 0001482512 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Hudson Pacific Partners L.P. | ||
Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 333-202799-01 | |
Entity Registrant Name | Hudson Pacific Properties, L.P. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 80-0579682 | |
Entity Address, Address Line One | 11601 Wilshire Blvd., Ninth Floor | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90025 | |
City Area Code | 310 | |
Local Phone Number | 445-5700 | |
Title of 12(b) Security | 4.750% Series C Cumulative Redeemable Preferred Stock | |
Trading Symbol | HPP Pr C | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001496264 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Investment in real estate, at cost | $ 8,656,934 | $ 8,361,477 |
Accumulated depreciation and amortization | (1,478,250) | (1,283,774) |
Investment in real estate, net | 7,178,684 | 7,077,703 |
Non-real estate property, plant and equipment, net | 128,504 | 58,469 |
Cash and cash equivalents | 161,667 | 96,555 |
Restricted cash | 42,401 | 100,321 |
Accounts receivable, net | 19,692 | 25,339 |
Straight-line rent receivables, net | 275,518 | 240,306 |
Deferred leasing costs and intangible assets, net | 405,434 | 341,444 |
U.S. Government securities | 0 | 129,321 |
Operating lease right-of-use assets | 399,570 | 287,041 |
Prepaid expenses and other assets, net | 106,640 | 119,000 |
Investment in unconsolidated real estate entities | 154,144 | 154,731 |
Goodwill | 261,139 | 109,439 |
Assets associated with real estate held for sale | 187,026 | 250,520 |
TOTAL ASSETS | 9,320,419 | 8,990,189 |
Liabilities | ||
Accounts payable, accrued liabilities and other | 355,545 | 300,959 |
Operating lease liabilities | 396,412 | 293,596 |
Intangible liabilities, net | 35,758 | 42,290 |
Security deposits, prepaid rent and other | 87,049 | 84,939 |
Liabilities associated with real estate held for sale | 2,475 | 3,898 |
Total liabilities | 5,392,691 | 4,653,933 |
Commitments and contingencies | ||
Redeemable preferred units of the operating partnership | 9,815 | 9,815 |
Redeemable non-controlling interest in consolidated real estate entities | 125,583 | 129,449 |
Hudson Pacific Properties, Inc. stockholders’ equity | ||
Preferred stock, $0.01 par value, 18,400,000 authorized at September 30, 2022 and December 31, 2021; 4.750% Series C cumulative redeemable preferred stock, $25.00 per share liquidation preference, 17,000,000 outstanding at September 30, 2022 and December 31, 2021 | 425,000 | 425,000 |
Common stock, $0.01 par value, 481,600,000 authorized, 140,923,320 shares and 151,124,543 shares outstanding at September 30, 2022 and December 31, 2021, respectively | 1,408 | 1,511 |
Additional paid-in capital | 2,935,448 | 3,317,072 |
Accumulated other comprehensive loss | (17,066) | (1,761) |
Total Hudson Pacific Properties, Inc. stockholders’ equity | 3,344,790 | 3,741,822 |
Total equity | 3,792,330 | 4,196,992 |
TOTAL LIABILITIES AND EQUITY | 9,320,419 | 8,990,189 |
Non-controlling interest—members in consolidated real estate entities | ||
Hudson Pacific Properties, Inc. stockholders’ equity | ||
Non-controlling interest | 384,724 | 402,971 |
Non-controlling interest—units in the operating partnership | ||
Hudson Pacific Properties, Inc. stockholders’ equity | ||
Non-controlling interest | 62,816 | 52,199 |
Unsecured and secured debt, net | ||
Liabilities | ||
Notes payable, net | 4,449,316 | 3,733,903 |
In-substance defeased debt | ||
Liabilities | ||
Notes payable, net | 0 | 128,212 |
Joint venture partner debt | ||
Liabilities | ||
Notes payable, net | $ 66,136 | $ 66,136 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 18,400,000 | 18,400,000 |
Liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred Stock, outstanding (in shares) | 17,000,000 | 17,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 481,600,000 | 481,600,000 |
Common stock/units, outstanding (in shares) | 140,923,320 | 151,124,543 |
Cumulative Preferred Stock | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | |
Preferred stock, authorized (in shares) | 17,000,000 | |
Interest rate of preferred stock | 4.75% | 4.75% |
Liquidation preference (in dollars per share) | $ 25 | |
Hudson Pacific Partners L.P. | ||
Liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred Stock, outstanding (in shares) | 17,000,000 | 17,000,000 |
Common stock/units, outstanding (in shares) | 142,769,584 | 152,967,441 |
Hudson Pacific Partners L.P. | Cumulative Preferred Stock | ||
Interest rate of preferred stock | 4.75% | 4.75% |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
REVENUES | ||||
Revenues | $ 260,354 | $ 227,632 | $ 756,297 | $ 656,353 |
OPERATING EXPENSES | ||||
Operating expenses | 105,028 | 83,909 | 296,886 | 243,501 |
General and administrative | 19,795 | 18,288 | 62,178 | 53,846 |
Depreciation and amortization | 93,070 | 88,568 | 276,701 | 255,507 |
Total operating expenses | 217,893 | 190,765 | 635,765 | 552,854 |
OTHER INCOME (EXPENSE) | ||||
(Loss) income from unconsolidated real estate entities | (352) | 566 | 1,731 | 1,671 |
Fee income | 911 | 678 | 3,122 | 2,323 |
Interest expense | (37,261) | (30,825) | (101,816) | (91,800) |
Interest income | 196 | 934 | 2,026 | 2,868 |
Management services reimbursement income—unconsolidated real estate entities | 983 | 253 | 3,159 | 879 |
Management services expense—unconsolidated real estate entities | (983) | (253) | (3,159) | (879) |
Transaction-related expenses | (9,331) | (6,300) | (10,713) | (7,364) |
Unrealized (loss) gain on non-real estate investments | (894) | 827 | (1,062) | 11,620 |
Loss on sale of real estate | (180) | 0 | (180) | 0 |
Impairment loss | (4,795) | (2,762) | (28,548) | (2,762) |
Loss on extinguishment of debt | 0 | (6,249) | 0 | (6,249) |
Other income (expense) | 2,453 | 82 | 4,047 | (1,547) |
Total other expenses | (49,253) | (43,049) | (131,393) | (91,240) |
Net (loss) income | (6,792) | (6,182) | (10,861) | 12,259 |
Net income attributable to participating securities | (300) | (276) | (894) | (830) |
Net income attributable to non-controlling interest in consolidated real estate entities | (6,256) | (3,585) | (21,898) | (15,764) |
Net loss attributable to redeemable non-controlling interest in consolidated real estate entities | 1,037 | 816 | 4,433 | 2,780 |
Net loss attributable to common units in the operating partnership | 225 | 85 | 548 | 16 |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (17,286) | $ (9,295) | $ (44,515) | $ (1,998) |
BASIC AND DILUTED PER SHARE AMOUNTS | ||||
Net loss attributable to common stockholders - basic (in dollars per share) | $ (0.12) | $ (0.06) | $ (0.31) | $ (0.01) |
Net loss attributable to common stockholders - diluted (in dollars per share) | $ (0.12) | $ (0.06) | $ (0.31) | $ (0.01) |
Weighted average shares of common stock outstanding—basic (in shares) | 141,117,194 | 152,320,252 | 144,677,652 | 151,443,305 |
Weighted average shares of common stock outstanding—diluted (in shares) | 141,117,194 | 152,320,252 | 144,677,652 | 151,443,305 |
Series A preferred units | ||||
OTHER INCOME (EXPENSE) | ||||
Net income attributable to preferred units | $ (153) | $ (153) | $ (459) | $ (459) |
Series C preferred stock | ||||
OTHER INCOME (EXPENSE) | ||||
Net income attributable to preferred units | (5,047) | 0 | (15,384) | 0 |
Office | ||||
REVENUES | ||||
Rental | 208,779 | 197,941 | 626,807 | 580,354 |
Service and other revenues | 4,712 | 3,925 | 14,328 | 9,358 |
Revenues | 213,491 | 201,866 | 641,135 | 589,712 |
OPERATING EXPENSES | ||||
Operating expenses | 78,340 | 71,865 | 230,529 | 207,538 |
Studio | ||||
REVENUES | ||||
Rental | 15,305 | 12,768 | 42,137 | 36,472 |
Service and other revenues | 31,558 | 12,998 | 73,025 | 30,169 |
Revenues | 46,863 | 25,766 | 115,162 | 66,641 |
OPERATING EXPENSES | ||||
Operating expenses | $ 26,688 | $ 12,044 | $ 66,357 | $ 35,963 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net (loss) income | $ (6,792) | $ (6,182) | $ (10,861) | $ 12,259 |
Currency translation adjustments | (10,052) | (3,511) | (18,501) | (1,588) |
Net unrealized gains on derivative instruments: | ||||
Unrealized gains (losses) | 4,640 | (243) | 9,200 | (379) |
Reclassification adjustment for realized (gains) losses | (4,782) | 2,019 | (6,277) | 5,702 |
Total net unrealized gains (losses) on derivative instruments | (142) | 1,776 | 2,923 | 5,323 |
Total other comprehensive (loss) income | (10,194) | (1,735) | (15,578) | 3,735 |
Comprehensive (loss) income | (16,986) | (7,917) | (26,439) | 15,994 |
Comprehensive income attributable to participating securities | (300) | (276) | (894) | (830) |
Comprehensive income attributable to non-controlling interest in consolidated real estate entities | (6,256) | (3,585) | (21,898) | (15,764) |
Comprehensive loss attributable to redeemable non-controlling interest in consolidated real estate entities | 1,037 | 816 | 4,433 | 2,780 |
Comprehensive loss (income) attributable to non-controlling interest in the operating partnership | 404 | 108 | 821 | (34) |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | (27,301) | (11,007) | (59,820) | 1,687 |
Series A preferred units | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable Series | (153) | (153) | (459) | (459) |
Series C preferred stock | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable Series | $ (5,047) | $ 0 | $ (15,384) | $ 0 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Series C Cumulative Redeemable Preferred Stock | Common stock | Additional Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Units in the Operating Partnership | Non-controlling Interest—Members in Consolidated Real Estate Entities |
Beginning balance at Dec. 31, 2020 | $ 3,967,980 | $ 0 | $ 1,514 | $ 3,469,758 | $ 0 | $ (8,133) | $ 37,832 | $ 467,009 |
Beginning balance (in shares) at Dec. 31, 2020 | 151,401,365 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Contributions | 24,718 | 24,718 | ||||||
Distributions | (90,236) | (90,236) | ||||||
Proceeds from sale of common stock, net transaction costs (in shares) | 1,526,163 | |||||||
Proceeds from sale of common stock, net of transaction costs | 44,588 | $ 15 | 44,573 | |||||
Issuance of unrestricted stock (in shares) | 54,414 | |||||||
Shares repurchased (in shares) | (632,109) | |||||||
Shares repurchased | (14,756) | $ (6) | (14,750) | |||||
Shares withheld to satisfy tax withholding obligations | (693) | (693) | ||||||
Shares withheld to satisfy tax withholding obligation (in shares) | (29,581) | |||||||
Declared dividend | (115,913) | (115,393) | 1,168 | (1,688) | ||||
Amortization of stock-based compensation | 18,377 | 6,198 | 12,179 | |||||
Net income (loss) | 14,580 | (1,168) | (16) | 15,764 | ||||
Other comprehensive income (loss) | 3,735 | 3,685 | 50 | |||||
Ending balance at Sep. 30, 2021 | 3,852,380 | 0 | $ 1,523 | 3,389,693 | 0 | (4,448) | 48,357 | 417,255 |
Ending balance (in shares) at Sep. 30, 2021 | 152,320,252 | |||||||
Beginning balance at Jun. 30, 2021 | 3,945,806 | 0 | $ 1,523 | 3,435,156 | 0 | (2,736) | 44,387 | 467,476 |
Beginning balance (in shares) at Jun. 30, 2021 | 152,319,084 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Contributions | 9,702 | 9,702 | ||||||
Distributions | (63,508) | (63,508) | ||||||
Transaction costs | (232) | (232) | ||||||
Issuance of unrestricted stock (in shares) | 1,168 | |||||||
Declared dividend | (38,745) | (47,204) | 9,019 | (560) | ||||
Amortization of stock-based compensation | 6,611 | 1,973 | 4,638 | |||||
Net income (loss) | (5,519) | (9,019) | (85) | 3,585 | ||||
Other comprehensive income (loss) | (1,735) | (1,712) | (23) | |||||
Ending balance at Sep. 30, 2021 | 3,852,380 | 0 | $ 1,523 | 3,389,693 | 0 | (4,448) | 48,357 | 417,255 |
Ending balance (in shares) at Sep. 30, 2021 | 152,320,252 | |||||||
Beginning balance at Dec. 31, 2021 | $ 4,196,992 | 425,000 | $ 1,511 | 3,317,072 | 0 | (1,761) | 52,199 | 402,971 |
Beginning balance (in shares) at Dec. 31, 2021 | 151,124,543 | 151,124,543 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Contributions | $ 16,241 | 16,241 | ||||||
Distributions | (56,386) | (56,386) | ||||||
Transaction costs | (573) | (573) | ||||||
Issuance of unrestricted stock (in shares) | 32,861 | |||||||
Shares repurchased (in shares) | (2,105,359) | |||||||
Shares repurchased | (37,206) | $ (21) | (37,185) | |||||
Accelerated share repurchase | (200,000) | $ (82) | (199,918) | |||||
Accelerated share repurchase (in shares) | (8,128,725) | |||||||
Declared dividend | (124,772) | (15,384) | (150,972) | 43,621 | (2,037) | |||
Amortization of stock-based compensation | 20,499 | 7,024 | 13,475 | |||||
Net income (loss) | (6,887) | 15,384 | (43,621) | (548) | 21,898 | |||
Other comprehensive income (loss) | (15,578) | (15,305) | (273) | |||||
Ending balance at Sep. 30, 2022 | $ 3,792,330 | 425,000 | $ 1,408 | 2,935,448 | 0 | (17,066) | 62,816 | 384,724 |
Ending balance (in shares) at Sep. 30, 2022 | 140,923,320 | 140,923,320 | ||||||
Beginning balance at Jun. 30, 2022 | $ 3,848,729 | 425,000 | $ 1,415 | 2,985,666 | 0 | (7,051) | 58,992 | 384,707 |
Beginning balance (in shares) at Jun. 30, 2022 | 141,609,336 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Contributions | 784 | 784 | ||||||
Distributions | (7,023) | (7,023) | ||||||
Transaction costs | (359) | (359) | ||||||
Accelerated share repurchase | 0 | $ (7) | 7 | |||||
Accelerated share repurchase (in shares) | (686,016) | |||||||
Declared dividend | (41,087) | (5,047) | (52,347) | 16,986 | (679) | |||
Amortization of stock-based compensation | 7,388 | 2,481 | 4,907 | |||||
Net income (loss) | (5,908) | 5,047 | (16,986) | (225) | 6,256 | |||
Other comprehensive income (loss) | (10,194) | (10,015) | (179) | |||||
Ending balance at Sep. 30, 2022 | $ 3,792,330 | $ 425,000 | $ 1,408 | $ 2,935,448 | $ 0 | $ (17,066) | $ 62,816 | $ 384,724 |
Ending balance (in shares) at Sep. 30, 2022 | 140,923,320 | 140,923,320 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (loss) income | $ (10,861) | $ 12,259 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 276,701 | 255,507 |
Non-cash portion of interest expense | 10,248 | 7,508 |
Amortization of stock-based compensation | 17,816 | 15,718 |
Income from unconsolidated real estate entities | (1,731) | (1,671) |
Unrealized loss (gain) on non-real estate investments | 1,062 | (11,620) |
Straight-line rents | (33,951) | (15,596) |
Straight-line rent expenses | 1,796 | 1,079 |
Amortization of above- and below-market leases, net | (6,393) | (8,281) |
Amortization of above- and below-market ground leases, net | 2,042 | 1,764 |
Amortization of lease incentive costs | 1,222 | 1,427 |
Distribution of income from unconsolidated real estate entities | 1,961 | 1,437 |
Gain on derivatives | (8,044) | 0 |
Impairment loss | 28,548 | 2,762 |
Loss on extinguishment of debt | 0 | 6,249 |
Earnout liability fair value adjustment | 1,757 | 0 |
Loss on sale of real estate | 180 | 0 |
Gain from insurance proceeds | (1,167) | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | 13,003 | 4,526 |
Deferred leasing costs and lease intangibles | (19,553) | (11,696) |
Prepaid expenses and other assets | (10,928) | (18,665) |
Accounts payable, accrued liabilities and other | 63,334 | 55,735 |
Security deposits, prepaid rent and other | 1,507 | (12,930) |
Net cash provided by operating activities | 328,549 | 285,512 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sale of real estate | 44,537 | 0 |
Additions to investment in real estate | (171,011) | (271,102) |
Property acquisitions | (96,443) | 0 |
Acquisitions of businesses | (197,862) | (209,854) |
Maturities of U.S. Government securities | 129,300 | 5,002 |
Contributions to non-real estate investments | (14,791) | (10,530) |
Distributions from non-real estate investments | 329 | 13 |
Distributions from unconsolidated real estate entities | 1,067 | 1,246 |
Contributions to unconsolidated real estate entities | (18,766) | (73,098) |
Additions to non-real estate property, plant and equipment | (13,071) | (2,279) |
Insurance proceeds for damaged property, plant and equipment | 1,284 | 0 |
Net cash used in investing activities | (335,427) | (560,602) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from unsecured and secured debt | 978,251 | 1,304,352 |
Payments of unsecured and secured debt | (430,000) | (792,656) |
Payments of in-substance defeased debt | (128,212) | (2,602) |
Proceeds from sale of common stock | 0 | 44,974 |
Transaction costs | (573) | (386) |
Repurchases of common stock | (37,206) | (14,756) |
Accelerated share repurchase | (200,000) | 0 |
Dividends paid to common stock and unitholders | (109,388) | (115,913) |
Dividends paid to preferred stock and unitholders | (18,124) | (459) |
Contributions from redeemable non-controlling members in consolidated real estate entities | 575 | 4,262 |
Distributions to redeemable non-controlling members in consolidated real estate entities | (8) | (8) |
Contributions from non-controlling members in consolidated real estate entities | 16,241 | 24,718 |
Distributions to non-controlling members in consolidated real estate entities | (56,386) | (90,236) |
Payments to satisfy tax withholding obligations | 0 | (693) |
Payments of loan costs | (1,100) | (14,810) |
Net cash provided by financing activities | 14,070 | 345,787 |
Net increase in cash and cash equivalents and restricted cash | 7,192 | 70,697 |
Cash and cash equivalents and restricted cash—beginning of period | 196,876 | 149,540 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD | $ 204,068 | $ 220,237 |
CONSOLIDATED BALANCE SHEETS L.P
CONSOLIDATED BALANCE SHEETS L.P. - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Investment in real estate, at cost | $ 8,656,934 | $ 8,361,477 |
Accumulated depreciation and amortization | (1,478,250) | (1,283,774) |
Investment in real estate, net | 7,178,684 | 7,077,703 |
Non-real estate property, plant and equipment, net | 128,504 | 58,469 |
Cash and cash equivalents | 161,667 | 96,555 |
Restricted cash | 42,401 | 100,321 |
Accounts receivable, net | 19,692 | 25,339 |
Straight-line rent receivables, net | 275,518 | 240,306 |
Deferred leasing costs and intangible assets, net | 405,434 | 341,444 |
U.S. Government securities | 0 | 129,321 |
Operating lease right-of-use assets | 399,570 | 287,041 |
Prepaid expenses and other assets, net | 106,640 | 119,000 |
Investment in unconsolidated real estate entities | 154,144 | 154,731 |
Goodwill | 261,139 | 109,439 |
Assets associated with real estate held for sale | 187,026 | 250,520 |
TOTAL ASSETS | 9,320,419 | 8,990,189 |
Liabilities | ||
Accounts payable, accrued liabilities and other | 355,545 | 300,959 |
Operating lease liabilities | 396,412 | 293,596 |
Intangible liabilities, net | 35,758 | 42,290 |
Security deposits, prepaid rent and other | 87,049 | 84,939 |
Liabilities associated with real estate held for sale | 2,475 | 3,898 |
Total liabilities | 5,392,691 | 4,653,933 |
Commitments and contingencies | ||
Redeemable preferred units of the operating partnership | 9,815 | 9,815 |
Redeemable non-controlling interest in consolidated real estate entities | 125,583 | 129,449 |
Hudson Pacific Properties, L.P. partners’ capital | ||
Accumulated other comprehensive loss | (17,066) | (1,761) |
TOTAL LIABILITIES AND EQUITY | 9,320,419 | 8,990,189 |
Unsecured and Secured Debt | ||
Liabilities | ||
Notes payable, net | 4,449,316 | 3,733,903 |
In-substance defeased debt | ||
Liabilities | ||
Notes payable, net | 0 | 128,212 |
Joint venture partner debt | ||
Liabilities | ||
Notes payable, net | 66,136 | 66,136 |
Hudson Pacific Partners L.P. | ||
ASSETS | ||
Investment in real estate, at cost | 8,656,934 | 8,361,477 |
Accumulated depreciation and amortization | (1,478,250) | (1,283,774) |
Investment in real estate, net | 7,178,684 | 7,077,703 |
Non-real estate property, plant and equipment, net | 128,504 | 58,469 |
Cash and cash equivalents | 161,667 | 96,555 |
Restricted cash | 42,401 | 100,321 |
Accounts receivable, net | 19,692 | 25,339 |
Straight-line rent receivables, net | 275,518 | 240,306 |
Deferred leasing costs and intangible assets, net | 405,434 | 341,444 |
U.S. Government securities | 0 | 129,321 |
Operating lease right-of-use assets | 399,570 | 287,041 |
Prepaid expenses and other assets, net | 106,640 | 119,000 |
Investment in unconsolidated real estate entities | 154,144 | 154,731 |
Goodwill | 261,139 | 109,439 |
Assets associated with real estate held for sale | 187,026 | 250,520 |
TOTAL ASSETS | 9,320,419 | 8,990,189 |
Liabilities | ||
Accounts payable, accrued liabilities and other | 355,545 | 300,959 |
Operating lease liabilities | 396,412 | 293,596 |
Intangible liabilities, net | 35,758 | 42,290 |
Security deposits, prepaid rent and other | 87,049 | 84,939 |
Liabilities associated with real estate held for sale | 2,475 | 3,898 |
Total liabilities | 5,392,691 | 4,653,933 |
Commitments and contingencies | ||
Redeemable preferred units of the operating partnership | 9,815 | 9,815 |
Redeemable non-controlling interest in consolidated real estate entities | 125,583 | 129,449 |
Hudson Pacific Properties, L.P. partners’ capital | ||
4.750% Series C cumulative redeemable preferred units, $25.00 per unit liquidation preference, 17,000,000 outstanding at September 30, 2022 and December 31, 2021 | 425,000 | 425,000 |
Common units, 142,769,584 and 152,967,441 outstanding at September 30, 2022 and December 31, 2021, respectively | 2,999,963 | 3,370,800 |
Accumulated other comprehensive loss | (17,357) | (1,779) |
Total Hudson Pacific Properties, L.P. partners’ capital | 3,407,606 | 3,794,021 |
Non-controlling interest—members in consolidated real estate entities | 384,724 | 402,971 |
Total capital | 3,792,330 | 4,196,992 |
TOTAL LIABILITIES AND EQUITY | 9,320,419 | 8,990,189 |
Hudson Pacific Partners L.P. | Unsecured and Secured Debt | ||
Liabilities | ||
Notes payable, net | 4,449,316 | 3,733,903 |
Hudson Pacific Partners L.P. | In-substance defeased debt | ||
Liabilities | ||
Notes payable, net | 0 | 128,212 |
Hudson Pacific Partners L.P. | Joint venture partner debt | ||
Liabilities | ||
Notes payable, net | $ 66,136 | $ 66,136 |
CONSOLIDATED BALANCE SHEETS L_2
CONSOLIDATED BALANCE SHEETS L.P. (Parenthetical) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Common Stock: | ||
Liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred Stock, outstanding (in shares) | 17,000,000 | 17,000,000 |
Company-owned common units in the operating partnership (in shares) | 140,923,320 | 151,124,543 |
Cumulative Preferred Stock | ||
Common Stock: | ||
Interest rate of preferred stock | 4.75% | 4.75% |
Liquidation preference (in dollars per share) | $ 25 | |
Hudson Pacific Partners L.P. | ||
Common Stock: | ||
Liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred Stock, outstanding (in shares) | 17,000,000 | 17,000,000 |
Company-owned common units in the operating partnership (in shares) | 142,769,584 | 152,967,441 |
Hudson Pacific Partners L.P. | Cumulative Preferred Stock | ||
Common Stock: | ||
Interest rate of preferred stock | 4.75% | 4.75% |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS L.P. - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
REVENUES | ||||
Revenues | $ 260,354 | $ 227,632 | $ 756,297 | $ 656,353 |
OPERATING EXPENSES | ||||
Operating expenses | 105,028 | 83,909 | 296,886 | 243,501 |
General and administrative | 19,795 | 18,288 | 62,178 | 53,846 |
Depreciation and amortization | 93,070 | 88,568 | 276,701 | 255,507 |
Total operating expenses | 217,893 | 190,765 | 635,765 | 552,854 |
OTHER INCOME (EXPENSE) | ||||
(Loss) income from unconsolidated real estate entities | (352) | 566 | 1,731 | 1,671 |
Fee income | 911 | 678 | 3,122 | 2,323 |
Interest expense | (37,261) | (30,825) | (101,816) | (91,800) |
Interest income | 196 | 934 | 2,026 | 2,868 |
Management services reimbursement income—unconsolidated real estate entities | 983 | 253 | 3,159 | 879 |
Management services expense—unconsolidated real estate entities | (983) | (253) | (3,159) | (879) |
Transaction-related expenses | (9,331) | (6,300) | (10,713) | (7,364) |
Unrealized (loss) gain on non-real estate investments | (894) | 827 | (1,062) | 11,620 |
Loss on sale of real estate | (180) | 0 | (180) | 0 |
Impairment loss | (4,795) | (2,762) | (28,548) | (2,762) |
Loss on extinguishment of debt | 0 | (6,249) | 0 | (6,249) |
Other income (expense) | 2,453 | 82 | 4,047 | (1,547) |
Total other expenses | (49,253) | (43,049) | (131,393) | (91,240) |
Net (loss) income | (6,792) | (6,182) | (10,861) | 12,259 |
Net income attributable to non-controlling interest in consolidated real estate entities | (6,256) | (3,585) | (21,898) | (15,764) |
Net loss attributable to redeemable non-controlling interest in consolidated real estate entities | 1,037 | 816 | 4,433 | 2,780 |
Net income attributable to participating securities | (300) | (276) | (894) | (830) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | (17,286) | (9,295) | (44,515) | (1,998) |
Series A preferred units | ||||
OTHER INCOME (EXPENSE) | ||||
Net income attributable to preferred units | (153) | (153) | (459) | (459) |
Series C preferred stock | ||||
OTHER INCOME (EXPENSE) | ||||
Net income attributable to preferred units | (5,047) | 0 | (15,384) | 0 |
Office | ||||
REVENUES | ||||
Rental | 208,779 | 197,941 | 626,807 | 580,354 |
Service and other revenues | 4,712 | 3,925 | 14,328 | 9,358 |
Revenues | 213,491 | 201,866 | 641,135 | 589,712 |
OPERATING EXPENSES | ||||
Operating expenses | 78,340 | 71,865 | 230,529 | 207,538 |
Studio | ||||
REVENUES | ||||
Rental | 15,305 | 12,768 | 42,137 | 36,472 |
Service and other revenues | 31,558 | 12,998 | 73,025 | 30,169 |
Revenues | 46,863 | 25,766 | 115,162 | 66,641 |
OPERATING EXPENSES | ||||
Operating expenses | 26,688 | 12,044 | 66,357 | 35,963 |
Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | 260,354 | 227,632 | 756,297 | 656,353 |
OPERATING EXPENSES | ||||
General and administrative | 19,795 | 18,288 | 62,178 | 53,846 |
Depreciation and amortization | 93,070 | 88,568 | 276,701 | 255,507 |
Total operating expenses | 217,893 | 190,765 | 635,765 | 552,854 |
OTHER INCOME (EXPENSE) | ||||
(Loss) income from unconsolidated real estate entities | (352) | 566 | 1,731 | 1,671 |
Fee income | 911 | 678 | 3,122 | 2,323 |
Interest expense | (37,261) | (30,825) | (101,816) | (91,800) |
Interest income | 196 | 934 | 2,026 | 2,868 |
Management services reimbursement income—unconsolidated real estate entities | 983 | 253 | 3,159 | 879 |
Management services expense—unconsolidated real estate entities | (983) | (253) | (3,159) | (879) |
Transaction-related expenses | (9,331) | (6,300) | (10,713) | (7,364) |
Unrealized (loss) gain on non-real estate investments | (894) | 827 | (1,062) | 11,620 |
Loss on sale of real estate | (180) | 0 | (180) | 0 |
Impairment loss | (4,795) | (2,762) | (28,548) | (2,762) |
Loss on extinguishment of debt | 0 | (6,249) | 0 | (6,249) |
Other income (expense) | 2,453 | 82 | 4,047 | (1,547) |
Total other expenses | (49,253) | (43,049) | (131,393) | (91,240) |
Net (loss) income | (6,792) | (6,182) | (10,861) | 12,259 |
Net income attributable to non-controlling interest in consolidated real estate entities | (6,256) | (3,585) | (21,898) | (15,764) |
Net loss attributable to redeemable non-controlling interest in consolidated real estate entities | 1,037 | 816 | 4,433 | 2,780 |
Net loss attributable to Hudson Pacific Properties, L.P. | (12,011) | (8,951) | (28,326) | (725) |
Net income attributable to participating securities | (300) | (276) | (894) | (830) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (17,511) | $ (9,380) | $ (45,063) | $ (2,014) |
BASIC AND DILUTED PER UNIT AMOUNTS | ||||
Net loss attributable to common unitholders —basic (in dollars per share) | $ (0.12) | $ (0.06) | $ (0.31) | $ (0.01) |
Net loss attributable to common unitholders —diluted (in dollars per share) | $ (0.12) | $ (0.06) | $ (0.31) | $ (0.01) |
Weighted average shares of common units outstanding—basic (in shares) | 142,963,458 | 153,701,876 | 146,523,102 | 152,818,720 |
Weighted average shares of common units outstanding—diluted (in shares) | 142,963,458 | 153,701,876 | 146,523,102 | 152,818,720 |
Hudson Pacific Partners L.P. | Series A preferred units | ||||
OTHER INCOME (EXPENSE) | ||||
Net income attributable to preferred units | $ (153) | $ (153) | $ (459) | $ (459) |
Hudson Pacific Partners L.P. | Series C preferred stock | ||||
OTHER INCOME (EXPENSE) | ||||
Net income attributable to preferred units | (5,047) | 0 | (15,384) | 0 |
Hudson Pacific Partners L.P. | Office | ||||
REVENUES | ||||
Rental | 208,779 | 197,941 | 626,807 | 580,354 |
Service and other revenues | 4,712 | 3,925 | 14,328 | 9,358 |
Revenues | 213,491 | 201,866 | 641,135 | 589,712 |
OPERATING EXPENSES | ||||
Operating expenses | 78,340 | 71,865 | 230,529 | 207,538 |
Hudson Pacific Partners L.P. | Studio | ||||
REVENUES | ||||
Rental | 15,305 | 12,768 | 42,137 | 36,472 |
Service and other revenues | 31,558 | 12,998 | 73,025 | 30,169 |
Revenues | 46,863 | 25,766 | 115,162 | 66,641 |
OPERATING EXPENSES | ||||
Operating expenses | $ 26,688 | $ 12,044 | $ 66,357 | $ 35,963 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME L.P. - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net (loss) income | $ (6,792) | $ (6,182) | $ (10,861) | $ 12,259 |
Currency translation adjustments | (10,052) | (3,511) | (18,501) | (1,588) |
Net unrealized gains on derivative instruments: | ||||
Unrealized gains (losses) | 4,640 | (243) | 9,200 | (379) |
Reclassification adjustment for realized (gains) losses | (4,782) | 2,019 | (6,277) | 5,702 |
Total net unrealized gains (losses) on derivative instruments | (142) | 1,776 | 2,923 | 5,323 |
Total other comprehensive (loss) income | (10,194) | (1,735) | (15,578) | 3,735 |
Comprehensive (loss) income | (16,986) | (7,917) | (26,439) | 15,994 |
Comprehensive income attributable to participating securities | (300) | (276) | (894) | (830) |
Net income attributable to non-controlling interest in consolidated real estate entities | (6,256) | (3,585) | (21,898) | (15,764) |
Comprehensive loss attributable to redeemable non-controlling interest in consolidated real estate entities | 1,037 | 816 | 4,433 | 2,780 |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | (27,301) | (11,007) | (59,820) | 1,687 |
Series A preferred units | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable Series | (153) | (153) | (459) | (459) |
