Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 27, 2023 | |
Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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 | |
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 | 140,937,702 | |
Entity Central Index Key | 0001482512 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock, $0.01 par value | ||
Entity Information | ||
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | HPP | |
Security Exchange Name | NYSE | |
4.750% Series C Cumulative Redeemable Preferred Stock | ||
Entity Information | ||
Title of 12(b) Security | 4.750% Series C Cumulative Redeemable Preferred Stock | |
Trading Symbol | HPP Pr C | |
Security Exchange Name | NYSE | |
Hudson Pacific Partners L.P. | ||
Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 333-202799-01 | |
Entity Registrant Name | Hudson Pacific Properties, L.P. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 80-0579682 | |
Entity Address, Address Line One | 11601 Wilshire Blvd., Ninth Floor | |
Entity Address, City or Town | Los Angeles | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90025 | |
City Area Code | 310 | |
Local Phone Number | 445-5700 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001496264 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Investment in real estate, at cost | $ 8,831,914 | $ 8,716,572 |
Accumulated depreciation and amortization | (1,735,715) | (1,541,271) |
Investment in real estate, net | 7,096,199 | 7,175,301 |
Non-real estate property, plant and equipment, net | 115,903 | 130,289 |
Cash and cash equivalents | 75,040 | 255,761 |
Restricted cash | 19,054 | 29,970 |
Accounts receivable, net | 19,330 | 16,820 |
Straight-line rent receivables, net | 290,938 | 279,910 |
Deferred leasing costs and intangible assets, net | 359,870 | 393,842 |
Operating lease right-of-use assets | 391,177 | 401,051 |
Prepaid expenses and other assets, net | 119,494 | 98,837 |
Investment in unconsolidated real estate entities | 236,248 | 180,572 |
Goodwill | 263,549 | 263,549 |
Assets associated with real estate held for sale | 0 | 93,238 |
TOTAL ASSETS | 8,986,802 | 9,319,140 |
Liabilities | ||
Accounts payable, accrued liabilities and other | 267,426 | 264,098 |
Operating lease liabilities | 393,773 | 399,801 |
Intangible liabilities, net | 29,247 | 34,091 |
Security deposits, prepaid rent and other | 86,980 | 83,797 |
Liabilities associated with real estate held for sale | 0 | 665 |
Total liabilities | 5,260,582 | 5,434,450 |
Commitments and contingencies (note 21) | ||
Redeemable preferred units of the operating partnership | 9,815 | 9,815 |
Redeemable non-controlling interest in consolidated real estate entities | 115,580 | 125,044 |
Hudson Pacific Properties, Inc. stockholders' equity: | ||
Common stock, $0.01 par value, 481,600,000 authorized, 140,937,702 and 141,054,478 shares outstanding at September 30, 2023 and December 31, 2022, respectively | 1,403 | 1,409 |
Additional paid-in capital | 2,748,309 | 2,889,967 |
Accumulated other comprehensive income (loss) | 4,178 | (11,272) |
Total Hudson Pacific Properties, Inc. stockholders’ equity | 3,178,890 | 3,305,104 |
Total equity | 3,600,825 | 3,749,831 |
TOTAL LIABILITIES AND EQUITY | 8,986,802 | 9,319,140 |
Non-controlling interest—members in consolidated real estate entities | ||
Hudson Pacific Properties, Inc. stockholders' equity: | ||
Non-controlling interest | 345,058 | 377,756 |
Non-controlling interest—units in the operating partnership | ||
Hudson Pacific Properties, Inc. stockholders' equity: | ||
Non-controlling interest | 76,877 | 66,971 |
4.750% Series C Cumulative Redeemable Preferred Stock | ||
Hudson Pacific Properties, Inc. stockholders' equity: | ||
4.750% Series C cumulative redeemable preferred stock, $0.01 par value, $25.00 per share liquidation preference, 18,400,000 authorized, 17,000,000 shares outstanding at September 30, 2023 and December 31, 2022 | 425,000 | 425,000 |
Unsecured and secured debt, net | ||
Liabilities | ||
Notes payable, net | 4,417,020 | 4,585,862 |
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, 2023 | Dec. 31, 2022 | |
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) | 140,937,702 | 141,054,478 |
4.750% Series C Cumulative Redeemable Preferred Stock | ||
Interest rate of preferred stock | 4.75% | 4.75% |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, authorized (in shares) | 18,400,000 | 18,400,000 |
Preferred stock, outstanding (in shares) | 17,000,000 | 17,000,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
REVENUES | ||||
Revenues | $ 231,443,000 | $ 260,354,000 | $ 728,874,000 | $ 756,297,000 |
OPERATING EXPENSES | ||||
Office and studio operating expenses | 112,176,000 | 105,028,000 | 334,920,000 | 296,886,000 |
General and administrative | 17,512,000 | 19,795,000 | 55,177,000 | 62,178,000 |
Depreciation and amortization | 98,580,000 | 93,070,000 | 294,654,000 | 276,701,000 |
Total operating expenses | 228,268,000 | 217,893,000 | 684,751,000 | 635,765,000 |
OTHER INCOME (EXPENSES) | ||||
(Loss) income from unconsolidated real estate entities | (759,000) | (352,000) | (2,219,000) | 1,731,000 |
Fee income | 340,000 | 911,000 | 5,026,000 | 3,122,000 |
Interest expense | (53,581,000) | (37,261,000) | (162,036,000) | (101,816,000) |
Interest income | 800,000 | 196,000 | 1,407,000 | 2,026,000 |
Management services reimbursement income—unconsolidated real estate entities | 1,015,000 | 983,000 | 3,138,000 | 3,159,000 |
Management services expense—unconsolidated real estate entities | (1,015,000) | (983,000) | (3,138,000) | (3,159,000) |
Transaction-related expenses | 0 | (9,331,000) | 1,344,000 | (10,713,000) |
Unrealized loss on non-real estate investments | (2,265,000) | (894,000) | (2,269,000) | (1,062,000) |
Gain on extinguishment of debt | 0 | 0 | 10,000,000 | 0 |
Gain (loss) on sale of real estate | 16,108,000 | (180,000) | 23,154,000 | (180,000) |
Impairment loss | 0 | (4,795,000) | 0 | (28,548,000) |
Other income | 5,000 | 1,147,000 | 139,000 | 1,138,000 |
Total other expenses | (39,352,000) | (50,559,000) | (125,454,000) | (134,302,000) |
Loss before income tax benefit (provision) | (36,177,000) | (8,098,000) | (81,331,000) | (13,770,000) |
Income tax benefit (provision) | 425,000 | 1,306,000 | (715,000) | 2,909,000 |
Net loss | (35,752,000) | (6,792,000) | (82,046,000) | (10,861,000) |
Net income attributable to participating securities | 0 | (300,000) | (850,000) | (894,000) |
Net loss (income) attributable to non-controlling interest in consolidated real estate entities | 1,752,000 | (6,256,000) | 375,000 | (21,898,000) |
Net loss attributable to redeemable non-controlling interest in consolidated real estate entities | 931,000 | 1,037,000 | 2,333,000 | 4,433,000 |
Net loss attributable to common units in the operating partnership | 672,000 | 225,000 | 1,600,000 | 548,000 |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (37,597,000) | $ (17,286,000) | $ (94,188,000) | $ (44,515,000) |
BASIC AND DILUTED PER SHARE AMOUNTS | ||||
Net loss attributable to common stockholders—basic (in dollars per share) | $ (0.27) | $ (0.12) | $ (0.67) | $ (0.31) |
Net loss attributable to common stockholders—diluted (in dollars per share) | $ (0.27) | $ (0.12) | $ (0.67) | $ (0.31) |
Weighted average shares of common stock outstanding—basic (in shares) | 140,937,702 | 141,117,194 | 140,957,170 | 144,677,652 |
Weighted average shares of common stock outstanding—diluted (in shares) | 140,937,702 | 141,117,194 | 140,957,170 | 144,677,652 |
Series A preferred units | ||||
OTHER INCOME (EXPENSES) | ||||
Net income attributable to preferred units/shares | $ (153,000) | $ (153,000) | $ (459,000) | $ (459,000) |
Series C preferred shares/units | ||||
OTHER INCOME (EXPENSES) | ||||
Net income attributable to preferred units/shares | (5,047,000) | (5,047,000) | (15,141,000) | (15,384,000) |
Office | ||||
REVENUES | ||||
Rental | 199,633,000 | 208,779,000 | 605,776,000 | 626,807,000 |
Service and other revenues | 3,954,000 | 4,712,000 | 11,735,000 | 14,328,000 |
Revenues | 203,587,000 | 213,491,000 | 617,511,000 | 641,135,000 |
OPERATING EXPENSES | ||||
Office and studio operating expenses | 80,521,000 | 78,340,000 | 231,342,000 | 230,529,000 |
Studio | ||||
REVENUES | ||||
Rental | 13,482,000 | 15,305,000 | 46,109,000 | 42,137,000 |
Service and other revenues | 14,374,000 | 31,558,000 | 65,254,000 | 73,025,000 |
Revenues | 27,856,000 | 46,863,000 | 111,363,000 | 115,162,000 |
OPERATING EXPENSES | ||||
Office and studio operating expenses | $ 31,655,000 | $ 26,688,000 | $ 103,578,000 | $ 66,357,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net loss | $ (35,752) | $ (6,792) | $ (82,046) | $ (10,861) |
Currency translation adjustments | (5,571) | (10,052) | 203 | (18,501) |
Net unrealized gains on derivative instruments: | ||||
Unrealized gains | 5,007 | 4,640 | 18,040 | 9,200 |
Reclassification adjustment for realized gains | (2,049) | (4,782) | (2,297) | (6,277) |
Total net unrealized gains (losses) on derivative instruments | 2,958 | (142) | 15,743 | 2,923 |
Total other comprehensive (loss) income | (2,613) | (10,194) | 15,946 | (15,578) |
Comprehensive loss | (38,365) | (16,986) | (66,100) | (26,439) |
Comprehensive income attributable to participating securities | 0 | (300) | (850) | (894) |
Comprehensive loss (income) attributable to non-controlling interest in consolidated real estate entities | 2,067 | (6,256) | 319 | (21,898) |
Comprehensive loss attributable to redeemable non-controlling interest in consolidated real estate entities | 931 | 1,037 | 2,333 | 4,433 |
Comprehensive loss attributable to non-controlling interest in the operating partnership | 735 | 404 | 1,160 | 821 |
COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | (39,832) | (27,301) | (78,738) | (59,820) |
Series A preferred units | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable to preferred units/stock | (153) | (153) | (459) | (459) |
Series C preferred stock | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable to preferred units/stock | $ (5,047) | $ (5,047) | $ (15,141) | $ (15,384) |
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 Income (Loss) | Units in the Operating Partnership | Members in Consolidated Real Estate Entities |
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 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Contributions | 16,241 | 16,241 | ||||||
Distributions | (56,386) | (56,386) | ||||||
Transaction costs | (573) | (573) | ||||||
Accelerated share repurchase (in shares) | (8,128,725) | |||||||
Accelerated share repurchase | (200,000) | $ (82) | (199,918) | |||||
Issuance of unrestricted stock (in shares) | 32,861 | |||||||
Shares repurchased (in shares) | (2,105,359) | |||||||
Shares repurchased | (37,206) | $ (21) | (37,185) | |||||
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 | |||||||
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 (in shares) | (686,016) | |||||||
Accelerated share repurchase | 0 | $ (7) | 7 | |||||
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 | |||||||
Beginning balance at Dec. 31, 2022 | $ 3,749,831 | 425,000 | $ 1,409 | 2,889,967 | 0 | (11,272) | 66,971 | 377,756 |
Beginning balance (in shares) at Dec. 31, 2022 | 141,054,478 | 141,054,478 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Contributions | $ 21,531 | 21,531 | ||||||
Distributions | (53,910) | (53,910) | ||||||
Issuance of unrestricted stock (in shares) | 82,861 | |||||||
Shares repurchased (in shares) | (187,400) | |||||||
Shares repurchased | (1,369) | $ (6) | (1,363) | |||||
Shares withheld to satisfy tax withholding obligations (in shares) | (12,237) | |||||||
Shares withheld to satisfy tax withholding obligations | (87) | (87) | ||||||
Declared dividend | (70,101) | (15,141) | (146,556) | 93,335 | (1,739) | |||
Amortization of stock-based compensation | 19,153 | 6,348 | 12,805 | |||||
Net income (loss) | (80,169) | 15,141 | (93,335) | (1,600) | (375) | |||
Other comprehensive income (loss) | 15,946 | 15,450 | 440 | 56 | ||||
Ending balance at Sep. 30, 2023 | $ 3,600,825 | 425,000 | $ 1,403 | 2,748,309 | 0 | 4,178 | 76,877 | 345,058 |
Ending balance (in shares) at Sep. 30, 2023 | 140,937,702 | 140,937,702 | ||||||
Beginning balance at Jun. 30, 2023 | $ 3,645,352 | 425,000 | $ 1,403 | 2,783,858 | 0 | 6,413 | 73,408 | 355,270 |
Beginning balance (in shares) at Jun. 30, 2023 | 140,937,702 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Contributions | 7,326 | 7,326 | ||||||
Distributions | (15,471) | (15,471) | ||||||
Declared dividend | (5,047) | (5,047) | (37,597) | 37,597 | ||||
Amortization of stock-based compensation | 6,252 | 2,048 | 4,204 | |||||
Net income (loss) | (34,974) | 5,047 | (37,597) | (672) | (1,752) | |||
Other comprehensive income (loss) | (2,613) | (2,235) | (63) | (315) | ||||
Ending balance at Sep. 30, 2023 | $ 3,600,825 | $ 425,000 | $ 1,403 | $ 2,748,309 | $ 0 | $ 4,178 | $ 76,877 | $ 345,058 |
Ending balance (in shares) at Sep. 30, 2023 | 140,937,702 | 140,937,702 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (82,046,000) | $ (10,861,000) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 294,654,000 | 276,701,000 |
Non-cash interest expense | 19,390,000 | 2,204,000 |
Amortization of stock-based compensation | 17,087,000 | 17,816,000 |
Loss (income) from unconsolidated real estate entities | 2,219,000 | (1,731,000) |
Unrealized loss on non-real estate investments | 2,269,000 | 1,062,000 |
Straight-line rents | (11,248,000) | (33,951,000) |
Straight-line rent expenses | 3,846,000 | 1,796,000 |
Amortization of above- and below-market leases, net | (4,764,000) | (6,393,000) |
Amortization of above- and below-market ground leases, net | 2,064,000 | 2,042,000 |
Amortization of lease incentive costs | 892,000 | 1,222,000 |
Distribution of income from unconsolidated real estate entities | 0 | 1,961,000 |
Impairment loss | 0 | 28,548,000 |
Earnout liability fair value adjustment | (3,017,000) | 1,757,000 |
(Gain) loss on sale of real estate | (23,154,000) | 180,000 |
Deferred tax provision (benefit) | 549,000 | (1,373,000) |
Gain from insurance proceeds | 0 | (1,167,000) |
Change in operating assets and liabilities: | ||
Accounts receivable | (2,398,000) | 13,003,000 |
Deferred leasing costs and lease intangibles | (12,571,000) | (19,553,000) |
Prepaid expenses and other assets | (18,374,000) | (10,028,000) |
Accounts payable, accrued liabilities and other | 37,137,000 | 63,807,000 |
Security deposits, prepaid rent and other | 503,000 | 1,507,000 |
Net cash provided by operating activities | 223,038,000 | 328,549,000 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sales of real estate | 167,045,000 | 44,537,000 |
Additions to investment in real estate | (229,298,000) | (171,011,000) |
Property acquisitions | 0 | (96,443,000) |
Acquisitions of businesses | 0 | (197,862,000) |
Maturities of U.S. Government securities | 0 | 129,300,000 |
Contributions to non-real estate investments | (4,184,000) | (14,791,000) |
Proceeds from sales of non-real estate investments | 503,000 | 0 |
Distributions from non-real estate investments | 0 | 329,000 |
Distributions from unconsolidated real estate entities | 1,895,000 | 1,067,000 |
Contributions to unconsolidated real estate entities | (56,017,000) | (18,766,000) |
Additions to non-real estate property, plant and equipment | (4,449,000) | (13,071,000) |
Insurance proceeds for damaged property, plant and equipment | 0 | 1,284,000 |
Net cash used in investing activities | (124,505,000) | (335,427,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from unsecured and secured debt | 338,356,000 | 978,251,000 |
Payments of unsecured and secured debt | (517,000,000) | (430,000,000) |
Payments of in-substance defeased debt | 0 | (128,212,000) |
Transaction costs | 0 | (573,000) |
Repurchases of common stock | (1,369,000) | (37,206,000) |
Accelerated share repurchase | 0 | (200,000,000) |
Dividends paid to common stock and unitholders | (54,960,000) | (109,388,000) |
Dividends paid to preferred stock and unitholders | (15,600,000) | (18,124,000) |
Contributions from redeemable non-controlling members in consolidated real estate entities | 1,125,000 | 575,000 |
Distributions to redeemable non-controlling members in consolidated real estate entities | (8,256,000) | (8,000) |
Contributions from non-controlling members in consolidated real estate entities | 21,531,000 | 16,241,000 |
Distributions to non-controlling members in consolidated real estate entities | (53,910,000) | (56,386,000) |
Payments to satisfy tax withholding obligations | (87,000) | 0 |
Payments of loan costs | 0 | (1,100,000) |
Net cash (used in) provided by financing activities | (290,170,000) | 14,070,000 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (191,637,000) | 7,192,000 |
Cash and cash equivalents and restricted cash—beginning of period | 285,731,000 | 196,876,000 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD | $ 94,094,000 | $ 204,068,000 |
CONSOLIDATED BALANCE SHEETS L.P
CONSOLIDATED BALANCE SHEETS L.P. - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Investment in real estate, at cost | $ 8,831,914 | $ 8,716,572 |
Accumulated depreciation and amortization | (1,735,715) | (1,541,271) |
Investment in real estate, net | 7,096,199 | 7,175,301 |
Non-real estate property, plant and equipment, net | 115,903 | 130,289 |
Cash and cash equivalents | 75,040 | 255,761 |
Restricted cash | 19,054 | 29,970 |
Accounts receivable, net | 19,330 | 16,820 |
Straight-line rent receivables, net | 290,938 | 279,910 |
Deferred leasing costs and intangible assets, net | 359,870 | 393,842 |
Operating lease right-of-use assets | 391,177 | 401,051 |
Prepaid expenses and other assets, net | 119,494 | 98,837 |
Investment in unconsolidated real estate entities | 236,248 | 180,572 |
Goodwill | 263,549 | 263,549 |
Assets associated with real estate held for sale | 0 | 93,238 |
TOTAL ASSETS | 8,986,802 | 9,319,140 |
Liabilities | ||
Accounts payable, accrued liabilities and other | 267,426 | 264,098 |
Operating lease liabilities | 393,773 | 399,801 |
Intangible liabilities, net | 29,247 | 34,091 |
Security deposits, prepaid rent and other | 86,980 | 83,797 |
Liabilities associated with real estate held for sale | 0 | 665 |
Total liabilities | 5,260,582 | 5,434,450 |
Commitments and contingencies (note 21) | ||
Redeemable preferred units of the operating partnership | 9,815 | 9,815 |
Redeemable non-controlling interest in consolidated real estate entities | 115,580 | 125,044 |
Hudson Pacific Properties, L.P. partners’ capital | ||
Accumulated other comprehensive income (loss) | 4,178 | (11,272) |
TOTAL LIABILITIES AND EQUITY | 8,986,802 | 9,319,140 |
Unsecured and Secured Debt | ||
Liabilities | ||
Notes payable, net | 4,417,020 | 4,585,862 |
Joint venture partner debt | ||
Liabilities | ||
Notes payable, net | 66,136 | 66,136 |
Hudson Pacific Partners L.P. | ||
ASSETS | ||
Investment in real estate, at cost | 8,831,914 | 8,716,572 |
Accumulated depreciation and amortization | (1,735,715) | (1,541,271) |
Investment in real estate, net | 7,096,199 | 7,175,301 |
Non-real estate property, plant and equipment, net | 115,903 | 130,289 |
Cash and cash equivalents | 75,040 | 255,761 |
Restricted cash | 19,054 | 29,970 |
Accounts receivable, net | 19,330 | 16,820 |
Straight-line rent receivables, net | 290,938 | 279,910 |
Deferred leasing costs and intangible assets, net | 359,870 | 393,842 |
Operating lease right-of-use assets | 391,177 | 401,051 |
Prepaid expenses and other assets, net | 119,494 | 98,837 |
Investment in unconsolidated real estate entities | 236,248 | 180,572 |
Goodwill | 263,549 | 263,549 |
Assets associated with real estate held for sale | 0 | 93,238 |
TOTAL ASSETS | 8,986,802 | 9,319,140 |
Liabilities | ||
Accounts payable, accrued liabilities and other | 267,426 | 264,098 |
Operating lease liabilities | 393,773 | 399,801 |
Intangible liabilities, net | 29,247 | 34,091 |
Security deposits, prepaid rent and other | 86,980 | 83,797 |
Liabilities associated with real estate held for sale | 0 | 665 |
Total liabilities | 5,260,582 | 5,434,450 |
Commitments and contingencies (note 21) | ||
Redeemable preferred units of the operating partnership | 9,815 | 9,815 |
Redeemable non-controlling interest in consolidated real estate entities | 115,580 | 125,044 |
Hudson Pacific Properties, L.P. partners’ capital | ||
Common units, 143,456,164 and 143,246,320 outstanding at September 30, 2023 and December 31, 2022, respectively | 2,826,337 | 2,958,535 |
Accumulated other comprehensive income (loss) | 4,430 | (11,460) |
Total Hudson Pacific Properties, L.P. partners’ capital | 3,255,767 | 3,372,075 |
Non-controlling interest—members in consolidated real estate entities | 345,058 | 377,756 |
Total capital | 3,600,825 | 3,749,831 |