Series C preferred stock | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable Series | (5,047) | 0 | (15,384) | 0 |
Hudson Pacific Partners L.P. | ||||
Net (loss) income | (6,792) | (6,182) | (10,861) | 12,259 |
Currency translation adjustments | (10,052) | (3,511) | (18,501) | (1,588) |
Net unrealized gains on derivative instruments: | ||||
Unrealized gains (losses) | 4,640 | (243) | 9,200 | (379) |
Reclassification adjustment for realized (gains) losses | (4,782) | 2,019 | (6,277) | 5,702 |
Total net unrealized gains (losses) on derivative instruments | (142) | 1,776 | 2,923 | 5,323 |
Total other comprehensive (loss) income | (10,194) | (1,735) | (15,578) | 3,735 |
Comprehensive (loss) income | (16,986) | (7,917) | (26,439) | 15,994 |
Comprehensive income attributable to participating securities | (300) | (276) | (894) | (830) |
Net income attributable to non-controlling interest in consolidated real estate entities | (6,256) | (3,585) | (21,898) | (15,764) |
Comprehensive loss attributable to redeemable non-controlling interest in consolidated real estate entities | 1,037 | 816 | 4,433 | 2,780 |
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS | (27,705) | (11,115) | (60,641) | 1,721 |
Hudson Pacific Partners L.P. | Series A preferred units | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable Series | (153) | (153) | (459) | (459) |
Hudson Pacific Partners L.P. | Series C preferred stock | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable Series | $ (5,047) | $ 0 | $ (15,384) | $ 0 |
CONSOLIDATED STATEMENTS OF CAPI
CONSOLIDATED STATEMENTS OF CAPITAL - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Increase (Decrease) in Partners' Capital | ||||
Beginning balance (in shares) | 151,124,543 | |||
Contributions | $ 784 | $ 9,702 | $ 16,241 | $ 24,718 |
Distributions | (7,023) | (63,508) | (56,386) | (90,236) |
Proceeds from sale of common stock, net of transaction costs | 44,588 | |||
Transaction costs | (359) | (232) | (573) | |
Units withheld to satisfy tax withholding obligations | (693) | |||
Repurchase of common units | (37,206) | (14,756) | ||
Declared distributions | (41,087) | (38,745) | (124,772) | (115,913) |
Amortization of unit-based compensation | 7,388 | 6,611 | 20,499 | 18,377 |
Net income (loss) | (5,908) | (5,519) | (6,887) | 14,580 |
Other comprehensive income (loss) | $ (10,194) | (1,735) | $ (15,578) | 3,735 |
Ending balance (in shares) | 140,923,320 | 140,923,320 | ||
Hudson Pacific Partners L.P. | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | $ 3,848,729 | 3,945,806 | $ 4,196,992 | 3,967,980 |
Beginning balance (in shares) | 152,967,441 | |||
Contributions | 784 | 9,702 | $ 16,241 | 24,718 |
Distributions | (7,023) | (63,508) | (56,386) | (90,236) |
Proceeds from sale of common stock, net of transaction costs | 44,588 | |||
Transaction costs | (359) | (232) | (573) | |
Units withheld to satisfy tax withholding obligations | (693) | |||
Repurchase of common units | 0 | (237,206) | (14,756) | |
Declared distributions | (41,087) | (38,745) | (124,772) | (115,913) |
Amortization of unit-based compensation | 7,388 | 6,611 | 20,499 | 18,377 |
Net income (loss) | (5,908) | (5,519) | (6,887) | 14,580 |
Other comprehensive income (loss) | (10,194) | (1,735) | (15,578) | 3,735 |
Ending balance | $ 3,792,330 | 3,852,380 | $ 3,792,330 | 3,852,380 |
Ending balance (in shares) | 142,769,584 | 142,769,584 | ||
Hudson Pacific Partners L.P. | Total Partners’ Capital | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | $ 3,464,022 | 3,478,330 | $ 3,794,021 | 3,500,971 |
Proceeds from sale of common stock, net of transaction costs | 44,588 | |||
Transaction costs | (359) | (232) | (573) | |
Units withheld to satisfy tax withholding obligations | (693) | |||
Repurchase of common units | 0 | (237,206) | (14,756) | |
Declared distributions | (41,087) | (38,745) | (124,772) | (115,913) |
Amortization of unit-based compensation | 7,388 | 6,611 | 20,499 | 18,377 |
Net income (loss) | (12,164) | (9,104) | (28,785) | (1,184) |
Other comprehensive income (loss) | (10,194) | (1,735) | (15,578) | 3,735 |
Ending balance | 3,407,606 | 3,435,125 | 3,407,606 | 3,435,125 |
Hudson Pacific Partners L.P. | Preferred Units | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | 425,000 | 0 | 425,000 | 0 |
Declared distributions | (5,047) | (15,384) | ||
Net income (loss) | 5,047 | 15,384 | ||
Ending balance | 425,000 | 0 | 425,000 | 0 |
Hudson Pacific Partners L.P. | Common units | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | $ 3,046,185 | $ 3,481,106 | $ 3,370,800 | $ 3,509,217 |
Beginning balance (in shares) | 143,455,600 | 153,700,708 | 152,967,441 | 152,722,448 |
Proceeds from sale of common stock, net of transaction costs | $ 44,588 | |||
Proceeds from sale of common stock, net transaction costs (in shares) | 1,526,163 | |||
Transaction costs | $ (359) | $ (232) | $ (573) | |
Issuance of unrestricted stock (in shares) | 1,168 | 36,227 | 114,955 | |
Units withheld to satisfy tax withholding obligations | $ (693) | |||
Units withheld to satisfy tax withholding obligations (in shares) | (29,581) | |||
Repurchase of common units | $ 0 | $ (237,206) | $ (14,756) | |
Repurchase of common units (in shares) | (686,016) | (10,234,084) | (632,109) | |
Declared distributions | $ (36,040) | $ (38,745) | $ (109,388) | $ (115,913) |
Amortization of unit-based compensation | 7,388 | 6,611 | 20,499 | 18,377 |
Net income (loss) | (17,211) | (9,104) | (44,169) | (1,184) |
Ending balance | $ 2,999,963 | $ 3,439,636 | $ 2,999,963 | $ 3,439,636 |
Ending balance (in shares) | 142,769,584 | 153,701,876 | 142,769,584 | 153,701,876 |
Hudson Pacific Partners L.P. | Accumulated Other Comprehensive Loss | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | $ (7,163) | $ (2,776) | $ (1,779) | $ (8,246) |
Other comprehensive income (loss) | (10,194) | (1,735) | (15,578) | 3,735 |
Ending balance | (17,357) | (4,511) | (17,357) | (4,511) |
Hudson Pacific Partners L.P. | Non-controlling Interest—Members in Consolidated Real Estate Entities | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | 384,707 | 467,476 | 402,971 | 467,009 |
Contributions | 784 | 9,702 | 16,241 | 24,718 |
Distributions | (7,023) | (63,508) | (56,386) | (90,236) |
Net income (loss) | 6,256 | 3,585 | 21,898 | 15,764 |
Ending balance | $ 384,724 | $ 417,255 | $ 384,724 | $ 417,255 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS L.P. - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (loss) income | $ (10,861) | $ 12,259 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 276,701 | 255,507 |
Non-cash portion of interest expense | 10,248 | 7,508 |
Amortization of stock-based compensation | 17,816 | 15,718 |
Income from unconsolidated real estate entities | (1,731) | (1,671) |
Unrealized loss (gain) on non-real estate investments | 1,062 | (11,620) |
Straight-line rents | (33,951) | (15,596) |
Straight-line rent expenses | 1,796 | 1,079 |
Amortization of above- and below-market leases, net | (6,393) | (8,281) |
Amortization of above- and below-market ground leases, net | 2,042 | 1,764 |
Amortization of lease incentive costs | 1,222 | 1,427 |
Distribution of income from unconsolidated real estate entities | 1,961 | 1,437 |
Impairment loss | 28,548 | 2,762 |
Loss on extinguishment of debt | 0 | 6,249 |
Earnout liability fair value adjustment | 1,757 | 0 |
Loss on sale of real estate | 180 | 0 |
Gain from insurance proceeds | (1,167) | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | 13,003 | 4,526 |
Deferred leasing costs and lease intangibles | (19,553) | (11,696) |
Prepaid expenses and other assets | (10,928) | (18,665) |
Accounts payable, accrued liabilities and other | 63,334 | 55,735 |
Security deposits, prepaid rent and other | 1,507 | (12,930) |
Net cash provided by operating activities | 328,549 | 285,512 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sale of real estate | 44,537 | 0 |
Additions to investment in real estate | (171,011) | (271,102) |
Property acquisitions | (96,443) | 0 |
Acquisitions of businesses | (197,862) | (209,854) |
Maturities of U.S. Government securities | 129,300 | 5,002 |
Contributions to non-real estate investments | (14,791) | (10,530) |
Distributions from non-real estate investments | 329 | 13 |
Distributions from unconsolidated real estate entities | 1,067 | 1,246 |
Contributions to unconsolidated real estate entities | (18,766) | (73,098) |
Additions to non-real estate property, plant and equipment | (13,071) | (2,279) |
Insurance proceeds for damaged property, plant and equipment | 1,284 | 0 |
Net cash used in investing activities | (335,427) | (560,602) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from unsecured and secured debt | 978,251 | 1,304,352 |
Payments of unsecured and secured debt | (430,000) | (792,656) |
Payments of in-substance defeased debt | (128,212) | (2,602) |
Proceeds from sale of common stock | 0 | 44,974 |
Transaction costs | (573) | (386) |
Repurchases of common stock | (37,206) | (14,756) |
Dividends paid to common stock and unitholders | (109,388) | (115,913) |
Dividends paid to preferred stock and unitholders | (18,124) | (459) |
Contributions from redeemable non-controlling members in consolidated real estate entities | 575 | 4,262 |
Distributions to redeemable non-controlling members in consolidated real estate entities | (8) | (8) |
Contributions from non-controlling members in consolidated real estate entities | 16,241 | 24,718 |
Distributions to non-controlling members in consolidated real estate entities | (56,386) | (90,236) |
Payments to satisfy tax withholding obligations | 0 | (693) |
Payments of loan costs | (1,100) | (14,810) |
Net cash provided by financing activities | 14,070 | 345,787 |
Net increase in cash and cash equivalents and restricted cash | 7,192 | 70,697 |
Cash and cash equivalents and restricted cash—beginning of period | 196,876 | 149,540 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD | 204,068 | 220,237 |
Hudson Pacific Partners L.P. | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net (loss) income | (10,861) | 12,259 |
Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||
Depreciation and amortization | 276,701 | 255,507 |
Non-cash portion of interest expense | 10,248 | 7,508 |
Amortization of stock-based compensation | 17,816 | 15,718 |
Income from unconsolidated real estate entities | (1,731) | (1,671) |
Unrealized loss (gain) on non-real estate investments | 1,062 | (11,620) |
Straight-line rents | (33,951) | (15,596) |
Straight-line rent expenses | 1,796 | 1,079 |
Amortization of above- and below-market leases, net | (6,393) | (8,281) |
Amortization of above- and below-market ground leases, net | 2,042 | 1,764 |
Amortization of lease incentive costs | 1,222 | 1,427 |
Distribution of income from unconsolidated real estate entities | 1,961 | 1,437 |
Gain on derivatives | (8,044) | 0 |
Impairment loss | 28,548 | 2,762 |
Loss on extinguishment of debt | 0 | 6,249 |
Earnout liability fair value adjustment | 1,757 | 0 |
Loss on sale of real estate | 180 | 0 |
Gain from insurance proceeds | (1,167) | 0 |
Change in operating assets and liabilities: | ||
Accounts receivable | 13,003 | 4,526 |
Deferred leasing costs and lease intangibles | (19,553) | (11,696) |
Prepaid expenses and other assets | (10,928) | (18,665) |
Accounts payable, accrued liabilities and other | 63,334 | 55,735 |
Security deposits, prepaid rent and other | 1,507 | (12,930) |
Net cash provided by operating activities | 328,549 | 285,512 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sale of real estate | 44,537 | 0 |
Additions to investment in real estate | (171,011) | (271,102) |
Property acquisitions | (96,443) | 0 |
Acquisitions of businesses | (197,862) | (209,854) |
Maturities of U.S. Government securities | 129,300 | 5,002 |
Contributions to non-real estate investments | (14,791) | (10,530) |
Distributions from non-real estate investments | 329 | 13 |
Distributions from unconsolidated real estate entities | 1,067 | 1,246 |
Contributions to unconsolidated real estate entities | (18,766) | (73,098) |
Additions to non-real estate property, plant and equipment | (13,071) | (2,279) |
Insurance proceeds for damaged property, plant and equipment | 1,284 | 0 |
Net cash used in investing activities | (335,427) | (560,602) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from unsecured and secured debt | 978,251 | 1,304,352 |
Payments of unsecured and secured debt | (430,000) | (792,656) |
Payments of in-substance defeased debt | (128,212) | (2,602) |
Proceeds from sale of common stock | 0 | 44,974 |
Transaction costs | (573) | (386) |
Repurchases of common stock | (237,206) | (14,756) |
Dividends paid to common stock and unitholders | (109,388) | (115,913) |
Dividends paid to preferred stock and unitholders | (18,124) | (459) |
Contributions from redeemable non-controlling members in consolidated real estate entities | 575 | 4,262 |
Distributions to redeemable non-controlling members in consolidated real estate entities | (8) | (8) |
Contributions from non-controlling members in consolidated real estate entities | 16,241 | 24,718 |
Distributions to non-controlling members in consolidated real estate entities | (56,386) | (90,236) |
Payments to satisfy tax withholding obligations | 0 | (693) |
Payments of loan costs | (1,100) | (14,810) |
Net cash provided by financing activities | 14,070 | 345,787 |
Net increase in cash and cash equivalents and restricted cash | 7,192 | 70,697 |
Cash and cash equivalents and restricted cash—beginning of period | 196,876 | 149,540 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD | $ 204,068 | $ 220,237 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2022 | |
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. The Company’s portfolio consists of properties primarily located throughout the United States, Western Canada and Greater London, United Kingdom. The following table summarizes the Company’s portfolio as of September 30, 2022: Segments Number of Properties Square Feet (unaudited) Consolidated portfolio Office 52 14,543,539 Studio 4 1,291,260 Land 5 1,966,242 Total consolidated portfolio 61 17,801,041 Unconsolidated portfolio (1) Office (2) 1 1,509,943 Studio (3) 1 241,000 Land (4) 2 1,617,347 Total unconsolidated portfolio 4 3,368,290 TOTAL (5) 65 21,169,331 _________________ 1. The Company owns 20% of the unconsolidated joint venture entity which owns the Bentall Centre property, 50% of the unconsolidated joint venture entity that owns the Sunset Glenoaks Studios and 35% of the unconsolidated joint venture entity that owns the Sunset Waltham Cross Studios development. The square footage shown above represents 100% of the properties. See Notes 2 and 6 for details. 2. Includes Bentall Centre. 3. Includes Sunset Glenoaks Studios. 4. Includes land for the Burrard Exchange at Bentall Centre and Sunset Waltham Cross Studios. 5. Includes repositioning, redevelopment, development and held for sale properties. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in the 2021 Annual Report on Form 10-K of Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. and the notes thereto. 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 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, 2022, the Company has determined that its operating partnership and 19 joint ventures met the definition of a VIE. 13 of these joint ventures are consolidated and six are unconsolidated. Consolidated Joint Ventures As of September 30, 2022, the operating partnership has determined that 13 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 % Hudson One Ferry REIT, L.P. Ferry Building 55.0 % Sunset Bronson Entertainment Properties, LLC Sunset Bronson Studios, ICON, CUE 51.0 % Sunset Gower Entertainment Properties, LLC Sunset Gower Studios 51.0 % Sunset 1440 North Gower Street, LLC Sunset Gower Studios 51.0 % Sunset Las Palmas Entertainment Properties, LLC Sunset Las Palmas Studios, Harlow 51.0 % Sunset Services Holdings, LLC None (1) 51.0 % Sunset Studios Holdings, LLC EPIC 51.0 % Hudson Media and Entertainment Management, LLC None (2) 51.0 % Hudson 6040 Sunset, LLC 6040 Sunset 51.0 % Hudson 1918 Eighth, L.P. 1918 Eighth 55.0 % __________________ 1. Sunset Services Holdings, LLC wholly owns Services Holdings, LLC, which owns 100% interests in Sunset Bronson Services, LLC, Sunset Gower Services, LLC and Sunset Las Palmas Services, LLC, which provide services to the respective entertainment properties above. 2. Hudson Media and Entertainment Management, LLC manages the following properties: Sunset Gower Studios, Sunset Bronson Studios, Sunset Las Palmas Studios, 6040 Sunset, ICON, CUE, EPIC and Harlow (collectively “Hollywood Media Portfolio”). As of September 30, 2022 and December 31, 2021, 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 the operating partnership VIE. The assets and credit of certain VIEs can only be used to satisfy those VIEs’ own contractual obligations, and the VIEs’ creditors have no recourse to the general credit of the Company. Unconsolidated Joint Ventures As of September 30, 2022, the Company has determined it is not the primary beneficiary of six of its joint ventures that are VIEs. Due to its significant influence over the unconsolidated entities, the Company accounts for them 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. The Company’s net equity investment in its unconsolidated joint ventures is reflected within investment in unconsolidated real estate entities on the Consolidated Balance Sheets. The Company’s share of net income or loss from the joint ventures is included within (loss) income from unconsolidated real estate entities on the Consolidated Statements of Operations. The Company uses the cumulative earnings approach for determining cash flow presentation of distributions from unconsolidated joint ventures. Under this approach, distributions up to the amount of cumulative equity in earnings recognized are classified as cash inflows from operating activities, and those in excess of that amount are classified as cash inflows from investing activities. Refer to Note 6 for further details regarding our investments in unconsolidated joint ventures. 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, the fair value measurement of contingent consideration, assets acquired and liabilities assumed in business combination transactions, determining the incremental borrowing rate used in the present value calculations of its new or modified operating lessee agreements, its accrued liabilities and the valuation of 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. Lease Accounting The Company accounts for its leases under ASC 842, which 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. Lessee Accounting The Company determines if an arrangement is a lease at inception. The Company’s operating lease agreements relate to ground leases, sound stage leases, office leases and other facility leases and are reflected in operating lease right-of-use (“ROU”) assets and operating lease liabilities on the Consolidated Balance Sheets. For leases with a term of 12 months or less the Company makes an accounting policy election, by class of underlying asset, not to recognize ROU assets and lease liabilities. The Company recognizes lease expense for such leases generally on a straight-line basis over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As the Company’s leases do not provide an implicit rate, the Company determines its incremental borrowing rate based on the information available at commencement date, or the date of the ASC 842 adoption, in determining the present value of lease payments. The weighted average incremental borrowing rate used to calculate the ROU assets and liabilities was 5.6%. ROU assets also include any lease payments made and exclude lease incentives. Many of the Company’s lessee agreements include options to extend the lease, which the Company does not include in its minimum lease terms unless the option is reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. The weighted average remaining lease term was 23 years as of September 30, 2022. Lessor Accounting The presentation of revenues on the Consolidated Statements of Operations reflects a single lease component that combines rental, tenant recoveries and other tenant-related revenues for the office portfolio, with the election of the lessor practical expedient. For the Company’s rentals at the studio properties, total lease consideration is allocated to lease and non-lease components on a relative standalone basis. The recognition of revenues related to lease components is governed by ASC 842, while revenue related to non-lease components is subject to ASC 606, Revenue from Contracts with Customers (“ASC 606”). 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 and other tenant-related revenues (iii) ancillary revenues (iv) other revenues (v) sale of real estate (vi) management fee income and (vii) management services reimbursement income. Revenue Stream Components Financial Statement Location Rental revenues Office, stage and storage rentals Office and Studio segments: rental Tenant recoveries and other tenant-related revenues Reimbursement of real estate taxes, insurance, repairs and maintenance, other operating expenses and must-take parking revenues Office segment: rental Ancillary revenues Revenues derived from tenants’ use of power, HVAC and telecommunications (i.e., telephone and internet) and lighting, equipment and vehicle rentals Studio segment: service and other revenues Other revenues Parking revenue that is not associated with lease agreements and other Office and Studio segments: service and other revenues Sale of real estate Gains on sales derived from cash consideration less cost basis Gains on sale of real estate Management fee income Income derived from management services provided to unconsolidated joint venture entities Fee income Management services reimbursement income Reimbursement of costs incurred by the Company in the management of unconsolidated joint venture entities Management services reimbursement income—unconsolidated real estate entities The Company recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is probable and the tenant has taken possession of or controls the physical use of the leased asset. The Company does not account for lease concessions related to the effects of the COVID-19 pandemic as lease modifications to the extent that the concessions are granted as payment deferrals and total payments remain substantially the same during the lease term. The Company recognizes tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance and other operating expenses as revenue in the period during which the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Company 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. Other tenant-related revenues include parking stipulated in lease agreements as must-take parking rentals. These revenues are recognized over the term of the lease. Ancillary revenues, other revenues, management fee income and management services reimbursement income are accounted for under ASC 606. These revenues have single performance obligations and are recognized at the point in time when services are rendered. The following table summarizes the Company’s revenue streams that are accounted for under ASC 606 for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Ancillary revenues $ 29,854 $ 12,224 $ 68,817 $ 26,857 Other revenues $ 5,925 $ 4,281 $ 17,129 $ 11,246 Studio-related tenant recoveries $ 491 $ 418 $ 1,407 $ 1,424 Management fee income $ 911 $ 678 $ 3,122 $ 2,323 Management services reimbursement income $ 983 $ 253 $ 3,159 $ 879 The following table summarizes the Company’s receivables that are accounted for under ASC 606 as of: September 30, 2022 December 31, 2021 Ancillary revenues $ 16,890 $ 7,381 Other revenues $ 1,241 $ 1,078 In regards to sales of real estate, the Company applies certain recognition and measurement principles in accordance with ASC 606. 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 with the sold property by the seller, 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 on sale of real estate if the sale includes continued involvement that represents a separate performance obligation. Acquisitions The Company applies the acquisition method for acquisitions that meet the definition of a business combination. Under the acquisition method, the Company estimates the fair value of the identifiable assets and liabilities of the acquired entity on the acquisition date. The difference between the fair value of the consideration transferred for the acquisition and the fair value of the net assets acquired is recorded as goodwill and acquisition-related expenses arising from the transaction are expensed as incurred. The Company includes the results of operations of the businesses that it acquires beginning on the acquisition date. The Company applies a cost accumulation and allocation model to acquisitions that meet the definition of an asset acquisition. Under this model, the purchase price is allocated based on the relative fair value of the assets acquired and liabilities assumed. Additionally, acquisition-related expenses associated with an asset acquisition are capitalized as part of the purchase price. Goodwill and Acquired Intangible Assets Goodwill is an unidentifiable intangible asset and is recognized as a residual, generally measured as the excess of consideration transferred in a business combination over the identifiable assets acquired and liabilities assumed. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination. The Company tests its goodwill and indefinite-lived intangible assets for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Goodwill is tested for impairment at the reporting unit to which it is assigned, which can be an operating segment or one level below an operating segment. The Company has three operating segments: the management entity, Office and Studio. The management entity and the Office operating segments are each a reporting unit. Within the Studio operating segment, there are two reporting units: Studio Properties and Studio Services, the latter of which consists of the Zio Entertainment Network, LLC (“Zio”) and Star Waggons, LLC (“Star Waggons”) businesses acquired in the year ended December 31, 2021 and the Quixote Studios (“Quixote”) business acquired in August 2022. The assessment of goodwill for impairment may initially be performed based on qualitative factors to determine if it is more likely than not that the fair value of the reporting unit is less than its carrying value, including goodwill. If so, a quantitative assessment is performed, and to the extent the carrying value of the reporting unit exceeds its fair value, impairment is recognized |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Quixote Acquisition On August 31, 2022 (“Quixote Acquisition Date”), the Company acquired 100% of the equity interests in Quixote, which rents sound stages, cast trailers and trucks and other equipment essential for media content production and will expand the Company’s service offerings for its studio platform. The following table summarizes the Quixote Acquisition Date fair value of the consideration transferred in connection with the acquisition: Cash $ 197,862 Seller note payable 160,000 Total consideration $ 357,862 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Quixote Acquisition Date. The Company is in the process of obtaining third-party valuations of certain intangible assets and determining the useful life of certain intangible assets; thus, the provisional measurements of intangible assets and goodwill are subject to change: Cash and cash equivalents $ 5,780 Accounts receivable 7,238 Prepaid expenses and other assets 3,788 Investment in real estate 47,741 Non-real estate property, plant and equipment 65,939 Intangible assets 76,900 Right-of-use assets 103,579 Total assets acquired 310,965 Accounts payable, accrued liabilities and other $ 12,700 Lease liabilities 92,070 Total liabilities assumed 104,770 Net identifiable assets acquired $ 206,195 Goodwill 151,667 NET ASSETS ACQUIRED $ 357,862 Of the $76.9 million of intangible assets acquired as part of the Quixote acquisition, $28.6 million was provisionally assigned to the registered trade name, which is not subject to amortization. The remaining $48.3 million of acquired intangible assets includes provisional measurements for customer relationships of $45.4 million (seven-year useful life) and non-compete agreements of $2.9 million (five-year weighted-average useful life). The definite-lived intangible assets are subject to a weighted-average useful life of approximately seven years. Goodwill of $151.7 million for the Quixote acquisition was recognized on the Quixote Acquisition Date. The goodwill recognized is attributable to expected synergies and the assembled workforce of Quixote. The goodwill has been allocated to the studio services reporting unit. Goodwill is deductible for tax purposes and, as a result, deferred taxes have been recorded. As of September 30, 2022, there was no change in the recognized amount of goodwill resulting from this acquisition. During the three and nine months ended September 30, 2022, the Company recognized acquisition-related costs of $7.1 million for the Quixote acquisition. These costs are included in transaction-related expenses on the Consolidated Statement of Operations. The amounts of revenue and net income of Quixote included in the Company’s Consolidated Statements of Operations from the Quixote Acquisition Date to September 30, 2022 are as follows: Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Revenue $ 8,852 $ 8,852 Net income 1,257 1,257 Zio and Star Waggons Acquisitions On August 16, 2021 and August 31, 2021 (each an “Acquisition Date” individually, and collectively, the “Acquisition Dates”), the Company acquired 100% of the equity interests in Zio and Star Waggons, respectively. The acquired businesses provide transportation and logistics services to studio productions and their acquisition will expand the Company’s service offerings for its studio platform. The following table summarizes the Acquisition Date fair value of the consideration transferred in connection with the acquisitions: Zio Star Waggons Cash $ 117,198 $ 92,656 Contingent consideration 22,543 — Total consideration $ 139,741 $ 92,656 The terms of the Zio securities purchase agreement require the Company to pay up to $35.0 million of additional consideration to the business’s former shareholders, subject to certain performance thresholds being met, of which $15.0 million has been paid through September 30, 2022. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective Acquisition Dates: Zio Star Waggons Cash and cash equivalents $ 1,084 $ 300 Accounts receivable 3,001 4,185 Prepaid expenses and other assets 1,509 1,605 Non-real estate property, plant and equipment 23,399 25,000 Intangible assets 41,670 33,480 Total assets acquired 70,663 64,570 Accounts payable, accrued liabilities and other $ 1,498 $ 1,913 Intangible liabilities — 110 Total liabilities assumed 1,498 2,023 Net identifiable assets acquired $ 69,165 $ 62,547 Goodwill 70,576 30,109 NET ASSETS ACQUIRED $ 139,741 $ 92,656 Of the $41.7 million of intangible assets acquired as part of the Zio acquisition, $8.5 million was assigned to the registered trade name, which is not subject to amortization. The remaining $33.2 million of acquired intangible assets includes customer relationships of $30.0 million (seven-year useful life) and non-compete agreements of $3.0 million (five-year weighted-average useful life). The definite-lived intangible assets are subject to a weighted-average useful life of approximately seven years. Of the $33.5 million of intangible assets acquired as part of the Star Waggons acquisition, $8.6 million was assigned to the registered trade name, which is not subject to amortization. The remaining $24.9 million of acquired intangible assets includes customer relationships valued at $22.5 million (seven-year useful life) and non-compete agreements valued at $2.3 million (five-year weighted-average useful life). The definite-lived intangible assets are subject to a weighted-average useful life of approximately seven years. Goodwill of $70.6 million and $30.1 million for the Zio and Star Waggons acquisitions, respectively, was recognized on the respective Acquisition Dates. The goodwill recognized is attributable to expected synergies and the assembled workforce of Zio and Star Waggons. The goodwill has been allocated to the studio services reporting unit. Goodwill is deductible for tax purposes and as a result, deferred taxes have been recorded. As of September 30, 2022, there were no changes in the recognized amounts of goodwill resulting from these acquisitions. During the three and nine months ended September 30, 2021, the Company recognized acquisition-related costs of $3.4 million and $2.4 million for the Zio and Star Waggons acquisitions, respectively. These costs are included in transaction-related expenses on the Consolidated Statement of Operations. |
Investment in Real Estate
Investment in Real Estate | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Investment in Real Estate | Investment in Real Estate The following table summarizes the Company’s investment in real estate, at cost as of: September 30, 2022 December 31, 2021 Land $ 1,397,714 $ 1,313,385 Building and improvements 6,305,120 6,241,254 Tenant improvements 868,750 786,991 Furniture and fixtures 9,600 14,020 Property under development 75,750 5,827 INVESTMENT IN REAL ESTATE, AT COST $ 8,656,934 $ 8,361,477 Acquisitions of Real Estate On April 27, 2022, the Company completed its previously announced acquisition of Washington 1000, a fully entitled office development site in Seattle, Washington for a total purchase price of $85.6 million, before certain credits, prorations and closing costs. On May 19, 2022, the Company purchased a parcel of land at Sunset Gower Studios that was previously encumbered by a ground lease for a total purchase price of $22.0 million, before certain credits, prorations and closing costs. On July 15, 2022, the Company purchased 5801 Bobby Foster Road, approximately 29 acres of land with an office/warehouse located in Albuquerque, New Mexico, for the storage of trailers and other rental assets used to serve the surrounding studio production industry. The property was acquired for a total purchase price of $8.0 million, before certain credits, prorations and closing costs. The following table represents the Company’s final purchase price accounting for the asset acquisitions completed during the nine months ended September 30, 2022: Washington 1000 Sunset Gower Studios Land 5801 Bobby Foster Road TOTAL ACQUISITION COST (1) $ 86,313 $ 22,156 $ 8,457 Allocation of acquisition cost Land $ 59,987 $ 22,156 $ 2,189 Building and improvements 11,053 — 6,268 Parking easement (2) 15,273 — — TOTAL $ 86,313 $ 22,156 $ 8,457 _____________ 1. Includes capitalized transaction-related expenses. 2. Parking easement has an indefinite useful life and is recorded in deferred leasing costs and intangible assets, net on the Consolidated Balance Sheet. Impairment of Long-Lived Assets The Company assesses the carrying value of real estate assets and related intangibles whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable in accordance with GAAP. Impairment losses are recorded on real estate assets held for investment when indicators of impairment are present and the future undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. The Company recognizes impairment losses to the extent the carrying amount exceeds the fair value, based on Level 1 or Level 2 inputs. During three and nine months ended September 30, 2022, the Company recorded $0.2 million and $13.0 million, respectively, of impairment charges related to the tangible assets of its Del Amo office property due to a reduction in the estimated fair value of the property. The property was sold in August 2022. The estimated fair value of $2.8 million was based on the sales price of the property, which is classified within Level 2 of the fair value hierarchy. During three and nine months ended September 30, 2022, the Company recorded $1.5 million of impairment charges related to the tangible assets of its Northview Center office property due to a reduction in the estimated fair value of the property. The property was sold in August 2022. The estimated fair value of $46.0 million was based on the sales price of the property, which is classified within Level 2 of the fair value hierarchy. During three and nine months ended September 30, 2022, the Company recorded $3.1 million of impairment charges related to the tangible assets of its 6922 Hollywood office property due to a reduction in the estimated fair value of the property. The property was classified as held for sale as of September 30, 2022 and December 31, 2021. The estimated fair value of $96.0 million was based on the sales price of the property, which is classified within Level 2 of the fair value hierarchy. The Company recognized impairment charges of $2.8 million during the three and nine months ended September 30, 2021. Dispositions of Real Estate The following table summarizes information on dispositions completed during the nine months ended September 30, 2022. These properties were considered non-strategic to the Company’s portfolio: Property Segment Date of Disposition Square Feet Sales Price (1) (in millions) Del Amo Office 8/5/2022 113,000 $ 2.8 Northview Center Office 8/30/2022 179,985 46.0 TOTAL DISPOSITIONS 292,985 $ 48.8 _____________ 1. Represents gross sales price before certain credits, prorations and closing costs. The Company had no dispositions of real estate during the nine months ended September 30, 2021. Held for Sale The Company had two and four properties classified as held for sale as of September 30, 2022 and December 31, 2021, respectively. The properties were identified as non-strategic assets to the Company’s portfolio and are included in the Company’s Office segment. The following table summarizes the components of assets and liabilities associated with real estate held for sale as of September 30, 2022: Skyway Landing 6922 Hollywood ASSETS Investment in real estate, net $ 90,899 $ 88,253 Accounts receivable, net 172 48 Straight-line rent receivables, net 531 4,440 Deferred leasing costs and intangible assets, net 501 2,043 Prepaid expenses and other assets, net 26 113 ASSETS ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ 92,129 $ 94,897 LIABILITIES Accounts payable, accrued liabilities and other $ 575 $ 965 Intangible liabilities, net — 96 Security deposits and prepaid rent 369 470 LIABILITIES ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ 944 $ 1,531 The following table summarizes the components of assets and liabilities associated with real estate held for sale as of December 31, 2021: Northview Center Skyway Landing Del Amo 6922 Hollywood ASSETS Investment in real estate, net $ 40,338 $ 89,873 $ 15,213 $ 91,353 Accounts receivable, net 95 142 — 103 Straight-line rent receivables, net 901 1,659 — 4,714 Deferred leasing costs and intangible assets, net 751 450 2,742 1,999 Prepaid expenses and other assets, net — — — 187 ASSETS ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ 42,085 $ 92,124 $ 17,955 $ 98,356 LIABILITIES Accounts payable, accrued liabilities and other $ 184 $ 273 $ 12 $ 1,372 Intangible liabilities, net — — — 96 Security deposits and prepaid rent 395 1,205 — 361 LIABILITIES ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ 579 $ 1,478 $ 12 $ 1,829 |
Non-Real Estate Property, Plant
Non-Real Estate Property, Plant and Equipment, net | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Non-Real Estate Property, Plant and Equipment, net | Non-Real Estate Property, Plant and Equipment, net The following table summarizes the Company’s non-real estate property, plant and equipment, net as of: September 30, 2022 December 31, 2021 Trailers $ 64,178 $ 35,181 Production equipment 34,296 — Trucks and other vehicles 19,811 12,204 Leasehold improvements 18,490 15,267 Other equipment 6,838 4,605 Furniture, fixtures and equipment 6,967 4,592 Non-real estate property, plant and equipment, at cost 150,580 71,849 Accumulated depreciation (22,076) (13,380) NON-REAL ESTATE PROPERTY, PLANT AND EQUIPMENT, NET $ 128,504 $ 58,469 Non-real estate property, plant and equipment is carried at cost less accumulated depreciation. The Company computes depreciation using the straight-line method over the estimated useful lives of the assets, which range from 5 to 20 years. The Company evaluates its non-real estate property, plant and equipment, net for impairment using the same accounting model that it applies to its real estate assets and related intangibles. See Note 4 for details. The Company did not recognize any impairment charges for non-real estate property, plant and equipment during the nine months ended September 30, 2022 and 2021. |
Investment in Unconsolidated Re
Investment in Unconsolidated Real Estate Entities | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Unconsolidated Real Estate Entities | Investment in Unconsolidated Real Estate Entities The following table summarizes the Company’s investments in unconsolidated joint ventures: Property Property Type Submarket Ownership Interest Functional Currency Sunset Waltham Cross Studios Development Broxbourne, United Kingdom 35% Pound sterling (1) Sunset Glenoaks Studios Development Los Angeles 50% U.S. dollar (2)(3) Bentall Centre Operating Property Downtown Vancouver 20% Canadian dollar (2)(4) __________________ 1. On July 29, 2021, the Company purchased 35% of the ownership interests in the joint venture that owns the Sunset Waltham Cross Studios development. The Company also owns 35% of the ownership interests in the joint venture entities formed to serve as the general partner and management services company for the property-owning joint venture entity. 2. The Company serves as the operating member of this joint venture. 3. The Company has provided various guarantees for this joint venture’s construction loan, including a completion guarantee, equity guarantee and recourse carve-out guarantee. 4. The Company has guaranteed $96.5 million of this joint venture’s debt. The Company’s maximum exposure related to its unconsolidated joint ventures is limited to its investment. The Company’s investments in foreign real estate entities are subject to foreign currency fluctuation risk. Such investments are translated into U.S. dollars at the exchange rate in effect as of the financial statement date. The Company’s share of the income (loss) from foreign unconsolidated real estate entities is translated using the monthly-average exchange rate for the periods presented. Gains or losses resulting from the translation are classified in accumulated other comprehensive loss as a separate component of total equity and are excluded from net income. The Company held ownership interests in other immaterial unconsolidated joint ventures in the total of $0.2 million and $0.1 million as of September 30, 2022 and December 31, 2021, respectively. The table below presents the combined and condensed balance sheets for the Company’s unconsolidated joint ventures: September 30, 2022 December 31, 2021 ASSETS Investment in real estate, net $ 1,011,495 $ 1,048,593 Other assets 58,539 57,232 TOTAL ASSETS $ 1,070,034 $ 1,105,825 LIABILITIES Secured debt, net $ 509,212 $ 516,153 Other liabilities 45,410 40,307 TOTAL LIABILITIES 554,622 556,460 Company’s capital (1) 144,667 148,914 Partner’s capital 370,745 400,451 TOTAL CAPITAL 515,412 549,365 TOTAL LIABILITIES AND CAPITAL $ 1,070,034 $ 1,105,825 __________________ 1. To the extent the Company’s cost basis is different from the basis reflected at the joint venture level, the basis is amortized over the life of the related asset and is included in the (loss) income from unconsolidated real estate entities line item on the Consolidated Statements of Operations. The table below presents the combined and condensed statements of operations for the Company’s unconsolidated joint ventures: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 TOTAL REVENUES $ 18,515 $ 20,694 $ 64,962 $ 60,121 TOTAL EXPENSES 20,151 17,893 55,802 51,865 NET (LOSS) INCOME $ (1,636) $ 2,801 $ 9,160 $ 8,256 |
Deferred Leasing Costs and Inta
Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net | Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net The following summarizes the Company’s deferred leasing costs and intangibles as of: September 30, 2022 December 31, 2021 Deferred leasing costs and in-place lease intangibles $ 329,067 $ 331,149 Accumulated amortization (134,833) (126,423) Deferred leasing costs and in-place lease intangibles, net 194,234 204,726 Below-market ground leases 79,562 79,562 Accumulated amortization (17,291) (15,233) Below-market ground leases, net 62,271 64,329 Above-market leases 725 1,334 Accumulated amortization (297) (782) Above-market leases, net 428 552 Customer relationships 97,900 52,500 Accumulated amortization (8,850) (2,684) Customer relationships, net 89,050 49,816 Non-competition agreements 8,200 5,300 Accumulated amortization (1,222) (379) Non-competition agreements, net 6,978 4,921 Trade name 37,200 17,100 Parking easement 15,273 — DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET $ 405,434 $ 341,444 Below-market leases $ 59,670 $ 75,827 Accumulated amortization (24,668) (34,326) Below-market leases, net 35,002 41,501 Above-market ground leases 1,095 1,095 Accumulated amortization (339) (306) Above-market ground leases, net 756 789 INTANGIBLE LIABILITIES, NET $ 35,758 $ 42,290 The Company recognized the following amortization related to deferred leasing costs and intangibles: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Deferred leasing costs and in-place lease intangibles (1) $ (9,450) $ (11,540) $ (29,657) $ (34,761) Below-market ground leases (2) $ (698) $ (600) $ (2,075) $ (1,797) Above-market leases (3) $ (16) $ (73) $ (107) $ (573) Customer relationships (1) $ (2,415) $ (809) $ (6,165) $ (809) Non-competition agreements (1) $ (313) $ (114) $ (843) $ (114) Below-market leases (3) $ 1,717 $ 3,096 $ 6,500 $ 8,854 Above-market ground leases (2) $ 11 $ 11 $ 33 $ 33 __________________ 1. Amortization is recorded in depreciation and amortization expenses and for lease incentive costs in office rental revenues in the Consolidated Statements of Operations. 2. Amortization is recorded in office operating expenses in the Consolidated Statements of Operations. 3. Amortization is recorded in office rental revenues in the Consolidated Statements of Operations. During the nine months ended September 30, 2022, the Company recognized an $8.5 million impairment of the Zio trade name within impairment loss on the Consolidated Statement of Operations. The impairment is related to the announced rebranding and integration of Zio into the Company’s existing Sunset Studios platform, after which the Company will no longer use the Zio trade name. During the nine months ended September 30, 2022, the Company recognized an impairment loss of $2.4 million related to the below-market ground lease at its Del Amo office property. During the three and nine months ended September 30, 2021, the Company recognized an impairment loss of $0.4 million related to the below-market ground lease at its Del Amo office property. See Note 4 for details. The losses are recorded within impairment loss on the Consolidated Statements of Operations. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Receivables | Receivables The Company’s accounting policy and methodology used to estimate the allowance for doubtful accounts related to service revenues are discussed in the Company’s 2021 Annual Report on Form 10-K. Accounts Receivable As of September 30, 2022, accounts receivable was $19.9 million and there was a $0.2 million allowance for doubtful accounts. As of December 31, 2021, accounts receivable was $25.5 million and there was $0.2 million allowance for doubtful accounts. Straight-Line Rent Receivables As of September 30, 2022, straight-line rent receivables was $275.5 million and there was no allowance for doubtful accounts. As of December 31, 2021, straight-line rent receivables was $240.3 million and there was no allowance for doubtful accounts. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets, net | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 Deposits and pre-development costs for future acquisitions $ — $ 47,605 Prepaid insurance 11,325 5,442 Non-real estate investments 46,533 31,447 Stock purchase warrant 113 1,664 Deferred financing costs 6,315 7,750 Prepaid property tax 3,058 2,192 Interest rate derivative assets 8,801 368 Inventory 4,795 1,578 Other 25,700 20,954 PREPAID EXPENSES AND OTHER ASSETS, NET $ 106,640 $ 119,000 Non-Real Estate Investments The Company measures its investments in common stock and convertible preferred stock at fair value based on Level 1 and Level 2 inputs, respectively. The Company measures its investments in funds that do not have a readily determinable fair value using the Net Asset Value (“NAV”) practical expedient and uses NAV reported without adjustment unless it is aware of information indicating the NAV reported does not accurately reflect the fair value of the investment. Changes in the fair value of these non-real estate investments are included in unrealized (loss) gain on non-real estate investments on the Consolidated Statements of Operations. The Company recognized an unrealized loss of $0.7 million and an unrealized gain of $0.5 million on its non-real estate investments due to the observable changes in fair value during the three and nine months ended September 30, 2022, respectively. The Company recognized an unrealized gain of $1.0 million and $9.9 million on its non-real estate investments due to the observable changes in fair value during the three and nine months ended September 30, 2021, respectively. Stock Purchase Warrant |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table sets forth information with respect to the Company’s outstanding indebtedness: September 30, 2022 December 31, 2021 Interest Rate (1) Contractual Maturity Date (2) UNSECURED AND SECURED DEBT Unsecured debt Unsecured revolving credit facility (3)(4)(5) $ 295,000 $ 125,000 SOFR + 1.15% to 1.60% 12/21/2026 (6) Series A notes 110,000 110,000 4.34% 1/2/2023 Series B notes 259,000 259,000 4.69% 12/16/2025 Series C notes 56,000 56,000 4.79% 12/16/2027 Series D notes 150,000 150,000 3.98% 7/6/2026 Series E notes 50,000 50,000 3.66% 9/15/2023 3.95% Registered senior notes 400,000 400,000 3.95% 11/1/2027 4.65% Registered senior notes 500,000 500,000 4.65% 4/1/2029 3.25% Registered senior notes 400,000 400,000 3.25% 1/15/2030 5.95% Registered senior notes (7) 350,000 — 5.95% 2/15/2028 Total unsecured debt 2,570,000 2,050,000 Secured debt Hollywood Media Portfolio $ 1,100,000 $ 1,100,000 LIBOR + 0.99% 8/9/2026 (8) Acquired Hollywood Media Portfolio debt (209,814) (209,814) LIBOR + 1.55% 8/9/2026 (8) Hollywood Media Portfolio, net (9)(10) 890,186 890,186 One Westside and 10850 Pico (11) 273,089 241,388 LIBOR + 1.70% 12/18/2024 (12) Element LA 168,000 168,000 4.59% 11/6/2025 1918 Eighth (13) 314,300 314,300 SOFR + 1.40% 12/18/2025 Hill7 (14) 101,000 101,000 3.38% 11/6/2028 Quixote 160,000 — 5.00% 12/31/2023 Total secured debt 1,906,575 1,714,874 Total unsecured and secured debt 4,476,575 3,764,874 Unamortized deferred financing costs/loan discounts (15) (27,259) (30,971) TOTAL UNSECURED AND SECURED DEBT, NET $ 4,449,316 $ 3,733,903 IN-SUBSTANCE DEFEASED DEBT (16) $ — $ 128,212 4.47% 10/1/2022 JOINT VENTURE PARTNER DEBT (17) $ 66,136 $ 66,136 4.50% 10/9/2032 (18) _________________ 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, 2022, which may be different than the interest rates as of December 31, 2021 for corresponding indebtedness. 2. Maturity dates include the effect of extension options. 3. The annual facility fee rate ranges from 0.15% to 0.30% based on the operating partnership’s leverage ratio. 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, 2022, no such election had been made and the unsecured revolving credit facility bore interest at SOFR + 1.30%. 4. The Company has a total capacity of $1.0 billion available under its unsecured revolving credit facility, up to $250.0 million of which can be used for borrowings in pounds sterling or Canadian dollars. 5. On October 20, 2022, the Company made an $85.0 million repayment on this facility. 6. Includes the option to extend the initial maturity date of December 21, 2025 twice for an additional six-month term each. 7. An amount equal to the net proceeds from the 5.95% Registered senior notes has been allocated to new or existing eligible green projects. 8. Includes the option to extend the initial maturity date of August 9, 2023 three times for an additional one-year term each. 9. The Company owns 51% of the ownership interests in the consolidated joint venture that owns the Hollywood Media Portfolio. The joint venture holds a $1.1 billion mortgage loan secured by the Hollywood Media Portfolio. The Company purchased bonds comprising the loan in the amount of $209.8 million. 10. The interest rate on a portion of the outstanding loan balance has been effectively fixed through the use of an interest rate swap under the first payments approach. As of September 30, 2022, the LIBOR component of the interest rate was fixed at 1.43% with respect to $125.0 million of the loan secured by the Hollywood Media Portfolio. Additionally, the interest on the full principal amount has been effectively capped at 4.49% (3.50% strike rate + 0.99% spread) per annum through the use of an interest rate cap. 11. The Company has the ability to draw up to $414.6 million under the construction loan secured by the One Westside and 10850 Pico properties. 12. Includes the option to extend the initial maturity date of December 18, 2023 twice for an additional six-month term each. 13. The Company owns 55% of the ownership interests in the consolidated joint venture that owns the 1918 Eighth property. The full amount of the loan is shown. This loan is interest-only through its term. 14. The Company owns 55% of the ownership interests 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. 15. Excludes deferred financing costs related to establishing the Company’s unsecured revolving credit facility, which are reflected in prepaid expenses and other assets, net on the Consolidated Balance Sheets. See Note 9 for details. 16. The Company owns 75% of the ownership interests in the joint venture that owns the One Westside and 10850 Pico properties. The full amount of the loan is shown. Monthly debt service includes debt amortization payments based on a 10-year amortization schedule with a balloon payment at maturity. 17. This amount relates to debt attributable to Allianz U.S. Private REIT LP (“Allianz”), the Company’s partner in the joint venture that owns the Ferry Building property. 18. Includes the option to extend the initial maturity date of October 9, 2028 twice for an additional two-year term each. Current Year Activity During the nine months ended September 30, 2022, there were $170.0 million in borrowings on the unsecured revolving credit facility, net of repayments. The Company generally uses the unsecured revolving credit facility to finance the acquisition of properties and businesses, to provide funds for tenant improvements and capital expenditures and to provide for working capital and other corporate purposes. In July 2022, the Company repaid its in-substance defeased debt in the amount of $126.4 million in full using the proceeds from the maturity of its U.S. Government securities in June 2022. In August 2022, the Company modified the existing loan agreement secured by its 1918 Eighth property, whereby the LIBOR-based floating interest rate was replaced with a term SOFR-based floating interest rate. The Company applied the relief provisions of ASC 848 and accounted for this modification as a continuation of the existing loan agreement. In August 2022, the Company acquired Quixote. In conjunction with the acquisition, the Company obtained a $160.0 million note payable from the sellers secured by the assets of Quixote. The loan has an interest rate of 5.00% per annum and is interest-only through the maturity date of December 31, 2023. In September 2022, the operating partnership completed an underwritten public offering of $350.0 million of 5.95% Senior Notes due in 2028, which were issued at a discount of 99.614% of par and are fully and unconditionally guaranteed by the Company. The net proceeds from the offering, after deducting the underwriting discount and commissions, were approximately $346.5 million and were used to repay the outstanding borrowings under its unsecured revolving credit facility. An amount equal to the net proceeds has been allocated to new or existing eligible green projects. In September 2022, the operating partnership entered into the First Modification Agreement to the Fourth Amended and Restated Credit Agreement, which replaced the LIBOR-based floating interest rate option with a term SOFR-based floating interest rate option as a benchmark rate for borrowings denominated in U.S. dollars for all purposes under the existing credit agreement. The Company applied the relief provisions of ASC 848 and accounted for this modification as a continuation of the existing credit agreement. Indebtedness The Company presents its financial statements on a consolidated basis. Notwithstanding such presentation, except to the extent expressly indicated, the Company’s separate property-owning subsidiaries are not obligors of or under 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 provides information regarding the Company’s future minimum principal payments due on the Company’s debt (after the impact of extension options, if applicable) as of September 30, 2022: Year Unsecured and Secured Debt Joint Venture Partner Debt Remaining 2022 $ — $ — 2023 320,000 — 2024 273,089 — 2025 741,300 — 2026 1,335,186 — Thereafter 1,807,000 66,136 TOTAL $ 4,476,575 $ 66,136 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 as of September 30, 2022 related to our unsecured revolving credit facility, term loans and note purchase agreements, when considering the most restrictive terms: Covenant Ratio Covenant Level Actual Performance Total liabilities to total asset value ≤ 60% 44.1% Unsecured indebtedness to unencumbered asset value ≤ 60% 44.3% Adjusted EBITDA to fixed charges ≥ 1.5x 3.3x Secured indebtedness to total asset value ≤ 45% 19.6% Unencumbered NOI to unsecured interest expense ≥ 2.0x 3.0x The following table summarizes existing covenants and their covenant levels related to the registered senior notes as of September 30, 2022: Covenant Ratio (1) Covenant Level Actual Performance Debt to total assets ≤ 60% 46.2% Total unencumbered assets to unsecured debt ≥ 150% 229.8% Consolidated income available for debt service to annual debt service charge ≥ 1.5x 3.3x Secured debt to total assets ≤ 45% 20.2% _________________ 1. The covenant and actual performance metrics above represent terms and definitions reflected in the indentures governing the 3.25% Senior Notes, 3.95% Senior Notes, 4.65% Senior Notes and 5.95% Senior Notes. The operating partnership was in compliance with its financial covenants as of September 30, 2022. Repayment Guarantees 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. The Company guarantees the operating partnership’s unsecured debt. Interest Expense The following table represents a reconciliation from gross interest expense to the interest expense on the Consolidated Statements of Operations: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gross interest expense (1) $ 38,595 $ 33,912 $ 103,242 $ 101,341 Capitalized interest (4,797) (5,760) (11,674) (17,049) Amortization of deferred financing costs and loan discounts/premiums 3,463 2,673 10,248 7,508 INTEREST EXPENSE $ 37,261 $ 30,825 $ 101,816 $ 91,800 _________________ 1. Includes interest on the Company’s debt and hedging activities. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives The Company enters into derivatives in order to hedge interest rate risk. Derivative assets are recorded in prepaid expenses and other assets and derivative liabilities are recorded in accounts payable, accrued liabilities and other on the Consolidated Balance Sheets. 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, 2022 and December 31, 2021: Interest Rate Range (1) Fair Value Assets (Liabilities) Underlying Debt Instrument Number of Derivatives Notional Amount Effective Date Maturity Date Low High September 30, 2022 December 31, 2021 Interest rate swaps Hollywood Media Portfolio (2)(3) 2 $ 350,000 April 2015 April 2022 2.96% 3.46% $ — $ (1,413) Hollywood Media Portfolio (2)(3) 1 125,000 June 2016 November 2022 2.63% 3.13% 304 (1,122) Interest rate cap Strike rate Hollywood Media Portfolio (4) 1 1,100,000 August 2021 August 2023 3.50% 8,497 368 TOTAL $ 8,801 $ (2,167) _____________ 1. The rate is based on the fixed rate from the swap and the spread based on the operating partnership’s leverage ratio. 2. The swaps were designated under the first payments approach within hedge accounting, where the Company elected to designate a cash flow (LIBOR-based interest payments) instead of a specific piece of debt. 3. These derivatives were designated as effective cash flow hedges for accounting purposes. 4. The interest rate cap is not designated under hedge accounting and is accounted for under mark-to-market accounting. The Company reclassifies unrealized gains and losses related to cash flow hedges into earnings in the same period during which the hedged forecasted transaction affects earnings. As of September 30, 2022, the Company expects $0.1 million of unrealized gain included in accumulated other comprehensive loss will be reclassified as a decrease to interest expense in the next 12 months. |