TOTAL LIABILITIES AND EQUITY | 8,986,802 | 9,319,140 |
Hudson Pacific Partners L.P. | Unsecured and Secured Debt | ||
Liabilities | ||
Notes payable, net | 4,417,020 | 4,585,862 |
Hudson Pacific Partners L.P. | Joint venture partner debt | ||
Liabilities | ||
Notes payable, net | 66,136 | 66,136 |
Hudson Pacific Partners L.P. | 4.750% Series C Cumulative Redeemable Preferred Stock | ||
Hudson Pacific Properties, L.P. partners’ capital | ||
4.750% Series C cumulative redeemable preferred units, $25.00 per unit liquidation preference, 17,000,000 units outstanding at September 30, 2023 and December 31, 2022 | $ 425,000 | $ 425,000 |
CONSOLIDATED BALANCE SHEETS L_2
CONSOLIDATED BALANCE SHEETS L.P. (Parenthetical) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Common Stock: | ||
Common stock/units, outstanding (in shares) | 140,937,702 | 141,054,478 |
4.750% Series C Cumulative Redeemable Preferred Stock | ||
Common Stock: | ||
Interest rate of preferred stock | 4.75% | 4.75% |
Liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, outstanding (in shares) | 17,000,000 | 17,000,000 |
Hudson Pacific Partners L.P. | ||
Common Stock: | ||
Common stock/units, outstanding (in shares) | 143,456,164 | 143,246,320 |
Hudson Pacific Partners L.P. | 4.750% Series C Cumulative Redeemable Preferred Stock | ||
Common Stock: | ||
Interest rate of preferred stock | 4.75% | 4.75% |
Liquidation preference (in dollars per share) | $ 25 | $ 25 |
Preferred stock, outstanding (in shares) | 17,000,000 | 17,000,000 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS L.P. - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
REVENUES | ||||
Revenues | $ 231,443,000 | $ 260,354,000 | $ 728,874,000 | $ 756,297,000 |
OPERATING EXPENSES | ||||
Office and studio operating expenses | 112,176,000 | 105,028,000 | 334,920,000 | 296,886,000 |
General and administrative | 17,512,000 | 19,795,000 | 55,177,000 | 62,178,000 |
Depreciation and amortization | 98,580,000 | 93,070,000 | 294,654,000 | 276,701,000 |
Total operating expenses | 228,268,000 | 217,893,000 | 684,751,000 | 635,765,000 |
OTHER INCOME (EXPENSES) | ||||
(Loss) income from unconsolidated real estate entities | (759,000) | (352,000) | (2,219,000) | 1,731,000 |
Fee income | 340,000 | 911,000 | 5,026,000 | 3,122,000 |
Interest expense | (53,581,000) | (37,261,000) | (162,036,000) | (101,816,000) |
Interest income | 800,000 | 196,000 | 1,407,000 | 2,026,000 |
Management services reimbursement income—unconsolidated real estate entities | 1,015,000 | 983,000 | 3,138,000 | 3,159,000 |
Management services expense—unconsolidated real estate entities | (1,015,000) | (983,000) | (3,138,000) | (3,159,000) |
Transaction-related expenses | 0 | (9,331,000) | 1,344,000 | (10,713,000) |
Unrealized loss on non-real estate investments | (2,265,000) | (894,000) | (2,269,000) | (1,062,000) |
Gain (loss) on sale of real estate | 16,108,000 | (180,000) | 23,154,000 | (180,000) |
Impairment loss | 0 | (4,795,000) | 0 | (28,548,000) |
Gain on extinguishment of debt | 0 | 0 | 10,000,000 | 0 |
Other income | 5,000 | 1,147,000 | 139,000 | 1,138,000 |
Total other expenses | (39,352,000) | (50,559,000) | (125,454,000) | (134,302,000) |
Loss before income tax benefit (provision) | (36,177,000) | (8,098,000) | (81,331,000) | (13,770,000) |
Income tax benefit (provision) | 425,000 | 1,306,000 | (715,000) | 2,909,000 |
Net loss | (35,752,000) | (6,792,000) | (82,046,000) | (10,861,000) |
Net loss (income) attributable to non-controlling interest in consolidated real estate entities | 1,752,000 | (6,256,000) | 375,000 | (21,898,000) |
Net loss attributable to redeemable non-controlling interest in consolidated real estate entities | 931,000 | 1,037,000 | 2,333,000 | 4,433,000 |
Net income attributable to participating securities | 0 | (300,000) | (850,000) | (894,000) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | (37,597,000) | (17,286,000) | (94,188,000) | (44,515,000) |
Series A preferred units | ||||
OTHER INCOME (EXPENSES) | ||||
Net income attributable to preferred units/shares | (153,000) | (153,000) | (459,000) | (459,000) |
Series C preferred shares/units | ||||
OTHER INCOME (EXPENSES) | ||||
Net income attributable to preferred units/shares | (5,047,000) | (5,047,000) | (15,141,000) | (15,384,000) |
Office | ||||
REVENUES | ||||
Rental | 199,633,000 | 208,779,000 | 605,776,000 | 626,807,000 |
Service and other revenues | 3,954,000 | 4,712,000 | 11,735,000 | 14,328,000 |
Revenues | 203,587,000 | 213,491,000 | 617,511,000 | 641,135,000 |
OPERATING EXPENSES | ||||
Office and studio operating expenses | 80,521,000 | 78,340,000 | 231,342,000 | 230,529,000 |
Studio | ||||
REVENUES | ||||
Rental | 13,482,000 | 15,305,000 | 46,109,000 | 42,137,000 |
Service and other revenues | 14,374,000 | 31,558,000 | 65,254,000 | 73,025,000 |
Revenues | 27,856,000 | 46,863,000 | 111,363,000 | 115,162,000 |
OPERATING EXPENSES | ||||
Office and studio operating expenses | 31,655,000 | 26,688,000 | 103,578,000 | 66,357,000 |
Hudson Pacific Partners L.P. | ||||
REVENUES | ||||
Revenues | 231,443,000 | 260,354,000 | 728,874,000 | 756,297,000 |
OPERATING EXPENSES | ||||
General and administrative | 17,512,000 | 19,795,000 | 55,177,000 | 62,178,000 |
Depreciation and amortization | 98,580,000 | 93,070,000 | 294,654,000 | 276,701,000 |
Total operating expenses | 228,268,000 | 217,893,000 | 684,751,000 | 635,765,000 |
OTHER INCOME (EXPENSES) | ||||
(Loss) income from unconsolidated real estate entities | (759,000) | (352,000) | (2,219,000) | 1,731,000 |
Fee income | 340,000 | 911,000 | 5,026,000 | 3,122,000 |
Interest expense | (53,581,000) | (37,261,000) | (162,036,000) | (101,816,000) |
Interest income | 800,000 | 196,000 | 1,407,000 | 2,026,000 |
Management services reimbursement income—unconsolidated real estate entities | 1,015,000 | 983,000 | 3,138,000 | 3,159,000 |
Management services expense—unconsolidated real estate entities | (1,015,000) | (983,000) | (3,138,000) | (3,159,000) |
Transaction-related expenses | 0 | (9,331,000) | 1,344,000 | (10,713,000) |
Unrealized loss on non-real estate investments | (2,265,000) | (894,000) | (2,269,000) | (1,062,000) |
Gain (loss) on sale of real estate | 16,108,000 | (180,000) | 23,154,000 | (180,000) |
Impairment loss | 0 | (4,795,000) | 0 | (28,548,000) |
Gain on extinguishment of debt | 0 | 0 | 10,000,000 | 0 |
Other income | 5,000 | 1,147,000 | 139,000 | 1,138,000 |
Total other expenses | (39,352,000) | (50,559,000) | (125,454,000) | (134,302,000) |
Loss before income tax benefit (provision) | (36,177,000) | (8,098,000) | (81,331,000) | (13,770,000) |
Income tax benefit (provision) | 425,000 | 1,306,000 | (715,000) | 2,909,000 |
Net loss | (35,752,000) | (6,792,000) | (82,046,000) | (10,861,000) |
Net loss (income) attributable to non-controlling interest in consolidated real estate entities | 1,752,000 | (6,256,000) | 375,000 | (21,898,000) |
Net loss attributable to redeemable non-controlling interest in consolidated real estate entities | 931,000 | 1,037,000 | 2,333,000 | 4,433,000 |
Net loss attributable to Hudson Pacific Properties, L.P. | (33,069,000) | (12,011,000) | (79,338,000) | (28,326,000) |
Net income attributable to participating securities | 0 | (300,000) | (850,000) | (894,000) |
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | $ (38,269,000) | $ (17,511,000) | $ (95,788,000) | $ (45,063,000) |
BASIC AND DILUTED PER UNIT AMOUNTS | ||||
Net loss attributable to common unitholders —basic (in dollars per share) | $ (0.27) | $ (0.12) | $ (0.67) | $ (0.31) |
Net loss attributable to common unitholders —diluted (in dollars per share) | $ (0.27) | $ (0.12) | $ (0.67) | $ (0.31) |
Weighted average shares of common units outstanding—basic (in shares) | 143,456,164 | 142,963,458 | 143,405,044 | 146,523,102 |
Weighted average shares of common units outstanding—diluted (in shares) | 143,456,164 | 142,963,458 | 143,405,044 | 146,523,102 |
Hudson Pacific Partners L.P. | Series A preferred units | ||||
OTHER INCOME (EXPENSES) | ||||
Net income attributable to preferred units/shares | $ (153,000) | $ (153,000) | $ (459,000) | $ (459,000) |
Hudson Pacific Partners L.P. | Series C preferred shares/units | ||||
OTHER INCOME (EXPENSES) | ||||
Net income attributable to preferred units/shares | (5,047,000) | (5,047,000) | (15,141,000) | (15,384,000) |
Hudson Pacific Partners L.P. | Office | ||||
REVENUES | ||||
Rental | 199,633,000 | 208,779,000 | 605,776,000 | 626,807,000 |
Service and other revenues | 3,954,000 | 4,712,000 | 11,735,000 | 14,328,000 |
Revenues | 203,587,000 | 213,491,000 | 617,511,000 | 641,135,000 |
OPERATING EXPENSES | ||||
Office and studio operating expenses | 80,521,000 | 78,340,000 | 231,342,000 | 230,529,000 |
Hudson Pacific Partners L.P. | Studio | ||||
REVENUES | ||||
Rental | 13,482,000 | 15,305,000 | 46,109,000 | 42,137,000 |
Service and other revenues | 14,374,000 | 31,558,000 | 65,254,000 | 73,025,000 |
Revenues | 27,856,000 | 46,863,000 | 111,363,000 | 115,162,000 |
OPERATING EXPENSES | ||||
Office and studio operating expenses | $ 31,655,000 | $ 26,688,000 | $ 103,578,000 | $ 66,357,000 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS L.P. - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Net loss | $ (35,752) | $ (6,792) | $ (82,046) | $ (10,861) |
Currency translation adjustments | (5,571) | (10,052) | 203 | (18,501) |
Net unrealized gains on derivative instruments: | ||||
Unrealized gains | 5,007 | 4,640 | 18,040 | 9,200 |
Reclassification adjustment for realized gains | (2,049) | (4,782) | (2,297) | (6,277) |
Total net unrealized gains (losses) on derivative instruments | 2,958 | (142) | 15,743 | 2,923 |
Total other comprehensive (loss) income | (2,613) | (10,194) | 15,946 | (15,578) |
Comprehensive loss | (38,365) | (16,986) | (66,100) | (26,439) |
Comprehensive income attributable to participating securities | 0 | (300) | (850) | (894) |
Comprehensive loss (income) attributable to non-controlling interest in consolidated real estate entities | 2,067 | (6,256) | 319 | (21,898) |
Comprehensive loss attributable to redeemable non-controlling interest in consolidated real estate entities | 931 | 1,037 | 2,333 | 4,433 |
COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | (39,832) | (27,301) | (78,738) | (59,820) |
Series A preferred units | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable to preferred units/stock | (153) | (153) | (459) | (459) |
Series C preferred shares/units | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable to preferred units/stock | (5,047) | (5,047) | (15,141) | (15,384) |
Hudson Pacific Partners L.P. | ||||
Net loss | (35,752) | (6,792) | (82,046) | (10,861) |
Currency translation adjustments | (5,571) | (10,052) | 203 | (18,501) |
Net unrealized gains on derivative instruments: | ||||
Unrealized gains | 5,007 | 4,640 | 18,040 | 9,200 |
Reclassification adjustment for realized gains | (2,049) | (4,782) | (2,297) | (6,277) |
Total net unrealized gains (losses) on derivative instruments | 2,958 | (142) | 15,743 | 2,923 |
Total other comprehensive (loss) income | (2,613) | (10,194) | 15,946 | (15,578) |
Comprehensive loss | (38,365) | (16,986) | (66,100) | (26,439) |
Comprehensive income attributable to participating securities | 0 | (300) | (850) | (894) |
Comprehensive loss (income) attributable to non-controlling interest in consolidated real estate entities | 2,067 | (6,256) | 319 | (21,898) |
Comprehensive loss attributable to redeemable non-controlling interest in consolidated real estate entities | 931 | 1,037 | 2,333 | 4,433 |
COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS | (40,567) | (27,705) | (79,898) | (60,641) |
Hudson Pacific Partners L.P. | Series A preferred units | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable to preferred units/stock | (153) | (153) | (459) | (459) |
Hudson Pacific Partners L.P. | Series C preferred shares/units | ||||
Net unrealized gains on derivative instruments: | ||||
Comprehensive income attributable to preferred units/stock | $ (5,047) | $ (5,047) | $ (15,141) | $ (15,384) |
CONSOLIDATED STATEMENTS OF CAPI
CONSOLIDATED STATEMENTS OF CAPITAL - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Increase (Decrease) in Partners' Capital | ||||
Beginning balance (in shares) | 141,054,478 | |||
Contributions | $ 7,326 | $ 784 | $ 21,531 | $ 16,241 |
Distributions | (15,471) | (7,023) | (53,910) | (56,386) |
Transaction costs | (359) | (573) | ||
Repurchase of common units | (1,369) | (37,206) | ||
Units withheld to satisfy tax withholding obligations | (87) | |||
Declared distributions | (5,047) | (41,087) | (70,101) | (124,772) |
Amortization of unit-based compensation | 6,252 | 7,388 | 19,153 | 20,499 |
Net income (loss) | (34,974) | (5,908) | (80,169) | (6,887) |
Other comprehensive income (loss) | $ (2,613) | (10,194) | $ 15,946 | (15,578) |
Ending balance (in shares) | 140,937,702 | 140,937,702 | ||
Hudson Pacific Partners L.P. | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | $ 3,645,352 | 3,848,729 | $ 3,749,831 | 4,196,992 |
Beginning balance (in shares) | 143,246,320 | |||
Contributions | 7,326 | 784 | $ 21,531 | 16,241 |
Distributions | (15,471) | (7,023) | (53,910) | (56,386) |
Transaction costs | (359) | (573) | ||
Repurchase of common units | (1,369) | (237,206) | ||
Units withheld to satisfy tax withholding obligations | (87) | |||
Declared distributions | (5,047) | (41,087) | (70,101) | (124,772) |
Amortization of unit-based compensation | 6,252 | 7,388 | 19,153 | 20,499 |
Net income (loss) | (34,974) | (5,908) | (80,169) | (6,887) |
Other comprehensive income (loss) | (2,613) | (10,194) | 15,946 | (15,578) |
Ending balance | $ 3,600,825 | 3,792,330 | $ 3,600,825 | 3,792,330 |
Ending balance (in shares) | 143,456,164 | 143,456,164 | ||
Hudson Pacific Partners L.P. | Total Partners’ Capital | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | $ 3,290,082 | 3,464,022 | $ 3,372,075 | 3,794,021 |
Transaction costs | (359) | (573) | ||
Repurchase of common units | (1,369) | (237,206) | ||
Units withheld to satisfy tax withholding obligations | (87) | |||
Declared distributions | (5,047) | (41,087) | (70,101) | (124,772) |
Amortization of unit-based compensation | 6,252 | 7,388 | 19,153 | 20,499 |
Net income (loss) | (33,222) | (12,164) | (79,794) | (28,785) |
Other comprehensive income (loss) | (2,298) | (10,194) | 15,890 | (15,578) |
Ending balance | 3,255,767 | 3,407,606 | 3,255,767 | 3,407,606 |
Hudson Pacific Partners L.P. | Preferred Units | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | 425,000 | 425,000 | 425,000 | 425,000 |
Declared distributions | (5,047) | (5,047) | (15,141) | (15,384) |
Net income (loss) | 5,047 | 5,047 | 15,141 | 15,384 |
Ending balance | 425,000 | 425,000 | 425,000 | 425,000 |
Hudson Pacific Partners L.P. | Common units | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | $ 2,858,354 | $ 3,046,185 | $ 2,958,535 | $ 3,370,800 |
Beginning balance (in shares) | 143,456,164 | 143,455,600 | 143,246,320 | 152,967,441 |
Transaction costs | $ (359) | $ (573) | ||
Issuance of unrestricted stock (in shares) | 409,481 | 36,227 | ||
Repurchase of common units (in shares) | (686,016) | (187,400) | (10,234,084) | |
Repurchase of common units | $ (1,369) | $ (237,206) | ||
Units withheld to satisfy tax withholding obligations (in shares) | (12,237) | |||
Units withheld to satisfy tax withholding obligations | $ (87) | |||
Declared distributions | $ (36,040) | (54,960) | (109,388) | |
Amortization of unit-based compensation | $ 6,252 | 7,388 | 19,153 | 20,499 |
Net income (loss) | (38,269) | (17,211) | (94,935) | (44,169) |
Ending balance | $ 2,826,337 | $ 2,999,963 | $ 2,826,337 | $ 2,999,963 |
Ending balance (in shares) | 143,456,164 | 142,769,584 | 143,456,164 | 142,769,584 |
Hudson Pacific Partners L.P. | Accumulated Other Comprehensive Income (Loss) | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | $ 6,728 | $ (7,163) | $ (11,460) | $ (1,779) |
Other comprehensive income (loss) | (2,298) | (10,194) | 15,890 | (15,578) |
Ending balance | 4,430 | (17,357) | 4,430 | (17,357) |
Hudson Pacific Partners L.P. | Non-controlling Interest—Members in Consolidated Real Estate Entities | ||||
Increase (Decrease) in Partners' Capital | ||||
Beginning balance | 355,270 | 384,707 | 377,756 | 402,971 |
Contributions | 7,326 | 784 | 21,531 | 16,241 |
Distributions | (15,471) | (7,023) | (53,910) | (56,386) |
Net income (loss) | (1,752) | 6,256 | (375) | 21,898 |
Other comprehensive income (loss) | (315) | 56 | ||
Ending balance | $ 345,058 | $ 384,724 | $ 345,058 | $ 384,724 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS L.P. - USD ($) | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (82,046,000) | $ (10,861,000) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 294,654,000 | 276,701,000 |
Non-cash interest expense | 19,390,000 | 2,204,000 |
Amortization of stock-based compensation | 17,087,000 | 17,816,000 |
Loss (income) from unconsolidated real estate entities | 2,219,000 | (1,731,000) |
Unrealized loss on non-real estate investments | 2,269,000 | 1,062,000 |
Straight-line rents | (11,248,000) | (33,951,000) |
Straight-line rent expenses | 3,846,000 | 1,796,000 |
Amortization of above- and below-market leases, net | (4,764,000) | (6,393,000) |
Amortization of above- and below-market ground leases, net | 2,064,000 | 2,042,000 |
Amortization of lease incentive costs | 892,000 | 1,222,000 |
Distribution of income from unconsolidated real estate entities | 0 | 1,961,000 |
Impairment loss | 0 | 28,548,000 |
Earnout liability fair value adjustment | (3,017,000) | 1,757,000 |
(Gain) loss on sale of real estate | (23,154,000) | 180,000 |
Deferred tax provision (benefit) | 549,000 | (1,373,000) |
Gain from insurance proceeds | 0 | (1,167,000) |
Change in operating assets and liabilities: | ||
Accounts receivable | (2,398,000) | 13,003,000 |
Deferred leasing costs and lease intangibles | (12,571,000) | (19,553,000) |
Prepaid expenses and other assets | (18,374,000) | (10,028,000) |
Accounts payable, accrued liabilities and other | 37,137,000 | 63,807,000 |
Security deposits, prepaid rent and other | 503,000 | 1,507,000 |
Net cash provided by operating activities | 223,038,000 | 328,549,000 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sales of real estate | 167,045,000 | 44,537,000 |
Additions to investment in real estate | (229,298,000) | (171,011,000) |
Property acquisitions | 0 | (96,443,000) |
Acquisitions of businesses | 0 | (197,862,000) |
Maturities of U.S. Government securities | 0 | 129,300,000 |
Contributions to non-real estate investments | (4,184,000) | (14,791,000) |
Proceeds from sales of non-real estate investments | 503,000 | 0 |
Distributions from non-real estate investments | 0 | 329,000 |
Distributions from unconsolidated real estate entities | 1,895,000 | 1,067,000 |
Contributions to unconsolidated real estate entities | (56,017,000) | (18,766,000) |
Additions to non-real estate property, plant and equipment | (4,449,000) | (13,071,000) |
Insurance proceeds for damaged property, plant and equipment | 0 | 1,284,000 |
Net cash used in investing activities | (124,505,000) | (335,427,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from unsecured and secured debt | 338,356,000 | 978,251,000 |
Payments of unsecured and secured debt | (517,000,000) | (430,000,000) |
Payments of in-substance defeased debt | 0 | (128,212,000) |
Transaction costs | 0 | (573,000) |
Repurchases of common stock | (1,369,000) | (37,206,000) |
Dividends paid to common stock and unitholders | (54,960,000) | (109,388,000) |
Dividends paid to preferred stock and unitholders | (15,600,000) | (18,124,000) |
Contributions from redeemable non-controlling members in consolidated real estate entities | 1,125,000 | 575,000 |
Distributions to redeemable non-controlling members in consolidated real estate entities | (8,256,000) | (8,000) |
Contributions from non-controlling members in consolidated real estate entities | 21,531,000 | 16,241,000 |
Distributions to non-controlling members in consolidated real estate entities | (53,910,000) | (56,386,000) |
Payments to satisfy tax withholding obligations | (87,000) | 0 |
Payments of loan costs | 0 | (1,100,000) |
Net cash (used in) provided by financing activities | (290,170,000) | 14,070,000 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (191,637,000) | 7,192,000 |
Cash and cash equivalents and restricted cash—beginning of period | 285,731,000 | 196,876,000 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD | 94,094,000 | 204,068,000 |
Hudson Pacific Partners L.P. | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | (82,046,000) | (10,861,000) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 294,654,000 | 276,701,000 |
Non-cash interest expense | 19,390,000 | 2,204,000 |
Amortization of stock-based compensation | 17,087,000 | 17,816,000 |
Loss (income) from unconsolidated real estate entities | 2,219,000 | (1,731,000) |
Unrealized loss on non-real estate investments | 2,269,000 | 1,062,000 |
Straight-line rents | (11,248,000) | (33,951,000) |
Straight-line rent expenses | 3,846,000 | 1,796,000 |
Amortization of above- and below-market leases, net | (4,764,000) | (6,393,000) |
Amortization of above- and below-market ground leases, net | 2,064,000 | 2,042,000 |
Amortization of lease incentive costs | 892,000 | 1,222,000 |
Distribution of income from unconsolidated real estate entities | 0 | 1,961,000 |
Impairment loss | 0 | 28,548,000 |
Earnout liability fair value adjustment | (3,017,000) | 1,757,000 |
(Gain) loss on sale of real estate | (23,154,000) | 180,000 |
Deferred tax provision (benefit) | 549,000 | (1,373,000) |
Gain from insurance proceeds | 0 | (1,167,000) |
Change in operating assets and liabilities: | ||
Accounts receivable | (2,398,000) | 13,003,000 |
Deferred leasing costs and lease intangibles | (12,571,000) | (19,553,000) |
Prepaid expenses and other assets | (18,374,000) | (10,028,000) |
Accounts payable, accrued liabilities and other | 37,137,000 | 63,807,000 |
Security deposits, prepaid rent and other | 503,000 | 1,507,000 |
Net cash provided by operating activities | 223,038,000 | 328,549,000 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Proceeds from sales of real estate | 167,045,000 | 44,537,000 |
Additions to investment in real estate | (229,298,000) | (171,011,000) |
Property acquisitions | 0 | (96,443,000) |
Acquisitions of businesses | 0 | (197,862,000) |
Maturities of U.S. Government securities | 0 | 129,300,000 |
Contributions to non-real estate investments | (4,184,000) | (14,791,000) |
Proceeds from sales of non-real estate investments | 503,000 | 0 |
Distributions from non-real estate investments | 0 | 329,000 |
Distributions from unconsolidated real estate entities | 1,895,000 | 1,067,000 |
Contributions to unconsolidated real estate entities | (56,017,000) | (18,766,000) |
Additions to non-real estate property, plant and equipment | (4,449,000) | (13,071,000) |
Insurance proceeds for damaged property, plant and equipment | 0 | 1,284,000 |
Net cash used in investing activities | (124,505,000) | (335,427,000) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from unsecured and secured debt | 338,356,000 | 978,251,000 |
Payments of unsecured and secured debt | (517,000,000) | (430,000,000) |
Payments of in-substance defeased debt | 0 | (128,212,000) |
Transaction costs | 0 | (573,000) |
Repurchases of common stock | (1,369,000) | (237,206,000) |
Dividends paid to common stock and unitholders | (54,960,000) | (109,388,000) |
Dividends paid to preferred stock and unitholders | (15,600,000) | (18,124,000) |
Contributions from redeemable non-controlling members in consolidated real estate entities | 1,125,000 | 575,000 |
Distributions to redeemable non-controlling members in consolidated real estate entities | (8,256,000) | (8,000) |
Contributions from non-controlling members in consolidated real estate entities | 21,531,000 | 16,241,000 |
Distributions to non-controlling members in consolidated real estate entities | (53,910,000) | (56,386,000) |
Payments to satisfy tax withholding obligations | (87,000) | 0 |
Payments of loan costs | 0 | (1,100,000) |
Net cash (used in) provided by financing activities | (290,170,000) | 14,070,000 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (191,637,000) | 7,192,000 |
Cash and cash equivalents and restricted cash—beginning of period | 285,731,000 | 196,876,000 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD | $ 94,094,000 | $ 204,068,000 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023: Segments Number of Properties Square Feet (unaudited) Consolidated portfolio Office 47 13,817,222 Studio 3 1,256,579 Future development 6 1,966,242 Total consolidated portfolio 56 17,040,043 Unconsolidated portfolio (1) Office (2) 1 1,516,051 Studio (3) 2 473,000 Future development (4) 2 1,617,347 Total unconsolidated portfolio 5 3,606,398 TOTAL 61 20,646,441 _________________ 1. The Company owns 20% of the unconsolidated joint venture entity that owns the Bentall Centre property, 50% of the unconsolidated joint venture entity that owns Sunset Glenoaks Studios, 35% of the unconsolidated joint venture entity that owns Sunset Waltham Cross Studios and approximately 26% of the unconsolidated joint venture entity that owns the Sunset Pier 94 Studios development. The square footage shown above represents 100% of the properties. 2. Includes Bentall Centre. 3. Includes Sunset Glenoaks Studios and Sunset Pier 94 Studios. 4. Includes land for the Burrard Exchange and Sunset Waltham Cross Studios. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in the 2022 Annual Report on Form 10-K of Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. and the notes thereto. The Company has reclassified an income tax benefit of $1.3 million and $2.9 million from other income to income tax benefit (provision) on the Consolidated Statements of Operations for the three and nine months ended September 30, 2022, respectively, to conform to the presentation for the three and nine months ended September 30, 2023. The Company has reclassified a gain on derivatives of $8.0 million from gain on derivatives to non-cash interest expense on the Consolidated Statement of Cash Flows for the nine months ended September 30, 2022 to conform to the presentation for the nine months ended September 30, 2023. The Company has reclassified $0.9 million and $0.5 million from change in operating assets and liabilities—prepaid expenses and other assets and change in operating assets and liabilities—accounts payable, accrued liabilities and other, respectively, to deferred tax provision (benefit) on the Consolidated Statement of Cash Flows for the nine months ended September 30, 2022 to conform to the presentation for the nine months ended September 30, 2023. 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, 2023, the Company has determined that its operating partnership and 20 joint ventures met the definition of a VIE. 13 of these joint ventures are consolidated and seven are unconsolidated. Consolidated Joint Ventures As of September 30, 2023, 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 Westside Two 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 Sunset Bronson Entertainment Properties, LLC, Sunset Gower Entertainment Properties, LLC and Sunset Las Palmas Entertainment Properties, LLC, respectively. 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, 2023 and December 31, 2022, 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, 2023, the Company has determined it is not the primary beneficiary of seven 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. On August 28, 2023, the Company entered into a joint venture with subsidiaries of Blackstone Property Partners and Vornado Realty Trust to develop Sunset Pier 94 Studios in the borough of Manhattan in New York, New York. The Company owns approximately 26% of the ownership interests in the joint venture. 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 Accounting Standards Codification (“ASC”) 842, Leases (“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 22 years as of September 30, 2023. 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 Gain 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 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, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Ancillary revenues $ 13,337 $ 29,854 $ 61,651 $ 68,817 Other revenues $ 4,302 $ 5,925 $ 13,643 $ 17,129 Studio-related tenant recoveries $ 689 $ 491 $ 1,695 $ 1,407 Management fee income $ 340 $ 911 $ 5,026 $ 3,122 Management services reimbursement income $ 1,015 $ 983 $ 3,138 $ 3,159 The following table summarizes the Company’s receivables that are accounted for under ASC 606 as of: September 30, 2023 December 31, 2022 Ancillary revenues $ 5,651 $ 15,503 Other revenues $ 1,045 $ 1,193 In regard 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, each of which is a reporting unit. 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 for the excess up to the amount of goodwill assigned to the reporting unit. Alternatively, the Company may bypass a qualitative assessment and proceed directly to a quantitative assessment. A qualitative assessment considers various factors such as macroeconomic, industry and market conditions to the extent they affect the earnings performance of the reporting unit, changes in business strategy and/or management of the reporting unit, changes in composition or mix of revenues and/or cost structure of the reporting unit, financial performance and business prospects of the reporting unit, among other factors. In a quantitative assessment, significant judgment, assumptions and estimates are applied in determining the fair value of reporting units. The Company generally uses the income approach to estimate fair value by discounting the projected net cash flows of the reporting unit, and may corroborate with market-based data where available and appropriate. Projection of future cash flows is based upon various factors, including, but not limited to, our strategic plans in regard to our business and operations, internal forecasts, terminal year residual revenue multiples, operating profit margins, pricing of similar businesses and comparable transactions where applicable, and risk-adjusted discount rates to present value future cash flows. Given the level of sensitivity in the inputs, a change in the value of any one input, in isolation or in combination, could significantly affect the overall estimation of fair value of the reporting unit. As of September 30, 2023 and December 31, 2022, the carrying value of goodwill was $263.5 million. No impairment indicators have been identified during the three and nine months ended September 30, 2023. Intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method, which reflects the pattern in which the assets are consumed. The estimated useful lives for acquired intangible assets range from five Recently Issued Accounting Pronouncements In August 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60) Recognition and Initial Measurement , which requires companies to measure contributed assets at fair value, with the difference in the fair value of the joint venture as a whole and its net assets recorded as goodwill or an equity adjustment. This ASU is effective for fiscal periods beginning after January 1, 2025. The Company is currently evaluating this guidance and the impact it may have on the Company’s consolidated financial statements. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2023 | |
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 $ 199,098 Seller note payable 160,000 Total consideration $ 359,098 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the Quixote Acquisition Date: Cash and cash equivalents $ 5,780 Accounts receivable 7,238 Prepaid expenses and other assets 3,788 Investment in real estate (1) 47,741 Non-real estate property, plant and equipment 65,939 Intangible assets 76,900 Right-of-use assets 106,115 Total assets acquired 313,501 Accounts payable, accrued liabilities and other $ 12,700 Lease liabilities 95,112 Total liabilities assumed 107,812 Net identifiable assets acquired $ 205,689 Goodwill 153,409 NET ASSETS ACQUIRED $ 359,098 _____________ 1. Represents leasehold improvements related to Quixote’s leasehold interests in studio properties. Of the $76.9 million of intangible assets acquired as part of the Quixote acquisition, $28.6 million was assigned to the registered trade name, which is not subject to amortization. The remaining $48.3 million of acquired intangible assets includes 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 $153.4 million for the Quixote acquisition was recognized in connection with the transaction. The goodwill recognized is attributable to expected synergies and the assembled workforce of Quixote. The goodwill has been allocated to the studio reporting unit. Goodwill is deductible for tax purposes and, as a result, deferred taxes have been recorded. During the three and nine months ended September 30, 2022, the Company recognized acquisition-related costs of $7.1 million. These costs are included in transaction-related expenses on the Consolidated Statements of Operations. The amounts of revenue and net income from operations 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 from operations 1,257 1,257 |
Investment in Real Estate
Investment in Real Estate | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 December 31, 2022 Land $ 1,377,970 $ 1,397,714 Building and improvements 6,370,018 6,342,851 Tenant improvements 894,595 868,193 Furniture and fixtures 9,441 9,639 Property under development 179,890 98,175 INVESTMENT IN REAL ESTATE, AT COST $ 8,831,914 $ 8,716,572 Acquisitions of Real Estate The Company had no acquisitions of real estate during the three and nine months ended September 30, 2023. 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. The Company had no impairments of real estate during the three and nine months ended September 30, 2023. During the 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 estimated 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 was subsequently sold in October 2022. 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. Dispositions of Real Estate The following table summarizes information on dispositions completed during the nine months ended September 30, 2023. These properties were considered non-strategic to the Company’s portfolio: Property Segment Date of Disposition Square Feet (unaudited) Sales Price (1) (in millions) Gain on Sale (2) (in millions) Skyway Landing Office 2/6/2023 246,997 $ 102.0 $ 7.0 604 Arizona Office 8/24/2023 44,260 $ 32.5 $ 10.3 3401 Exposition Office 8/25/2023 63,376 $ 40.0 $ 5.8 _____________ 1. Represents gross sales price before certain credits, prorations and closing costs. 2. Included within gain (loss) on sale of real estate on the Consolidated Statement of Operations. 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) Gain (Loss) on Sale (in millions) Del Amo Office 8/5/2022 113,000 $ 2.8 $ — Northview Center Office 8/30/2022 179,985 $ 46.0 $ (0.2) _____________ 1. Represents gross sales price before certain credits, prorations and closing costs. |
Non-Real Estate Property, Plant
Non-Real Estate Property, Plant and Equipment, net | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 December 31, 2022 Trailers $ 71,746 $ 68,973 Production equipment 36,960 36,019 Trucks and other vehicles 20,921 20,306 Leasehold improvements 14,491 16,993 Other equipment 7,200 5,693 Furniture, fixtures and equipment 6,975 5,849 Non-real estate property, plant and equipment, at cost 158,293 153,833 Accumulated depreciation (42,390) (23,544) NON-REAL ESTATE PROPERTY, PLANT AND EQUIPMENT, NET $ 115,903 $ 130,289 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 three |
Investment in Unconsolidated Re
Investment in Unconsolidated Real Estate Entities | 9 Months Ended |
Sep. 30, 2023 | |
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 Sun Valley 50% U.S. dollar (2)(3) Bentall Centre Operating Property Downtown Vancouver 20% Canadian dollar (2)(4) Sunset Pier 94 Studios Development Manhattan 51% U.S dollar (4)(5) __________________ 1. The Company owns 35% of the ownership interests in each of the joint venture entities that own the Sunset Waltham Cross Studios and 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. The likelihood of loss relating to the completion guarantee is remote as of September 30, 2023. 4. The Company has guaranteed the joint ventures’ outstanding indebtedness in the amount of $98.4 million at Bentall Centre and $26 thousand at Sunset Pier 94 Studios, respectively. 5. As of August 28, 2023, the Company owns 51% of the ownership interests in an upper-tier joint venture entity that owns 50.1% of the ownership interests in the lower-tier joint venture entity that owns the Sunset Pier 94 Studios development. The Company’s resulting economic interest in the development is 25.6%. The Company has provided various guarantees for the lower-tier joint venture’s construction loan, including a completion guarantee, recourse guarantee and guaranty of interest and carry. The likelihood of loss relating to the completion guarantee is remote as of September 30, 2023. The Company’s maximum exposure related to its unconsolidated joint ventures is limited to its investment and the guarantees provided in relation to the joint ventures’ indebtedness. 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 (loss) income 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 income as a separate component of total equity and are excluded from net (loss) 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, 2023 and December 31, 2022, respectively. The table below presents the combined and condensed balance sheets for the Company’s unconsolidated joint ventures: September 30, 2023 December 31, 2022 ASSETS Investment in real estate, net $ 1,201,957 $ 1,093,448 Other assets 113,597 62,870 TOTAL ASSETS $ 1,315,554 $ 1,156,318 LIABILITIES Secured debt, net $ 572,762 $ 527,985 Other liabilities 64,850 49,027 TOTAL LIABILITIES 637,612 577,012 Company’s capital (1) 213,165 170,656 Partner’s capital 464,777 408,650 TOTAL CAPITAL 677,942 579,306 TOTAL LIABILITIES AND CAPITAL $ 1,315,554 $ 1,156,318 __________________ 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, 2023 2022 2023 2022 TOTAL REVENUES $ 18,478 $ 18,515 $ 56,220 $ 64,962 TOTAL EXPENSES 22,427 20,151 67,104 55,802 NET (LOSS) INCOME $ (3,949) $ (1,636) $ (10,884) $ 9,160 |
Deferred Leasing Costs and Inta
Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 December 31, 2022 Deferred leasing costs and in-place lease intangibles $ 327,346 $ 328,617 Accumulated amortization (160,163) (141,353) Deferred leasing costs and in-place lease intangibles, net 167,183 187,264 Below-market ground leases 79,562 79,562 Accumulated amortization (20,044) (17,979) Below-market ground leases, net 59,518 61,583 Above-market leases 673 724 Accumulated amortization (350) (324) Above-market leases, net 323 400 Customer relationships 97,900 97,900 Accumulated amortization (22,859) (12,346) Customer relationships, net 75,041 85,554 Non-competition agreements 8,200 8,200 Accumulated amortization (2,868) (1,632) Non-competition agreements, net 5,332 6,568 Trade name 37,200 37,200 Parking easement 15,273 15,273 DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET $ 359,870 $ 393,842 Below-market leases $ 59,274 $ 59,540 Accumulated amortization (30,741) (26,195) Below-market leases, net 28,533 33,345 Above-market ground leases 1,095 1,095 Accumulated amortization (381) (349) Above-market ground leases, net 714 746 INTANGIBLE LIABILITIES, NET $ 29,247 $ 34,091 The Company recognized the following amortization related to deferred leasing costs and intangibles: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Deferred leasing costs and in-place lease intangibles (1) $ (9,382) $ (9,450) $ (28,439) $ (29,657) Below-market ground leases (2) $ (698) $ (698) $ (2,096) $ (2,075) Above-market leases (3) $ (15) $ (16) $ (47) $ (107) Customer relationships (1) $ (3,504) $ (2,415) $ (10,512) $ (6,165) Non-competition agreements (1) $ (412) $ (313) $ (1,235) $ (843) Below-market leases (3) $ 1,540 $ 1,717 $ 4,811 $ 6,500 Above-market ground leases (2) $ 11 $ 11 $ 32 $ 33 __________________ 1. Amortization is recorded in depreciation and amortization expenses and for lease incentive costs in office rental revenues on the Consolidated Statements of Operations. 2. Amortization is recorded in office operating expenses on the Consolidated Statements of Operations. 3. Amortization is recorded in office rental revenues on the Consolidated Statements of Operations. The Company had no impairments of deferred leasing costs and intangible assets or liabilities during the three and nine months ended ended September 30, 2023. During the nine months ended September 30, 2022, the Company recognized an $8.5 million impairment of the Zio trade name. The impairment was related to the rebranding and integration of the previously acquired Zio brand into the Company’s existing Sunset Studios platform, after which the Company stopped using the Zio trade name. During the nine months ended September 30, 2022, the Company also recognized an impairment loss of $2.4 million related to the below-market ground lease at its Del Amo office property, which was sold in August 2022. The losses are recorded within impairment loss on the Consolidated Statement of Operations. |
Receivables