U.S. Government Securities
U.S. Government Securities | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
U.S. Government Securities | U.S. Government SecuritiesThe acquisition of the One Westside and 10850 Pico properties in 2018 included the assumption of debt that was, in substance, defeased through the purchase of U.S. Government-backed securities. The securities were held to maturity and were carried at amortized cost on the Consolidated Balance Sheet. The remaining securities matured during the nine months ended September 30, 2022, resulting in a balance of $0 as of September 30, 2022, as compared to a balance of $129.3 million as of December 31, 2021. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
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 certain of its subsidiaries, to treat each such subsidiary as a taxable REIT subsidiary (“TRS”) for federal income tax purposes. In general, the Company’s property-owning subsidiaries are limited liability companies and are treated as pass-through entities or disregarded entities (or, in the case of the entities that own the 1455 Market, Hill7, Ferry Building and 1918 Eighth properties, REITs) for federal income tax purposes. In the case of the Bentall Centre property, the Company owns its interest in the property through a non-U.S entity treated as a TRS 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, 2022, the Company has not established a liability for uncertain tax positions. The Company and certain of its TRSs file income tax returns with the U.S. federal government and various state and local jurisdictions. The Company and its TRSs are no longer subject to tax examinations by tax authorities for years prior to 2017. The Company has assessed its tax positions for all open years, which as of September 30, 2022 included 2018 to 2020 for federal purposes and 2017 to 2020 for state purposes, and concluded that there are no material uncertainties to be recognized. |
Future Minimum Rents and Lease
Future Minimum Rents and Lease Payments | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Future Minimum Rents and Lease Payments | Future Minimum Rents and Lease Payments The Company’s properties are leased to tenants under operating leases with initial term expiration dates ranging from 2022 to 2034. The following table summarizes the future minimum base rents (excluding tenant reimbursements for operating expenses and termination fees related to tenants exercising early termination options) for properties as of September 30, 2022: Year Ended Non-cancellable Subject to Early Termination Options Total (1) Remaining 2022 $ 161,060 $ 35 $ 161,095 2023 633,820 1,905 635,725 2024 583,517 4,560 588,077 2025 443,584 40,697 484,281 2026 378,315 54,272 432,587 Thereafter 1,412,518 188,362 1,600,880 TOTAL $ 3,612,814 $ 289,831 $ 3,902,645 _____________ 1. Excludes rents under leases at the Company’s studio properties with terms of one year or less. Operating Lease Agreements The Company is party to long-term non-cancellable operating lease agreements in which it is a lessee, consisting of 12 ground leases, 10 sound stage leases, five office leases and 16 other leases as of September 30, 2022. The Company’s operating lease obligations have expiration dates ranging from 2023 through 2067, including extension options which the Company is reasonably certain to exercise. Certain leases provide for variable rental payments based on third-party appraisals of fair market land value, CPI adjustments or a percentage of annual gross income. There are no notable restrictions or covenants imposed by the leases, nor guarantees of residual value. As of September 30, 2022, the present value of the remaining contractual payments of $746.7 million under the Company’s operating lease agreements was $396.4 million. The corresponding operating lease right-of-use assets amounted to $399.6 million. The following table provides information regarding the Company’s future minimum lease payments for its operating leases (including the impact of the extension options which the Company is reasonably certain to exercise) as of September 30, 2022: Year Lease Payments (1) Remaining 2022 $ 9,541 2023 38,525 2024 38,297 2025 38,193 2026 36,745 Thereafter 585,373 Total operating lease payments 746,674 Less: interest portion (350,262) PRESENT VALUE OF OPERATING LEASE LIABILITIES $ 396,412 _____________ 1. Future minimum lease payments for operating leases denominated in a foreign currency are translated to U.S. dollars using the exchange rate in effect as of the financial statement date. The following table summarizes rental expense for operating leases: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Variable rental expense $ 1,219 $ 2,765 $ 7,316 $ 7,873 Minimum rental expense $ 7,841 $ 5,421 $ 20,122 $ 15,963 |
Future Minimum Rents and Lease Payments | Future Minimum Rents and Lease Payments The Company’s properties are leased to tenants under operating leases with initial term expiration dates ranging from 2022 to 2034. The following table summarizes the future minimum base rents (excluding tenant reimbursements for operating expenses and termination fees related to tenants exercising early termination options) for properties as of September 30, 2022: Year Ended Non-cancellable Subject to Early Termination Options Total (1) Remaining 2022 $ 161,060 $ 35 $ 161,095 2023 633,820 1,905 635,725 2024 583,517 4,560 588,077 2025 443,584 40,697 484,281 2026 378,315 54,272 432,587 Thereafter 1,412,518 188,362 1,600,880 TOTAL $ 3,612,814 $ 289,831 $ 3,902,645 _____________ 1. Excludes rents under leases at the Company’s studio properties with terms of one year or less. Operating Lease Agreements The Company is party to long-term non-cancellable operating lease agreements in which it is a lessee, consisting of 12 ground leases, 10 sound stage leases, five office leases and 16 other leases as of September 30, 2022. The Company’s operating lease obligations have expiration dates ranging from 2023 through 2067, including extension options which the Company is reasonably certain to exercise. Certain leases provide for variable rental payments based on third-party appraisals of fair market land value, CPI adjustments or a percentage of annual gross income. There are no notable restrictions or covenants imposed by the leases, nor guarantees of residual value. As of September 30, 2022, the present value of the remaining contractual payments of $746.7 million under the Company’s operating lease agreements was $396.4 million. The corresponding operating lease right-of-use assets amounted to $399.6 million. The following table provides information regarding the Company’s future minimum lease payments for its operating leases (including the impact of the extension options which the Company is reasonably certain to exercise) as of September 30, 2022: Year Lease Payments (1) Remaining 2022 $ 9,541 2023 38,525 2024 38,297 2025 38,193 2026 36,745 Thereafter 585,373 Total operating lease payments 746,674 Less: interest portion (350,262) PRESENT VALUE OF OPERATING LEASE LIABILITIES $ 396,412 _____________ 1. Future minimum lease payments for operating leases denominated in a foreign currency are translated to U.S. dollars using the exchange rate in effect as of the financial statement date. The following table summarizes rental expense for operating leases: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Variable rental expense $ 1,219 $ 2,765 $ 7,316 $ 7,873 Minimum rental expense $ 7,841 $ 5,421 $ 20,122 $ 15,963 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Interest rate derivative assets (1) $ — $ 8,801 $ — $ 8,801 $ — $ 368 $ — $ 368 Interest rate derivative liabilities (2) $ — $ — $ — $ — $ — $ (2,535) $ — $ (2,535) Non-real estate investments measured at fair value (1) $ 533 $ — $ — $ 533 $ 1,915 $ 1,568 $ — $ 3,483 Stock purchase warrant (1) $ — $ 113 $ — $ 113 $ — $ 1,664 $ — $ 1,664 Earnout liability (2)(3) $ — $ — $ (9,300) $ (9,300) $ — $ — $ (11,383) $ (11,383) Non-real estate investments measured at NAV (1)(4) $ — $ — $ — $ 46,000 $ — $ — $ — $ 27,964 ___________ 1. Included in prepaid expenses and other assets, net on the Consolidated Balance Sheets. 2. Included in accounts payable, accrued liabilities and other on the Consolidated Balance Sheets. 3. Related to the acquisition of Zio. Refer to Note 3 for additional details. 4. According to the relevant accounting standards, certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets. Level 1 items include an investment in common stock of a publicly traded company which is valued on a quarterly basis using the closing stock price. Level 2 items include an interest rate cap and swaps which are valued on a quarterly basis using a linear regression model, as well as investments in preferred stock and warrants of a publicly traded company value which are valued on a quarterly basis using the closing stock price and a Black-Scholes model, respectively. Level 3 items include the earnout liability which is valued on a quarterly basis using a probability-weighted discounted cash flow model. Inputs to the model include the discount rate and probability-weighted earnout payments based on a Monte Carlo simulation with one million trials. Fair value measurement using unobservable inputs is inherently uncertain, and a change in significant inputs could result in different fair values. The following table summarizes changes in the carrying amount of the earnout liability during the nine months ended September 30, 2022: Balance, December 31, 2021 $ (11,383) Partial settlement 3,840 Remeasurement to fair value (1,757) Balance, September 30, 2022 $ (9,300) 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. The fair value of the investment in U.S. Government securities is an estimate based on Level 1 inputs. The fair values of 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, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value ASSETS U.S. Government securities $ — $ — $ 129,321 $ 130,910 LIABILITIES Unsecured debt (1) $ 2,570,000 $ 2,332,902 $ 2,050,000 $ 2,154,908 Secured debt (1) $ 1,906,575 $ 1,883,357 $ 1,714,874 $ 1,713,726 In-substance defeased debt $ — $ — $ 128,212 $ 128,361 Joint venture partner debt $ 66,136 $ 60,997 $ 66,136 $ 69,116 _________________ 1. Amounts represent debt excluding unamortized deferred financing costs and loan discounts/premiums. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-Based Compensation The Company’s 2010 Incentive Plan permits the Company’s board of directors (the “Board”) to grant, among other things, restricted stock, restricted stock units, operating partnership performance units and performance-based awards. As of September 30, 2022, 7.2 million common shares were available for grant under the 2010 Plan. The calculation of shares available for grant is determined after taking into account unvested restricted stock, unvested operating partnership performance units and unvested RSUs, assuming the maximum bonus pool eligible ultimately is earned and based on a stock price of $10.95. 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. Additionally, certain non-employee Board members elect to receive operating partnership performance units in lieu of their annual cash retainer fees. These awards are generally issued in the fourth quarter and are fully-vested upon their issuance. The Board awards time-based restricted shares or time-based operating partnership performance units to certain employees on an annual basis as part of the employees’ annual compensation. These time-based awards are generally issued in the fourth quarter and vest in equal annual installments over the applicable service vesting period, which is generally three years. Additionally, certain awards are subject to a mandatory holding period upon vesting if the grantee is an executive officer. Lastly, certain employees elect to receive operating partnership performance units in lieu of their annual cash bonus. These awards are generally issued in the fourth quarter and are fully-vested upon their issuance. Beginning in 2020, the compensation committee of the Board (the “Compensation Committee”) adopted an annual Hudson Pacific Properties, Inc. Performance Stock Unit Plan (“PSU Plan”). Under the PSU Plan, the Compensation Committee awards restricted stock units or performance units in the operating partnership to certain employees. PSU Plan grants consist of two portions. A portion of each award, the Relative Total Shareholder Return (“TSR”) Performance Unit, is eligible to vest based on the achievement of the Company’s TSR compared to the TSR of the FTSE NAREIT All Equity REITs index over a three-year performance period, with the vesting percentage subject to certain percentage targets. The remaining portion of each award, the Operational Performance Unit, becomes eligible to vest based on the achievement of operational performance metrics over a one-year performance period and vests over three years. The number of Operational Performance Units that becomes eligible to vest based on the achievement of operational performance metrics may be adjusted based on the Company’s achievement of absolute TSR goals over a three-year performance period by applying the applicable vesting percentages. Certain of the awards granted under the PSU Plan are subject to a two-year post-vesting restriction period, during which any awards earned may not be sold or transferred. 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, 2022 2021 2022 2021 Expensed stock compensation (1) $ 6,494 $ 5,840 $ 17,816 $ 15,718 Capitalized stock compensation (2) 894 771 2,683 2,659 TOTAL STOCK COMPENSATION (3) $ 7,388 $ 6,611 $ 20,499 $ 18,377 _________________ 1. Amounts are recorded in general and administrative expenses on the Consolidated Statements of Operations. 2. Amounts are recorded in investment in real estate, at cost on the Consolidated Balance Sheets. 3. Amounts are recorded in additional paid-in capital and non-controlling interest—units in the operating partnership on the Consolidated Balance Sheets. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Hudson Pacific Properties, Inc. The Company calculates basic earnings per share using the two-class method by dividing the net income available to common stockholders for the period by the weighted average number of common shares outstanding during the period. Unvested time-based restricted stock awards, unvested time-based performance unit awards and unvested restricted stock units (“RSUs”) that contain non-forfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The Company calculates diluted earnings per share using the two-class method or the treasury stock and if-converted method, whichever results in more dilution. For the three and nine months ended September 30, 2022 and 2021, both methods of calculation yielded the same diluted earnings per share amount. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower earnings per share amount. The following table reconciles the numerator and denominator in computing the Company’s basic and diluted earnings per share to net loss available to common stockholders: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Basic and diluted net loss available to common stockholders $ (17,286) $ (9,295) $ (44,515) $ (1,998) Denominator: Basic weighted average common shares outstanding 141,117,194 152,320,252 144,677,652 151,443,305 Effect of dilutive instruments (1)(2) — — — — DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 141,117,194 152,320,252 144,677,652 151,443,305 Basic earnings per common share $ (0.12) $ (0.06) $ (0.31) $ (0.01) Diluted earnings per common share $ (0.12) $ (0.06) $ (0.31) $ (0.01) ________________ 1. The Company includes unvested awards and convertible common and participating units as contingently issuable shares in the computation of diluted earnings per share once the market or performance 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. 2. The Company includes the dilutive effect of the forward sale component of its accelerated share repurchase agreements in the computation of diluted earnings per share. Hudson Pacific Properties, L.P. The operating partnership calculates basic earnings per unit using the two-class method by dividing the net income available to common unitholders for the period by the weighted average number of common units outstanding during the period. Unvested time-based restricted stock awards, unvested time-based performance unit awards and unvested RSUs that contain non-forfeitable rights to dividends are participating securities and are included in the computation of earnings per unit pursuant to the two-class method. The operating partnership calculates diluted earnings per unit using the two-class method or the treasury stock and if-converted method, whichever results in more dilution. For the three and nine months ended September 30, 2022 and 2021, both methods of calculation yielded the same diluted earnings per unit amount. Diluted earnings per unit reflects the potential dilution that could occur if securities or other contracts to issue common units were exercised or converted into common units, where such exercise or conversion would result in a lower earnings per unit amount. The following table reconciles the numerator and denominator in computing the operating partnership’s basic and diluted earnings per unit to net loss available to common unitholders: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Basic and diluted net loss available to common unitholders $ (17,511) $ (9,380) $ (45,063) $ (2,014) Denominator: Basic weighted average common units outstanding 142,963,458 153,701,876 146,523,102 152,818,720 Effect of dilutive instruments (1)(2) — — — — DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING 142,963,458 153,701,876 146,523,102 152,818,720 Basic earnings per common unit $ (0.12) $ (0.06) $ (0.31) $ (0.01) Diluted earnings per common unit $ (0.12) $ (0.06) $ (0.31) $ (0.01) ________________ 1. The operating partnership includes unvested awards as contingently issuable units in the computation of diluted earnings per unit once the market or performance 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 unit calculation. 2. The Company includes the dilutive effect of the forward sale component of its accelerated share repurchase agreements in the computation of diluted earnings per unit. |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interest | 9 Months Ended |
Sep. 30, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Non-Controlling Interest | Redeemable Non-controlling Interest Redeemable Preferred Units of the Operating Partnership As of September 30, 2022 and December 31, 2021, there were 392,598 Series A preferred units of partnership interest in the operating partnership, or Series A preferred units, which are not owned by the Company. 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. The units are 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. Redeemable Non-controlling Interest in Consolidated Real Estate Entities On March 1, 2018, the Company entered into a joint venture agreement with Macerich to form the HPP-MAC JV. On August 31, 2018, Macerich contributed Westside Pavilion to the HPP-MAC JV. 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. Therefore, the non-controlling interest related to this joint venture is included as temporary equity. The put right is not currently redeemable. On October 9, 2018, the Company entered into a joint venture with Allianz to purchase the Ferry Building property. The Company has a 55% interest in the joint venture that owns the Ferry Building property. The Company has a put right, if certain events occur, to sell its interest at fair market value. Allianz has a put right, if certain events occur, to sell its interest at fair market value, which is a redemption right that is not solely within the control of the Company. Therefore, the non-controlling interest related to this joint venture is included as temporary equity. The put right is not currently redeemable. The following table reconciles the beginning and ending balances of redeemable non-controlling interests: Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Series A Redeemable Preferred Units Consolidated Real Estate Entities Series A Redeemable Preferred Units Consolidated Real Estate Entities BEGINNING OF PERIOD $ 9,815 $ 126,420 $ 9,815 $ 129,449 Contributions — 200 — 575 Distributions — — — (8) Declared dividend (153) — (459) — Net income (loss) 153 (1,037) 459 (4,433) END OF PERIOD $ 9,815 $ 125,583 $ 9,815 $ 125,583 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Equity | Equity The table below presents the activity related to Hudson Pacific Properties, Inc.’s accumulated other comprehensive loss (“OCI”): Derivative Instruments Currency Translation Adjustments Total Accumulated Other Comprehensive Loss BALANCE AT DECEMBER 31, 2021 $ (3,957) $ 2,196 $ (1,761) Unrealized gains (losses) recognized in OCI 9,039 (18,177) (9,138) Reclassification from OCI into income (1) (6,167) — (6,167) Net change in OCI 2,872 (18,177) (15,305) BALANCE AT SEPTEMBER 30, 2022 $ (1,085) $ (15,981) $ (17,066) _____________ 1. The gains and losses on the Company’s derivative instruments classified as hedges are reported in interest expense on the Consolidated Statements of Operations. The table below presents the activity related to Hudson Pacific Properties, L.P.’s OCI: Derivative Instruments Currency Translation Adjustments Total Accumulated Other Comprehensive Loss BALANCE AT DECEMBER 31, 2021 $ (3,954) $ 2,175 $ (1,779) Unrealized gains (losses) recognized in OCI 9,200 (18,501) (9,301) Reclassification from OCI into income (1) (6,277) — (6,277) Net change in OCI 2,923 (18,501) (15,578) BALANCE AT SEPTEMBER 30, 2022 $ (1,031) $ (16,326) $ (17,357) _____________ 1. The gains and losses on the operating partnership’s derivative instruments classified as hedges are reported in interest expense on the Consolidated Statements of Operations. 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 at a value equal to the then-current market value of one share of common stock. However, in lieu of such payment of cash, the Company may, at its election, issue shares of its common stock in exchange for such common units on a one-for-one basis. 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. Ownership Interest in the Operating Partnership The following table summarizes the ownership interest in the operating partnership, excluding unvested restricted units and unvested restricted performance units, as of: September 30, 2022 December 31, 2021 Company-owned common units in the operating partnership 140,923,320 151,124,543 Company’s ownership interest percentage 98.7 % 98.8 % Non-controlling common units in the operating partnership (1) 1,846,264 1,842,898 Non-controlling ownership interest percentage 1.3 % 1.2 % _________________ 1. Represents common units held by certain of the Company’s executive officers, directors and other outside investors. As of September 30, 2022, this amount represents both common units and performance units of 550,969 and 1,295,295, respectively. As of December 31, 2021, this amount represents both common units and performance units in the amount of 550,969 and 1,291,929, respectively. Common Stock Activity The Company has not completed any common stock offerings during the nine months ended September 30, 2022. The Company’s 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, 2022. A cumulative total of $65.8 million has been sold as of September 30, 2022. Share Repurchase Program The Company is authorized to repurchase shares of its common stock up to a total of $250.0 million of its common stock under the share repurchase program. During the nine months ended September 30, 2022, the Company repurchased $37.2 million of its common stock, before transaction costs. Since commencement of the program, a cumulative total of $213.4 million has been repurchased. Share repurchases are accounted for on the trade date. The Company may make repurchases under the program at any time in its discretion, subject to market conditions, applicable legal requirements and other factors. Accelerated Share Repurchase Agreements On February 25, 2022, the Company entered into an uncollared accelerated share repurchase (“ASR”) agreement to purchase $100 million of its outstanding common stock. During the first quarter 2022, the Company made an initial payment of $100 million and received an initial delivery of approximately 3.3 million shares of common stock representing 85% of the total $100 million agreement based on the closing price of our common stock on the transaction date. Final settlement of the agreement occurred during the second quarter 2022, resulting in the receipt of an additional 0.9 million shares of common stock based on an adjusted daily volume-weighted average price of $23.90 during the measurement period. On February 25, 2022, the Company entered into a collared ASR agreement to purchase $100 million of its outstanding common stock. During the nine months ended September 30, 2022, the Company made an initial payment of $100 million and received an initial delivery of approximately 3.3 million shares of common stock based on an estimated cap price calculated using the daily volume-weighted average price during an initial hedge period. Final settlement of the agreement occurred during the third quarter 2022, resulting in the receipt of an additional 0.7 million shares of common stock based on a floor price of $25.35. At the conclusion of the ASR program in July 2022, a total of 8.1 million shares had been repurchased at an average price of $24.60. Series C Cumulative Redeemable Preferred Stock Series C cumulative redeemable preferred stock relates to the 17,000,000 shares of our Series C preferred stock, $0.01 par value per share. Holders of Series C preferred stock, when and as authorized by the board of directors of the Company, are entitled to cumulative cash dividends at the rate of 4.750% per annum of the $25.00 per share, equivalent to $1.1875 per annum per share. Dividends are payable quarterly in arrears on or about the last day of December, March, June and September of each year. In addition to other preferential rights, the holders of Series C preferred stock are entitled to receive the liquidation preference, which is $25.00 per share, before the holders of common stock in the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company’s affairs. Generally, shares of Series C preferred stock are not redeemable by the Company prior to November 16, 2026. However, upon the occurrence of a change of control, holders of the Series C preferred stock will have the right, (unless the Company has elected to redeem the Series C preferred stock) to convert into a specified number of shares of common stock. Dividends The Board declares dividends on a quarterly basis and the Company pays the dividends during the quarters in which the dividends are declared. The following table summarizes dividends per share declared and paid for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Common stock $ 0.25 $ 0.25 $ 0.75 $ 0.75 Common units $ 0.25 $ 0.25 $ 0.75 $ 0.75 Series A preferred units $ 0.3906 $ 0.3906 $ 1.1718 $ 1.1718 Series C preferred stock (1) $ 0.2968750 $ — $ 1.0390625 $ — Performance units $ 0.25 $ 0.25 $ 0.75 $ 0.75 Payment date September 29, 2022 September 30, 2021 N/A N/A Record date September 19, 2022 September 20, 2021 N/A N/A _________________ 1. Dividends paid during the nine months ended September 30, 2022 include a $0.2968750 per share dividend declared and paid in each of the first, second and third quarters of 2022 and a $0.1484375 per share dividend declared during the fourth quarter of 2021. 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. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment ReportingThe Company’s reporting segments are based on the Company’s method of internal reporting, which classifies its operations into two reportable segments: (i) office properties and related operations and (ii) studio properties and related operations. The Company evaluates performance based upon net operating income of the segment operations. General and administrative expenses and interest expense are not included in segment profit as the Company’s internal reporting addresses these items on a corporate level. Asset information by segment is not reported because the Company does not use this measure to assess performance or make decisions to allocate resources; therefore, depreciation and amortization expense is not allocated among segments. The table below presents the operating activity of the Company’s reportable segments: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Office segment Office revenues $ 213,491 $ 201,866 $ 641,135 $ 589,712 Office expenses (78,340) (71,865) (230,529) (207,538) Office segment profit 135,151 130,001 410,606 382,174 Studio segment Studio revenues 46,863 25,766 115,162 66,641 Studio expenses (26,688) (12,044) (66,357) (35,963) Studio segment profit 20,175 13,722 48,805 30,678 TOTAL SEGMENT PROFIT $ 155,326 $ 143,723 $ 459,411 $ 412,852 Segment revenues $ 260,354 $ 227,632 $ 756,297 $ 656,353 Segment expenses (105,028) (83,909) (296,886) (243,501) TOTAL SEGMENT PROFIT $ 155,326 $ 143,723 $ 459,411 $ 412,852 The table below is a reconciliation of the total profit from all segments to net income: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 NET (LOSS) INCOME $ (6,792) $ (6,182) $ (10,861) $ 12,259 General and administrative 19,795 18,288 62,178 53,846 Depreciation and amortization 93,070 88,568 276,701 255,507 Loss (income) from unconsolidated real estate entities 352 (566) (1,731) (1,671) Fee income (911) (678) (3,122) (2,323) Interest expense 37,261 30,825 101,816 91,800 Interest income (196) (934) (2,026) (2,868) Management services reimbursement income—unconsolidated real estate entities (983) (253) (3,159) (879) Management services expense—unconsolidated real estate entities 983 253 3,159 879 Transaction-related expenses 9,331 6,300 10,713 7,364 Unrealized loss (gain) on non-real estate investments 894 (827) 1,062 (11,620) Loss on sale of real estate 180 — 180 — Impairment loss 4,795 2,762 28,548 2,762 Loss on extinguishment of debt — 6,249 — 6,249 Other (income) expense (2,453) (82) (4,047) 1,547 TOTAL PROFIT FROM ALL SEGMENTS $ 155,326 $ 143,723 $ 459,411 $ 412,852 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Employment Agreements The Company has entered into employment agreements with certain of its executive officers, effective January 1, 2020, that provide for various severance and change in control benefits and other terms and conditions of employment. Cost Reimbursements from Unconsolidated Real Estate Entities The Company is reimbursed for certain costs incurred in managing certain of its unconsolidated real estate entities. During the three and nine months ended September 30, 2022, the Company recognized $1.0 million and $3.2 million, respectively, of such reimbursement income in management services reimbursement income—unconsolidated real estate entities on the Consolidated Statement of Operations. During the three and nine months ended September 30, 2021, the Company recognized $0.3 million and $0.9 million of such reimbursement income, respectively. Related Party Leases The Company’s wholly-owned subsidiary is party to long-term operating lease agreements with an unconsolidated joint venture for office space and fitness and conference facilities. As of September 30, 2022, the Company’s right-of-use assets and lease liabilities related to these lease obligations were $6.2 million and $6.3 million, respectively, as compared to right-of-use assets and lease liabilities of $7.4 million and $7.5 million, respectively, as of September 30, 2021. During the three and nine months ended September 30, 2022, the Company recognized $0.2 million and $0.7 million, respectively, of related rental expense in management services expense—unconsolidated real estate entities on the Consolidated Statement of Operations related to these leases. During the three and nine months ended September 30, 2021, the Company recognized $0.2 million and $0.8 million of related rental expense, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Fund Investments On April 14, 2022, the Company launched EquiBlue, an investing platform that seeks to leverage commercial real estate to holistically provide economic opportunity and upward mobility for women and people of color. As sponsor, the Company and its strategic partner have collectively committed to contributing at least 20% of the total capital commitment for EquiBlue’s initial fund, which is targeted at $300.0 million. The Company invests in several non-real estate funds with an aggregate commitment to contribute up to $48.0 million. As of September 30, 2022, the Company has contributed $30.2 million to these funds, net of distributions, with $17.8 million remaining to be contributed. 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, 2022, 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 As of September 30, 2022, the Company had $3.1 million in outstanding letters of credit under the unsecured revolving credit facility. The letters of credit are primarily related to utility company security deposit requirements. Contractual Obligations The Company has entered into a number of construction agreements related to its development activities at various properties and its obligations under executed leases. As of September 30, 2022, the Company had $312.7 million in related commitments. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information for Hudson Pacific Properties, Inc. is included as follows: Nine Months Ended September 30, 2022 2021 Cash paid for interest, net of capitalized interest $ 68,821 $ 74,381 Non-cash investing and financing activities Accounts payable and accrued liabilities for real estate investments $ 181,689 $ 136,661 Ground lease remeasurement $ 23,177 $ — Note payable issued as consideration in a business combination $ 160,000 $ — Earnout liability recognized as contingent consideration for business combination $ — $ 22,800 Lease liabilities recorded in connection with right-of-use assets $ 94,447 $ 13,881 Supplemental cash flow information for Hudson Pacific Properties, L.P. is included as follows: Nine Months Ended September 30, 2022 2021 Cash paid for interest, net of capitalized interest $ 68,821 $ 74,381 Non-cash investing and financing activities Accounts payable and accrued liabilities for real estate investments $ 181,689 $ 136,661 Ground lease remeasurement $ 23,177 $ — Note payable issued as consideration in a business combination $ 160,000 $ — Earnout liability recognized as contingent consideration for business combination $ — $ 22,800 Lease liabilities recorded in connection with right-of-use assets $ 94,447 $ 13,881 Restricted cash primarily consists of amounts held by lenders to fund reserves such as capital improvements, taxes, insurance, debt service and operating expenditures. The following table provides a reconciliation of cash and cash equivalents and restricted cash at the beginning and end of the periods presented for Hudson Pacific Properties, Inc: Nine Months Ended September 30, 2022 2021 BEGINNING OF PERIOD Cash and cash equivalents $ 96,555 $ 113,686 Restricted cash 100,321 35,854 TOTAL $ 196,876 $ 149,540 END OF PERIOD Cash and cash equivalents $ 161,667 $ 110,500 Restricted cash 42,401 109,737 TOTAL $ 204,068 $ 220,237 The following table provides a reconciliation of cash and cash equivalents and restricted cash at the beginning and end of the periods presented for Hudson Pacific Properties, L.P.: Nine Months Ended September 30, 2022 2021 BEGINNING OF PERIOD Cash and cash equivalents $ 96,555 $ 113,686 Restricted cash 100,321 35,854 TOTAL $ 196,876 $ 149,540 END OF PERIOD Cash and cash equivalents $ 161,667 $ 110,500 Restricted cash 42,401 109,737 TOTAL $ 204,068 $ 220,237 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn October 20, 2022, the Company sold its 6922 Hollywood office property for $96.0 million before certain credits, prorations and closing costs. A portion of the proceeds was used to make an $85.0 million repayment on the Company’s unsecured revolving credit facility. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in the 2021 Annual Report on Form 10-K of Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. and the notes thereto. |
Principles of Consolidation | 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 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, 2022, the Company has determined that its operating partnership and 19 joint ventures met the definition of a VIE. 13 of these joint ventures are consolidated and six are unconsolidated. |
Use of Estimates | 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, the fair value measurement of contingent consideration, assets acquired and liabilities assumed in business combination transactions, determining the incremental borrowing rate used in the present value calculations of its new or modified operating lessee agreements, its accrued liabilities and the valuation of 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. |
Lessee Accounting | Lessee Accounting The Company determines if an arrangement is a lease at inception. The Company’s operating lease agreements relate to ground leases, sound stage leases, office leases and other facility leases and are reflected in operating lease right-of-use (“ROU”) assets and operating lease liabilities on the Consolidated Balance Sheets. For leases with a term of 12 months or less the Company makes an accounting policy election, by class of underlying asset, not to recognize ROU assets and lease liabilities. The Company recognizes lease expense for such leases generally on a straight-line basis over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As the Company’s leases do not provide an implicit rate, the Company determines its incremental borrowing rate based on the information available at commencement date, or the date of the ASC 842 adoption, in determining the present value of lease payments. The weighted average incremental borrowing rate used to calculate the ROU assets and liabilities was 5.6%. ROU assets also include any lease payments made and exclude lease incentives. Many of the Company’s lessee agreements include options to extend the lease, which the Company does not include in its minimum lease terms unless the option is reasonably certain to be exercised. Rental expense |
Lessor Accounting | Lessor Accounting The presentation of revenues on the Consolidated Statements of Operations reflects a single lease component that combines rental, tenant recoveries and other tenant-related revenues for the office portfolio, with the election of the lessor practical expedient. For the Company’s rentals at the studio properties, total lease consideration is allocated to lease and non-lease components on a relative standalone basis. The recognition of revenues related to lease components is governed by ASC 842, while revenue related to non-lease components is subject to ASC 606, Revenue from Contracts with Customers |
Revenue Recognition | 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 and other tenant-related revenues (iii) ancillary revenues (iv) other revenues (v) sale of real estate (vi) management fee income and (vii) management services reimbursement income. Revenue Stream Components Financial Statement Location Rental revenues Office, stage and storage rentals Office and Studio segments: rental Tenant recoveries and other tenant-related revenues Reimbursement of real estate taxes, insurance, repairs and maintenance, other operating expenses and must-take parking revenues Office segment: rental Ancillary revenues Revenues derived from tenants’ use of power, HVAC and telecommunications (i.e., telephone and internet) and lighting, equipment and vehicle rentals Studio segment: service and other revenues Other revenues Parking revenue that is not associated with lease agreements and other Office and Studio segments: service and other revenues Sale of real estate Gains on sales derived from cash consideration less cost basis Gains on sale of real estate Management fee income Income derived from management services provided to unconsolidated joint venture entities Fee income Management services reimbursement income Reimbursement of costs incurred by the Company in the management of unconsolidated joint venture entities Management services reimbursement income—unconsolidated real estate entities The Company recognizes rental revenue from tenants on a straight-line basis over the lease term when collectability is probable and the tenant has taken possession of or controls the physical use of the leased asset. The Company does not account for lease concessions related to the effects of the COVID-19 pandemic as lease modifications to the extent that the concessions are granted as payment deferrals and total payments remain substantially the same during the lease term. The Company recognizes tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance and other operating expenses as revenue in the period during which the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Company 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. Other tenant-related revenues include parking stipulated in lease agreements as must-take parking rentals. These revenues are recognized over the term of the lease. Ancillary revenues, |
Acquisitions | Acquisitions The Company applies the acquisition method for acquisitions that meet the definition of a business combination. Under the acquisition method, the Company estimates the fair value of the identifiable assets and liabilities of the acquired entity on the acquisition date. The difference between the fair value of the consideration transferred for the acquisition and the fair value of the net assets acquired is recorded as goodwill and acquisition-related expenses arising from the transaction are expensed as incurred. The Company includes the results of operations of the businesses that it acquires beginning on the acquisition date. The Company applies a cost accumulation and allocation model to acquisitions that meet the definition of an asset acquisition. Under this model, the purchase price is allocated based on the relative fair value of the assets acquired and liabilities assumed. Additionally, acquisition-related expenses associated with an asset acquisition are capitalized as part of the purchase price. |
Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets Goodwill is an unidentifiable intangible asset and is recognized as a residual, generally measured as the excess of consideration transferred in a business combination over the identifiable assets acquired and liabilities assumed. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination. The Company tests its goodwill and indefinite-lived intangible assets for impairment at least annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Goodwill is tested for impairment at the reporting unit to which it is assigned, which can be an operating segment or one level below an operating segment. The Company has three operating segments: the management entity, Office and Studio. The management entity and the Office operating segments are each a reporting unit. Within the Studio operating segment, there are two reporting units: Studio Properties and Studio Services, the latter of which consists of the Zio Entertainment Network, LLC (“Zio”) and Star Waggons, LLC (“Star Waggons”) businesses acquired in the year ended December 31, 2021 and the Quixote Studios (“Quixote”) business acquired in August 2022. The assessment of goodwill for impairment may initially be performed based on qualitative factors to determine if it is more likely than not that the fair value of the reporting unit is less than its carrying value, including goodwill. If so, a quantitative assessment is performed, and to the extent the carrying value of the reporting unit exceeds its fair value, impairment is recognized |
Organization (Tables)
Organization (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Company's Portfolio | The following table summarizes the Company’s portfolio as of September 30, 2022: Segments Number of Properties Square Feet (unaudited) Consolidated portfolio Office 52 14,543,539 Studio 4 1,291,260 Land 5 1,966,242 Total consolidated portfolio 61 17,801,041 Unconsolidated portfolio (1) Office (2) 1 1,509,943 Studio (3) 1 241,000 Land (4) 2 1,617,347 Total unconsolidated portfolio 4 3,368,290 TOTAL (5) 65 21,169,331 _________________ 1. The Company owns 20% of the unconsolidated joint venture entity which owns the Bentall Centre property, 50% of the unconsolidated joint venture entity that owns the Sunset Glenoaks Studios and 35% of the unconsolidated joint venture entity that owns the Sunset Waltham Cross Studios development. The square footage shown above represents 100% of the properties. See Notes 2 and 6 for details. 2. Includes Bentall Centre. 3. Includes Sunset Glenoaks Studios. 4. Includes land for the Burrard Exchange at Bentall Centre and Sunset Waltham Cross Studios. 5. Includes repositioning, redevelopment, development and held for sale properties. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Variable Interest Entities | As of September 30, 2022, the operating partnership has determined that 13 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 % Hudson One Ferry REIT, L.P. Ferry Building 55.0 % Sunset Bronson Entertainment Properties, LLC Sunset Bronson Studios, ICON, CUE 51.0 % Sunset Gower Entertainment Properties, LLC Sunset Gower Studios 51.0 % Sunset 1440 North Gower Street, LLC Sunset Gower Studios 51.0 % Sunset Las Palmas Entertainment Properties, LLC Sunset Las Palmas Studios, Harlow 51.0 % Sunset Services Holdings, LLC None (1) 51.0 % Sunset Studios Holdings, LLC EPIC 51.0 % Hudson Media and Entertainment Management, LLC None (2) 51.0 % Hudson 6040 Sunset, LLC 6040 Sunset 51.0 % Hudson 1918 Eighth, L.P. 1918 Eighth 55.0 % __________________ 1. Sunset Services Holdings, LLC wholly owns Services Holdings, LLC, which owns 100% interests in Sunset Bronson Services, LLC, Sunset Gower Services, LLC and Sunset Las Palmas Services, LLC, which provide services to the respective entertainment properties above. 2. Hudson Media and Entertainment Management, LLC manages the following properties: Sunset Gower Studios, Sunset Bronson Studios, Sunset Las Palmas Studios, 6040 Sunset, ICON, CUE, EPIC and Harlow (collectively “Hollywood Media Portfolio”). The following table summarizes the Company’s investments in unconsolidated joint ventures: Property Property Type Submarket Ownership Interest Functional Currency Sunset Waltham Cross Studios Development Broxbourne, United Kingdom 35% Pound sterling (1) Sunset Glenoaks Studios Development Los Angeles 50% U.S. dollar (2)(3) Bentall Centre Operating Property Downtown Vancouver 20% Canadian dollar (2)(4) __________________ 1. On July 29, 2021, the Company purchased 35% of the ownership interests in the joint venture that owns the Sunset Waltham Cross Studios development. The Company also owns 35% of the ownership interests in the joint venture entities formed to serve as the general partner and management services company for the property-owning joint venture entity. 2. The Company serves as the operating member of this joint venture. 3. The Company has provided various guarantees for this joint venture’s construction loan, including a completion guarantee, equity guarantee and recourse carve-out guarantee. 4. The Company has guaranteed $96.5 million of this joint venture’s debt. |
Schedule of Revenue Streams | 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 and other tenant-related revenues (iii) ancillary revenues (iv) other revenues (v) sale of real estate (vi) management fee income and (vii) management services reimbursement income. Revenue Stream Components Financial Statement Location Rental revenues Office, stage and storage rentals Office and Studio segments: rental Tenant recoveries and other tenant-related revenues Reimbursement of real estate taxes, insurance, repairs and maintenance, other operating expenses and must-take parking revenues Office segment: rental Ancillary revenues Revenues derived from tenants’ use of power, HVAC and telecommunications (i.e., telephone and internet) and lighting, equipment and vehicle rentals Studio segment: service and other revenues Other revenues Parking revenue that is not associated with lease agreements and other Office and Studio segments: service and other revenues Sale of real estate Gains on sales derived from cash consideration less cost basis Gains on sale of real estate Management fee income Income derived from management services provided to unconsolidated joint venture entities Fee income Management services reimbursement income Reimbursement of costs incurred by the Company in the management of unconsolidated joint venture entities Management services reimbursement income—unconsolidated real estate entities The following table summarizes the Company’s revenue streams that are accounted for under ASC 606 for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Ancillary revenues $ 29,854 $ 12,224 $ 68,817 $ 26,857 Other revenues $ 5,925 $ 4,281 $ 17,129 $ 11,246 Studio-related tenant recoveries $ 491 $ 418 $ 1,407 $ 1,424 Management fee income $ 911 $ 678 $ 3,122 $ 2,323 Management services reimbursement income $ 983 $ 253 $ 3,159 $ 879 The following table summarizes the Company’s receivables that are accounted for under ASC 606 as of: September 30, 2022 December 31, 2021 Ancillary revenues $ 16,890 $ 7,381 Other revenues $ 1,241 $ 1,078 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the Quixote Acquisition Date fair value of the consideration transferred in connection with the acquisition: Cash $ 197,862 Seller note payable 160,000 Total consideration $ 357,862 The following table summarizes the Acquisition Date fair value of the consideration transferred in connection with the acquisitions: Zio Star Waggons Cash $ 117,198 $ 92,656 Contingent consideration 22,543 — Total consideration $ 139,741 $ 92,656 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Quixote Acquisition Date. The Company is in the process of obtaining third-party valuations of certain intangible assets and determining the useful life of certain intangible assets; thus, the provisional measurements of intangible assets and goodwill are subject to change: Cash and cash equivalents $ 5,780 Accounts receivable 7,238 Prepaid expenses and other assets 3,788 Investment in real estate 47,741 Non-real estate property, plant and equipment 65,939 Intangible assets 76,900 Right-of-use assets 103,579 Total assets acquired 310,965 Accounts payable, accrued liabilities and other $ 12,700 Lease liabilities 92,070 Total liabilities assumed 104,770 Net identifiable assets acquired $ 206,195 Goodwill 151,667 NET ASSETS ACQUIRED $ 357,862 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective Acquisition Dates: Zio Star Waggons Cash and cash equivalents $ 1,084 $ 300 Accounts receivable 3,001 4,185 Prepaid expenses and other assets 1,509 1,605 Non-real estate property, plant and equipment 23,399 25,000 Intangible assets 41,670 33,480 Total assets acquired 70,663 64,570 Accounts payable, accrued liabilities and other $ 1,498 $ 1,913 Intangible liabilities — 110 Total liabilities assumed 1,498 2,023 Net identifiable assets acquired $ 69,165 $ 62,547 Goodwill 70,576 30,109 NET ASSETS ACQUIRED $ 139,741 $ 92,656 |
Business acquisition, pro Forma information | The amounts of revenue and net income of Quixote included in the Company’s Consolidated Statements of Operations from the Quixote Acquisition Date to September 30, 2022 are as follows: Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Revenue $ 8,852 $ 8,852 Net income 1,257 1,257 |
Investment in Real Estate (Tabl
Investment in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Real Estate [Abstract] | |
Investment in Real Estate | The following table summarizes the Company’s investment in real estate, at cost as of: September 30, 2022 December 31, 2021 Land $ 1,397,714 $ 1,313,385 Building and improvements 6,305,120 6,241,254 Tenant improvements 868,750 786,991 Furniture and fixtures 9,600 14,020 Property under development 75,750 5,827 INVESTMENT IN REAL ESTATE, AT COST $ 8,656,934 $ 8,361,477 |
Purchase Price of Accounting | The following table represents the Company’s final purchase price accounting for the asset acquisitions completed during the nine months ended September 30, 2022: Washington 1000 Sunset Gower Studios Land 5801 Bobby Foster Road TOTAL ACQUISITION COST (1) $ 86,313 $ 22,156 $ 8,457 Allocation of acquisition cost Land $ 59,987 $ 22,156 $ 2,189 Building and improvements 11,053 — 6,268 Parking easement (2) 15,273 — — TOTAL $ 86,313 $ 22,156 $ 8,457 _____________ 1. Includes capitalized transaction-related expenses. 2. Parking easement has an indefinite useful life and is recorded in deferred leasing costs and intangible assets, net on the Consolidated Balance Sheet. |
Dispositions of Real Estate | The following table summarizes information on dispositions completed during the nine months ended September 30, 2022. These properties were considered non-strategic to the Company’s portfolio: Property Segment Date of Disposition Square Feet Sales Price (1) (in millions) Del Amo Office 8/5/2022 113,000 $ 2.8 Northview Center Office 8/30/2022 179,985 46.0 TOTAL DISPOSITIONS 292,985 $ 48.8 _____________ 1. Represents gross sales price before certain credits, prorations and closing costs. |
Held For Sale | The following table summarizes the components of assets and liabilities associated with real estate held for sale as of September 30, 2022: Skyway Landing 6922 Hollywood ASSETS Investment in real estate, net $ 90,899 $ 88,253 Accounts receivable, net 172 48 Straight-line rent receivables, net 531 4,440 Deferred leasing costs and intangible assets, net 501 2,043 Prepaid expenses and other assets, net 26 113 ASSETS ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ 92,129 $ 94,897 LIABILITIES Accounts payable, accrued liabilities and other $ 575 $ 965 Intangible liabilities, net — 96 Security deposits and prepaid rent 369 470 LIABILITIES ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ 944 $ 1,531 The following table summarizes the components of assets and liabilities associated with real estate held for sale as of December 31, 2021: Northview Center Skyway Landing Del Amo 6922 Hollywood ASSETS Investment in real estate, net $ 40,338 $ 89,873 $ 15,213 $ 91,353 Accounts receivable, net 95 142 — 103 Straight-line rent receivables, net 901 1,659 — 4,714 Deferred leasing costs and intangible assets, net 751 450 2,742 1,999 Prepaid expenses and other assets, net — — — 187 ASSETS ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ 42,085 $ 92,124 $ 17,955 $ 98,356 LIABILITIES Accounts payable, accrued liabilities and other $ 184 $ 273 $ 12 $ 1,372 Intangible liabilities, net — — — 96 Security deposits and prepaid rent 395 1,205 — 361 LIABILITIES ASSOCIATED WITH REAL ESTATE HELD FOR SALE $ 579 $ 1,478 $ 12 $ 1,829 |
Non-Real Estate Property, Pla_2
Non-Real Estate Property, Plant and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment Net | The following table summarizes the Company’s non-real estate property, plant and equipment, net as of: September 30, 2022 December 31, 2021 Trailers $ 64,178 $ 35,181 Production equipment 34,296 — Trucks and other vehicles 19,811 12,204 Leasehold improvements 18,490 15,267 Other equipment 6,838 4,605 Furniture, fixtures and equipment 6,967 4,592 Non-real estate property, plant and equipment, at cost 150,580 71,849 Accumulated depreciation (22,076) (13,380) NON-REAL ESTATE PROPERTY, PLANT AND EQUIPMENT, NET $ 128,504 $ 58,469 |
Investment in Unconsolidated _2
Investment in Unconsolidated Real Estate Entities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Variable Interest Entities | As of September 30, 2022, the operating partnership has determined that 13 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 % Hudson One Ferry REIT, L.P. Ferry Building 55.0 % Sunset Bronson Entertainment Properties, LLC Sunset Bronson Studios, ICON, CUE 51.0 % Sunset Gower Entertainment Properties, LLC Sunset Gower Studios 51.0 % Sunset 1440 North Gower Street, LLC Sunset Gower Studios 51.0 % Sunset Las Palmas Entertainment Properties, LLC Sunset Las Palmas Studios, Harlow 51.0 % Sunset Services Holdings, LLC None (1) 51.0 % Sunset Studios Holdings, LLC EPIC 51.0 % Hudson Media and Entertainment Management, LLC None (2) 51.0 % Hudson 6040 Sunset, LLC 6040 Sunset 51.0 % Hudson 1918 Eighth, L.P. 1918 Eighth 55.0 % __________________ 1. Sunset Services Holdings, LLC wholly owns Services Holdings, LLC, which owns 100% interests in Sunset Bronson Services, LLC, Sunset Gower Services, LLC and Sunset Las Palmas Services, LLC, which provide services to the respective entertainment properties above. 2. Hudson Media and Entertainment Management, LLC manages the following properties: Sunset Gower Studios, Sunset Bronson Studios, Sunset Las Palmas Studios, 6040 Sunset, ICON, CUE, EPIC and Harlow (collectively “Hollywood Media Portfolio”). The following table summarizes the Company’s investments in unconsolidated joint ventures: Property Property Type Submarket Ownership Interest Functional Currency Sunset Waltham Cross Studios Development Broxbourne, United Kingdom 35% Pound sterling (1) Sunset Glenoaks Studios Development Los Angeles 50% U.S. dollar (2)(3) Bentall Centre Operating Property Downtown Vancouver 20% Canadian dollar (2)(4) __________________ 1. On July 29, 2021, the Company purchased 35% of the ownership interests in the joint venture that owns the Sunset Waltham Cross Studios development. The Company also owns 35% of the ownership interests in the joint venture entities formed to serve as the general partner and management services company for the property-owning joint venture entity. 2. The Company serves as the operating member of this joint venture. 3. The Company has provided various guarantees for this joint venture’s construction loan, including a completion guarantee, equity guarantee and recourse carve-out guarantee. 4. The Company has guaranteed $96.5 million of this joint venture’s debt. |
Summarized Financial Information of Unconsolidated Real Estate Entity | The table below presents the combined and condensed balance sheets for the Company’s unconsolidated joint ventures: September 30, 2022 December 31, 2021 ASSETS Investment in real estate, net $ 1,011,495 $ 1,048,593 Other assets 58,539 57,232 TOTAL ASSETS $ 1,070,034 $ 1,105,825 LIABILITIES Secured debt, net $ 509,212 $ 516,153 Other liabilities 45,410 40,307 TOTAL LIABILITIES 554,622 556,460 Company’s capital (1) 144,667 148,914 Partner’s capital 370,745 400,451 TOTAL CAPITAL 515,412 549,365 TOTAL LIABILITIES AND CAPITAL $ 1,070,034 $ 1,105,825 __________________ 1. To the extent the Company’s cost basis is different from the basis reflected at the joint venture level, the basis is amortized over the life of the related asset and is included in the (loss) income from unconsolidated real estate entities line item on the Consolidated Statements of Operations. The table below presents the combined and condensed statements of operations for the Company’s unconsolidated joint ventures: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 TOTAL REVENUES $ 18,515 $ 20,694 $ 64,962 $ 60,121 TOTAL EXPENSES 20,151 17,893 55,802 51,865 NET (LOSS) INCOME $ (1,636) $ 2,801 $ 9,160 $ 8,256 |
Deferred Leasing Costs and In_2
Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets and Liabilities | The following summarizes the Company’s deferred leasing costs and intangibles as of: September 30, 2022 December 31, 2021 Deferred leasing costs and in-place lease intangibles $ 329,067 $ 331,149 Accumulated amortization (134,833) (126,423) Deferred leasing costs and in-place lease intangibles, net 194,234 204,726 Below-market ground leases 79,562 79,562 Accumulated amortization (17,291) (15,233) Below-market ground leases, net 62,271 64,329 Above-market leases 725 1,334 Accumulated amortization (297) (782) Above-market leases, net 428 552 Customer relationships 97,900 52,500 Accumulated amortization (8,850) (2,684) Customer relationships, net 89,050 49,816 Non-competition agreements 8,200 5,300 Accumulated amortization (1,222) (379) Non-competition agreements, net 6,978 4,921 Trade name 37,200 17,100 Parking easement 15,273 — DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET $ 405,434 $ 341,444 Below-market leases $ 59,670 $ 75,827 Accumulated amortization (24,668) (34,326) Below-market leases, net 35,002 41,501 Above-market ground leases 1,095 1,095 Accumulated amortization (339) (306) Above-market ground leases, net 756 789 INTANGIBLE LIABILITIES, NET $ 35,758 $ 42,290 |
Schedule of Amortization During Period | The Company recognized the following amortization related to deferred leasing costs and intangibles: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Deferred leasing costs and in-place lease intangibles (1) $ (9,450) $ (11,540) $ (29,657) $ (34,761) Below-market ground leases (2) $ (698) $ (600) $ (2,075) $ (1,797) Above-market leases (3) $ (16) $ (73) $ (107) $ (573) Customer relationships (1) $ (2,415) $ (809) $ (6,165) $ (809) Non-competition agreements (1) $ (313) $ (114) $ (843) $ (114) Below-market leases (3) $ 1,717 $ 3,096 $ 6,500 $ 8,854 Above-market ground leases (2) $ 11 $ 11 $ 33 $ 33 __________________ 1. Amortization is recorded in depreciation and amortization expenses and for lease incentive costs in office rental revenues in the Consolidated Statements of Operations. 2. Amortization is recorded in office operating expenses in the Consolidated Statements of Operations. 3. Amortization is recorded in office rental revenues in the Consolidated Statements of Operations. |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 December 31, 2021 Deposits and pre-development costs for future acquisitions $ — $ 47,605 Prepaid insurance 11,325 5,442 Non-real estate investments 46,533 31,447 Stock purchase warrant 113 1,664 Deferred financing costs 6,315 7,750 Prepaid property tax 3,058 2,192 Interest rate derivative assets 8,801 368 Inventory 4,795 1,578 Other 25,700 20,954 PREPAID EXPENSES AND OTHER ASSETS, NET $ 106,640 $ 119,000 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt Instruments | The following table sets forth information with respect to the Company’s outstanding indebtedness: September 30, 2022 December 31, 2021 Interest Rate (1) Contractual Maturity Date (2) UNSECURED AND SECURED DEBT Unsecured debt Unsecured revolving credit facility (3)(4)(5) $ 295,000 $ 125,000 SOFR + 1.15% to 1.60% 12/21/2026 (6) Series A notes 110,000 110,000 4.34% 1/2/2023 Series B notes 259,000 259,000 4.69% 12/16/2025 Series C notes 56,000 56,000 4.79% 12/16/2027 Series D notes 150,000 150,000 3.98% 7/6/2026 Series E notes 50,000 50,000 3.66% 9/15/2023 3.95% Registered senior notes 400,000 400,000 3.95% 11/1/2027 4.65% Registered senior notes 500,000 500,000 4.65% 4/1/2029 3.25% Registered senior notes 400,000 400,000 3.25% 1/15/2030 5.95% Registered senior notes (7) 350,000 — 5.95% 2/15/2028 Total unsecured debt 2,570,000 2,050,000 Secured debt Hollywood Media Portfolio $ 1,100,000 $ 1,100,000 LIBOR + 0.99% 8/9/2026 (8) Acquired Hollywood Media Portfolio debt (209,814) (209,814) LIBOR + 1.55% 8/9/2026 (8) Hollywood Media Portfolio, net (9)(10) 890,186 890,186 One Westside and 10850 Pico (11) 273,089 241,388 LIBOR + 1.70% 12/18/2024 (12) Element LA 168,000 168,000 4.59% 11/6/2025 1918 Eighth (13) 314,300 314,300 SOFR + 1.40% 12/18/2025 Hill7 (14) 101,000 101,000 3.38% 11/6/2028 Quixote 160,000 — 5.00% 12/31/2023 Total secured debt 1,906,575 1,714,874 Total unsecured and secured debt 4,476,575 3,764,874 Unamortized deferred financing costs/loan discounts (15) (27,259) (30,971) TOTAL UNSECURED AND SECURED DEBT, NET $ 4,449,316 $ 3,733,903 IN-SUBSTANCE DEFEASED DEBT (16) $ — $ 128,212 4.47% 10/1/2022 JOINT VENTURE PARTNER DEBT (17) $ 66,136 $ 66,136 4.50% 10/9/2032 (18) _________________ 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, 2022, which may be different than the interest rates as of December 31, 2021 for corresponding indebtedness. 2. Maturity dates include the effect of extension options. 3. The annual facility fee rate ranges from 0.15% to 0.30% based on the operating partnership’s leverage ratio. 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, 2022, no such election had been made and the unsecured revolving credit facility bore interest at SOFR + 1.30%. 4. The Company has a total capacity of $1.0 billion available under its unsecured revolving credit facility, up to $250.0 million of which can be used for borrowings in pounds sterling or Canadian dollars. 5. On October 20, 2022, the Company made an $85.0 million repayment on this facility. 6. Includes the option to extend the initial maturity date of December 21, 2025 twice for an additional six-month term each. 7. An amount equal to the net proceeds from the 5.95% Registered senior notes has been allocated to new or existing eligible green projects. 8. Includes the option to extend the initial maturity date of August 9, 2023 three times for an additional one-year term each. 9. The Company owns 51% of the ownership interests in the consolidated joint venture that owns the Hollywood Media Portfolio. The joint venture holds a $1.1 billion mortgage loan secured by the Hollywood Media Portfolio. The Company purchased bonds comprising the loan in the amount of $209.8 million. 10. The interest rate on a portion of the outstanding loan balance has been effectively fixed through the use of an interest rate swap under the first payments approach. As of September 30, 2022, the LIBOR component of the interest rate was fixed at 1.43% with respect to $125.0 million of the loan secured by the Hollywood Media Portfolio. Additionally, the interest on the full principal amount has been effectively capped at 4.49% (3.50% strike rate + 0.99% spread) per annum through the use of an interest rate cap. 11. The Company has the ability to draw up to $414.6 million under the construction loan secured by the One Westside and 10850 Pico properties. 12. Includes the option to extend the initial maturity date of December 18, 2023 twice for an additional six-month term each. 13. The Company owns 55% of the ownership interests in the consolidated joint venture that owns the 1918 Eighth property. The full amount of the loan is shown. This loan is interest-only through its term. 14. The Company owns 55% of the ownership interests 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. 15. Excludes deferred financing costs related to establishing the Company’s unsecured revolving credit facility, which are reflected in prepaid expenses and other assets, net on the Consolidated Balance Sheets. See Note 9 for details. 16. The Company owns 75% of the ownership interests in the joint venture that owns the One Westside and 10850 Pico properties. The full amount of the loan is shown. Monthly debt service includes debt amortization payments based on a 10-year amortization schedule with a balloon payment at maturity. 17. This amount relates to debt attributable to Allianz U.S. Private REIT LP (“Allianz”), the Company’s partner in the joint venture that owns the Ferry Building property. |
Schedule of Maturities of Long-Term Debt | The following table provides information regarding the Company’s future minimum principal payments due on the Company’s debt (after the impact of extension options, if applicable) as of September 30, 2022: Year Unsecured and Secured Debt Joint Venture Partner Debt Remaining 2022 $ — $ — 2023 320,000 — 2024 273,089 — 2025 741,300 — 2026 1,335,186 — Thereafter 1,807,000 66,136 TOTAL $ 4,476,575 $ 66,136 |
Summary of Existing Covenants and their Covenant Levels | The following table summarizes existing covenants and their covenant levels as of September 30, 2022 related to our unsecured revolving credit facility, term loans and note purchase agreements, when considering the most restrictive terms: Covenant Ratio Covenant Level Actual Performance Total liabilities to total asset value ≤ 60% 44.1% Unsecured indebtedness to unencumbered asset value ≤ 60% 44.3% Adjusted EBITDA to fixed charges ≥ 1.5x 3.3x Secured indebtedness to total asset value ≤ 45% 19.6% Unencumbered NOI to unsecured interest expense ≥ 2.0x 3.0x The following table summarizes existing covenants and their covenant levels related to the registered senior notes as of September 30, 2022: Covenant Ratio (1) Covenant Level Actual Performance Debt to total assets ≤ 60% 46.2% Total unencumbered assets to unsecured debt ≥ 150% 229.8% Consolidated income available for debt service to annual debt service charge ≥ 1.5x 3.3x Secured debt to total assets ≤ 45% 20.2% _________________ 1. The covenant and actual performance metrics above represent terms and definitions reflected in the indentures governing the 3.25% Senior Notes, 3.95% Senior Notes, 4.65% Senior Notes and 5.95% Senior Notes. |
Reconciliation of Gross Interest Expense and Interest Expense | The following table represents a reconciliation from gross interest expense to the interest expense on the Consolidated Statements of Operations: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Gross interest expense (1) $ 38,595 $ 33,912 $ 103,242 $ 101,341 Capitalized interest (4,797) (5,760) (11,674) (17,049) Amortization of deferred financing costs and loan discounts/premiums 3,463 2,673 10,248 7,508 INTEREST EXPENSE $ 37,261 $ 30,825 $ 101,816 $ 91,800 _________________ 1. Includes interest on the Company’s debt and hedging activities. |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table summarizes the Company’s derivative instruments as of September 30, 2022 and December 31, 2021: Interest Rate Range (1) Fair Value Assets (Liabilities) Underlying Debt Instrument Number of Derivatives Notional Amount Effective Date Maturity Date Low High September 30, 2022 December 31, 2021 Interest rate swaps Hollywood Media Portfolio (2)(3) 2 $ 350,000 April 2015 April 2022 2.96% 3.46% $ — $ (1,413) Hollywood Media Portfolio (2)(3) 1 125,000 June 2016 November 2022 2.63% 3.13% 304 (1,122) Interest rate cap Strike rate Hollywood Media Portfolio (4) 1 1,100,000 August 2021 August 2023 3.50% 8,497 368 TOTAL $ 8,801 $ (2,167) _____________ 1. The rate is based on the fixed rate from the swap and the spread based on the operating partnership’s leverage ratio. 2. The swaps were designated under the first payments approach within hedge accounting, where the Company elected to designate a cash flow (LIBOR-based interest payments) instead of a specific piece of debt. 3. These derivatives were designated as effective cash flow hedges for accounting purposes. |
Future Minimum Rents and Leas_2
Future Minimum Rents and Lease Payments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Future Minimum Base Rents Receivable | The following table summarizes the future minimum base rents (excluding tenant reimbursements for operating expenses and termination fees related to tenants exercising early termination options) for properties as of September 30, 2022: Year Ended Non-cancellable Subject to Early Termination Options Total (1) Remaining 2022 $ 161,060 $ 35 $ 161,095 2023 633,820 1,905 635,725 2024 583,517 4,560 588,077 2025 443,584 40,697 484,281 2026 378,315 54,272 432,587 Thereafter 1,412,518 188,362 1,600,880 TOTAL $ 3,612,814 $ 289,831 $ 3,902,645 _____________ 1. Excludes rents under leases at the Company’s studio properties with terms of one year or less. |
Future Minimum Lease Payments Due | The following table provides information regarding the Company’s future minimum lease payments for its operating leases (including the impact of the extension options which the Company is reasonably certain to exercise) as of September 30, 2022: Year Lease Payments (1) Remaining 2022 $ 9,541 2023 38,525 2024 38,297 2025 38,193 2026 36,745 Thereafter 585,373 Total operating lease payments 746,674 Less: interest portion (350,262) PRESENT VALUE OF OPERATING LEASE LIABILITIES $ 396,412 _____________ 1. Future minimum lease payments for operating leases denominated in a foreign currency are translated to U.S. dollars using the exchange rate in effect as of the financial statement date. |
Rental Expense | The following table summarizes rental expense for operating leases: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Variable rental expense $ 1,219 $ 2,765 $ 7,316 $ 7,873 Minimum rental expense $ 7,841 $ 5,421 $ 20,122 $ 15,963 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities, Recurring | The Company’s financial assets and liabilities measured and reported at fair value on a recurring basis include the following as of: September 30, 2022 December 31, 2021 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Interest rate derivative assets (1) $ — $ 8,801 $ — $ 8,801 $ — $ 368 $ — $ 368 Interest rate derivative liabilities (2) $ — $ — $ — $ — $ — $ (2,535) $ — $ (2,535) Non-real estate investments measured at fair value (1) $ 533 $ — $ — $ 533 $ 1,915 $ 1,568 $ — $ 3,483 Stock purchase warrant (1) $ — $ 113 $ — $ 113 $ — $ 1,664 $ — $ 1,664 Earnout liability (2)(3) $ — $ — $ (9,300) $ (9,300) $ — $ — $ (11,383) $ (11,383) Non-real estate investments measured at NAV (1)(4) $ — $ — $ — $ 46,000 $ — $ — $ — $ 27,964 ___________ 1. Included in prepaid expenses and other assets, net on the Consolidated Balance Sheets. 2. Included in accounts payable, accrued liabilities and other on the Consolidated Balance Sheets. 3. Related to the acquisition of Zio. Refer to Note 3 for additional details. 4. According to the relevant accounting standards, certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Consolidated Balance Sheets. |
Fair Value Measurements, Recurring and Nonrecurring | The table below represents the carrying value and fair value of the Company’s investment in securities and debt as of: September 30, 2022 December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value ASSETS U.S. Government securities $ — $ — $ 129,321 $ 130,910 LIABILITIES Unsecured debt (1) $ 2,570,000 $ 2,332,902 $ 2,050,000 $ 2,154,908 Secured debt (1) $ 1,906,575 $ 1,883,357 $ 1,714,874 $ 1,713,726 In-substance defeased debt $ — $ — $ 128,212 $ 128,361 Joint venture partner debt $ 66,136 $ 60,997 $ 66,136 $ 69,116 _________________ 1. Amounts represent debt excluding unamortized deferred financing costs and loan discounts/premiums. |
Fair Value, Liabilities Measured on Recurring Basis | The following table summarizes changes in the carrying amount of the earnout liability during the nine months ended September 30, 2022: Balance, December 31, 2021 $ (11,383) Partial settlement 3,840 Remeasurement to fair value (1,757) Balance, September 30, 2022 $ (9,300) |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation Related to Company's Awards | 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, 2022 2021 2022 2021 Expensed stock compensation (1) $ 6,494 $ 5,840 $ 17,816 $ 15,718 Capitalized stock compensation (2) 894 771 2,683 2,659 TOTAL STOCK COMPENSATION (3) $ 7,388 $ 6,611 $ 20,499 $ 18,377 _________________ 1. Amounts are recorded in general and administrative expenses on the Consolidated Statements of Operations. 2. Amounts are recorded in investment in real estate, at cost on the Consolidated Balance Sheets. 3. Amounts are recorded in additional paid-in capital and non-controlling interest—units in the operating partnership on the Consolidated Balance Sheets. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share | The following table reconciles the numerator and denominator in computing the Company’s basic and diluted earnings per share to net loss available to common stockholders: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Basic and diluted net loss available to common stockholders $ (17,286) $ (9,295) $ (44,515) $ (1,998) Denominator: Basic weighted average common shares outstanding 141,117,194 152,320,252 144,677,652 151,443,305 Effect of dilutive instruments (1)(2) — — — — DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 141,117,194 152,320,252 144,677,652 151,443,305 Basic earnings per common share $ (0.12) $ (0.06) $ (0.31) $ (0.01) Diluted earnings per common share $ (0.12) $ (0.06) $ (0.31) $ (0.01) ________________ 1. The Company includes unvested awards and convertible common and participating units as contingently issuable shares in the computation of diluted earnings per share once the market or performance 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. 2. The Company includes the dilutive effect of the forward sale component of its accelerated share repurchase agreements in the computation of diluted earnings per share. The following table reconciles the numerator and denominator in computing the operating partnership’s basic and diluted earnings per unit to net loss available to common unitholders: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Numerator: Basic and diluted net loss available to common unitholders $ (17,511) $ (9,380) $ (45,063) $ (2,014) Denominator: Basic weighted average common units outstanding 142,963,458 153,701,876 146,523,102 152,818,720 Effect of dilutive instruments (1)(2) — — — — DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING 142,963,458 153,701,876 146,523,102 152,818,720 Basic earnings per common unit $ (0.12) $ (0.06) $ (0.31) $ (0.01) Diluted earnings per common unit $ (0.12) $ (0.06) $ (0.31) $ (0.01) ________________ 1. The operating partnership includes unvested awards as contingently issuable units in the computation of diluted earnings per unit once the market or performance 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 unit calculation. 2. The Company includes the dilutive effect of the forward sale component of its accelerated share repurchase agreements in the computation of diluted earnings per unit. |
Redeemable Non-Controlling In_2
Redeemable Non-Controlling Interest (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Temporary Equity Disclosure [Abstract] | |
Non-controlling Interests | The following table reconciles the beginning and ending balances of redeemable non-controlling interests: Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Series A Redeemable Preferred Units Consolidated Real Estate Entities Series A Redeemable Preferred Units Consolidated Real Estate Entities BEGINNING OF PERIOD $ 9,815 $ 126,420 $ 9,815 $ 129,449 Contributions — 200 — 575 Distributions — — — (8) Declared dividend (153) — (459) — Net income (loss) 153 (1,037) 459 (4,433) END OF PERIOD $ 9,815 $ 125,583 $ 9,815 $ 125,583 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below presents the activity related to Hudson Pacific Properties, Inc.’s accumulated other comprehensive loss (“OCI”): Derivative Instruments Currency Translation Adjustments Total Accumulated Other Comprehensive Loss BALANCE AT DECEMBER 31, 2021 $ (3,957) $ 2,196 $ (1,761) Unrealized gains (losses) recognized in OCI 9,039 (18,177) (9,138) Reclassification from OCI into income (1) (6,167) — (6,167) Net change in OCI 2,872 (18,177) (15,305) BALANCE AT SEPTEMBER 30, 2022 $ (1,085) $ (15,981) $ (17,066) _____________ 1. The gains and losses on the Company’s derivative instruments classified as hedges are reported in interest expense on the Consolidated Statements of Operations. The table below presents the activity related to Hudson Pacific Properties, L.P.’s OCI: Derivative Instruments Currency Translation Adjustments Total Accumulated Other Comprehensive Loss BALANCE AT DECEMBER 31, 2021 $ (3,954) $ 2,175 $ (1,779) Unrealized gains (losses) recognized in OCI 9,200 (18,501) (9,301) Reclassification from OCI into income (1) (6,277) — (6,277) Net change in OCI 2,923 (18,501) (15,578) BALANCE AT SEPTEMBER 30, 2022 $ (1,031) $ (16,326) $ (17,357) _____________ 1. The gains and losses on the operating partnership’s derivative instruments classified as hedges are reported in interest expense on the Consolidated Statements of Operations. |
Schedule of Other Ownership Interests | The following table summarizes the ownership interest in the operating partnership, excluding unvested restricted units and unvested restricted performance units, as of: September 30, 2022 December 31, 2021 Company-owned common units in the operating partnership 140,923,320 151,124,543 Company’s ownership interest percentage 98.7 % 98.8 % Non-controlling common units in the operating partnership (1) 1,846,264 1,842,898 Non-controlling ownership interest percentage 1.3 % 1.2 % _________________ 1. Represents common units held by certain of the Company’s executive officers, directors and other outside investors. As of September 30, 2022, this amount represents both common units and performance units of 550,969 and 1,295,295, respectively. As of December 31, 2021, this amount represents both common units and performance units in the amount of 550,969 and 1,291,929, respectively. |
Schedule of Dividends | The following table summarizes dividends per share declared and paid for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Common stock $ 0.25 $ 0.25 $ 0.75 $ 0.75 Common units $ 0.25 $ 0.25 $ 0.75 $ 0.75 Series A preferred units $ 0.3906 $ 0.3906 $ 1.1718 $ 1.1718 Series C preferred stock (1) $ 0.2968750 $ — $ 1.0390625 $ — Performance units $ 0.25 $ 0.25 $ 0.75 $ 0.75 Payment date September 29, 2022 September 30, 2021 N/A N/A Record date September 19, 2022 September 20, 2021 N/A N/A _________________ 1. Dividends paid during the nine months ended September 30, 2022 include a $0.2968750 per share dividend declared and paid in each of the first, second and third quarters of 2022 and a $0.1484375 per share dividend declared during the fourth quarter of 2021. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The table below presents the operating activity of the Company’s reportable segments: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Office segment Office revenues $ 213,491 $ 201,866 $ 641,135 $ 589,712 Office expenses (78,340) (71,865) (230,529) (207,538) Office segment profit 135,151 130,001 410,606 382,174 Studio segment Studio revenues 46,863 25,766 115,162 66,641 Studio expenses (26,688) (12,044) (66,357) (35,963) Studio segment profit 20,175 13,722 48,805 30,678 TOTAL SEGMENT PROFIT $ 155,326 $ 143,723 $ 459,411 $ 412,852 Segment revenues $ 260,354 $ 227,632 $ 756,297 $ 656,353 Segment expenses (105,028) (83,909) (296,886) (243,501) TOTAL SEGMENT PROFIT $ 155,326 $ 143,723 $ 459,411 $ 412,852 The table below is a reconciliation of the total profit from all segments to net income: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 NET (LOSS) INCOME $ (6,792) $ (6,182) $ (10,861) $ 12,259 General and administrative 19,795 18,288 62,178 53,846 Depreciation and amortization 93,070 88,568 276,701 255,507 Loss (income) from unconsolidated real estate entities 352 (566) (1,731) (1,671) Fee income (911) (678) (3,122) (2,323) Interest expense 37,261 30,825 101,816 91,800 Interest income (196) (934) (2,026) (2,868) Management services reimbursement income—unconsolidated real estate entities (983) (253) (3,159) (879) Management services expense—unconsolidated real estate entities 983 253 3,159 879 Transaction-related expenses 9,331 6,300 10,713 7,364 Unrealized loss (gain) on non-real estate investments 894 (827) 1,062 (11,620) Loss on sale of real estate 180 — 180 — Impairment loss 4,795 2,762 28,548 2,762 Loss on extinguishment of debt — 6,249 — 6,249 Other (income) expense (2,453) (82) (4,047) 1,547 TOTAL PROFIT FROM ALL SEGMENTS $ 155,326 $ 143,723 $ 459,411 $ 412,852 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash Flow, Supplemental Information | Supplemental cash flow information for Hudson Pacific Properties, Inc. is included as follows: Nine Months Ended September 30, 2022 2021 Cash paid for interest, net of capitalized interest $ 68,821 $ 74,381 Non-cash investing and financing activities Accounts payable and accrued liabilities for real estate investments $ 181,689 $ 136,661 Ground lease remeasurement $ 23,177 $ — Note payable issued as consideration in a business combination $ 160,000 $ — Earnout liability recognized as contingent consideration for business combination $ — $ 22,800 Lease liabilities recorded in connection with right-of-use assets $ 94,447 $ 13,881 Supplemental cash flow information for Hudson Pacific Properties, L.P. is included as follows: Nine Months Ended September 30, 2022 2021 Cash paid for interest, net of capitalized interest $ 68,821 $ 74,381 Non-cash investing and financing activities Accounts payable and accrued liabilities for real estate investments $ 181,689 $ 136,661 Ground lease remeasurement $ 23,177 $ — Note payable issued as consideration in a business combination $ 160,000 $ — Earnout liability recognized as contingent consideration for business combination $ — $ 22,800 Lease liabilities recorded in connection with right-of-use assets $ 94,447 $ 13,881 |
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 for Hudson Pacific Properties, Inc: Nine Months Ended September 30, 2022 2021 BEGINNING OF PERIOD Cash and cash equivalents $ 96,555 $ 113,686 Restricted cash 100,321 35,854 TOTAL $ 196,876 $ 149,540 END OF PERIOD Cash and cash equivalents $ 161,667 $ 110,500 Restricted cash 42,401 109,737 TOTAL $ 204,068 $ 220,237 The following table provides a reconciliation of cash and cash equivalents and restricted cash at the beginning and end of the periods presented for Hudson Pacific Properties, L.P.: Nine Months Ended September 30, 2022 2021 BEGINNING OF PERIOD Cash and cash equivalents $ 96,555 $ 113,686 Restricted cash 100,321 35,854 TOTAL $ 196,876 $ 149,540 END OF PERIOD Cash and cash equivalents $ 161,667 $ 110,500 Restricted cash 42,401 109,737 TOTAL $ 204,068 $ 220,237 |
Schedule of 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 for Hudson Pacific Properties, Inc: Nine Months Ended September 30, 2022 2021 BEGINNING OF PERIOD Cash and cash equivalents $ 96,555 $ 113,686 Restricted cash 100,321 35,854 TOTAL $ 196,876 $ 149,540 END OF PERIOD Cash and cash equivalents $ 161,667 $ 110,500 Restricted cash 42,401 109,737 TOTAL $ 204,068 $ 220,237 The following table provides a reconciliation of cash and cash equivalents and restricted cash at the beginning and end of the periods presented for Hudson Pacific Properties, L.P.: Nine Months Ended September 30, 2022 2021 BEGINNING OF PERIOD Cash and cash equivalents $ 96,555 $ 113,686 Restricted cash 100,321 35,854 TOTAL $ 196,876 $ 149,540 END OF PERIOD Cash and cash equivalents $ 161,667 $ 110,500 Restricted cash 42,401 109,737 TOTAL $ 204,068 $ 220,237 |
Organization (Details)
Organization (Details) | Sep. 30, 2022 ft² property | Jul. 29, 2021 |
Real Estate Properties | ||
Number of properties | property | 65 | |
Square Feet | ft² | 21,169,331 | |
Consolidated portfolio | ||
Real Estate Properties | ||
Number of properties | property | 61 | |
Square Feet | ft² | 17,801,041 | |
Consolidated portfolio | Office | ||
Real Estate Properties | ||
Number of properties | property | 52 | |
Square Feet | ft² | 14,543,539 | |
Consolidated portfolio | Studio | ||
Real Estate Properties | ||
Number of properties | property | 4 | |
Square Feet | ft² | 1,291,260 | |
Consolidated portfolio | Land | ||
Real Estate Properties | ||
Number of properties | property | 5 | |
Square Feet | ft² | 1,966,242 | |
Unconsolidated portfolio | ||
Real Estate Properties | ||
Number of properties | property | 4 | |
Square Feet | ft² | 3,368,290 | |
Unconsolidated portfolio | Bentall Centre | ||
Real Estate Properties | ||
Joint venture, ownership percentage | 20% | |
Unconsolidated portfolio | Joint Venture Sunset Glenoaks Studios Property | ||
Real Estate Properties | ||
Joint venture, ownership percentage | 50% | |
Unconsolidated portfolio | Sunset Waltham Cross Studios | ||
Real Estate Properties | ||
Joint venture, ownership percentage | 35% | 35% |
Unconsolidated portfolio | Office | ||
Real Estate Properties | ||
Number of properties | property | 1 | |
Square Feet | ft² | 1,509,943 | |
Unconsolidated portfolio | Studio | ||
Real Estate Properties | ||
Number of properties | property | 1 | |
Square Feet | ft² | 241,000 | |
Unconsolidated portfolio | Land | ||
Real Estate Properties | ||
Number of properties | property | 2 | |
Square Feet | ft² | 1,617,347 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narratives (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) jointVenture segment unit | Sep. 30, 2021 USD ($) | Aug. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Variable Interest Entity | ||||||
Weighted average incremental borrowing rate | 5.60% | 5.60% | ||||
Weighted average remaining lease term (in years) | 23 years | 23 years | ||||
Number of operating segments | segment | 3 | |||||
Goodwill | $ 261,139,000 | $ 261,139,000 | $ 109,439,000 | |||
Goodwill impairment | $ 0 | $ 0 | 0 | $ 0 | ||
Quixote | ||||||
Variable Interest Entity | ||||||
Goodwill | $ 151,667,000 | |||||
Acquisitions | $ 151,700,000 | |||||
Minimum | ||||||
Variable Interest Entity | ||||||
Finite-lived intangible assets useful life (years) | 5 years | |||||