Receivables | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Receivables | Receivables The Company’s accounting policy and methodology used to estimate the allowance for doubtful accounts related to receivables are discussed in the Company’s 2022 Annual Report on Form 10-K. Accounts Receivable As of September 30, 2023, accounts receivable was $19.5 million and there was a $0.2 million allowance for doubtful accounts. As of December 31, 2022, accounts receivable was $16.9 million and there was $0.1 million allowance for doubtful accounts. Straight-Line Rent Receivables As of September 30, 2023, straight-line rent receivables was $290.9 million and there was no allowance for doubtful accounts. As of December 31, 2022, straight-line rent receivables was $279.9 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, 2023 | |
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, 2023 December 31, 2022 Non-real estate investments 48,833 47,329 Deferred tax asset, net 4,769 5,317 Interest rate derivative assets 19,559 9,292 Deferred financing costs, net 4,327 5,824 Inventory 5,954 4,914 Prepaid property tax 3,475 2,041 Prepaid insurance 17,422 6,530 Stock purchase warrant 2 95 Other 15,153 17,495 PREPAID EXPENSES AND OTHER ASSETS, NET $ 119,494 $ 98,837 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 on non-real estate investments on the Consolidated Statements of Operations. The Company recognized an unrealized loss of $2.2 million on its non-real estate investments due to the observable changes in fair value during the three and nine months ended September 30, 2023. 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. Stock Purchase Warrants |
Debt
Debt | 9 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The following table sets forth information with respect to the Company’s outstanding indebtedness: September 30, 2023 December 31, 2022 Interest Rate (1) Contractual Maturity Date (2) UNSECURED AND SECURED DEBT Unsecured debt Unsecured revolving credit facility (3)(4) $ 520,000 $ 385,000 SOFR + 1.15% to 1.60% 12/21/2026 (5) Series A notes — 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 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 (6) 350,000 350,000 5.95% 2/15/2028 Total unsecured debt 2,635,000 2,660,000 Secured debt Hollywood Media Portfolio $ 1,100,000 $ 1,100,000 SOFR + 1.10% 8/9/2026 (7) Acquired Hollywood Media Portfolio debt (209,814) (209,814) SOFR + 1.66% 8/9/2026 (7) Hollywood Media Portfolio, net (8)(9) 890,186 890,186 One Westside and Westside Two (10) 324,632 316,602 SOFR + 1.60% 12/18/2024 (11) Element LA 168,000 168,000 4.59% 11/6/2025 1918 Eighth (12) 314,300 314,300 SOFR + 1.40% 12/18/2025 Hill7 (13) 101,000 101,000 3.38% 11/6/2028 Quixote — 160,000 5.00% 12/31/2023 (14) Total secured debt 1,798,118 1,950,088 Total unsecured and secured debt 4,433,118 4,610,088 Unamortized deferred financing costs/loan discounts (15) (16,098) (24,226) TOTAL UNSECURED AND SECURED DEBT, NET $ 4,417,020 $ 4,585,862 JOINT VENTURE PARTNER DEBT (16) $ 66,136 $ 66,136 4.50% 10/9/2032 (17) _________________ 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, 2023, which may be different than the interest rates as of December 31, 2022 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, 2023, no such election had been made and the unsecured revolving credit facility bore interest at SOFR + 1.35%. 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. Subject to the satisfaction of certain conditions and lender commitments, the operating partnership may increase the commitments held under the Amended and Restated Credit Agreement up to a total of $2.0 billion either in the form of an increase to an existing unsecured revolving credit facility or a new loan, including a term loan. 5. Includes the option to extend the initial maturity date of December 21, 2025 twice for an additional six-month term each. 6. An amount equal to the net proceeds from the 5.95% Registered senior notes has been allocated to new or existing eligible green projects. 7. Includes the option to extend the initial maturity date of August 9, 2023 three times for an additional one-year term each. The first extension option was executed as of August 9, 2023. 8. The Company purchased bonds comprising the loan in the amount of $209.8 million. 9. The floating interest rate on $539.0 million of principal has been capped at 5.70% through the use of an interest rate cap. The floating interest rate on the remaining $351.2 million of principal is effectively fixed at 3.31% through the use of an interest rate swap. 10. The Company has the ability to draw up to $414.6 million under the construction loan, which is secured by the One Westside and Westside Two properties. 11. Includes the option to extend the initial maturity date of December 18, 2023 twice for an additional six-month term each. 12. This loan is interest-only through its term. The floating interest rate on $141.4 million of principal has been capped at 5.00% through the use of an interest rate cap. The floating interest rate on the remaining $172.9 million of principal has been effectively fixed at 3.75% through the use of an interest rate swap. 13. 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. 14. The note was settled in April 2023 for consideration of $150.0 million, a $10.0 million discount on the note’s principal balance. 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. 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. 17. 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, 2023, there were $135.0 million of borrowings on the unsecured revolving credit facility, net of repayments. The Company generally uses the unsecured revolving credit facility to finance the acquisition of properties and businesses, to provide funds for tenant improvements and capital expenditures and to provide for working capital and other corporate purposes. In January 2023, the Company repaid its $110.0 million Series A notes in full. In April 2023, the Company settled the Quixote note for consideration of $150.0 million, a $10.0 million discount on the note’s principal balance, which resulted in a gain on extinguishment of debt of $10.0 million during the three and nine months ended September 30, 2023. The Company drew on its unsecured revolving credit facility to fund the settlement. In July 2023, the Company modified the existing loan agreement secured by the Hollywood Media Portfolio, 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, Reference Rate Reform, and accounted for this modification as a continuation of the existing loan agreement. In September 2023, the Company repaid its $50.0 million Series E notes in full. 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, 2023: Year Unsecured and Secured Debt Joint Venture Partner Debt Remaining 2023 $ — $ — 2024 324,632 — 2025 741,300 — 2026 1,560,186 — 2027 456,000 — Thereafter 1,351,000 66,136 TOTAL $ 4,433,118 $ 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, 2023 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% 49.0% Unsecured indebtedness to unencumbered asset value ≤ 60% 57.7% Adjusted EBITDA to fixed charges ≥ 1.5x 2.1x Secured indebtedness to total asset value ≤ 45% 20.8% Unencumbered NOI to unsecured interest expense ≥ 2.0x 2.4x The following table summarizes existing covenants and their covenant levels related to the registered senior notes as of September 30, 2023: Covenant Ratio (1) Covenant Level Actual Performance Debt to total assets ≤ 60% 45.2% Total unencumbered assets to unsecured debt ≥ 150% 221.9% Consolidated income available for debt service to annual debt service charge ≥ 1.5x 2.2x Secured debt to total assets ≤ 45% 19.1% _________________ 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, 2023. 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 and certain of its subsidiaries guarantee the operating partnership’s unsecured debt. The likelihood of loss relating to this guarantee is remote as of September 30, 2023. 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, 2023 2022 2023 2022 Gross interest expense (1) $ 57,702 $ 43,126 $ 165,425 $ 111,286 Capitalized interest (8,606) (4,797) (22,779) (11,674) Non-cash interest expense (income) (2) 4,485 (1,068) 19,390 2,204 INTEREST EXPENSE $ 53,581 $ 37,261 $ 162,036 $ 101,816 _________________ 1. Includes interest on the Company’s debt and hedging activities. 2. Includes the amortization of deferred financing costs and fair market value adjustments for our mark-to-market interest rate derivatives. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 and December 31, 2022: Fair Value Assets (Liabilities) Underlying Debt Instrument Derivative Type Accounting Policy Notional Amount Effective Date Maturity Interest Rate September 30, 2023 December 31, 2022 Hollywood Media Portfolio Cap Cash flow hedge $ 1,100,000 August 2021 August 2023 3.50% $ — $ 9,292 1918 Eighth Swap Cash flow hedge 172,865 February 2023 October 2025 3.75% 3,706 — 1918 Eighth Cap Partial cash flow hedge (1) 314,300 June 2023 December 2025 5.00% 3,089 — 1918 Eighth Sold cap (2) Mark-to-market 172,865 June 2023 December 2025 5.00% (1,705) — Hollywood Media Portfolio Cap Partial cash flow hedge (1) 1,100,000 August 2023 August 2024 5.70% 1,010 — Hollywood Media Portfolio Sold cap(2) Mark-to-market 561,000 August 2023 August 2024 5.70% (516) — Hollywood Media Portfolio Swap Cash flow hedge 351,186 August 2023 June 2026 3.31% 11,754 — TOTAL $ 17,338 $ 9,292 _____________ 1. $141,435 and $539,000 of the notional amounts of the 1918 Eighth and Hollywood Media Portfolio caps, respectively, have been designated as effective cash flow hedges for accounting purposes. The remainder of each is accounted for under mark-to-market accounting. 2. The sold caps serve to offset the changes in fair value of the portions of the 1918 Eighth and Hollywood Media Portfolio caps that are not designated as cash flow hedges for accounting purposes. 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, 2023, the Company expects $8.6 million of unrealized gain included in accumulated other comprehensive income will be reclassified as a reduction to interest expense in the next 12 months. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
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 that 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. 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. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements for the activities of these entities. In the case of the Bentall Centre property and the Sunset Waltham Cross Studios development, the Company owns its interest in the properties through non-U.S. entities treated as TRSs for federal income tax purposes. 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. Certain activities that the Company may undertake, such as non-customary services for the Company’s tenants and holding assets that the Company cannot hold directly, will be conducted by a TRS. A TRS is subject to federal and, where applicable, state income taxes on its net income. The Company recognized an income tax benefit of $0.4 million and provision of $0.7 million for the three and nine months ended September 30, 2023, respectively, and an income tax benefit of $1.3 million and $2.9 million for the three and nine months ended September 30, 2022, respectively. Deferred tax assets and liabilities are recognized for the net tax effect of temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax basis. A valuation allowance is recognized when it is determined that it is more likely than not that a deferred tax asset will not be realized. As of September 30, 2023, the Company had recorded a net deferred tax asset, net of valuation allowance, of $4.8 million within prepaid expenses and other assets, net on the consolidated Balance Sheet. As of December 31, 2022, the Company had recorded a net deferred tax asset of $5.3 million, consisting of gross deferred tax assets of $16.9 million, gross deferred tax liabilities of $11.6 million and no valuation allowance, within prepaid expenses and other assets, net on the Consolidated Balance Sheet. Significant components of the Company’s deferred tax assets and liabilities relate to depreciation and amortization, unrealized gains and losses on non-real estate investments and net operating loss carryforwards. The Company is subject to the statutory requirements of the states in which it conducts business. 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, 2023, 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 2018. The Company has assessed its tax positions for all open years, which as of September 30, 2023 included 2019 to 2021 for federal purposes and 2018 to 2021 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, 2023 | |
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 2023 to 2040. 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, 2023: Year Ended Remaining 2023 $ 157,835 2024 608,532 2025 515,865 2026 460,496 2027 407,481 Thereafter 1,390,474 TOTAL $ 3,540,683 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, seven office leases and 19 other leases as of September 30, 2023. 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, 2023, the present value of the remaining contractual payments of $725.3 million under the Company’s operating lease agreements was $393.8 million. The corresponding operating lease right-of-use assets amounted to $391.2 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, 2023: Year Lease Payments (1) Remaining 2023 $ 10,115 2024 41,275 2025 40,514 2026 38,938 2027 36,272 Thereafter 558,138 Total operating lease payments 725,252 Less: interest portion (331,479) PRESENT VALUE OF OPERATING LEASE LIABILITIES $ 393,773 _____________ 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, 2023 2022 2023 2022 Variable rental expense $ 2,691 $ 1,219 $ 8,870 $ 7,316 Minimum rental expense $ 11,372 $ 7,841 $ 33,760 $ 20,122 |
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 2023 to 2040. 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, 2023: Year Ended Remaining 2023 $ 157,835 2024 608,532 2025 515,865 2026 460,496 2027 407,481 Thereafter 1,390,474 TOTAL $ 3,540,683 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, seven office leases and 19 other leases as of September 30, 2023. 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, 2023, the present value of the remaining contractual payments of $725.3 million under the Company’s operating lease agreements was $393.8 million. The corresponding operating lease right-of-use assets amounted to $391.2 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, 2023: Year Lease Payments (1) Remaining 2023 $ 10,115 2024 41,275 2025 40,514 2026 38,938 2027 36,272 Thereafter 558,138 Total operating lease payments 725,252 Less: interest portion (331,479) PRESENT VALUE OF OPERATING LEASE LIABILITIES $ 393,773 _____________ 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, 2023 2022 2023 2022 Variable rental expense $ 2,691 $ 1,219 $ 8,870 $ 7,316 Minimum rental expense $ 11,372 $ 7,841 $ 33,760 $ 20,122 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 December 31, 2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Interest rate derivative assets (1) $ — $ 19,559 $ — $ 19,559 $ — $ 9,292 $ — $ 9,292 Interest rate derivative liabilities (2) $ — $ (2,221) $ — $ (2,221) $ — $ — $ — $ — Non-real estate investments measured at fair value (1) $ 3 $ — $ — $ 3 $ 544 $ — $ — $ 544 Stock purchase warrant (1) $ — $ 2 $ — $ 2 $ — $ 95 $ — $ 95 Earnout liability (2) $ — $ — $ (6,283) $ (6,283) $ — $ — $ (9,300) $ (9,300) Non-real estate investments measured at NAV (1)(3) $ — $ — $ — $ 48,830 $ — $ — $ — $ 46,785 ___________ 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. 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, 2023: Balance, December 31, 2022 $ (9,300) Remeasurement to fair value 3,017 Balance, September 30, 2023 $ (6,283) The remeasurement gain of $3.0 million recognized during the nine months ended September 30, 2023 is recorded in transaction-related expenses on the Consolidated Statements of Operations. 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 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, 2023 December 31, 2022 Carrying Value Fair Value Carrying Value Fair Value LIABILITIES Unsecured debt (1) $ 2,635,000 $ 2,200,793 $ 2,660,000 $ 2,364,871 Secured debt (1) $ 1,798,118 $ 1,776,417 $ 1,950,088 $ 1,927,297 Consolidated joint venture partner debt $ 66,136 $ 59,558 $ 66,136 $ 60,327 _________________ 1. Amounts represent debt excluding unamortized deferred financing costs and loan discounts/premiums. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023, 12.0 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 $6.65. 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 first or 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 first quarter of the year subsequent to the year in which they were earned 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. Annual PSU Plan grants made prior to 2023 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. The 2023 PSU Plan grants contain only an Operational Performance Unit, which is eligible to vest based on the achievement of operational 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 the Company’s TSR compared to the TSR of the FTSE NAREIT All Equity REITs index over a three-year performance period. 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, 2023 2022 2023 2022 Expensed stock compensation (1) $ 5,540 $ 6,494 $ 17,087 $ 17,816 Capitalized stock compensation (2) 712 894 2,066 2,683 TOTAL STOCK COMPENSATION (3) $ 6,252 $ 7,388 $ 19,153 $ 20,499 _________________ 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, 2023 | |
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, 2023 and 2022, 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, 2023 2022 2023 2022 Numerator: Basic and diluted net loss available to common stockholders $ (37,597) $ (17,286) $ (94,188) $ (44,515) Denominator: Basic weighted average common shares outstanding 140,937,702 141,117,194 140,957,170 144,677,652 Effect of dilutive instruments (1) — — — — DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 140,937,702 141,117,194 140,957,170 144,677,652 Basic earnings per common share $ (0.27) $ (0.12) $ (0.67) $ (0.31) Diluted earnings per common share $ (0.27) $ (0.12) $ (0.67) $ (0.31) ________________ 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. 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, 2023 and 2022, 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, 2023 2022 2023 2022 Numerator: Basic and diluted net loss available to common unitholders $ (38,269) $ (17,511) $ (95,788) $ (45,063) Denominator: Basic weighted average common units outstanding 143,456,164 142,963,458 143,405,044 146,523,102 Effect of dilutive instruments (1) — — — — DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING 143,456,164 142,963,458 143,405,044 146,523,102 Basic earnings per common unit $ (0.27) $ (0.12) $ (0.67) $ (0.31) Diluted earnings per common unit $ (0.27) $ (0.12) $ (0.67) $ (0.31) ________________ 1. The Company includes unvested awards and convertible common and participating units as contingently issuable shares 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. |
Redeemable Non-Controlling Inte
Redeemable Non-Controlling Interest | 9 Months Ended |
Sep. 30, 2023 | |
Temporary Equity Disclosure [Abstract] | |
Redeemable Non-Controlling Interest | Redeemable Non-controlling Interest Redeemable Preferred Units of the Operating Partnership As of September 30, 2023 and December 31, 2022, 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 Westside Two 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 probable of becoming 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, 2023 Nine Months Ended September 30, Series A Redeemable Preferred Units Consolidated Real Estate Entities Series A Redeemable Preferred Units Consolidated Real Estate Entities BEGINNING OF PERIOD $ 9,815 $ 119,136 $ 9,815 $ 125,044 Contributions — 1,125 — 1,125 Distributions — (3,750) — (8,256) Declared dividend (153) — (459) — Net income (loss) 153 (931) 459 (2,333) END OF PERIOD $ 9,815 $ 115,580 $ 9,815 $ 115,580 |
Equity
Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Equity | Equity The table below presents the activity related to Hudson Pacific Properties, Inc.’s accumulated other comprehensive (loss) income (“AOCI”): Derivative Instruments Currency Translation Adjustments Total Accumulated Other Comprehensive (Loss) Income BALANCE AT DECEMBER 31, 2022 $ (1,280) $ (9,992) $ (11,272) Unrealized gains recognized in AOCI 17,447 199 17,646 Reclassification from AOCI into income (1) (2,196) — (2,196) Net change in AOCI 15,251 199 15,450 BALANCE AT SEPTEMBER 30, 2023 $ 13,971 $ (9,793) $ 4,178 _____________ 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 AOCI: Derivative Instruments Currency Translation Adjustments Total Accumulated Other Comprehensive (Loss) Income BALANCE AT DECEMBER 31, 2022 $ (1,260) $ (10,200) $ (11,460) Unrealized gains recognized in AOCI 17,943 205 18,148 Reclassification from AOCI into income (1) (2,258) — (2,258) Net change in AOCI 15,685 205 15,890 BALANCE AT SEPTEMBER 30, 2023 $ 14,425 $ (9,995) $ 4,430 _____________ 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, 2023 December 31, 2022 Company-owned common units in the operating partnership 140,937,702 141,054,478 Company’s ownership interest percentage 98.2 % 98.5 % Non-controlling common units in the operating partnership (1) 2,518,462 2,191,842 Non-controlling ownership interest percentage 1.8 % 1.5 % _________________ 1. Represents common units held by certain of the Company’s executive officers, directors and other outside investors. As of September 30, 2023, this amount represents both common units and performance units of 550,969 and 1,967,493, respectively. As of December 31, 2022, this amount represents both common units and performance units in the amount of 550,969 and 1,640,873, respectively. Common Stock Activity The Company has not completed any common stock offerings during the three and nine months ended September 30, 2023. 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 three and nine months ended September 30, 2023. A cumulative total of $65.8 million has been sold as of September 30, 2023. Share Repurchase Program The Company is authorized to repurchase shares of its common stock up to a total of $250.0 million under the share repurchase program. During the three and nine months ended September 30, 2023, the Company repurchased $0 and $1.4 million, respectively, of its common stock, before transaction costs. Since commencement of the program, a cumulative total of $214.7 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 based on the daily volume-weighted average price during the measurement period, less a negotiated discount. On February 25, 2022, the Company entered into a collared 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 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 based on the daily volume-weighted average price during the measurement period, subject to a floor and cap, less a negotiated discount. 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, 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 has historically declared dividends on a quarterly basis and the Company has paid the dividends during the quarters in which the dividends were declared. Declaration of any future dividends will be determined by the Company’s Board of Directors after considering the Company’s obligations under its various financing agreements, projected taxable income, compliance with its debt covenants, long-term operating projections, expected capital requirements and the risks affecting the Company’s business. The following table summarizes dividends per share declared and paid for the periods presented: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Common stock (1) $ — $ 0.25 $ 0.375 $ 0.75 Common units (1) $ — $ 0.25 $ 0.375 $ 0.75 Series A preferred units $ 0.3906 $ 0.3906 $ 1.1718 $ 1.1718 Series C preferred stock (2) $ 0.2968750 $ 0.2968750 $ 0.8906250 $ 1.0390625 Performance units (1) $ — $ 0.25 $ 0.375 $ 0.75 Payment date September 29, 2023 September 29, 2022 N/A N/A Record date September 19, 2023 September 19, 2022 N/A N/A _________________ 1. In September 2023, the Company temporarily suspended its quarterly common stock dividend. As a result, the common unit and performance unit dividends were also suspended. 2. Dividends paid during 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 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, 2023 | |
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, 2023 2022 2023 2022 Office segment Office revenues $ 203,587 $ 213,491 $ 617,511 $ 641,135 Office expenses (80,521) (78,340) (231,342) (230,529) Office segment profit 123,066 135,151 386,169 410,606 Studio segment Studio revenues 27,856 46,863 111,363 115,162 Studio expenses (31,655) (26,688) (103,578) (66,357) Studio segment (loss) profit (3,799) 20,175 7,785 48,805 TOTAL SEGMENT PROFIT $ 119,267 $ 155,326 $ 393,954 $ 459,411 Segment revenues $ 231,443 $ 260,354 $ 728,874 $ 756,297 Segment expenses (112,176) (105,028) (334,920) (296,886) TOTAL SEGMENT PROFIT $ 119,267 $ 155,326 $ 393,954 $ 459,411 The table below is a reconciliation of the total profit from all segments to net (loss) income: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 NET LOSS $ (35,752) $ (6,792) $ (82,046) $ (10,861) General and administrative 17,512 19,795 55,177 62,178 Depreciation and amortization 98,580 93,070 294,654 276,701 Loss (income) from unconsolidated real estate entities 759 352 2,219 (1,731) Fee income (340) (911) (5,026) (3,122) Interest expense 53,581 37,261 162,036 101,816 Interest income (800) (196) (1,407) (2,026) Management services reimbursement income—unconsolidated real estate entities (1,015) (983) (3,138) (3,159) Management services expense—unconsolidated real estate entities 1,015 983 3,138 3,159 Transaction-related expenses — 9,331 (1,344) 10,713 Unrealized loss on non-real estate investments 2,265 894 2,269 1,062 (Gain) loss on sale of real estate (16,108) 180 (23,154) 180 Impairment loss — 4,795 — 28,548 Gain on extinguishment of debt — — (10,000) — Other income (5) (1,147) (139) (1,138) Income tax (benefit) provision (425) (1,306) 715 (2,909) TOTAL PROFIT FROM ALL SEGMENTS $ 119,267 $ 155,326 $ 393,954 $ 459,411 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023, the Company recognized $1.0 million and $3.1 million, respectively, of 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, 2022, the Company recognized $1.0 million and $3.2 million, respectively, of such reimbursement income. 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, 2023, the Company’s right-of-use assets and lease liabilities related to these lease obligations were $6.3 million and $6.4 million, respectively, as compared to right-of-use assets and lease liabilities of $6.1 million and $6.2 million, respectively, as of December 31, 2022. During the three and nine months ended September 30, 2023, the Company recognized $0.3 million and $0.8 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, 2022, the Company recognized $0.2 million and $0.7 million, respectively, of related rental expense. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Fund Investments The Company invests in several non-real estate funds with an aggregate commitment to contribute up to $51.0 million. As of September 30, 2023, the Company has contributed $37.3 million to these funds, net of distributions, with $13.7 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, 2023, 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, 2023, the Company had $3.1 million in outstanding letters of credit under the unsecured revolving credit facility. Subsequent to September 30, 2023, the Company issued an additional letter of credit in the amount of $1.4 million 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, 2023, the Company had $170.3 million in related commitments. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information for Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. is included as follows: Nine Months Ended September 30, 2023 2022 Cash paid for interest, net of capitalized interest $ 134,478 $ 68,821 Non-cash investing and financing activities Accounts payable and accrued liabilities for real estate investments $ 116,478 $ 181,689 Ground lease remeasurements $ 5,751 $ 23,177 Note payable issued as consideration in a business combination $ — $ 160,000 Lease liabilities recorded in connection with right-of-use assets $ 2,117 $ 94,447 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 and Hudson Pacific Properties, L.P.: Nine Months Ended September 30, 2023 2022 BEGINNING OF PERIOD Cash and cash equivalents $ 255,761 $ 96,555 Restricted cash 29,970 100,321 TOTAL $ 285,731 $ 196,876 END OF PERIOD Cash and cash equivalents $ 75,040 $ 161,667 Restricted cash 19,054 42,401 TOTAL $ 94,094 $ 204,068 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in the 2022 Annual Report on Form 10-K of Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. and the notes thereto. |
Reclassifications | The Company has reclassified an income tax benefit of $1.3 million and $2.9 million from other income to income tax benefit (provision) on the Consolidated Statements of Operations for the three and nine months ended September 30, 2022, respectively, to conform to the presentation for the three and nine months ended September 30, 2023. The Company has reclassified a gain on derivatives of $8.0 million from gain on derivatives to non-cash interest expense on the Consolidated Statement of Cash Flows for the nine months ended September 30, 2022 to conform to the presentation for the nine months ended September 30, 2023. The Company has reclassified $0.9 million and $0.5 million from change in operating assets and liabilities—prepaid expenses and other assets and change in operating assets and liabilities—accounts payable, accrued liabilities and other, respectively, to deferred tax provision (benefit) on the Consolidated Statement of Cash Flows for the nine months ended September 30, 2022 to conform to the presentation for the nine months ended September 30, 2023. |
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, 2023, the Company has determined that its operating partnership and 20 joint ventures met the definition of a VIE. 13 of these joint ventures are consolidated and seven are unconsolidated. As of September 30, 2023 and December 31, 2022, 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, 2023, the Company has determined it is not the primary beneficiary of seven 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. On August 28, 2023, the Company entered into a joint venture with subsidiaries of Blackstone Property Partners and Vornado Realty Trust to develop Sunset Pier 94 Studios in the borough of Manhattan in New York, New York. The Company owns approximately 26% of the ownership interests in the joint venture. 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 | 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. |
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 Gain 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 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, each of which is a reporting unit. 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 for the excess up to the amount of goodwill assigned to the reporting unit. Alternatively, the Company may bypass a qualitative assessment and proceed directly to a quantitative assessment. A qualitative assessment considers various factors such as macroeconomic, industry and market conditions to the extent they affect the earnings performance of the reporting unit, changes in business strategy and/or management of the reporting unit, changes in composition or mix of revenues and/or cost structure of the reporting unit, financial performance and business prospects of the reporting unit, among other factors. In a quantitative assessment, significant judgment, assumptions and estimates are applied in determining the fair value of reporting units. The Company generally uses the income approach to estimate fair value by discounting the projected net cash flows of the reporting unit, and may corroborate with market-based data where available and appropriate. Projection of future cash flows is based upon various factors, including, but not limited to, our strategic plans in regard to our business and operations, internal forecasts, terminal year residual revenue multiples, operating profit margins, pricing of similar businesses and comparable transactions where applicable, and risk-adjusted discount rates to present value future cash flows. Given the level of sensitivity in the inputs, a change in the value of any one input, in isolation or in combination, could significantly affect the overall estimation of fair value of the reporting unit. five |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-05, Business Combinations—Joint Venture Formations (Subtopic 805-60) Recognition and Initial Measurement , which requires companies to measure contributed assets at fair value, with the difference in the fair value of the joint venture as a whole and its net assets recorded as goodwill or an equity adjustment. This ASU is effective for fiscal periods beginning after January 1, 2025. The Company is currently evaluating this guidance and the impact it may have on the Company’s consolidated financial statements. |
Organization (Tables)
Organization (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Company's Portfolio | The following table summarizes the Company’s portfolio as of September 30, 2023: Segments Number of Properties Square Feet (unaudited) Consolidated portfolio Office 47 13,817,222 Studio 3 1,256,579 Future development 6 1,966,242 Total consolidated portfolio 56 17,040,043 Unconsolidated portfolio (1) Office (2) 1 1,516,051 Studio (3) 2 473,000 Future development (4) 2 1,617,347 Total unconsolidated portfolio 5 3,606,398 TOTAL 61 20,646,441 _________________ 1. The Company owns 20% of the unconsolidated joint venture entity that owns the Bentall Centre property, 50% of the unconsolidated joint venture entity that owns Sunset Glenoaks Studios, 35% of the unconsolidated joint venture entity that owns Sunset Waltham Cross Studios and approximately 26% of the unconsolidated joint venture entity that owns the Sunset Pier 94 Studios development. The square footage shown above represents 100% of the properties. 2. Includes Bentall Centre. 3. Includes Sunset Glenoaks Studios and Sunset Pier 94 Studios. 4. Includes land for the Burrard Exchange and Sunset Waltham Cross Studios. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Variable Interest Entities | As of September 30, 2023, 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 Westside Two 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 Sunset Bronson Entertainment Properties, LLC, Sunset Gower Entertainment Properties, LLC and Sunset Las Palmas Entertainment Properties, LLC, respectively. 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 Sun Valley 50% U.S. dollar (2)(3) Bentall Centre Operating Property Downtown Vancouver 20% Canadian dollar (2)(4) Sunset Pier 94 Studios Development Manhattan 51% U.S dollar (4)(5) __________________ 1. The Company owns 35% of the ownership interests in each of the joint venture entities that own the Sunset Waltham Cross Studios and 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. The likelihood of loss relating to the completion guarantee is remote as of September 30, 2023. 4. The Company has guaranteed the joint ventures’ outstanding indebtedness in the amount of $98.4 million at Bentall Centre and $26 thousand at Sunset Pier 94 Studios, respectively. 5. As of August 28, 2023, the Company owns 51% of the ownership interests in an upper-tier joint venture entity that owns 50.1% of the ownership interests in the lower-tier joint venture entity that owns the Sunset Pier 94 Studios development. The Company’s resulting economic interest in the development is 25.6%. The Company has provided various guarantees for the lower-tier joint venture’s construction loan, including a completion guarantee, recourse guarantee and guaranty of interest and carry. The likelihood of loss relating to the completion guarantee is remote as of September 30, 2023. |
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 Gain 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, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Ancillary revenues $ 13,337 $ 29,854 $ 61,651 $ 68,817 Other revenues $ 4,302 $ 5,925 $ 13,643 $ 17,129 Studio-related tenant recoveries $ 689 $ 491 $ 1,695 $ 1,407 Management fee income $ 340 $ 911 $ 5,026 $ 3,122 Management services reimbursement income $ 1,015 $ 983 $ 3,138 $ 3,159 The following table summarizes the Company’s receivables that are accounted for under ASC 606 as of: September 30, 2023 December 31, 2022 Ancillary revenues $ 5,651 $ 15,503 Other revenues $ 1,045 $ 1,193 |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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 $ 199,098 Seller note payable 160,000 Total consideration $ 359,098 |
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: Cash and cash equivalents $ 5,780 Accounts receivable 7,238 Prepaid expenses and other assets 3,788 Investment in real estate (1) 47,741 Non-real estate property, plant and equipment 65,939 Intangible assets 76,900 Right-of-use assets 106,115 Total assets acquired 313,501 Accounts payable, accrued liabilities and other $ 12,700 Lease liabilities 95,112 Total liabilities assumed 107,812 Net identifiable assets acquired $ 205,689 Goodwill 153,409 NET ASSETS ACQUIRED $ 359,098 _____________ 1. Represents leasehold improvements related to Quixote’s leasehold interests in studio properties. |
Schedule of Business Acquisition, Pro Forma Information | The amounts of revenue and net income from operations 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 from operations 1,257 1,257 |
Investment in Real Estate (Tabl
Investment in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Real Estate [Abstract] | |
Schedule of Investment in Real Estate | The following table summarizes the Company’s investment in real estate, at cost as of: September 30, 2023 December 31, 2022 Land $ 1,377,970 $ 1,397,714 Building and improvements 6,370,018 6,342,851 Tenant improvements 894,595 868,193 Furniture and fixtures 9,441 9,639 Property under development 179,890 98,175 INVESTMENT IN REAL ESTATE, AT COST $ 8,831,914 $ 8,716,572 |
Schedule of Dispositions of Real Estate | The following table summarizes information on dispositions completed during the nine months ended September 30, 2023. These properties were considered non-strategic to the Company’s portfolio: Property Segment Date of Disposition Square Feet (unaudited) Sales Price (1) (in millions) Gain on Sale (2) (in millions) Skyway Landing Office 2/6/2023 246,997 $ 102.0 $ 7.0 604 Arizona Office 8/24/2023 44,260 $ 32.5 $ 10.3 3401 Exposition Office 8/25/2023 63,376 $ 40.0 $ 5.8 _____________ 1. Represents gross sales price before certain credits, prorations and closing costs. 2. Included within gain (loss) on sale of real estate on the Consolidated Statement of Operations. 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) Gain (Loss) on Sale (in millions) Del Amo Office 8/5/2022 113,000 $ 2.8 $ — Northview Center Office 8/30/2022 179,985 $ 46.0 $ (0.2) _____________ 1. Represents gross sales price before certain credits, prorations and closing costs. |
Non-Real Estate Property, Pla_2
Non-Real Estate Property, Plant and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 December 31, 2022 Trailers $ 71,746 $ 68,973 Production equipment 36,960 36,019 Trucks and other vehicles 20,921 20,306 Leasehold improvements 14,491 16,993 Other equipment 7,200 5,693 Furniture, fixtures and equipment 6,975 5,849 Non-real estate property, plant and equipment, at cost 158,293 153,833 Accumulated depreciation (42,390) (23,544) NON-REAL ESTATE PROPERTY, PLANT AND EQUIPMENT, NET $ 115,903 $ 130,289 |
Investment in Unconsolidated _2
Investment in Unconsolidated Real Estate Entities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Variable Interest Entities | As of September 30, 2023, 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 Westside Two 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 Sunset Bronson Entertainment Properties, LLC, Sunset Gower Entertainment Properties, LLC and Sunset Las Palmas Entertainment Properties, LLC, respectively. 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 Sun Valley 50% U.S. dollar (2)(3) Bentall Centre Operating Property Downtown Vancouver 20% Canadian dollar (2)(4) Sunset Pier 94 Studios Development Manhattan 51% U.S dollar (4)(5) __________________ 1. The Company owns 35% of the ownership interests in each of the joint venture entities that own the Sunset Waltham Cross Studios and 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. The likelihood of loss relating to the completion guarantee is remote as of September 30, 2023. 4. The Company has guaranteed the joint ventures’ outstanding indebtedness in the amount of $98.4 million at Bentall Centre and $26 thousand at Sunset Pier 94 Studios, respectively. 5. As of August 28, 2023, the Company owns 51% of the ownership interests in an upper-tier joint venture entity that owns 50.1% of the ownership interests in the lower-tier joint venture entity that owns the Sunset Pier 94 Studios development. The Company’s resulting economic interest in the development is 25.6%. The Company has provided various guarantees for the lower-tier joint venture’s construction loan, including a completion guarantee, recourse guarantee and guaranty of interest and carry. The likelihood of loss relating to the completion guarantee is remote as of September 30, 2023. |
Schedule of 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, 2023 December 31, 2022 ASSETS Investment in real estate, net $ 1,201,957 $ 1,093,448 Other assets 113,597 62,870 TOTAL ASSETS $ 1,315,554 $ 1,156,318 LIABILITIES Secured debt, net $ 572,762 $ 527,985 Other liabilities 64,850 49,027 TOTAL LIABILITIES 637,612 577,012 Company’s capital (1) 213,165 170,656 Partner’s capital 464,777 408,650 TOTAL CAPITAL 677,942 579,306 TOTAL LIABILITIES AND CAPITAL $ 1,315,554 $ 1,156,318 __________________ 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, 2023 2022 2023 2022 TOTAL REVENUES $ 18,478 $ 18,515 $ 56,220 $ 64,962 TOTAL EXPENSES 22,427 20,151 67,104 55,802 NET (LOSS) INCOME $ (3,949) $ (1,636) $ (10,884) $ 9,160 |
Deferred Leasing Costs and In_2
Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 December 31, 2022 Deferred leasing costs and in-place lease intangibles $ 327,346 $ 328,617 Accumulated amortization (160,163) (141,353) Deferred leasing costs and in-place lease intangibles, net 167,183 187,264 Below-market ground leases 79,562 79,562 Accumulated amortization (20,044) (17,979) Below-market ground leases, net 59,518 61,583 Above-market leases 673 724 Accumulated amortization (350) (324) Above-market leases, net 323 400 Customer relationships 97,900 97,900 Accumulated amortization (22,859) (12,346) Customer relationships, net 75,041 85,554 Non-competition agreements 8,200 8,200 Accumulated amortization (2,868) (1,632) Non-competition agreements, net 5,332 6,568 Trade name 37,200 37,200 Parking easement 15,273 15,273 DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET $ 359,870 $ 393,842 Below-market leases $ 59,274 $ 59,540 Accumulated amortization (30,741) (26,195) Below-market leases, net 28,533 33,345 Above-market ground leases 1,095 1,095 Accumulated amortization (381) (349) Above-market ground leases, net 714 746 INTANGIBLE LIABILITIES, NET $ 29,247 $ 34,091 |
Schedule of Amortization Related to Deferred Leasing Costs and Intangibles | The Company recognized the following amortization related to deferred leasing costs and intangibles: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Deferred leasing costs and in-place lease intangibles (1) $ (9,382) $ (9,450) $ (28,439) $ (29,657) Below-market ground leases (2) $ (698) $ (698) $ (2,096) $ (2,075) Above-market leases (3) $ (15) $ (16) $ (47) $ (107) Customer relationships (1) $ (3,504) $ (2,415) $ (10,512) $ (6,165) Non-competition agreements (1) $ (412) $ (313) $ (1,235) $ (843) Below-market leases (3) $ 1,540 $ 1,717 $ 4,811 $ 6,500 Above-market ground leases (2) $ 11 $ 11 $ 32 $ 33 __________________ 1. Amortization is recorded in depreciation and amortization expenses and for lease incentive costs in office rental revenues on the Consolidated Statements of Operations. 2. Amortization is recorded in office operating expenses on the Consolidated Statements of Operations. 3. Amortization is recorded in office rental revenues on the Consolidated Statements of Operations. |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Assets, Net | The following table summarizes the Company’s prepaid expenses and other assets, net as of: September 30, 2023 December 31, 2022 Non-real estate investments 48,833 47,329 Deferred tax asset, net 4,769 5,317 Interest rate derivative assets 19,559 9,292 Deferred financing costs, net 4,327 5,824 Inventory 5,954 4,914 Prepaid property tax 3,475 2,041 Prepaid insurance 17,422 6,530 Stock purchase warrant 2 95 Other 15,153 17,495 PREPAID EXPENSES AND OTHER ASSETS, NET $ 119,494 $ 98,837 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 December 31, 2022 Interest Rate (1) Contractual Maturity Date (2) UNSECURED AND SECURED DEBT Unsecured debt Unsecured revolving credit facility (3)(4) $ 520,000 $ 385,000 SOFR + 1.15% to 1.60% 12/21/2026 (5) Series A notes — 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 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 (6) 350,000 350,000 5.95% 2/15/2028 Total unsecured debt 2,635,000 2,660,000 Secured debt Hollywood Media Portfolio $ 1,100,000 $ 1,100,000 SOFR + 1.10% 8/9/2026 (7) Acquired Hollywood Media Portfolio debt (209,814) (209,814) SOFR + 1.66% 8/9/2026 (7) Hollywood Media Portfolio, net (8)(9) 890,186 890,186 One Westside and Westside Two (10) 324,632 316,602 SOFR + 1.60% 12/18/2024 (11) Element LA 168,000 168,000 4.59% 11/6/2025 1918 Eighth (12) 314,300 314,300 SOFR + 1.40% 12/18/2025 Hill7 (13) 101,000 101,000 3.38% 11/6/2028 Quixote — 160,000 5.00% 12/31/2023 (14) Total secured debt 1,798,118 1,950,088 Total unsecured and secured debt 4,433,118 4,610,088 Unamortized deferred financing costs/loan discounts (15) (16,098) (24,226) TOTAL UNSECURED AND SECURED DEBT, NET $ 4,417,020 $ 4,585,862 JOINT VENTURE PARTNER DEBT (16) $ 66,136 $ 66,136 4.50% 10/9/2032 (17) _________________ 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, 2023, which may be different than the interest rates as of December 31, 2022 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, 2023, no such election had been made and the unsecured revolving credit facility bore interest at SOFR + 1.35%. 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. Subject to the satisfaction of certain conditions and lender commitments, the operating partnership may increase the commitments held under the Amended and Restated Credit Agreement up to a total of $2.0 billion either in the form of an increase to an existing unsecured revolving credit facility or a new loan, including a term loan. 5. Includes the option to extend the initial maturity date of December 21, 2025 twice for an additional six-month term each. 6. An amount equal to the net proceeds from the 5.95% Registered senior notes has been allocated to new or existing eligible green projects. 7. Includes the option to extend the initial maturity date of August 9, 2023 three times for an additional one-year term each. The first extension option was executed as of August 9, 2023. 8. The Company purchased bonds comprising the loan in the amount of $209.8 million. 9. The floating interest rate on $539.0 million of principal has been capped at 5.70% through the use of an interest rate cap. The floating interest rate on the remaining $351.2 million of principal is effectively fixed at 3.31% through the use of an interest rate swap. 10. The Company has the ability to draw up to $414.6 million under the construction loan, which is secured by the One Westside and Westside Two properties. 11. Includes the option to extend the initial maturity date of December 18, 2023 twice for an additional six-month term each. 12. This loan is interest-only through its term. The floating interest rate on $141.4 million of principal has been capped at 5.00% through the use of an interest rate cap. The floating interest rate on the remaining $172.9 million of principal has been effectively fixed at 3.75% through the use of an interest rate swap. 13. 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. 14. The note was settled in April 2023 for consideration of $150.0 million, a $10.0 million discount on the note’s principal balance. 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. 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, 2023: Year Unsecured and Secured Debt Joint Venture Partner Debt Remaining 2023 $ — $ — 2024 324,632 — 2025 741,300 — 2026 1,560,186 — 2027 456,000 — Thereafter 1,351,000 66,136 TOTAL $ 4,433,118 $ 66,136 |
Schedule of Existing Covenants and their Covenant Levels | The following table summarizes existing covenants and their covenant levels as of September 30, 2023 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% 49.0% Unsecured indebtedness to unencumbered asset value ≤ 60% 57.7% Adjusted EBITDA to fixed charges ≥ 1.5x 2.1x Secured indebtedness to total asset value ≤ 45% 20.8% Unencumbered NOI to unsecured interest expense ≥ 2.0x 2.4x The following table summarizes existing covenants and their covenant levels related to the registered senior notes as of September 30, 2023: Covenant Ratio (1) Covenant Level Actual Performance Debt to total assets ≤ 60% 45.2% Total unencumbered assets to unsecured debt ≥ 150% 221.9% Consolidated income available for debt service to annual debt service charge ≥ 1.5x 2.2x Secured debt to total assets ≤ 45% 19.1% _________________ 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. |
Schedule of 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, 2023 2022 2023 2022 Gross interest expense (1) $ 57,702 $ 43,126 $ 165,425 $ 111,286 Capitalized interest (8,606) (4,797) (22,779) (11,674) Non-cash interest expense (income) (2) 4,485 (1,068) 19,390 2,204 INTEREST EXPENSE $ 53,581 $ 37,261 $ 162,036 $ 101,816 _________________ 1. Includes interest on the Company’s debt and hedging activities. 2. Includes the amortization of deferred financing costs and fair market value adjustments for our mark-to-market interest rate derivatives. |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table summarizes the Company’s derivative instruments as of September 30, 2023 and December 31, 2022: Fair Value Assets (Liabilities) Underlying Debt Instrument Derivative Type Accounting Policy Notional Amount Effective Date Maturity Interest Rate September 30, 2023 December 31, 2022 Hollywood Media Portfolio Cap Cash flow hedge $ 1,100,000 August 2021 August 2023 3.50% $ — $ 9,292 1918 Eighth Swap Cash flow hedge 172,865 February 2023 October 2025 3.75% 3,706 — 1918 Eighth Cap Partial cash flow hedge (1) 314,300 June 2023 December 2025 5.00% 3,089 — 1918 Eighth Sold cap (2) Mark-to-market 172,865 June 2023 December 2025 5.00% (1,705) — Hollywood Media Portfolio Cap Partial cash flow hedge (1) 1,100,000 August 2023 August 2024 5.70% 1,010 — Hollywood Media Portfolio Sold cap(2) Mark-to-market 561,000 August 2023 August 2024 5.70% (516) — Hollywood Media Portfolio Swap Cash flow hedge 351,186 August 2023 June 2026 3.31% 11,754 — TOTAL $ 17,338 $ 9,292 _____________ 1. $141,435 and $539,000 of the notional amounts of the 1918 Eighth and Hollywood Media Portfolio caps, respectively, have been designated as effective cash flow hedges for accounting purposes. The remainder of each is accounted for under mark-to-market accounting. 2. The sold caps serve to offset the changes in fair value of the portions of the 1918 Eighth and Hollywood Media Portfolio caps that are not designated as cash flow hedges for accounting purposes. |
Future Minimum Rents and Leas_2
Future Minimum Rents and Lease Payments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of 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, 2023: Year Ended Remaining 2023 $ 157,835 2024 608,532 2025 515,865 2026 460,496 2027 407,481 Thereafter 1,390,474 TOTAL $ 3,540,683 |
Schedule of 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, 2023: Year Lease Payments (1) Remaining 2023 $ 10,115 2024 41,275 2025 40,514 2026 38,938 2027 36,272 Thereafter 558,138 Total operating lease payments 725,252 Less: interest portion (331,479) PRESENT VALUE OF OPERATING LEASE LIABILITIES $ 393,773 _____________ 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. |
Schedule of Rental Expense | The following table summarizes rental expense for operating leases: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Variable rental expense $ 2,691 $ 1,219 $ 8,870 $ 7,316 Minimum rental expense $ 11,372 $ 7,841 $ 33,760 $ 20,122 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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, 2023 December 31, 2022 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Interest rate derivative assets (1) $ — $ 19,559 $ — $ 19,559 $ — $ 9,292 $ — $ 9,292 Interest rate derivative liabilities (2) $ — $ (2,221) $ — $ (2,221) $ — $ — $ — $ — Non-real estate investments measured at fair value (1) $ 3 $ — $ — $ 3 $ 544 $ — $ — $ 544 Stock purchase warrant (1) $ — $ 2 $ — $ 2 $ — $ 95 $ — $ 95 Earnout liability (2) $ — $ — $ (6,283) $ (6,283) $ — $ — $ (9,300) $ (9,300) Non-real estate investments measured at NAV (1)(3) $ — $ — $ — $ 48,830 $ — $ — $ — $ 46,785 ___________ 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. 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. |
Schedule of 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, 2023: Balance, December 31, 2022 $ (9,300) Remeasurement to fair value 3,017 Balance, September 30, 2023 $ (6,283) |
Schedule of 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, 2023 December 31, 2022 Carrying Value Fair Value Carrying Value Fair Value LIABILITIES Unsecured debt (1) $ 2,635,000 $ 2,200,793 $ 2,660,000 $ 2,364,871 Secured debt (1) $ 1,798,118 $ 1,776,417 $ 1,950,088 $ 1,927,297 Consolidated joint venture partner debt $ 66,136 $ 59,558 $ 66,136 $ 60,327 _________________ 1. Amounts represent debt excluding unamortized deferred financing costs and loan discounts/premiums. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of 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, 2023 2022 2023 2022 Expensed stock compensation (1) $ 5,540 $ 6,494 $ 17,087 $ 17,816 Capitalized stock compensation (2) 712 894 2,066 2,683 TOTAL STOCK COMPENSATION (3) $ 6,252 $ 7,388 $ 19,153 $ 20,499 _________________ 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, 2023 | |
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, 2023 2022 2023 2022 Numerator: Basic and diluted net loss available to common stockholders $ (37,597) $ (17,286) $ (94,188) $ (44,515) Denominator: Basic weighted average common shares outstanding 140,937,702 141,117,194 140,957,170 144,677,652 Effect of dilutive instruments (1) — — — — DILUTED WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 140,937,702 141,117,194 140,957,170 144,677,652 Basic earnings per common share $ (0.27) $ (0.12) $ (0.67) $ (0.31) Diluted earnings per common share $ (0.27) $ (0.12) $ (0.67) $ (0.31) ________________ 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. 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, 2023 2022 2023 2022 Numerator: Basic and diluted net loss available to common unitholders $ (38,269) $ (17,511) $ (95,788) $ (45,063) Denominator: Basic weighted average common units outstanding 143,456,164 142,963,458 143,405,044 146,523,102 Effect of dilutive instruments (1) — — — — DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING 143,456,164 142,963,458 143,405,044 146,523,102 Basic earnings per common unit $ (0.27) $ (0.12) $ (0.67) $ (0.31) Diluted earnings per common unit $ (0.27) $ (0.12) $ (0.67) $ (0.31) ________________ 1. The Company includes unvested awards and convertible common and participating units as contingently issuable shares 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. |
Redeemable Non-Controlling In_2
Redeemable Non-Controlling Interest (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Temporary Equity Disclosure [Abstract] | |
Schedule of Non-controlling Interests | The following table reconciles the beginning and ending balances of redeemable non-controlling interests: Three Months Ended September 30, 2023 Nine Months Ended September 30, Series A Redeemable Preferred Units Consolidated Real Estate Entities Series A Redeemable Preferred Units Consolidated Real Estate Entities BEGINNING OF PERIOD $ 9,815 $ 119,136 $ 9,815 $ 125,044 Contributions — 1,125 — 1,125 Distributions — (3,750) — (8,256) Declared dividend (153) — (459) — Net income (loss) 153 (931) 459 (2,333) END OF PERIOD $ 9,815 $ 115,580 $ 9,815 $ 115,580 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
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) income (“AOCI”): Derivative Instruments Currency Translation Adjustments Total Accumulated Other Comprehensive (Loss) Income BALANCE AT DECEMBER 31, 2022 $ (1,280) $ (9,992) $ (11,272) Unrealized gains recognized in AOCI 17,447 199 17,646 Reclassification from AOCI into income (1) (2,196) — (2,196) Net change in AOCI 15,251 199 15,450 BALANCE AT SEPTEMBER 30, 2023 $ 13,971 $ (9,793) $ 4,178 _____________ 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 AOCI: Derivative Instruments Currency Translation Adjustments Total Accumulated Other Comprehensive (Loss) Income BALANCE AT DECEMBER 31, 2022 $ (1,260) $ (10,200) $ (11,460) Unrealized gains recognized in AOCI 17,943 205 18,148 Reclassification from AOCI into income (1) (2,258) — (2,258) Net change in AOCI 15,685 205 15,890 BALANCE AT SEPTEMBER 30, 2023 $ 14,425 $ (9,995) $ 4,430 _____________ 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, 2023 December 31, 2022 Company-owned common units in the operating partnership 140,937,702 141,054,478 Company’s ownership interest percentage 98.2 % 98.5 % Non-controlling common units in the operating partnership (1) 2,518,462 2,191,842 Non-controlling ownership interest percentage 1.8 % 1.5 % _________________ 1. Represents common units held by certain of the Company’s executive officers, directors and other outside investors. As of September 30, 2023, this amount represents both common units and performance units of 550,969 and 1,967,493, respectively. As of December 31, 2022, this amount represents both common units and performance units in the amount of 550,969 and 1,640,873, 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, 2023 2022 2023 2022 Common stock (1) $ — $ 0.25 $ 0.375 $ 0.75 Common units (1) $ — $ 0.25 $ 0.375 $ 0.75 Series A preferred units $ 0.3906 $ 0.3906 $ 1.1718 $ 1.1718 Series C preferred stock (2) $ 0.2968750 $ 0.2968750 $ 0.8906250 $ 1.0390625 Performance units (1) $ — $ 0.25 $ 0.375 $ 0.75 Payment date September 29, 2023 September 29, 2022 N/A N/A Record date September 19, 2023 September 19, 2022 N/A N/A _________________ 1. In September 2023, the Company temporarily suspended its quarterly common stock dividend. As a result, the common unit and performance unit dividends were also suspended. 2. Dividends paid during 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 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, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Operating Activity | The table below presents the operating activity of the Company’s reportable segments: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Office segment Office revenues $ 203,587 $ 213,491 $ 617,511 $ 641,135 Office expenses (80,521) (78,340) (231,342) (230,529) Office segment profit 123,066 135,151 386,169 410,606 Studio segment Studio revenues 27,856 46,863 111,363 115,162 Studio expenses (31,655) (26,688) (103,578) (66,357) Studio segment (loss) profit (3,799) 20,175 7,785 48,805 TOTAL SEGMENT PROFIT $ 119,267 $ 155,326 $ 393,954 $ 459,411 Segment revenues $ 231,443 $ 260,354 $ 728,874 $ 756,297 Segment expenses (112,176) (105,028) (334,920) (296,886) TOTAL SEGMENT PROFIT $ 119,267 $ 155,326 $ 393,954 $ 459,411 The table below is a reconciliation of the total profit from all segments to net (loss) income: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 NET LOSS $ (35,752) $ (6,792) $ (82,046) $ (10,861) General and administrative 17,512 19,795 55,177 62,178 Depreciation and amortization 98,580 93,070 294,654 276,701 Loss (income) from unconsolidated real estate entities 759 352 2,219 (1,731) Fee income (340) (911) (5,026) (3,122) Interest expense 53,581 37,261 162,036 101,816 Interest income (800) (196) (1,407) (2,026) Management services reimbursement income—unconsolidated real estate entities (1,015) (983) (3,138) (3,159) Management services expense—unconsolidated real estate entities 1,015 983 3,138 3,159 Transaction-related expenses — 9,331 (1,344) 10,713 Unrealized loss on non-real estate investments 2,265 894 2,269 1,062 (Gain) loss on sale of real estate (16,108) 180 (23,154) 180 Impairment loss — 4,795 — 28,548 Gain on extinguishment of debt — — (10,000) — Other income (5) (1,147) (139) (1,138) Income tax (benefit) provision (425) (1,306) 715 (2,909) TOTAL PROFIT FROM ALL SEGMENTS $ 119,267 $ 155,326 $ 393,954 $ 459,411 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Cash Flow, Supplemental Information | Supplemental cash flow information for Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. is included as follows: Nine Months Ended September 30, 2023 2022 Cash paid for interest, net of capitalized interest $ 134,478 $ 68,821 Non-cash investing and financing activities Accounts payable and accrued liabilities for real estate investments $ 116,478 $ 181,689 Ground lease remeasurements $ 5,751 $ 23,177 Note payable issued as consideration in a business combination $ — $ 160,000 Lease liabilities recorded in connection with right-of-use assets $ 2,117 $ 94,447 |