Maximum | ||||||
Variable Interest Entity | ||||||
Finite-lived intangible assets useful life (years) | 7 years | |||||
Studio | ||||||
Variable Interest Entity | ||||||
Number of reporting units | unit | 2 | |||||
VIE, primary beneficiary | ||||||
Variable Interest Entity | ||||||
Number of joint ventures meeting VIE definition | jointVenture | 19 | |||||
Number of joint ventures consolidated | jointVenture | 13 | |||||
VIE, not primary beneficiary | ||||||
Variable Interest Entity | ||||||
Number of joint ventures not consolidated | jointVenture | 6 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Consolidated Joint Ventures (Details) - VIE, primary beneficiary | 9 Months Ended |
Sep. 30, 2022 | |
1455 Market | |
Variable Interest Entity | |
VIE, ownership Interest | 55% |
Hill7 | |
Variable Interest Entity | |
VIE, ownership Interest | 55% |
One Westside and 10850 Pico | |
Variable Interest Entity | |
VIE, ownership Interest | 75% |
Ferry Building | |
Variable Interest Entity | |
VIE, ownership Interest | 55% |
Sunset Bronson Studios, ICON, CUE | |
Variable Interest Entity | |
VIE, ownership Interest | 51% |
Sunset Gower Entertainment Properties, LLC | |
Variable Interest Entity | |
VIE, ownership Interest | 51% |
Sunset 1440 North Gower Street, LLC | |
Variable Interest Entity | |
VIE, ownership Interest | 51% |
Sunset Las Palmas Studios, Harlow | |
Variable Interest Entity | |
VIE, ownership Interest | 51% |
Sunset Services Holdings, LLC | |
Variable Interest Entity | |
VIE, ownership Interest | 51% |
EPIC | |
Variable Interest Entity | |
VIE, ownership Interest | 51% |
Hudson Media And Entertainment Management | |
Variable Interest Entity | |
VIE, ownership Interest | 51% |
6040 Sunset | |
Variable Interest Entity | |
VIE, ownership Interest | 51% |
1918 Eighth | |
Variable Interest Entity | |
VIE, ownership Interest | 55% |
Sunset Bronson Services, LLC, Sunset Gower Services, LLC and Sunset Las Palmas Services, LLC | Sunset Services Holdings, LLC | |
Variable Interest Entity | |
VIE, ownership Interest | 100% |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Revenue Streams (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Disaggregation of Revenue | |||||
Management fee income | $ 911 | $ 678 | $ 3,122 | $ 2,323 | |
Management services reimbursement income | 983 | 253 | 3,159 | 879 | |
Hudson Pacific Partners L.P. | |||||
Disaggregation of Revenue | |||||
Management fee income | 911 | 678 | 3,122 | 2,323 | |
Management services reimbursement income | 983 | 253 | 3,159 | 879 | |
Ancillary revenues | |||||
Disaggregation of Revenue | |||||
Service and other revenues | 29,854 | 12,224 | 68,817 | 26,857 | |
Receivables | 16,890 | 16,890 | $ 7,381 | ||
Other revenues | |||||
Disaggregation of Revenue | |||||
Service and other revenues | 5,925 | 4,281 | 17,129 | 11,246 | |
Receivables | 1,241 | 1,241 | $ 1,078 | ||
Studio-related tenant recoveries | |||||
Disaggregation of Revenue | |||||
Service and other revenues | $ 491 | $ 418 | $ 1,407 | $ 1,424 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 14 Months Ended | ||||||
Aug. 31, 2022 | Aug. 31, 2021 | Aug. 16, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | |
Business Combination | |||||||||
Goodwill | $ 261,139,000 | $ 261,139,000 | $ 261,139,000 | $ 109,439,000 | |||||
Acquisition related costs | 9,331,000 | $ 6,300,000 | 10,713,000 | $ 7,364,000 | |||||
Quixote | |||||||||
Business Combination | |||||||||
Business acquisition, equity and voting interests acquired | 100% | ||||||||
Intangible assets | $ 76,900,000 | ||||||||
Weighted-average amortization period (in years) | 7 years | ||||||||
Goodwill | $ 151,667,000 | ||||||||
Change in goodwill | 0 | ||||||||
Acquisition related costs | $ 7,100,000 | $ 7,100,000 | |||||||
Quixote | Maximum | |||||||||
Business Combination | |||||||||
Contingent consideration | $ 35,000,000 | ||||||||
Quixote | Trade name | |||||||||
Business Combination | |||||||||
Intangible assets | 28,600,000 | ||||||||
Quixote | Customer Relationships And Non-Compete Agreements | |||||||||
Business Combination | |||||||||
Intangible assets | 48,300,000 | ||||||||
Quixote | Customer relationships | |||||||||
Business Combination | |||||||||
Intangible assets | $ 45,400,000 | ||||||||
Weighted-average amortization period (in years) | 7 years | ||||||||
Quixote | Non-competition agreements | |||||||||
Business Combination | |||||||||
Intangible assets | $ 2,900,000 | ||||||||
Weighted-average amortization period (in years) | 5 years | ||||||||
Zio | |||||||||
Business Combination | |||||||||
Business acquisition, equity and voting interests acquired | 100% | ||||||||
Contingent consideration | $ 22,543,000 | ||||||||
Payments for business combination | $ 15,000,000 | ||||||||
Intangible assets | $ 41,670,000 | ||||||||
Weighted-average amortization period (in years) | 7 years | ||||||||
Goodwill | $ 70,576,000 | ||||||||
Acquisition related costs | 3,400,000 | 3,400,000 | |||||||
Zio | Trade name | |||||||||
Business Combination | |||||||||
Intangible assets | 8,500,000 | ||||||||
Zio | Customer Relationships And Non-Compete Agreements | |||||||||
Business Combination | |||||||||
Intangible assets | 33,200,000 | ||||||||
Zio | Customer relationships | |||||||||
Business Combination | |||||||||
Intangible assets | $ 30,000,000 | ||||||||
Weighted-average amortization period (in years) | 7 years | ||||||||
Zio | Non-competition agreements | |||||||||
Business Combination | |||||||||
Intangible assets | $ 3,000,000 | ||||||||
Weighted-average amortization period (in years) | 5 years | ||||||||
Star Waggons | |||||||||
Business Combination | |||||||||
Business acquisition, equity and voting interests acquired | 100% | ||||||||
Contingent consideration | $ 0 | ||||||||
Intangible assets | $ 33,480,000 | ||||||||
Weighted-average amortization period (in years) | 7 years | ||||||||
Goodwill | $ 30,109,000 | ||||||||
Acquisition related costs | $ 2,400,000 | $ 2,400,000 | |||||||
Star Waggons | Trade name | |||||||||
Business Combination | |||||||||
Intangible assets | 8,600,000 | ||||||||
Star Waggons | Customer Relationships And Non-Compete Agreements | |||||||||
Business Combination | |||||||||
Intangible assets | 24,900,000 | ||||||||
Star Waggons | Customer relationships | |||||||||
Business Combination | |||||||||
Intangible assets | $ 22,500,000 | ||||||||
Weighted-average amortization period (in years) | 7 years | ||||||||
Star Waggons | Non-competition agreements | |||||||||
Business Combination | |||||||||
Intangible assets | $ 2,300,000 | ||||||||
Weighted-average amortization period (in years) | 5 years |
Business Combinations - Conside
Business Combinations - Consideration Transferred (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Aug. 31, 2022 | Aug. 31, 2021 | Aug. 16, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Combination | |||||
Cash | $ 197,862 | $ 209,854 | |||
Seller note payable | $ 160,000 | $ 0 | |||
Quixote | |||||
Business Combination | |||||
Cash | $ 197,862 | ||||
Seller note payable | 160,000 | ||||
Total consideration | $ 357,862 | ||||
Zio | |||||
Business Combination | |||||
Cash | $ 117,198 | ||||
Total consideration | $ 139,741 | ||||
Star Waggons | |||||
Business Combination | |||||
Cash | $ 92,656 | ||||
Total consideration | $ 92,656 |
Business Combinations - Fair Va
Business Combinations - Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Aug. 31, 2022 | Dec. 31, 2021 | Aug. 31, 2021 | Aug. 16, 2021 |
Business Combination | |||||
Goodwill | $ 261,139 | $ 109,439 | |||
Quixote | |||||
Business Combination | |||||
Cash and cash equivalents | $ 5,780 | ||||
Accounts receivable | 7,238 | ||||
Prepaid expenses and other assets | 3,788 | ||||
Investment in real estate | 47,741 | ||||
Non-real estate property, plant and equipment | 65,939 | ||||
Intangible assets | 76,900 | ||||
Right-of-use assets | 103,579 | ||||
Total assets acquired | 310,965 | ||||
Accounts payable, accrued liabilities and other | 12,700 | ||||
Lease liabilities | 92,070 | ||||
Total liabilities assumed | 104,770 | ||||
Net identifiable assets acquired | 206,195 | ||||
Goodwill | 151,667 | ||||
NET ASSETS ACQUIRED | $ 357,862 | ||||
Zio | |||||
Business Combination | |||||
Cash and cash equivalents | $ 1,084 | ||||
Accounts receivable | 3,001 | ||||
Prepaid expenses and other assets | 1,509 | ||||
Non-real estate property, plant and equipment | 23,399 | ||||
Intangible assets | 41,670 | ||||
Total assets acquired | 70,663 | ||||
Accounts payable, accrued liabilities and other | 1,498 | ||||
Intangible liabilities | 0 | ||||
Total liabilities assumed | 1,498 | ||||
Net identifiable assets acquired | 69,165 | ||||
Goodwill | 70,576 | ||||
NET ASSETS ACQUIRED | $ 139,741 | ||||
Star Waggons | |||||
Business Combination | |||||
Cash and cash equivalents | $ 300 | ||||
Accounts receivable | 4,185 | ||||
Prepaid expenses and other assets | 1,605 | ||||
Non-real estate property, plant and equipment | 25,000 | ||||
Intangible assets | 33,480 | ||||
Total assets acquired | 64,570 | ||||
Accounts payable, accrued liabilities and other | 1,913 | ||||
Intangible liabilities | 110 | ||||
Total liabilities assumed | 2,023 | ||||
Net identifiable assets acquired | 62,547 | ||||
Goodwill | 30,109 | ||||
NET ASSETS ACQUIRED | $ 92,656 |
Business Combinations- Statemen
Business Combinations- Statements of Operations (Details) - Quixote - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Business Combination | ||
Revenue | $ 8,852 | $ 8,852 |
Net income | $ 1,257 | $ 1,257 |
Investment in Real Estate (Deta
Investment in Real Estate (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Real Estate [Abstract] | ||
Land | $ 1,397,714 | $ 1,313,385 |
Building and improvements | 6,305,120 | 6,241,254 |
Tenant improvements | 868,750 | 786,991 |
Furniture and fixtures | 9,600 | 14,020 |
Property under development | 75,750 | 5,827 |
INVESTMENT IN REAL ESTATE, AT COST | $ 8,656,934 | $ 8,361,477 |
Investment in Real Estate - Nar
Investment in Real Estate - Narrative (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||
Jul. 15, 2022 USD ($) a | May 19, 2022 USD ($) | Apr. 27, 2022 USD ($) | Aug. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) property | Sep. 30, 2021 USD ($) property | Dec. 31, 2021 property | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Impairment loss | $ 4,795 | $ 2,762 | $ 28,548 | $ 2,762 | |||||
Proceeds from sale of real estate | $ 44,537 | $ 0 | |||||||
Number of dispositions | property | 0 | 0 | |||||||
Number of properties | property | 65 | 65 | |||||||
Held-for-sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Number of properties | property | 2 | 2 | 4 | ||||||
Washington 1000 | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Total purchase price | $ 85,600 | ||||||||
Sunset Gower Studios Land | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Total purchase price | $ 22,000 | ||||||||
5801 Bobby Foster Road | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Total purchase price | $ 8,000 | ||||||||
Land site purchased (in acre) | a | 29 | ||||||||
Del Amo Office | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Impairment loss | $ 200 | $ 13,000 | |||||||
Proceeds from sale of real estate | $ 2,800 | ||||||||
Northview Center | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Impairment loss | 1,500 | 1,500 | |||||||
Proceeds from sale of real estate | $ 46,000 | ||||||||
6922 Hollywood | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Impairment loss | 3,100 | 3,100 | |||||||
6922 Hollywood | Held-for-sale | |||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||||||
Investment in real estate, fair value | $ 96,000 | $ 96,000 |
Investment in Real Estate- Purc
Investment in Real Estate- Purchase Price Of Accounting (Details) - USD ($) $ in Thousands | Jul. 15, 2022 | May 19, 2022 | Apr. 27, 2022 |
Washington 1000 | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | $ 86,313 | ||
Washington 1000 | Land | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | 59,987 | ||
Washington 1000 | Building and improvements | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | 11,053 | ||
Washington 1000 | Parking easement | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | $ 15,273 | ||
Sunset Gower Studios Land | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | $ 22,156 | ||
Sunset Gower Studios Land | Land | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | 22,156 | ||
Sunset Gower Studios Land | Building and improvements | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | 0 | ||
Sunset Gower Studios Land | Parking easement | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | $ 0 | ||
5801 Bobby Foster Road | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | $ 8,457 | ||
5801 Bobby Foster Road | Land | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | 2,189 | ||
5801 Bobby Foster Road | Building and improvements | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | 6,268 | ||
5801 Bobby Foster Road | Parking easement | |||
Real Estate Properties | |||
TOTAL ACQUISITION COST | $ 0 |
Investment in Real Estate- Disp
Investment in Real Estate- Dispositions of Real Estate Properties (Details) - Disposed of by Sale $ in Millions | 9 Months Ended | ||
Aug. 30, 2022 USD ($) ft² | Aug. 05, 2022 USD ($) ft² | Sep. 30, 2022 USD ($) ft² | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||
Area of real estate property (in square feet) | ft² | 292,985 | ||
Sales price | $ | $ 48.8 | ||
Del Amo | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||
Area of real estate property (in square feet) | ft² | 113,000 | ||
Sales price | $ | $ 2.8 | ||
Northview Center | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||
Area of real estate property (in square feet) | ft² | 179,985 | ||
Sales price | $ | $ 46 |
Investment in Real Estate - Rea
Investment in Real Estate - Real Estate Held-for-sale (Details) - Held-for-sale - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Northview Center | ||
ASSETS | ||
Investment in real estate, net | $ 40,338 | |
Accounts receivable, net | 95 | |
Straight-line rent receivables, net | 901 | |
Deferred leasing costs and intangible assets, net | 751 | |
Prepaid expenses and other assets, net | 0 | |
Assets associated with real estate held for sale | 42,085 | |
LIABILITIES | ||
Accounts payable, accrued liabilities and other | 184 | |
Intangible liabilities, net | 0 | |
Security deposits and prepaid rent | 395 | |
Liabilities associated with real estate held for sale | 579 | |
Skyway Landing | ||
ASSETS | ||
Investment in real estate, net | $ 90,899 | 89,873 |
Accounts receivable, net | 172 | 142 |
Straight-line rent receivables, net | 531 | 1,659 |
Deferred leasing costs and intangible assets, net | 501 | 450 |
Prepaid expenses and other assets, net | 26 | 0 |
Assets associated with real estate held for sale | 92,129 | 92,124 |
LIABILITIES | ||
Accounts payable, accrued liabilities and other | 575 | 273 |
Intangible liabilities, net | 0 | 0 |
Security deposits and prepaid rent | 369 | 1,205 |
Liabilities associated with real estate held for sale | 944 | 1,478 |
Del Amo | ||
ASSETS | ||
Investment in real estate, net | 15,213 | |
Accounts receivable, net | 0 | |
Straight-line rent receivables, net | 0 | |
Deferred leasing costs and intangible assets, net | 2,742 | |
Prepaid expenses and other assets, net | 0 | |
Assets associated with real estate held for sale | 17,955 | |
LIABILITIES | ||
Accounts payable, accrued liabilities and other | 12 | |
Intangible liabilities, net | 0 | |
Security deposits and prepaid rent | 0 | |
Liabilities associated with real estate held for sale | 12 | |
6922 Hollywood | ||
ASSETS | ||
Investment in real estate, net | 88,253 | 91,353 |
Accounts receivable, net | 48 | 103 |
Straight-line rent receivables, net | 4,440 | 4,714 |
Deferred leasing costs and intangible assets, net | 2,043 | 1,999 |
Prepaid expenses and other assets, net | 113 | 187 |
Assets associated with real estate held for sale | 94,897 | 98,356 |
LIABILITIES | ||
Accounts payable, accrued liabilities and other | 965 | 1,372 |
Intangible liabilities, net | 96 | 96 |
Security deposits and prepaid rent | 470 | 361 |
Liabilities associated with real estate held for sale | $ 1,531 | $ 1,829 |
Non-Real Estate Property, Pla_3
Non-Real Estate Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | $ 150,580 | $ 71,849 |
Accumulated depreciation | (22,076) | (13,380) |
Non-real estate property, plant and equipment, net | $ 128,504 | 58,469 |
Minimum | ||
Property, Plant and Equipment, Net | ||
Estimate useful life | 5 years | |
Maximum | ||
Property, Plant and Equipment, Net | ||
Estimate useful life | 20 years | |
Trailers | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | $ 64,178 | 35,181 |
Production equipment | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | 34,296 | 0 |
Trucks and other vehicles | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | 19,811 | 12,204 |
Leasehold improvements | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | 18,490 | 15,267 |
Other equipment | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | 6,838 | 4,605 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | $ 6,967 | $ 4,592 |
Investment in Unconsolidated _3
Investment in Unconsolidated Real Estate Entities- Schedule of Variable Interest Entities (Details) - VIE, not primary beneficiary - USD ($) $ in Millions | Sep. 30, 2022 | Jul. 29, 2021 |
Sunset Waltham Cross Studios | ||
Schedule of Equity Method Investments | ||
Joint venture, ownership percentage | 35% | 35% |
Sunset Glenoaks Studios | ||
Schedule of Equity Method Investments | ||
Joint venture, ownership percentage | 50% | |
Bentall Centre | ||
Schedule of Equity Method Investments | ||
Joint venture, ownership percentage | 20% | |
Bentall Centre | Financial guarantee | ||
Schedule of Equity Method Investments | ||
Maximum exposure for guarantee | $ 96.5 |
Investment in Unconsolidated _4
Investment in Unconsolidated Real Estate Entities - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Schedule of Equity Method Investments | ||
Investment in unconsolidated real estate entities | $ 154,144 | $ 154,731 |
Unconsolidated joint ventures | ||
Schedule of Equity Method Investments | ||
Investment in unconsolidated real estate entities | $ 200 | $ 100 |
Investment in Unconsolidated _5
Investment in Unconsolidated Real Estate Entities - Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
ASSETS | ||||||
Investment in real estate, net | $ 7,178,684 | $ 7,077,703 | ||||
TOTAL ASSETS | 9,320,419 | 8,990,189 | ||||
Liabilities | ||||||
Total liabilities | 5,392,691 | 4,653,933 | ||||
Total equity | 3,792,330 | $ 3,848,729 | 4,196,992 | $ 3,852,380 | $ 3,945,806 | $ 3,967,980 |
TOTAL LIABILITIES AND EQUITY | 9,320,419 | 8,990,189 | ||||
Equity method investment, nonconsolidated investee or group of investees | ||||||
ASSETS | ||||||
Investment in real estate, net | 1,011,495 | 1,048,593 | ||||
Other assets | 58,539 | 57,232 | ||||
TOTAL ASSETS | 1,070,034 | 1,105,825 | ||||
Liabilities | ||||||
Secured debt, net | 509,212 | 516,153 | ||||
Other liabilities | 45,410 | 40,307 | ||||
Total liabilities | 554,622 | 556,460 | ||||
Company's capital | 144,667 | 148,914 | ||||
Partner’s capital | 370,745 | 400,451 | ||||
Total equity | 515,412 | 549,365 | ||||
TOTAL LIABILITIES AND EQUITY | $ 1,070,034 | $ 1,105,825 |
Investment in Unconsolidated _6
Investment in Unconsolidated Real Estate Entities - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity Method Investment, Summarized Financial Information, Income Statement | ||||
TOTAL REVENUES | $ 260,354 | $ 227,632 | $ 756,297 | $ 656,353 |
Net (loss) income | (6,792) | (6,182) | (10,861) | 12,259 |
Equity method investment, nonconsolidated investee or group of investees | ||||
Equity Method Investment, Summarized Financial Information, Income Statement | ||||
TOTAL REVENUES | 18,515 | 20,694 | 64,962 | 60,121 |
TOTAL EXPENSES | 20,151 | 17,893 | 55,802 | 51,865 |
Net (loss) income | $ (1,636) | $ 2,801 | $ 9,160 | $ 8,256 |
Deferred Leasing Costs and In_3
Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net - Schedule of Finite-Lived Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | $ 405,434 | $ 341,444 |
INTANGIBLE LIABILITIES, NET | 35,758 | 42,290 |
Below-market leases | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Market leases | 59,670 | 75,827 |
Accumulated amortization | (24,668) | (34,326) |
INTANGIBLE LIABILITIES, NET | 35,002 | 41,501 |
Above-market ground leases | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Market leases | 1,095 | 1,095 |
Accumulated amortization | (339) | (306) |
INTANGIBLE LIABILITIES, NET | 756 | 789 |
Deferred leasing costs and in-place lease intangibles | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Deferred leasing costs and intangible assets, gross | 329,067 | 331,149 |
Accumulated amortization | (134,833) | (126,423) |
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 194,234 | 204,726 |
Below-market ground leases | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Deferred leasing costs and intangible assets, gross | 79,562 | 79,562 |
Accumulated amortization | (17,291) | (15,233) |
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 62,271 | 64,329 |
Above-market leases | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Deferred leasing costs and intangible assets, gross | 725 | 1,334 |
Accumulated amortization | (297) | (782) |
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 428 | 552 |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Deferred leasing costs and intangible assets, gross | 97,900 | 52,500 |
Accumulated amortization | (8,850) | (2,684) |
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 89,050 | 49,816 |
Non-competition agreements | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Deferred leasing costs and intangible assets, gross | 8,200 | 5,300 |
Accumulated amortization | (1,222) | (379) |
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 6,978 | 4,921 |
Trade name | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 37,200 | 17,100 |
Parking easement | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | $ 15,273 | $ 0 |
Deferred Leasing Costs and In_4
Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net - Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | $ 6,393 | $ 8,281 | ||
Customer relationships | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | $ (2,415) | $ (809) | (6,165) | (809) |
Non-competition agreements | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | (313) | (114) | (843) | (114) |
Below-market leases | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | 1,717 | 3,096 | 6,500 | 8,854 |
Above-market ground leases | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | 11 | 11 | 33 | 33 |
Leasing costs and in place lease intangibles | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | (9,450) | (11,540) | (29,657) | (34,761) |
Below-market ground leases | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | (698) | (600) | (2,075) | (1,797) |
Above-market leases | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | $ (16) | $ (73) | $ (107) | $ (573) |
Deferred Leasing Costs and In_5
Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net- Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Below-market ground leases | Del Amo | |||
Finite-Lived Intangible Assets | |||
Impairment loss | $ 0.4 | $ 2.4 | $ 0.4 |
Trade name | |||
Finite-Lived Intangible Assets | |||
Impairment loss | $ 8.5 |
Receivables (Details)
Receivables (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Receivables [Abstract] | ||
Accounts receivable | $ 19,900,000 | $ 25,500,000 |
Accounts receivable, allowance for doubtful accounts | 200,000 | 200,000 |
Straight-line rent receivables, gross | 275,500,000 | 240,300,000 |
Allowance for straight-line rent receivables | $ 0 | $ 0 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets, net - Summarizes of prepaid expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deposits and pre-development costs for future acquisitions | $ 0 | $ 47,605 |
Prepaid insurance | 11,325 | 5,442 |
Non-real estate investments | 46,533 | 31,447 |
Stock purchase warrant | 113 | 1,664 |
Deferred financing costs | 6,315 | 7,750 |
Prepaid property tax | 3,058 | 2,192 |
Interest rate derivative assets | 8,801 | 368 |
Inventory | 4,795 | 1,578 |
Other | 25,700 | 20,954 |
PREPAID EXPENSES AND OTHER ASSETS, NET | $ 106,640 | $ 119,000 |
Prepaid Expenses and Other As_4
Prepaid Expenses and Other Assets, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Investment Holdings | ||||
Unrealized (loss) gain on non-real estate investments | $ (894) | $ 827 | $ (1,062) | $ 11,620 |
Gain (loss) recognized on stock purchase warrant | (200) | (200) | (1,600) | 1,700 |
Non Real Estate Investment That Does Not Report NAV | ||||
Investment Holdings | ||||
Unrealized (loss) gain on non-real estate investments | $ (700) | $ 1,000 | $ 500 | $ 9,900 |
Debt - Outstanding Indebtedness
Debt - Outstanding Indebtedness (Details) | 9 Months Ended | ||||
Nov. 20, 2022 USD ($) | Aug. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) extension | Aug. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Debt | |||||
Duration used in interest rate calculation (in days) | 360 days | ||||
One Westside and 10850 Pico | VIE, primary beneficiary | |||||
Debt | |||||
VIE, ownership Interest | 75% | ||||
Periodic payment, debt service payment term | 10 years | ||||
Hollywood Media Portfolio | |||||
Debt | |||||
VIE, ownership Interest | 51% | ||||
1918 Eighth | |||||
Debt | |||||
VIE, ownership Interest | 55% | ||||
Hill7 | |||||
Debt | |||||
VIE, ownership Interest | 55% | ||||
Hollywood Media Portfolio | Interest Rate Swaps | Designated as hedging Instrument | |||||
Debt | |||||
Notional Amount | $ 350,000,000 | ||||
Hollywood Media Portfolio D | Interest Rate Swaps | Designated as hedging Instrument | |||||
Debt | |||||
Notional Amount | $ 125,000,000 | ||||
Hollywood Media Portfolio D | LIBOR | Interest Rate Swaps | Designated as hedging Instrument | |||||
Debt | |||||
Derivative, basis spread on variable rate (in percent) | 1.43% | ||||
Unsecured debt | |||||
Debt | |||||
TOTAL | $ 2,570,000,000 | $ 2,050,000,000 | |||
Unsecured debt | Series A notes | |||||
Debt | |||||
TOTAL | $ 110,000,000 | 110,000,000 | |||
Interest rate (in percent) | 4.34% | ||||
Interest rate (in percent) | 4.34% | ||||
Unsecured debt | Series B notes | |||||
Debt | |||||
TOTAL | $ 259,000,000 | 259,000,000 | |||
Interest rate (in percent) | 4.69% | ||||
Interest rate (in percent) | 4.69% | ||||
Unsecured debt | Series C notes | |||||
Debt | |||||
TOTAL | $ 56,000,000 | 56,000,000 | |||
Interest rate (in percent) | 4.79% | ||||
Interest rate (in percent) | 4.79% | ||||
Unsecured debt | Series D notes | |||||
Debt | |||||
TOTAL | $ 150,000,000 | 150,000,000 | |||
Interest rate (in percent) | 3.98% | ||||
Interest rate (in percent) | 3.98% | ||||
Unsecured debt | Series E notes | |||||
Debt | |||||
TOTAL | $ 50,000,000 | 50,000,000 | |||
Interest rate (in percent) | 3.66% | ||||
Interest rate (in percent) | 3.66% | ||||
Unsecured debt | 3.95% Registered senior notes | |||||
Debt | |||||
TOTAL | $ 400,000,000 | 400,000,000 | |||
Interest rate (in percent) | 3.95% | ||||
Interest rate (in percent) | 3.95% | ||||
Unsecured debt | 4.65% Registered senior notes | |||||
Debt | |||||
TOTAL | $ 500,000,000 | 500,000,000 | |||
Interest rate (in percent) | 4.65% | ||||
Interest rate (in percent) | 4.65% | ||||
Unsecured debt | 3.25% Registered senior notes | |||||
Debt | |||||
TOTAL | $ 400,000,000 | 400,000,000 | |||
Interest rate (in percent) | 3.25% | ||||
Interest rate (in percent) | 3.25% | ||||
Unsecured debt | 5.95% Registered senior notes | |||||
Debt | |||||
TOTAL | $ 350,000,000 | 0 | |||
Interest rate (in percent) | 5.95% | ||||
Interest rate (in percent) | 5.95% | ||||
Unsecured debt | Revolving credit facility | |||||
Debt | |||||
TOTAL | $ 295,000,000 | 125,000,000 | |||
Maximum borrowing capacity | $ 1,000,000,000 | ||||
Extension term (in years) | 6 months | ||||
Unsecured debt | Revolving credit facility | Subsequent event | |||||
Debt | |||||
Repayments of debt | $ 85,000,000 | ||||
Unsecured debt | Revolving credit facility | GBP | |||||
Debt | |||||
Maximum borrowing capacity | $ 250,000,000 | ||||
Unsecured debt | Revolving credit facility | CAD | |||||
Debt | |||||
Maximum borrowing capacity | $ 250,000,000 | ||||
Unsecured debt | Revolving credit facility | Minimum | |||||
Debt | |||||
Commitment fee (in percent) | 0.15% | ||||
Unsecured debt | Revolving credit facility | Maximum | |||||
Debt | |||||
Commitment fee (in percent) | 0.30% | ||||
Unsecured debt | Revolving credit facility | SOFR | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.30% | ||||
Unsecured debt | Revolving credit facility | SOFR | Minimum | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.15% | ||||
Unsecured debt | Revolving credit facility | SOFR | Maximum | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.60% | ||||
Secured debt | |||||
Debt | |||||
TOTAL | $ 1,906,575,000 | 1,714,874,000 | |||
Secured debt | Hollywood Media Portfolio | |||||
Debt | |||||
TOTAL | 890,186,000 | 890,186,000 | |||
Debt instrument, face amount | $ 1,100,000,000 | 1,100,000,000 | |||
Extension term (in years) | 1 year | ||||
Debt instrument, number of extension options | extension | 3 | ||||
Payments to acquire bonds | $ 209,800,000 | ||||
Secured debt | Hollywood Media Portfolio | Maximum | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 0.99% | ||||
Interest rate (in percent) | 4.49% | ||||
Interest rate (in percent) | 4.49% | ||||
Strike rate (percent) | 3.50% | ||||
Secured debt | Hollywood Media Portfolio | LIBOR | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 0.99% | ||||
Secured debt | Acquired Hollywood Media Portfolio debt | |||||
Debt | |||||
Acquired Hollywood Media Portfolio debt | $ (209,814,000) | (209,814,000) | |||
Secured debt | Acquired Hollywood Media Portfolio debt | LIBOR | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.55% | ||||
Secured debt | One Westside and 10850 Pico | |||||
Debt | |||||
TOTAL | $ 273,089,000 | 241,388,000 | |||
Maximum borrowing capacity | $ 414,600,000 | ||||
Secured debt | One Westside and 10850 Pico | LIBOR | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.70% | ||||