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 and Hudson Pacific Properties, L.P.: Nine Months Ended September 30, 2023 2022 BEGINNING OF PERIOD Cash and cash equivalents $ 255,761 $ 96,555 Restricted cash 29,970 100,321 TOTAL $ 285,731 $ 196,876 END OF PERIOD Cash and cash equivalents $ 75,040 $ 161,667 Restricted cash 19,054 42,401 TOTAL $ 94,094 $ 204,068 |
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 and Hudson Pacific Properties, L.P.: Nine Months Ended September 30, 2023 2022 BEGINNING OF PERIOD Cash and cash equivalents $ 255,761 $ 96,555 Restricted cash 29,970 100,321 TOTAL $ 285,731 $ 196,876 END OF PERIOD Cash and cash equivalents $ 75,040 $ 161,667 Restricted cash 19,054 42,401 TOTAL $ 94,094 $ 204,068 |
Organization (Details)
Organization (Details) | Sep. 30, 2023 ft² property | Aug. 28, 2023 |
Real Estate Properties | ||
Number of Properties | property | 61 | |
Square Feet | ft² | 20,646,441 | |
Consolidated portfolio | ||
Real Estate Properties | ||
Number of Properties | property | 56 | |
Square Feet | ft² | 17,040,043 | |
Consolidated portfolio | Office | ||
Real Estate Properties | ||
Number of Properties | property | 47 | |
Square Feet | ft² | 13,817,222 | |
Consolidated portfolio | Studio | ||
Real Estate Properties | ||
Number of Properties | property | 3 | |
Square Feet | ft² | 1,256,579 | |
Consolidated portfolio | Future development | ||
Real Estate Properties | ||
Number of Properties | property | 6 | |
Square Feet | ft² | 1,966,242 | |
Unconsolidated portfolio | ||
Real Estate Properties | ||
Number of Properties | property | 5 | |
Square Feet | ft² | 3,606,398 | |
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% | |
Unconsolidated portfolio | Sunset Pier 94 Studios | ||
Real Estate Properties | ||
Joint venture, ownership percentage | 51% | 51% |
Joint venture, ownership percentage | 26% | 25.60% |
Unconsolidated portfolio | Office | ||
Real Estate Properties | ||
Number of Properties | property | 1 | |
Square Feet | ft² | 1,516,051 | |
Unconsolidated portfolio | Studio | ||
Real Estate Properties | ||
Number of Properties | property | 2 | |
Square Feet | ft² | 473,000 | |
Unconsolidated portfolio | Future development | ||
Real Estate Properties | ||
Number of Properties | property | 2 | |
Square Feet | ft² | 1,617,347 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) jointVenture segment | Sep. 30, 2022 USD ($) | Aug. 28, 2023 | Dec. 31, 2022 USD ($) | |
Variable Interest Entity | ||||||
Income tax benefit (provision) | $ 425,000 | $ 1,306,000 | $ (715,000) | $ 2,909,000 | ||
Gain on derivative | 8,000,000 | |||||
Prepaid expense and other assets, reclassification | 18,374,000 | 10,028,000 | ||||
Accounts payable, accrued liabilities and other, reclassification | $ 37,137,000 | 63,807,000 | ||||
Weighted average incremental borrowing rate | 5.60% | 5.60% | ||||
Weighted average remaining lease term (in years) | 22 years | 22 years | ||||
Number of operating segments | segment | 3 | |||||
Number of reporting units | segment | 3 | |||||
Goodwill | $ 263,549,000 | $ 263,549,000 | $ 263,549,000 | |||
Goodwill impairment | $ 0 | $ 0 | ||||
Minimum | ||||||
Variable Interest Entity | ||||||
Finite-lived intangible assets useful life (in years) | 5 years | 5 years | ||||
Maximum | ||||||
Variable Interest Entity | ||||||
Finite-lived intangible assets useful life (in years) | 7 years | 7 years | ||||
VIE, primary beneficiary | ||||||
Variable Interest Entity | ||||||
Number of joint ventures meeting VIE definition | jointVenture | 20 | |||||
Number of joint ventures consolidated | jointVenture | 13 | |||||
VIE, not primary beneficiary | ||||||
Variable Interest Entity | ||||||
Number of joint ventures not consolidated | jointVenture | 7 | |||||
VIE, not primary beneficiary | Sunset Pier 94 Studios | ||||||
Variable Interest Entity | ||||||
Joint venture, ownership percentage | 26% | 26% | 25.60% | |||
Revision of Prior Period, Adjustment | ||||||
Variable Interest Entity | ||||||
Prepaid expense and other assets, reclassification | 900,000 | |||||
Accounts payable, accrued liabilities and other, reclassification | $ 500,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Consolidated Joint Ventures (Details) - Consolidated Real Estate Entities | 9 Months Ended |
Sep. 30, 2023 | |
1455 Market | |
Variable Interest Entity | |
VIE, ownership interest | 55% |
Hill7 | |
Variable Interest Entity | |
VIE, ownership interest | 55% |
One Westside and Westside Two | |
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, LLC | |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue | |||||
Management fee income | $ 340 | $ 911 | $ 5,026 | $ 3,122 | |
Management services reimbursement income | 1,015 | 983 | 3,138 | 3,159 | |
Hudson Pacific Partners L.P. | |||||
Disaggregation of Revenue | |||||
Management fee income | 340 | 911 | 5,026 | 3,122 | |
Management services reimbursement income | 1,015 | 983 | 3,138 | 3,159 | |
Ancillary revenues | |||||
Disaggregation of Revenue | |||||
Service and other revenues | 13,337 | 29,854 | 61,651 | 68,817 | |
Receivables | 5,651 | 5,651 | $ 15,503 | ||
Other revenues | |||||
Disaggregation of Revenue | |||||
Service and other revenues | 4,302 | 5,925 | 13,643 | 17,129 | |
Receivables | 1,045 | 1,045 | $ 1,193 | ||
Studio-related tenant recoveries | |||||
Disaggregation of Revenue | |||||
Service and other revenues | $ 689 | $ 491 | $ 1,695 | $ 1,407 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Aug. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Business Combination | ||||||
Goodwill | $ 263,549 | $ 263,549 | $ 263,549 | |||
Transaction-related expenses | $ 0 | $ 9,331 | $ (1,344) | $ 10,713 | ||
Quixote | ||||||
Business Combination | ||||||
Business acquisition, equity and voting interests acquired | 100% | |||||
Intangible assets | $ 76,900 | |||||
Weighted-average amortization period (in years) | 7 years | |||||
Goodwill | $ 153,409 | |||||
Transaction-related expenses | $ 7,100 | $ 7,100 | ||||
Quixote | Trade name | ||||||
Business Combination | ||||||
Intangible assets | 28,600 | |||||
Quixote | Customer relationships and non-compete agreements | ||||||
Business Combination | ||||||
Intangible assets | 48,300 | |||||
Quixote | Customer relationships | ||||||
Business Combination | ||||||
Intangible assets | $ 45,400 | |||||
Weighted-average amortization period (in years) | 7 years | |||||
Quixote | Non-competition agreements | ||||||
Business Combination | ||||||
Intangible assets | $ 2,900 | |||||
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 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Combination | |||
Cash | $ 0 | $ 197,862 | |
Seller note payable | $ 0 | $ 160,000 | |
Quixote | |||
Business Combination | |||
Cash | $ 199,098 | ||
Seller note payable | 160,000 | ||
Total consideration | $ 359,098 |
Business Combinations - Fair Va
Business Combinations - Fair Value Assets and Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Aug. 31, 2022 |
Business Combination | |||
Goodwill | $ 263,549 | $ 263,549 | |
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 | 106,115 | ||
Total assets acquired | 313,501 | ||
Accounts payable, accrued liabilities and other | 12,700 | ||
Lease liabilities | 95,112 | ||
Total liabilities assumed | 107,812 | ||
Net identifiable assets acquired | 205,689 | ||
Goodwill | 153,409 | ||
NET ASSETS ACQUIRED | $ 359,098 |
Business Combinations- Schedule
Business Combinations- Schedule of Business Acquisition, Pro Forma Information (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 from operations | $ 1,257 | $ 1,257 |
Investment in Real Estate - Sch
Investment in Real Estate - Schedule of Investments in Real Estate (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Real Estate [Abstract] | ||
Land | $ 1,377,970 | $ 1,397,714 |
Building and improvements | 6,370,018 | 6,342,851 |
Tenant improvements | 894,595 | 868,193 |
Furniture and fixtures | 9,441 | 9,639 |
Property under development | 179,890 | 98,175 |
INVESTMENT IN REAL ESTATE, AT COST | $ 8,831,914 | $ 8,716,572 |
Investment in Real Estate - Nar
Investment in Real Estate - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Impairment loss | $ 0 | $ 4,795,000 | $ 0 | $ 28,548,000 |
Del Amo | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Impairment loss | 200,000 | 13,000,000 | ||
Impaired real estate, estimated fair value | 2,800,000 | 2,800,000 | ||
Northview Center | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Impairment loss | 1,500,000 | 1,500,000 | ||
Impaired real estate, estimated fair value | 46,000,000 | 46,000,000 | ||
Hollywood | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | ||||
Impairment loss | 3,100,000 | 3,100,000 | ||
Impaired real estate, estimated fair value | $ 96,000,000 | $ 96,000,000 |
Investment in Real Estate- Disp
Investment in Real Estate- Dispositions of Real Estate Properties (Details) - Disposed of by Sale $ in Millions | Aug. 25, 2023 USD ($) ft² | Aug. 24, 2023 USD ($) ft² | Feb. 06, 2023 USD ($) ft² | Aug. 30, 2022 USD ($) ft² | Aug. 05, 2022 USD ($) ft² |
Skyway Landing | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Area of real estate property (in square feet) | ft² | 246,997 | ||||
Sales Price | $ 102 | ||||
Gain (Loss) on Sale | $ 7 | ||||
604 Arizona | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Area of real estate property (in square feet) | ft² | 44,260 | ||||
Sales Price | $ 32.5 | ||||
Gain (Loss) on Sale | $ 10.3 | ||||
3401 Exposition | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations | |||||
Area of real estate property (in square feet) | ft² | 63,376 | ||||
Sales Price | $ 40 | ||||
Gain (Loss) on Sale | $ 5.8 | ||||
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 | ||||
Gain (Loss) on Sale | $ 0 | ||||
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 | ||||
Gain (Loss) on Sale | $ (0.2) |
Non-Real Estate Property, Pla_3
Non-Real Estate Property, Plant and Equipment, net (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | $ 158,293 | $ 153,833 |
Accumulated depreciation | (42,390) | (23,544) |
Non-real estate property, plant and equipment, net | $ 115,903 | 130,289 |
Minimum | ||
Property, Plant and Equipment, Net | ||
Estimate useful life | 3 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 | $ 71,746 | 68,973 |
Production equipment | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | 36,960 | 36,019 |
Trucks and other vehicles | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | 20,921 | 20,306 |
Leasehold improvements | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | 14,491 | 16,993 |
Other equipment | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | 7,200 | 5,693 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment, Net | ||
Non-real estate property, plant and equipment, at cost | $ 6,975 | $ 5,849 |
Investment in Unconsolidated _3
Investment in Unconsolidated Real Estate Entities- Schedule of Variable Interest Entities (Details) - VIE, not primary beneficiary - USD ($) $ in Thousands | Sep. 30, 2023 | Aug. 28, 2023 |
Sunset Waltham Cross Studios | ||
Schedule of Equity Method Investments | ||
Joint venture, ownership percentage | 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 | $ 98,400 | |
Sunset Pier 94 Studios | ||
Schedule of Equity Method Investments | ||
Joint venture, ownership percentage | 51% | 51% |
Joint venture, ownership percentage | 26% | 25.60% |
Sunset Pier 94 Studios | Financial guarantee | ||
Schedule of Equity Method Investments | ||
Maximum exposure for guarantee | $ 26 | |
Sunset Pier 94 Studios | ||
Schedule of Equity Method Investments | ||
Joint venture, ownership percentage | 50.10% |
Investment in Unconsolidated _4
Investment in Unconsolidated Real Estate Entities - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Equity Method Investments | ||
Investment in unconsolidated real estate entities | $ 236,248 | $ 180,572 |
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, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||||||
Investment in real estate, net | $ 7,096,199 | $ 7,175,301 | ||||
TOTAL ASSETS | 8,986,802 | 9,319,140 | ||||
Liabilities | ||||||
Total liabilities | 5,260,582 | 5,434,450 | ||||
Total equity | 3,600,825 | $ 3,645,352 | 3,749,831 | $ 3,792,330 | $ 3,848,729 | $ 4,196,992 |
TOTAL LIABILITIES AND EQUITY | 8,986,802 | 9,319,140 | ||||
Equity method investment, nonconsolidated investee or group of investees | ||||||
ASSETS | ||||||
Investment in real estate, net | 1,201,957 | 1,093,448 | ||||
Other assets | 113,597 | 62,870 | ||||
TOTAL ASSETS | 1,315,554 | 1,156,318 | ||||
Liabilities | ||||||
Secured debt, net | 572,762 | 527,985 | ||||
Other liabilities | 64,850 | 49,027 | ||||
Total liabilities | 637,612 | 577,012 | ||||
Company’s capital | 213,165 | 170,656 | ||||
Partner’s capital | 464,777 | 408,650 | ||||
Total equity | 677,942 | 579,306 | ||||
TOTAL LIABILITIES AND EQUITY | $ 1,315,554 | $ 1,156,318 |
Investment in Unconsolidated _6
Investment in Unconsolidated Real Estate Entities - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Equity Method Investment, Summarized Financial Information, Income Statement | ||||
TOTAL REVENUES | $ 231,443 | $ 260,354 | $ 728,874 | $ 756,297 |
Net loss | (35,752) | (6,792) | (82,046) | (10,861) |
Equity method investment, nonconsolidated investee or group of investees | ||||
Equity Method Investment, Summarized Financial Information, Income Statement | ||||
TOTAL REVENUES | 18,478 | 18,515 | 56,220 | 64,962 |
TOTAL EXPENSES | 22,427 | 20,151 | 67,104 | 55,802 |
Net loss | $ (3,949) | $ (1,636) | $ (10,884) | $ 9,160 |
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, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net | ||
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | $ 359,870 | $ 393,842 |
INTANGIBLE LIABILITIES, NET | 29,247 | 34,091 |
Below-market leases | ||
Finite-Lived Intangible Assets, Net | ||
Market leases | 59,274 | 59,540 |
Accumulated amortization | (30,741) | (26,195) |
INTANGIBLE LIABILITIES, NET | 28,533 | 33,345 |
Above-market ground leases | ||
Finite-Lived Intangible Assets, Net | ||
Market leases | 1,095 | 1,095 |
Accumulated amortization | (381) | (349) |
INTANGIBLE LIABILITIES, NET | 714 | 746 |
Deferred leasing costs and in-place lease intangibles | ||
Finite-Lived Intangible Assets, Net | ||
Deferred leasing costs and intangible assets, gross | 327,346 | 328,617 |
Accumulated amortization | (160,163) | (141,353) |
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 167,183 | 187,264 |
Below-market ground leases | ||
Finite-Lived Intangible Assets, Net | ||
Deferred leasing costs and intangible assets, gross | 79,562 | 79,562 |
Accumulated amortization | (20,044) | (17,979) |
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 59,518 | 61,583 |
Above-market leases | ||
Finite-Lived Intangible Assets, Net | ||
Deferred leasing costs and intangible assets, gross | 673 | 724 |
Accumulated amortization | (350) | (324) |
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 323 | 400 |
Customer relationships | ||
Finite-Lived Intangible Assets, Net | ||
Deferred leasing costs and intangible assets, gross | 97,900 | 97,900 |
Accumulated amortization | (22,859) | (12,346) |
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 75,041 | 85,554 |
Non-competition agreements | ||
Finite-Lived Intangible Assets, Net | ||
Deferred leasing costs and intangible assets, gross | 8,200 | 8,200 |
Accumulated amortization | (2,868) | (1,632) |
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 5,332 | 6,568 |
Trade name | ||
Finite-Lived Intangible Assets, Net | ||
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | 37,200 | 37,200 |
Parking easement | ||
Finite-Lived Intangible Assets, Net | ||
DEFERRED LEASING COSTS AND INTANGIBLE ASSETS, NET | $ 15,273 | $ 15,273 |
Deferred Leasing Costs and In_4
Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net - Schedule of Amortization Related to Deferred Leasing Costs and Intangibles (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | $ 4,764 | $ 6,393 | ||
Customer relationships | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | $ (3,504) | $ (2,415) | (10,512) | (6,165) |
Non-competition agreements | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | (412) | (313) | (1,235) | (843) |
Below-market leases | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | 1,540 | 1,717 | 4,811 | 6,500 |
Above-market ground leases | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | 11 | 11 | 32 | 33 |
Deferred leasing costs and in-place lease intangibles | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | (9,382) | (9,450) | (28,439) | (29,657) |
Below-market ground leases | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | (698) | (698) | (2,096) | (2,075) |
Above-market leases | ||||
Finite-Lived Intangible Assets | ||||
Amortization of above- and below-market leases, net | $ (15) | $ (16) | $ (47) | $ (107) |
Deferred Leasing Costs and In_5
Deferred Leasing Costs and Intangible Assets, net and Intangible Liabilities, net- Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Finite-Lived Intangible Assets | ||||
Impairment | $ 0 | $ 0 | $ 0 | $ 0 |
Operating lease, impairment loss | $ 0 | $ 0 | $ 0 | 0 |
Del Amo | ||||
Finite-Lived Intangible Assets | ||||
Operating lease, impairment loss | 2,400,000 | |||
Trade name | ||||
Finite-Lived Intangible Assets | ||||
Impairment | $ 8,500,000 |
Receivables (Details)
Receivables (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Receivables [Abstract] | ||
Accounts receivable | $ 19,500,000 | $ 16,900,000 |
Accounts receivable, allowance for doubtful accounts | 200,000 | 100,000 |
Straight-line rent receivables, gross | 290,900,000 | 279,900,000 |
Straight-line rent receivable, allowance for doubtful accounts | $ 0 | $ 0 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets, net - Schedule of Prepaid Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Non-real estate investments | $ 48,833 | $ 47,329 |
Deferred tax asset, net | 4,769 | 5,317 |
Interest rate derivative assets | 19,559 | 9,292 |
Deferred financing costs, net | 4,327 | 5,824 |
Inventory | 5,954 | 4,914 |
Prepaid property tax | 3,475 | 2,041 |
Prepaid insurance | 17,422 | 6,530 |
Stock purchase warrant | 2 | 95 |
Other | 15,153 | 17,495 |
PREPAID EXPENSES AND OTHER ASSETS, NET | $ 119,494 | $ 98,837 |
Prepaid Expenses and Other As_4
Prepaid Expenses and Other Assets, net - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Unrealized gain (loss) on non-real estate investments | $ (2.2) | $ (0.7) | $ (2.2) | $ 0.5 |
Unrealized gain (loss) recognized on stock purchase warrant | $ (0.1) | $ (0.2) | $ (0.1) | $ (1.6) |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt Instruments (Details) | 1 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Apr. 30, 2023 USD ($) | Jan. 31, 2023 USD ($) | Sep. 30, 2023 USD ($) extension | Dec. 31, 2022 USD ($) | |
Debt | |||||
Duration used in interest rate calculation (in days) | 360 days | ||||
Hollywood Media Portfolio | Interest Rate Caps | Designated as hedging Instrument | |||||
Debt | |||||
Notional amount | $ 539,000,000 | $ 539,000,000 | |||
Hollywood Media Portfolio | Interest Rate Caps | Designated as hedging Instrument | Cash Flow Hedging | |||||
Debt | |||||
Notional amount | $ 539,000,000 | $ 539,000,000 | |||
Interest rate | 3.50% | 3.50% | |||
Hollywood Media Portfolio | Interest Rate Caps | Designated as hedging Instrument | Cash Flow Hedging, Partial | |||||
Debt | |||||
Interest rate | 5.70% | 5.70% | |||
Hollywood Media Portfolio | Interest Rate Swaps | Designated as hedging Instrument | |||||
Debt | |||||
Notional amount | $ 351,200,000 | $ 351,200,000 | |||
Hollywood Media Portfolio | Interest Rate Swaps | Designated as hedging Instrument | Cash Flow Hedging | |||||
Debt | |||||
Interest rate | 3.31% | 3.31% | |||
1918 Eighth | Interest Rate Caps | Designated as hedging Instrument | |||||
Debt | |||||
Notional amount | $ 141,400,000 | $ 141,400,000 | |||
1918 Eighth | Interest Rate Caps | Designated as hedging Instrument | Cash Flow Hedging | |||||
Debt | |||||
Notional amount | $ 141,435,000 | $ 141,435,000 | |||
1918 Eighth | Interest Rate Caps | Designated as hedging Instrument | Cash Flow Hedging, Partial | |||||
Debt | |||||
Interest rate | 5% | 5% | |||
1918 Eighth | Interest Rate Swaps | Designated as hedging Instrument | |||||
Debt | |||||
Notional amount | $ 172,900,000 | $ 172,900,000 | |||
1918 Eighth | Interest Rate Swaps | Designated as hedging Instrument | Cash Flow Hedging | |||||
Debt | |||||
Interest rate | 3.75% | 3.75% | |||
Unsecured debt | |||||
Debt | |||||
TOTAL | $ 2,635,000,000 | $ 2,635,000,000 | $ 2,660,000,000 | ||