Secured debt | Element LA | |||||
Debt | |||||
TOTAL | $ 168,000,000 | 168,000,000 | |||
Interest rate (in percent) | 4.59% | ||||
Interest rate (in percent) | 4.59% | ||||
Secured debt | 1918 Eighth | |||||
Debt | |||||
TOTAL | $ 314,300,000 | 314,300,000 | |||
Secured debt | 1918 Eighth | SOFR | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.40% | ||||
Secured debt | Hill7 | |||||
Debt | |||||
TOTAL | $ 101,000,000 | 101,000,000 | |||
Interest rate (in percent) | 3.38% | ||||
Interest rate (in percent) | 3.38% | ||||
Secured debt | Quixote | |||||
Debt | |||||
TOTAL | $ 160,000,000 | $ 160,000,000 | 0 | ||
Interest rate (in percent) | 5% | 5% | |||
Interest rate (in percent) | 5% | 5% | |||
Unsecured and Secured Debt | |||||
Debt | |||||
TOTAL | $ 4,476,575,000 | 3,764,874,000 | |||
Deferred financing costs and discounts, net | (27,259,000) | (30,971,000) | |||
Debt | 4,449,316,000 | 3,733,903,000 | |||
In-substance defeased debt | |||||
Debt | |||||
Debt | $ 0 | 128,212,000 | |||
Interest rate (in percent) | 4.47% | ||||
Interest rate (in percent) | 4.47% | ||||
Joint venture partner debt | |||||
Debt | |||||
TOTAL | $ 66,136,000 | ||||
Debt | $ 66,136,000 | $ 66,136,000 | |||
Interest rate (in percent) | 4.50% | ||||
Extension term (in years) | 2 years | ||||
Debt instrument, number of extension options | extension | 2 | ||||
Interest rate (in percent) | 4.50% |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Jul. 01, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Aug. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument | ||||||
Proceeds from unsecured and secured debt | $ 978,251 | $ 1,304,352 | ||||
Payments of in-substance defeased debt | 128,212 | $ 2,602 | ||||
Secured debt | ||||||
Debt Instrument | ||||||
Payments of in-substance defeased debt | $ 126,400 | |||||
Notes payable | $ 1,906,575 | 1,906,575 | $ 1,714,874 | |||
Unsecured debt | ||||||
Debt Instrument | ||||||
Notes payable | 2,570,000 | 2,570,000 | 2,050,000 | |||
Quixote | Secured debt | ||||||
Debt Instrument | ||||||
Notes payable | $ 160,000 | $ 160,000 | $ 160,000 | 0 | ||
Interest rate (in percent) | 5% | 5% | 5% | |||
5.95% Registered senior notes | Unsecured debt | ||||||
Debt Instrument | ||||||
Proceeds from unsecured and secured debt | $ 346,500 | |||||
Notes payable | $ 350,000 | $ 350,000 | 0 | |||
Interest rate (in percent) | 5.95% | 5.95% | ||||
Discount rate (in percent) | 99.614% | 99.614% | ||||
Revolving credit facility | ||||||
Debt Instrument | ||||||
Proceeds from unsecured and secured debt | $ 170,000 | |||||
Revolving credit facility | Unsecured debt | ||||||
Debt Instrument | ||||||
Notes payable | $ 295,000 | $ 295,000 | $ 125,000 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Unsecured and Secured Debt | ||
Debt Instrument | ||
Remaining 2022 | $ 0 | |
2023 | 320,000 | |
2024 | 273,089 | |
2025 | 741,300 | |
2026 | 1,335,186 | |
Thereafter | 1,807,000 | |
TOTAL | 4,476,575 | $ 3,764,874 |
Joint venture partner debt | ||
Debt Instrument | ||
Remaining 2022 | 0 | |
2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 66,136 | |
TOTAL | $ 66,136 |
Debt - Covenant Summaries (Deta
Debt - Covenant Summaries (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Instrument | |
Total liabilities to total asset value | 60% |
Total liabilities to total asset value, actual | 44.10% |
Unsecured indebtedness to unencumbered asset value | 60% |
Unsecured indebtedness to unencumbered asset value, actual | 44.30% |
Adjusted EBITDA to fixed charges | 1.5 |
Adjusted EBITDA to fixed charges, actual | 3.3 |
Secured indebtedness to total asset value | 45% |
Secured indebtedness to total asset value, actual | 19.60% |
Unencumbered NOI to unsecured interest expense | 2 |
Unencumbered NOI to unsecured interest expense, actual | 3 |
Debt to total assets | 60% |
Debt to total assets, actual | 46.20% |
Total unencumbered assets to unsecured debt | 150% |
Total unencumbered assets to unsecured debt, actual | 229.80% |
Consolidated income available for debt service to annual debt service charge | 1.5 |
Consolidated income available for debt service to annual debt service charge, actual | 3.3 |
Secured debt to total assets | 45% |
Secured debt to total assets, actual | 20.20% |
Unsecured debt | 3.25% Registered senior notes | |
Debt Instrument | |
Interest rate (in percent) | 3.25% |
Unsecured debt | 3.95% Registered senior notes | |
Debt Instrument | |
Interest rate (in percent) | 3.95% |
Unsecured debt | 4.65% Registered senior notes | |
Debt Instrument | |
Interest rate (in percent) | 4.65% |
Unsecured debt | 5.95% Registered senior notes | |
Debt Instrument | |
Interest rate (in percent) | 5.95% |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Disclosure [Abstract] | ||||
Gross interest expense | $ 38,595 | $ 33,912 | $ 103,242 | $ 101,341 |
Capitalized interest | (4,797) | (5,760) | (11,674) | (17,049) |
Amortization of deferred financing costs and loan discounts/premiums | 3,463 | 2,673 | 10,248 | 7,508 |
INTEREST EXPENSE | $ 37,261 | $ 30,825 | $ 101,816 | $ 91,800 |
Derivatives (Details)
Derivatives (Details) | 9 Months Ended | |
Sep. 30, 2022 USD ($) instrument | Dec. 31, 2021 USD ($) | |
Derivative | ||
Unrealized loss included in accumulated other comprehensive loss | $ 100,000 | |
Designated as hedging Instrument | ||
Derivative | ||
Fair Value Assets (Liabilities) | $ 8,801,000 | $ (2,167,000) |
Designated as hedging Instrument | Interest Rate Swaps | Hollywood Media Portfolio | ||
Derivative | ||
Number of Derivatives | instrument | 2 | |
Notional Amount | $ 350,000,000 | |
Fair Value Assets (Liabilities) | $ 0 | (1,413,000) |
Designated as hedging Instrument | Interest Rate Swaps | Low | Hollywood Media Portfolio | ||
Derivative | ||
Interest rate | 2.96% | |
Designated as hedging Instrument | Interest Rate Swaps | High | Hollywood Media Portfolio | ||
Derivative | ||
Interest rate | 3.46% | |
Designated as hedging Instrument | Interest Rate Swap II | Hollywood Media Portfolio | ||
Derivative | ||
Number of Derivatives | instrument | 1 | |
Notional Amount | $ 125,000,000 | |
Fair Value Assets (Liabilities) | $ 304,000 | (1,122,000) |
Designated as hedging Instrument | Interest Rate Swap II | Low | Hollywood Media Portfolio | ||
Derivative | ||
Interest rate | 2.63% | |
Designated as hedging Instrument | Interest Rate Swap II | High | Hollywood Media Portfolio | ||
Derivative | ||
Interest rate | 3.13% | |
Designated as hedging Instrument | Interest Rate Caps | Hollywood Media Portfolio | ||
Derivative | ||
Number of Derivatives | instrument | 1 | |
Notional Amount | $ 1,100,000,000 | |
Strike rate (percent) | 3.50% | |
Fair Value Assets (Liabilities) | $ 8,497,000 | $ 368,000 |
U.S. Government Securities (Det
U.S. Government Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Investments, Debt and Equity Securities [Abstract] | ||
U.S. Government securities | $ 0 | $ 129,321 |
Income Taxes (Details)
Income Taxes (Details) | Sep. 30, 2022 USD ($) |
Income Tax Disclosure [Abstract] | |
Liability for uncertainty in income taxes, noncurrent | $ 0 |
Future Minimum Rents and Leas_3
Future Minimum Rents and Lease Payments - Future Minimum Base Rents Receivable (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Operating Leases, Future Minimum Payments Receivable | |
Remaining 2022 | $ 161,095 |
2023 | 635,725 |
2024 | 588,077 |
2025 | 484,281 |
2026 | 432,587 |
Thereafter | 1,600,880 |
TOTAL | 3,902,645 |
Non-cancellable | |
Operating Leases, Future Minimum Payments Receivable | |
Remaining 2022 | 161,060 |
2023 | 633,820 |
2024 | 583,517 |
2025 | 443,584 |
2026 | 378,315 |
Thereafter | 1,412,518 |
TOTAL | 3,612,814 |
Subject to Early Termination Options | |
Operating Leases, Future Minimum Payments Receivable | |
Remaining 2022 | 35 |
2023 | 1,905 |
2024 | 4,560 |
2025 | 40,697 |
2026 | 54,272 |
Thereafter | 188,362 |
TOTAL | $ 289,831 |
Future Minimum Rents and Leas_4
Future Minimum Rents and Lease Payments - Narratives (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 USD ($) property | Dec. 31, 2021 USD ($) | |
Operating Leased Assets | ||
Operating lease payment | $ | $ 746,674 | |
Operating lease liabilities | $ | 396,412 | $ 293,596 |
Operating lease right-of-use assets | $ | $ 399,570 | $ 287,041 |
Ground Lease | ||
Operating Leased Assets | ||
Number of operating lease contracts (contract) | 12 | |
Sound Stage | ||
Operating Leased Assets | ||
Number of operating lease contracts (contract) | 10 | |
Facility | ||
Operating Leased Assets | ||
Number of operating lease contracts (contract) | 16 | |
Office | ||
Operating Leased Assets | ||
Number of operating lease contracts (contract) | 5 |
Future Minimum Rents and Leas_5
Future Minimum Rents and Lease Payments - Future Minimum Payments Due (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Lessee, Operating Lease, Liability, Payment, Due | ||
Remaining 2022 | $ 9,541 | |
2023 | 38,525 | |
2024 | 38,297 | |
2025 | 38,193 | |
2026 | 36,745 | |
Thereafter | 585,373 | |
Total operating lease payments | 746,674 | |
Less: interest portion | (350,262) | |
PRESENT VALUE OF OPERATING LEASE LIABILITIES | $ 396,412 | $ 293,596 |
Future Minimum Rents and Leas_6
Future Minimum Rents and Lease Payments - Rental Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Variable rental expense | $ 1,219 | $ 2,765 | $ 7,316 | $ 7,873 |
Minimum rental expense | $ 7,841 | $ 5,421 | $ 20,122 | $ 15,963 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Assets And Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Interest rate derivative assets | $ 8,801 | $ 368 |
Interest rate swap derivative liabilities | 0 | (2,535) |
Stock purchase warrant | 113 | 1,664 |
Earnout liability | (9,300) | (11,383) |
Non-real estate investment | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Non-real estate investments measured at fair value | 533 | 3,483 |
Non-real estate investments measured at NAV | 46,000 | 27,964 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Interest rate derivative assets | 0 | 0 |
Interest rate swap derivative liabilities | 0 | 0 |
Stock purchase warrant | 0 | 0 |
Earnout liability | 0 | 0 |
Level 1 | Non-real estate investment | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Non-real estate investments measured at fair value | 533 | 1,915 |
Non-real estate investments measured at NAV | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Interest rate derivative assets | 8,801 | 368 |
Interest rate swap derivative liabilities | 0 | (2,535) |
Stock purchase warrant | 113 | 1,664 |
Earnout liability | 0 | 0 |
Level 2 | Non-real estate investment | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Non-real estate investments measured at fair value | 0 | 1,568 |
Non-real estate investments measured at NAV | 0 | 0 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Interest rate derivative assets | 0 | 0 |
Interest rate swap derivative liabilities | 0 | 0 |
Stock purchase warrant | 0 | 0 |
Earnout liability | (9,300) | (11,383) |
Level 3 | Non-real estate investment | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Non-real estate investments measured at fair value | 0 | 0 |
Non-real estate investments measured at NAV | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments- Contingent liability (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Contingent Liability | |
Balance at the beginning | $ (11,383) |
Partial settlement | 3,840 |
Remeasurement to fair value | (1,757) |
Balance at the beginning | $ (9,300) |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Investment in Securities and Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Investments | $ 0 | $ 129,321 |
Carrying Value | Unsecured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 2,570,000 | 2,050,000 |
Carrying Value | Secured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 1,906,575 | 1,714,874 |
Carrying Value | In-substance defeased debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 0 | 128,212 |
Carrying Value | Joint venture partner debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 66,136 | 66,136 |
Fair Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Investments | 0 | 130,910 |
Fair Value | Unsecured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 2,332,902 | 2,154,908 |
Fair Value | Secured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 1,883,357 | 1,713,726 |
Fair Value | In-substance defeased debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 0 | 128,361 |
Fair Value | Joint venture partner debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | $ 60,997 | $ 69,116 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) shares in Millions | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
2010 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Number of shares available for grant | shares | 7.2 |
Stock price assumption for maximum bonus pool eligibility (in dollars per share) | $ / shares | $ 10.95 |
Existing and newly elected board member | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Award vesting period (in years) | 3 years |
Employees | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Award vesting period (in years) | 3 years |
PSU plan 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Post vesting period (in years) | 2 years |
PSU plan 2020 | Tranche one | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Award performance period (in years) | 3 years |
PSU plan 2020 | Tranche two | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Award vesting period (in years) | 3 years |
Award performance period (in years) | 1 year |
Stock-based Compensation - Comp
Stock-based Compensation - Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||||
Employee stock compensation | $ 6,494 | $ 5,840 | $ 17,816 | $ 15,718 |
Capitalized stock compensation | 894 | 771 | 2,683 | 2,659 |
Total stock compensation | $ 7,388 | $ 6,611 | $ 20,499 | $ 18,377 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Basic net loss available to common stockholders | $ (17,286) | $ (9,295) | $ (44,515) | $ (1,998) |
Diluted net loss available to common stockholders | $ (17,286) | $ (9,295) | $ (44,515) | $ (1,998) |
Denominator: | ||||
Basic weighted average common shares outstanding (in shares) | 141,117,194 | 152,320,252 | 144,677,652 | 151,443,305 |
Effect of dilutive instruments (in shares) | 0 | 0 | 0 | 0 |
Diluted weighted average common shares outstanding (in shares) | 141,117,194 | 152,320,252 | 144,677,652 | 151,443,305 |
Basic earnings per common share (in dollars per share) | $ (0.12) | $ (0.06) | $ (0.31) | $ (0.01) |
Diluted earnings per common share (in dollars per share) | $ (0.12) | $ (0.06) | $ (0.31) | $ (0.01) |
Hudson Pacific Partners L.P. | ||||
Numerator: | ||||
Basic net loss available to common stockholders | $ (17,511) | $ (9,380) | $ (45,063) | $ (2,014) |
Diluted net loss available to common stockholders | $ (17,511) | $ (9,380) | $ (45,063) | $ (2,014) |
Denominator: | ||||
Basic weighted average common units outstanding (in shares) | 142,963,458 | 153,701,876 | 146,523,102 | 152,818,720 |
Effect of dilutive instruments (in shares) | 0 | 0 | 0 | 0 |
Diluted weighted average common units outstanding (in shares) | 142,963,458 | 153,701,876 | 146,523,102 | 152,818,720 |
Basic earnings per common unit (in dollars per share) | $ (0.12) | $ (0.06) | $ (0.31) | $ (0.01) |
Diluted earnings per common unit (in dollars per share) | $ (0.12) | $ (0.06) | $ (0.31) | $ (0.01) |
Redeemable Non-Controlling In_3
Redeemable Non-Controlling Interest (Details) - $ / shares | 9 Months Ended | |||
Oct. 09, 2018 | Aug. 31, 2018 | Sep. 30, 2022 | Dec. 31, 2021 | |
Redeemable Noncontrolling Interest | ||||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | ||
VIE, primary beneficiary | HPP-MAC WSP, LLC | ||||
Redeemable Noncontrolling Interest | ||||
VIE, ownership Interest | 75% | |||
VIE, primary beneficiary | Hudson One Ferry REIT, L.P. | ||||
Redeemable Noncontrolling Interest | ||||
VIE, ownership Interest | 55% | |||
Series A preferred units | ||||
Redeemable Noncontrolling Interest | ||||
Redeemable non-controlling interest shares (in shares) | 392,598 | 392,598 | ||
Interest rate of preferred stock | 6.25% | |||
Liquidation preference (in dollars per share) | $ 25 |
Redeemable Non-Controlling In_4
Redeemable Non-Controlling Interest - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
VIE, primary beneficiary | ||
Increase (Decrease) in Temporary Equity | ||
BEGINNING OF PERIOD | $ 126,420 | $ 129,449 |
Contributions | 200 | 575 |
Distributions | 0 | (8) |
Declared dividend | 0 | 0 |
Net income (loss) | (1,037) | (4,433) |
END OF PERIOD | 125,583 | 125,583 |
Series A preferred units | ||
Increase (Decrease) in Temporary Equity | ||
BEGINNING OF PERIOD | 9,815 | 9,815 |
Contributions | 0 | 0 |
Distributions | 0 | 0 |
Declared dividend | (153) | (459) |
Net income (loss) | 153 | 459 |
END OF PERIOD | $ 9,815 | $ 9,815 |
Equity - Comprehensive Income H
Equity - Comprehensive Income Hudson Pacific Properties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | $ 3,848,729 | $ 3,945,806 | $ 4,196,992 | $ 3,967,980 |
Unrealized gains (losses) recognized in OCI | (9,138) | |||
Reclassification from OCI into income | (6,167) | |||
Total other comprehensive (loss) income | (10,194) | (1,735) | (15,578) | 3,735 |
Ending balance | 3,792,330 | 3,852,380 | 3,792,330 | 3,852,380 |
Accumulated Other Comprehensive Loss | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | (7,051) | (2,736) | (1,761) | (8,133) |
Total other comprehensive (loss) income | (10,015) | (1,712) | (15,305) | 3,685 |
Ending balance | (17,066) | $ (4,448) | (17,066) | $ (4,448) |
Derivative Instruments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | (3,957) | |||
Unrealized gains (losses) recognized in OCI | 9,039 | |||
Reclassification from OCI into income | (6,167) | |||
Total other comprehensive (loss) income | 2,872 | |||
Ending balance | (1,085) | (1,085) | ||
Currency Translation Adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | 2,196 | |||
Unrealized gains (losses) recognized in OCI | (18,177) | |||
Reclassification from OCI into income | 0 | |||
Total other comprehensive (loss) income | (18,177) | |||
Ending balance | $ (15,981) | $ (15,981) |
Equity - Comprehensive Income L
Equity - Comprehensive Income LP (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Unrealized gains (losses) recognized in OCI | $ (9,138) | |||
Reclassification from OCI into income | (6,167) | |||
Total other comprehensive (loss) income | $ (10,194) | $ (1,735) | (15,578) | $ 3,735 |
Hudson Pacific Partners L.P. | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | 3,848,729 | 3,945,806 | 4,196,992 | 3,967,980 |
Unrealized gains (losses) recognized in OCI | (9,301) | |||
Reclassification from OCI into income | (6,277) | |||
Total other comprehensive (loss) income | (10,194) | (1,735) | (15,578) | 3,735 |
Ending balance | 3,792,330 | 3,852,380 | 3,792,330 | 3,852,380 |
Hudson Pacific Partners L.P. | Accumulated Other Comprehensive Loss | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | (7,163) | (2,776) | (1,779) | (8,246) |
Total other comprehensive (loss) income | (10,194) | (1,735) | (15,578) | 3,735 |
Ending balance | (17,357) | $ (4,511) | (17,357) | $ (4,511) |
Hudson Pacific Partners L.P. | Derivative Instruments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | (3,954) | |||
Unrealized gains (losses) recognized in OCI | 9,200 | |||
Reclassification from OCI into income | (6,277) | |||
Total other comprehensive (loss) income | 2,923 | |||
Ending balance | (1,031) | (1,031) | ||
Hudson Pacific Partners L.P. | Currency Translation Adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | 2,175 | |||
Unrealized gains (losses) recognized in OCI | (18,501) | |||
Reclassification from OCI into income | 0 | |||
Total other comprehensive (loss) income | (18,501) | |||
Ending balance | $ (16,326) | $ (16,326) |
Equity - Non-controlling Intere
Equity - Non-controlling Interests (Details) | 9 Months Ended | |
Sep. 30, 2022 shares | Dec. 31, 2021 shares | |
Class of Stock | ||
Company-owned common units in the operating partnership (in shares) | 140,923,320 | 151,124,543 |
Non-controlling common units in the operating partnership - common units (in shares) | 550,969 | 550,969 |
Non-controlling common units in the operating partnership - preferred units (in shares) | 1,295,295 | 1,291,929 |
Hudson Pacific Partners L.P. | ||
Class of Stock | ||
Company’s ownership interest percentage | 98.70% | 98.80% |
Hudson Pacific Partners L.P. | Company-owned common units in the operating partnership | ||
Class of Stock | ||
Company-owned common units in the operating partnership (in shares) | 140,923,320 | 151,124,543 |
Noncontrolling interest in operating partnership | ||
Class of Stock | ||
Non-controlling ownership interest percentage | 1.30% | 1.20% |
Noncontrolling interest in operating partnership | Common units | ||
Class of Stock | ||
Non-controlling units in the operating partnership (in shares) | 1,846,264 | 1,842,898 |
Units in the Operating Partnership | ||
Class of Stock | ||
Conversion ratio | 1 | |
Performance units | ||
Class of Stock | ||
Conversion ratio | 1 |
Equity - Common Stock Activity
Equity - Common Stock Activity (Details) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2022 $ / shares shares | Mar. 31, 2022 USD ($) shares | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Jul. 31, 2022 $ / shares shares | Feb. 25, 2022 USD ($) | |
Class of Stock | |||||||
Payments for repurchase of common stock | $ 37,206,000 | $ 14,756,000 | |||||
Weighted average price (in dollars per share) | $ / shares | $ 24.60 | ||||||
Accumulated shares repurchased (shares) | shares | 8,100,000 | ||||||
Common units | |||||||
Class of Stock | |||||||
Stock repurchase program authorized | $ 250,000,000 | $ 250,000,000 | |||||
Repurchase of common units (in shares) | shares | 37,200,000 | ||||||
Repurchase of common stock, cumulative | $ 213,400,000 | $ 213,400,000 | |||||
Common units | ASR | |||||||
Class of Stock | |||||||
Stock repurchase program authorized | $ 100,000,000 | ||||||
Repurchase of common units (in shares) | shares | 900,000 | 3,300,000 | |||||
Payments for repurchase of common stock | $ 100,000,000 | ||||||
Shares repurchased (in percentage) | 0.85 | ||||||
Weighted average price (in dollars per share) | $ / shares | $ 23.90 | ||||||
Common units | Collared Accelerated Share Repurchase Agreements | |||||||
Class of Stock | |||||||
Stock repurchase program authorized | $ 100,000,000 | ||||||
Repurchase of common units (in shares) | shares | 700,000 | 3,300,000 | |||||
Payments for repurchase of common stock | $ 100,000,000 | ||||||
Common stock, floor price (in dollars per share) | $ / shares | $ 25.35 | $ 25.35 | |||||
ATM Program | |||||||
Class of Stock | |||||||
Number of share authorized, value | $ 125,000,000 | ||||||
Sales of stock, shares issued (shares) | shares | 0 | ||||||
Cumulative total of sales of common stock | $ 65,800,000 | $ 65,800,000 |
Equity - Series C Cumulative Re
Equity - Series C Cumulative Redeemable Preferred Stock (Details) - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2022 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss) | ||||
Preferred stock, authorized (in shares) | 18,400,000 | 18,400,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | ||
Series C Cumulative Redeemable Preferred Stock | ||||
Accumulated Other Comprehensive Income (Loss) | ||||
Preferred stock, authorized (in shares) | 17,000,000 | |||
Preferred stock, par value (in dollars per share) | $ 0.01 | |||
Interest rate of preferred stock | 4.75% | 4.75% | ||
Liquidation preference (in dollars per share) | $ 25 | |||
Temporary equity, dividend rate (per share) | 1.1875 | $ 1.1875 | $ 1.1875 | $ 1.1875 |
Liquidation preference of preferred stock (dollars per share) | $ 25 |
Equity - Dividends (Details)
Equity - Dividends (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Class of Stock | |||||||
Common stock, dividends (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.75 | $ 0.75 | |||
Common stock, dividends, cash paid (in dollars per share) | 0.25 | 0.25 | 0.75 | 0.75 | |||
Common units, dividends (in dollars per share) | 0.25 | 0.25 | 0.75 | 0.75 | |||
Common units, dividends, cash paid (in dollars per share) | 0.25 | 0.25 | 0.75 | 0.75 | |||
Preferred stock, dividends, cash paid (in dollars per share) | 0.3906 | 0.3906 | |||||
Performance units, dividends, cash paid (in dollars per share) | 0.25 | 0.25 | 0.75 | 0.75 | |||
Performance units, dividends (in dollars per share) | 0.25 | 0.25 | 0.75 | 0.75 | |||
Series A preferred units | |||||||
Class of Stock | |||||||
Preferred units, dividends (in dollars per share) | 0.3906 | 0.3906 | 1.1718 | 1.1718 | |||
Preferred stock, dividends, cash paid (in dollars per share) | 1.1718 | 1.1718 | |||||
Series C preferred stock | |||||||
Class of Stock | |||||||
Preferred units, dividends (in dollars per share) | 0.2968750 | $ 0.2968750 | $ 0.2968750 | $ 0.1484375 | 0 | 1.0390625 | 0 |
Preferred stock, dividends, cash paid (in dollars per share) | $ 0.2968750 | $ 0 | $ 1.0390625 | $ 0 |
Segment Reporting - Operating A
Segment Reporting - Operating Activity (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information | ||||
Revenues | $ 260,354 | $ 227,632 | $ 756,297 | $ 656,353 |
Operating expenses | (105,028) | (83,909) | (296,886) | (243,501) |
TOTAL PROFIT FROM ALL SEGMENTS | 155,326 | 143,723 | 459,411 | 412,852 |
Net (loss) income | (6,792) | (6,182) | (10,861) | 12,259 |
General and administrative | 19,795 | 18,288 | 62,178 | 53,846 |
Depreciation and amortization | 93,070 | 88,568 | 276,701 | 255,507 |
Loss (income) from unconsolidated real estate entities | 352 | (566) | (1,731) | (1,671) |
Fee income | (911) | (678) | (3,122) | (2,323) |
Interest expense | 37,261 | 30,825 | 101,816 | 91,800 |
Interest income | (196) | (934) | (2,026) | (2,868) |
Management services reimbursement income—unconsolidated real estate entities | (983) | (253) | (3,159) | (879) |
Management services expense—unconsolidated real estate entities | 983 | 253 | 3,159 | 879 |
Transaction-related expenses | 9,331 | 6,300 | 10,713 | 7,364 |
Unrealized loss (gain) on non-real estate investments | 894 | (827) | 1,062 | (11,620) |
Loss on sale of real estate | 180 | 0 | 180 | 0 |
Impairment loss | 4,795 | 2,762 | 28,548 | 2,762 |
Loss on extinguishment of debt | 0 | 6,249 | 0 | 6,249 |
Other (income) expense | (2,453) | (82) | (4,047) | 1,547 |
Office | ||||
Segment Reporting Information | ||||
Revenues | 213,491 | 201,866 | 641,135 | 589,712 |
Operating expenses | (78,340) | (71,865) | (230,529) | (207,538) |
TOTAL PROFIT FROM ALL SEGMENTS | 135,151 | 130,001 | 410,606 | 382,174 |
Studio | ||||
Segment Reporting Information | ||||
Revenues | 46,863 | 25,766 | 115,162 | 66,641 |
Operating expenses | (26,688) | (12,044) | (66,357) | (35,963) |
TOTAL PROFIT FROM ALL SEGMENTS | $ 20,175 | $ 13,722 | $ 48,805 | $ 30,678 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Related Party Transaction | |||||
Management services reimbursement income—unconsolidated real estate entities | $ 983 | $ 253 | $ 3,159 | $ 879 | |
Operating lease right-of-use assets | 399,570 | 399,570 | $ 287,041 | ||
Operating lease liabilities | 396,412 | 396,412 | $ 293,596 | ||
Transaction-related expenses | 9,331 | 6,300 | 10,713 | 7,364 | |
Affiliated Entity | |||||
Related Party Transaction | |||||
Transaction-related expenses | 200 | 200 | 700 | 800 | |
Office Space and Fitness Facility | Affiliated Entity | |||||
Related Party Transaction | |||||
Operating lease right-of-use assets | 6,200 | 7,400 | 6,200 | 7,400 | |
Operating lease liabilities | $ 6,300 | $ 7,500 | $ 6,300 | $ 7,500 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 9 Months Ended | |
Apr. 14, 2022 | Sep. 30, 2022 | |
Capital Addition Purchase Commitments | ||
Loss Contingencies | ||
Commitment to fund amount | $ 312.7 | |
Revolving credit facility | Unsecured debt | ||
Loss Contingencies | ||
Letters of credit outstanding | 3.1 | |
EquiBlue | ||
Loss Contingencies | ||
Investment committed capital ratio | 20% | |
Committed capital | $ 300 | |
Real estate technology venture capital fund | ||
Loss Contingencies | ||
Commitment to fund amount | 48 | |
Contributions to date | 30.2 | |
Amount remaining to be contributed | $ 17.8 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest, net of capitalized interest | $ 68,821 | $ 74,381 |
Non-cash investing and financing activities | ||
Accounts payable and accrued liabilities for real estate investments | 181,689 | 136,661 |
Ground lease remeasurement | 23,177 | 0 |
Note payable issued as consideration in a business combination | 160,000 | 0 |
Earnout liability recognized as contingent consideration for business combination | 0 | 22,800 |
Lease liabilities recorded in connection with right-of-use assets | 94,447 | 13,881 |
Hudson Pacific Partners L.P. | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest, net of capitalized interest | 68,821 | 74,381 |
Non-cash investing and financing activities | ||
Accounts payable and accrued liabilities for real estate investments | 181,689 | 136,661 |
Ground lease remeasurement | 23,177 | 0 |
Note payable issued as consideration in a business combination | 160,000 | 0 |
Earnout liability recognized as contingent consideration for business combination | 0 | 22,800 |
Lease liabilities recorded in connection with right-of-use assets | $ 94,447 | $ 13,881 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Cash Rollforward (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Cash and Cash Equivalents | ||||
Cash and cash equivalents | $ 161,667 | $ 96,555 | $ 110,500 | $ 113,686 |
Restricted cash | 42,401 | 100,321 | 109,737 | 35,854 |
TOTAL | 204,068 | 196,876 | 220,237 | 149,540 |
Hudson Pacific Partners L.P. | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | 161,667 | 96,555 | 110,500 | 113,686 |
Restricted cash | 42,401 | 100,321 | 109,737 | 35,854 |
TOTAL | $ 204,068 | $ 196,876 | $ 220,237 | $ 149,540 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event - USD ($) $ in Millions | Nov. 20, 2022 | Oct. 20, 2022 |
Revolving credit facility | Unsecured debt | ||
Subsequent Event | ||
Repayments of debt | $ 85 | |
6922 Hollywood | ||
Subsequent Event | ||
Proceeds from the sales of property | $ 96 |