Unsecured debt | Series A notes | |||||
Debt | |||||
TOTAL | $ 0 | $ 0 | 110,000,000 | ||
Interest rate (in percent) | 4.34% | 4.34% | |||
Repayments of debt | $ 110,000,000 | ||||
Unsecured debt | Series B notes | |||||
Debt | |||||
TOTAL | $ 259,000,000 | $ 259,000,000 | 259,000,000 | ||
Interest rate (in percent) | 4.69% | 4.69% | |||
Unsecured debt | Series C notes | |||||
Debt | |||||
TOTAL | $ 56,000,000 | $ 56,000,000 | 56,000,000 | ||
Interest rate (in percent) | 4.79% | 4.79% | |||
Unsecured debt | Series D notes | |||||
Debt | |||||
TOTAL | $ 150,000,000 | $ 150,000,000 | 150,000,000 | ||
Interest rate (in percent) | 3.98% | 3.98% | |||
Unsecured debt | Series E notes | |||||
Debt | |||||
TOTAL | $ 0 | $ 0 | 50,000,000 | ||
Interest rate (in percent) | 3.66% | 3.66% | |||
Repayments of debt | $ 50,000,000 | ||||
Unsecured debt | 3.95% Registered senior notes | |||||
Debt | |||||
TOTAL | $ 400,000,000 | $ 400,000,000 | 400,000,000 | ||
Interest rate (in percent) | 3.95% | 3.95% | |||
Unsecured debt | 4.65% Registered senior notes | |||||
Debt | |||||
TOTAL | $ 500,000,000 | $ 500,000,000 | 500,000,000 | ||
Interest rate (in percent) | 4.65% | 4.65% | |||
Unsecured debt | 3.25% Registered senior notes | |||||
Debt | |||||
TOTAL | $ 400,000,000 | $ 400,000,000 | 400,000,000 | ||
Interest rate (in percent) | 3.25% | 3.25% | |||
Unsecured debt | 5.95% Registered senior notes | |||||
Debt | |||||
TOTAL | $ 350,000,000 | $ 350,000,000 | 350,000,000 | ||
Interest rate (in percent) | 5.95% | 5.95% | |||
Unsecured debt | Quixote | |||||
Debt | |||||
Repayments of debt | $ 150,000,000 | ||||
Debt discount | $ 10,000,000 | ||||
Secured debt | |||||
Debt | |||||
TOTAL | $ 1,798,118,000 | $ 1,798,118,000 | 1,950,088,000 | ||
Extension term (in years) | 6 months | ||||
Secured debt | Hollywood Media Portfolio | |||||
Debt | |||||
TOTAL | 890,186,000 | $ 890,186,000 | 890,186,000 | ||
Hollywood Media Portfolio | 1,100,000,000 | $ 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 | Acquired Hollywood Media Portfolio debt | |||||
Debt | |||||
Acquired Hollywood Media Portfolio debt | (209,814,000) | (209,814,000) | (209,814,000) | ||
Secured debt | One Westside and Westside Two | |||||
Debt | |||||
TOTAL | 324,632,000 | 324,632,000 | 316,602,000 | ||
Maximum borrowing capacity | 414,600,000 | 414,600,000 | |||
Secured debt | Element LA | |||||
Debt | |||||
TOTAL | $ 168,000,000 | $ 168,000,000 | 168,000,000 | ||
Interest rate (in percent) | 4.59% | 4.59% | |||
Secured debt | 1918 Eighth | |||||
Debt | |||||
TOTAL | $ 314,300,000 | $ 314,300,000 | 314,300,000 | ||
Secured debt | Hill7 | |||||
Debt | |||||
TOTAL | $ 101,000,000 | $ 101,000,000 | 101,000,000 | ||
Interest rate (in percent) | 3.38% | 3.38% | |||
Secured debt | Quixote | |||||
Debt | |||||
TOTAL | $ 0 | $ 0 | 160,000,000 | ||
Interest rate (in percent) | 5% | 5% | |||
Secured debt | SOFR | Hollywood Media Portfolio | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.10% | ||||
Secured debt | SOFR | Acquired Hollywood Media Portfolio debt | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.66% | ||||
Secured debt | SOFR | One Westside and Westside Two | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.60% | ||||
Secured debt | SOFR | 1918 Eighth | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.40% | ||||
Unsecured and Secured Debt | |||||
Debt | |||||
TOTAL | $ 4,433,118,000 | $ 4,433,118,000 | 4,610,088,000 | ||
Unamortized deferred financing costs/loan discounts | (16,098,000) | (16,098,000) | (24,226,000) | ||
Debt | 4,417,020,000 | 4,417,020,000 | 4,585,862,000 | ||
Joint venture partner debt | |||||
Debt | |||||
TOTAL | 66,136,000 | 66,136,000 | |||
Debt | $ 66,136,000 | $ 66,136,000 | 66,136,000 | ||
Interest rate (in percent) | 4.50% | 4.50% | |||
Extension term (in years) | 2 years | ||||
Revolving credit facility | Unsecured debt | |||||
Debt | |||||
TOTAL | $ 520,000,000 | $ 520,000,000 | $ 385,000,000 | ||
Maximum borrowing capacity | 1,000,000,000 | $ 1,000,000,000 | |||
Extension term (in years) | 6 months | ||||
Revolving credit facility | Unsecured debt | GBP | |||||
Debt | |||||
Maximum borrowing capacity | 250,000,000 | $ 250,000,000 | |||
Revolving credit facility | Unsecured debt | CAD | |||||
Debt | |||||
Maximum borrowing capacity | 250,000,000 | $ 250,000,000 | |||
Revolving credit facility | Unsecured debt | SOFR | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.35% | ||||
Revolving credit facility | Unsecured debt | Minimum | |||||
Debt | |||||
Commitment fee (in percent) | 0.15% | ||||
Revolving credit facility | Unsecured debt | Minimum | SOFR | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.15% | ||||
Revolving credit facility | Unsecured debt | Maximum | |||||
Debt | |||||
Commitment fee (in percent) | 0.30% | ||||
Revolving credit facility | Unsecured debt | Maximum | SOFR | |||||
Debt | |||||
Basis spread on variable rate (in percent) | 1.60% | ||||
Revolving Credit Facility, If Increased | Unsecured debt | |||||
Debt | |||||
Maximum borrowing capacity | $ 2,000,000,000 | $ 2,000,000,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Apr. 30, 2023 | Jan. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Instrument | |||||||
Gain on extinguishment of debt | $ 0 | $ 0 | $ 10,000 | $ 0 | |||
Series A notes | Unsecured debt | |||||||
Debt Instrument | |||||||
Repayments of debt | $ 110,000 | ||||||
Quixote | Unsecured debt | |||||||
Debt Instrument | |||||||
Repayments of debt | $ 150,000 | ||||||
Debt discount | $ 10,000 | ||||||
Gain on extinguishment of debt | $ 10,000 | 10,000 | |||||
Series E notes | Unsecured debt | |||||||
Debt Instrument | |||||||
Repayments of debt | $ 50,000 | ||||||
Revolving credit facility | |||||||
Debt Instrument | |||||||
Proceeds from unsecured lines of credit | $ 135,000 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Unsecured and Secured Debt | ||
Debt Instrument | ||
Remaining 2023 | $ 0 | |
2024 | 324,632 | |
2025 | 741,300 | |
2026 | 1,560,186 | |
2027 | 456,000 | |
Thereafter | 1,351,000 | |
TOTAL | 4,433,118 | $ 4,610,088 |
Consolidated joint venture partner debt | ||
Debt Instrument | ||
Remaining 2023 | 0 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
2027 | 0 | |
Thereafter | 66,136 | |
TOTAL | $ 66,136 |
Debt - Schedule of Existing Cov
Debt - Schedule of Existing Covenants and their Covenant Levels (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Debt Instrument | |
Total liabilities to total asset value | 60% |
Total liabilities to total asset value, actual | 49% |
Unsecured indebtedness to unencumbered asset value | 60% |
Unsecured indebtedness to unencumbered asset value, actual | 57.70% |
Adjusted EBITDA to fixed charges | 1.5 |
Adjusted EBITDA to fixed charges, actual | 2.1 |
Secured indebtedness to total asset value | 45% |
Secured indebtedness to total asset value, actual | 20.80% |
Unencumbered NOI to unsecured interest expense | 2 |
Unencumbered NOI to unsecured interest expense, actual | 2.4 |
Debt to total assets | 60% |
Debt to total assets, actual | 45.20% |
Total unencumbered assets to unsecured debt | 150% |
Total unencumbered assets to unsecured debt, actual | 221.90% |
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 | 2.2 |
Secured debt to total assets | 45% |
Secured debt to total assets, actual | 19.10% |
3.25% Registered senior notes | Unsecured debt | |
Debt Instrument | |
Interest rate (in percent) | 3.25% |
3.95% Registered senior notes | Unsecured debt | |
Debt Instrument | |
Interest rate (in percent) | 3.95% |
4.65% Registered senior notes | Unsecured debt | |
Debt Instrument | |
Interest rate (in percent) | 4.65% |
5.95% Registered senior notes | Unsecured debt | |
Debt Instrument | |
Interest rate (in percent) | 5.95% |
Debt - Schedule of Reconciliati
Debt - Schedule of Reconciliation of Gross Interest Expense and Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Debt Disclosure [Abstract] | ||||
Gross interest expense | $ 57,702 | $ 43,126 | $ 165,425 | $ 111,286 |
Capitalized interest | (8,606) | (4,797) | (22,779) | (11,674) |
Non-cash interest expense (income) | 4,485 | (1,068) | 19,390 | 2,204 |
INTEREST EXPENSE | $ 53,581 | $ 37,261 | $ 162,036 | $ 101,816 |
Derivatives - Schedule of Deriv
Derivatives - Schedule of Derivative Instruments (Details) - Designated as hedging Instrument - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Derivative | ||
Fair Value Assets (Liabilities) | $ 17,338,000 | $ 9,292,000 |
Hollywood Media Portfolio | Interest Rate Cap | ||
Derivative | ||
Notional amount | 539,000,000 | |
Hollywood Media Portfolio | Interest Rate Cap | Cash Flow Hedging | ||
Derivative | ||
Notional Amount | $ 1,100,000,000 | |
Interest Rate | 3.50% | |
Fair Value Assets (Liabilities) | $ 0 | 9,292,000 |
Notional amount | 539,000,000 | |
Hollywood Media Portfolio | Interest Rate Cap | Cash Flow Hedging, Partial | ||
Derivative | ||
Notional Amount | $ 1,100,000,000 | |
Interest Rate | 5.70% | |
Fair Value Assets (Liabilities) | $ 1,010,000 | 0 |
Hollywood Media Portfolio | Interest Rate Swap | ||
Derivative | ||
Notional amount | 351,200,000 | |
Hollywood Media Portfolio | Interest Rate Swap | Cash Flow Hedging | ||
Derivative | ||
Notional Amount | $ 351,186,000 | |
Interest Rate | 3.31% | |
Fair Value Assets (Liabilities) | $ 11,754,000 | 0 |
Hollywood Media Portfolio | Interest Rate Sold Cap | Mark-to-Market Hedging | ||
Derivative | ||
Notional Amount | $ 561,000,000 | |
Interest Rate | 5.70% | |
Fair Value Assets (Liabilities) | $ (516,000) | 0 |
1918 Eighth | Interest Rate Cap | ||
Derivative | ||
Notional amount | 141,400,000 | |
1918 Eighth | Interest Rate Cap | Cash Flow Hedging | ||
Derivative | ||
Notional amount | 141,435,000 | |
1918 Eighth | Interest Rate Cap | Cash Flow Hedging, Partial | ||
Derivative | ||
Notional Amount | $ 314,300,000 | |
Interest Rate | 5% | |
Fair Value Assets (Liabilities) | $ 3,089,000 | 0 |
1918 Eighth | Interest Rate Swap | ||
Derivative | ||
Notional amount | 172,900,000 | |
1918 Eighth | Interest Rate Swap | Cash Flow Hedging | ||
Derivative | ||
Notional Amount | $ 172,865,000 | |
Interest Rate | 3.75% | |
Fair Value Assets (Liabilities) | $ 3,706,000 | 0 |
1918 Eighth | Interest Rate Sold Cap | Mark-to-Market Hedging | ||
Derivative | ||
Notional Amount | $ 172,865,000 | |
Interest Rate | 5% | |
Fair Value Assets (Liabilities) | $ (1,705,000) | $ 0 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Unrealized gain (loss) included in accumulated other comprehensive loss | $ 8.6 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |||||
Income tax benefit (provision) | $ 425,000 | $ 1,306,000 | $ (715,000) | $ 2,909,000 | |
Deferred tax assets | 4,769,000 | 4,769,000 | $ 5,317,000 | ||
Deferred tax assets, gross | 16,900,000 | ||||
Deferred tax assets liabilities, gross | 11,600,000 | ||||
Deferred tax assets, valuation allowance | $ 0 | ||||
Liability for uncertainty in income taxes | $ 0 | $ 0 |
Future Minimum Rents and Leas_3
Future Minimum Rents and Lease Payments - Future Minimum Base Rents Receivable (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Operating Leases, Future Minimum Payments Receivable | |
Remaining 2023 | $ 157,835 |
2024 | 608,532 |
2025 | 515,865 |
2026 | 460,496 |
2027 | 407,481 |
Thereafter | 1,390,474 |
TOTAL | $ 3,540,683 |
Future Minimum Rents and Leas_4
Future Minimum Rents and Lease Payments - Narrative (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) contract | Dec. 31, 2022 USD ($) | |
Operating Leased Assets | ||
Operating lease payment | $ | $ 725,252 | |
Operating lease liabilities | $ | 393,773 | $ 399,801 |
Operating lease right-of-use assets | $ | $ 391,177 | $ 401,051 |
Ground Lease | ||
Operating Leased Assets | ||
Number of operating lease contracts (contract) | 12 | |
Sound Stage Lease | ||
Operating Leased Assets | ||
Number of operating lease contracts (contract) | 10 | |
Office Lease | ||
Operating Leased Assets | ||
Number of operating lease contracts (contract) | 7 | |
Other Lease | ||
Operating Leased Assets | ||
Number of operating lease contracts (contract) | 19 |
Future Minimum Rents and Leas_5
Future Minimum Rents and Lease Payments - Future Minimum Payments Due (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Lessee, Operating Lease, Liability, Payment, Due | ||
Remaining 2023 | $ 10,115 | |
2024 | 41,275 | |
2025 | 40,514 | |
2026 | 38,938 | |
2027 | 36,272 | |
Thereafter | 558,138 | |
Total operating lease payments | 725,252 | |
Less: interest portion | (331,479) | |
Operating lease liabilities | $ 393,773 | $ 399,801 |
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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases [Abstract] | ||||
Variable rental expense | $ 2,691 | $ 1,219 | $ 8,870 | $ 7,316 |
Minimum rental expense | $ 11,372 | $ 7,841 | $ 33,760 | $ 20,122 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Assets And Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Interest rate derivative assets | $ 19,559 | $ 9,292 |
Interest rate derivative liabilities | (2,221) | 0 |
Stock purchase warrant | 2 | 95 |
Earnout liability | (6,283) | (9,300) |
Non-real estate investment | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Non-real estate investments measured at fair value | 3 | 544 |
Non-real estate investments measured at NAV | 48,830 | 46,785 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Interest rate derivative assets | 0 | 0 |
Interest rate 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 | 3 | 544 |
Non-real estate investments measured at NAV | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Interest rate derivative assets | 19,559 | 9,292 |
Interest rate derivative liabilities | (2,221) | 0 |
Stock purchase warrant | 2 | 95 |
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 | 0 |
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 derivative liabilities | 0 | 0 |
Stock purchase warrant | 0 | 0 |
Earnout liability | (6,283) | (9,300) |
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, 2023 USD ($) | |
Contingent Liability | |
Balance at the beginning | $ (9,300) |
Remeasurement to fair value | 3,017 |
Balance at the ending | $ (6,283) |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Narrative (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Fair Value Disclosures [Abstract] | |
Remeasurement to fair value | $ 3,017 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Investment in Securities and Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Carrying Value | Unsecured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | $ 2,635,000 | $ 2,660,000 |
Carrying Value | Secured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 1,798,118 | 1,950,088 |
Carrying Value | Consolidated joint venture partner debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 66,136 | 66,136 |
Fair Value | Unsecured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 2,200,793 | 2,364,871 |
Fair Value | Secured debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | 1,776,417 | 1,927,297 |
Fair Value | Consolidated joint venture partner debt | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Debt | $ 59,558 | $ 60,327 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) shares in Millions | 9 Months Ended |
Sep. 30, 2023 portion $ / shares shares | |
2010 Plan | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Number of shares available for grant (in share) | shares | 12 |
Stock price assumption for maximum bonus pool eligibility (in dollars per share) | $ / shares | $ 6.65 |
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 | |
Award vesting portions | portion | 2 |
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 |
PSU Plan 2023 | Tranche one | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Award performance period (in years) | 3 years |
PSU Plan 2023 | 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 - Sche
Stock-Based Compensation - Schedule of Stock-based Compensation Related to Company's Awards (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||
Expensed stock compensation | $ 5,540 | $ 6,494 | $ 17,087 | $ 17,816 |
Capitalized stock compensation | 712 | 894 | 2,066 | 2,683 |
TOTAL STOCK COMPENSATION | $ 6,252 | $ 7,388 | $ 19,153 | $ 20,499 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator: | ||||
Basic net loss available to common stockholders | $ (37,597) | $ (17,286) | $ (94,188) | $ (44,515) |
Diluted net loss available to common stockholders | $ (37,597) | $ (17,286) | $ (94,188) | $ (44,515) |
Denominator: | ||||
Basic weighted average common shares outstanding (in shares) | 140,937,702 | 141,117,194 | 140,957,170 | 144,677,652 |
Effect of dilutive instruments (in shares) | 0 | 0 | 0 | 0 |
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING (in shares) | 140,937,702 | 141,117,194 | 140,957,170 | 144,677,652 |
Basic earnings per common share (in dollars per share) | $ (0.27) | $ (0.12) | $ (0.67) | $ (0.31) |
Diluted earnings per common share (in dollars per share) | $ (0.27) | $ (0.12) | $ (0.67) | $ (0.31) |
Hudson Pacific Partners L.P. | ||||
Numerator: | ||||
Basic net loss available to common stockholders | $ (38,269) | $ (17,511) | $ (95,788) | $ (45,063) |
Diluted net loss available to common stockholders | $ (38,269) | $ (17,511) | $ (95,788) | $ (45,063) |
Denominator: | ||||
Basic weighted average common units outstanding (in shares) | 143,456,164 | 142,963,458 | 143,405,044 | 146,523,102 |
Effect of dilutive instruments (in shares) | 0 | 0 | 0 | 0 |
DILUTED WEIGHTED AVERAGE COMMON UNITS OUTSTANDING (in shares) | 143,456,164 | 142,963,458 | 143,405,044 | 146,523,102 |
Basic earnings per common unit (in dollars per share) | $ (0.27) | $ (0.12) | $ (0.67) | $ (0.31) |
Diluted earnings per common unit (in dollars per share) | $ (0.27) | $ (0.12) | $ (0.67) | $ (0.31) |
Redeemable Non-Controlling In_3
Redeemable Non-Controlling Interest - Narrative (Details) - $ / shares | 9 Months Ended | |||
Oct. 09, 2018 | Aug. 31, 2018 | Sep. 30, 2023 | Dec. 31, 2022 | |
Consolidated Real Estate Entities | HPP-MAC WSP, LLC | ||||
Redeemable Noncontrolling Interest | ||||
VIE, ownership interest | 75% | |||
Consolidated Real Estate Entities | Hudson One Ferry REIT, L.P. | ||||
Redeemable Noncontrolling Interest | ||||
VIE, ownership interest | 55% | |||
Series A Redeemable 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, 2023 | Sep. 30, 2023 | |
Consolidated Real Estate Entities | ||
Increase (Decrease) in Temporary Equity | ||
BEGINNING OF PERIOD | $ 119,136 | $ 125,044 |
Contributions | 1,125 | 1,125 |
Distributions | (3,750) | (8,256) |
Declared dividend | 0 | 0 |
Net income (loss) | (931) | (2,333) |
END OF PERIOD | 115,580 | 115,580 |
Series A Redeemable 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, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | $ 3,645,352 | $ 3,848,729 | $ 3,749,831 | $ 4,196,992 |
Unrealized gains recognized in AOCI | 17,646 | |||
Reclassification from AOCI into income | (2,196) | |||
Net change in AOCI | (2,613) | (10,194) | 15,946 | (15,578) |
Ending balance | 3,600,825 | 3,792,330 | 3,600,825 | 3,792,330 |
Accumulated Other Comprehensive Income (Loss) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | 6,413 | (7,051) | (11,272) | (1,761) |
Net change in AOCI | (2,235) | (10,015) | 15,450 | (15,305) |
Ending balance | 4,178 | $ (17,066) | 4,178 | $ (17,066) |
Derivative Instruments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | (1,280) | |||
Unrealized gains recognized in AOCI | 17,447 | |||
Reclassification from AOCI into income | (2,196) | |||
Net change in AOCI | 15,251 | |||
Ending balance | 13,971 | 13,971 | ||
Currency Translation Adjustments | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | (9,992) | |||
Unrealized gains recognized in AOCI | 199 | |||
Reclassification from AOCI into income | 0 | |||
Net change in AOCI | 199 | |||
Ending balance | $ (9,793) | $ (9,793) |
Equity - Comprehensive Income L
Equity - Comprehensive Income LP (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Unrealized gains recognized in AOCI | $ 17,646 | |||
Reclassification from AOCI into income | (2,196) | |||
Net change in AOCI | $ (2,613) | $ (10,194) | 15,946 | $ (15,578) |
Hudson Pacific Partners L.P. | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | 3,645,352 | 3,848,729 | 3,749,831 | 4,196,992 |
Unrealized gains recognized in AOCI | 18,148 | |||
Reclassification from AOCI into income | (2,258) | |||
Net change in AOCI | (2,613) | (10,194) | 15,946 | (15,578) |
Ending balance | 3,600,825 | 3,792,330 | 3,600,825 | 3,792,330 |
Accumulated Other Comprehensive Income (Loss) | Hudson Pacific Partners L.P. | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | 6,728 | (7,163) | (11,460) | (1,779) |
Net change in AOCI | (2,298) | (10,194) | 15,890 | (15,578) |
Ending balance | 4,430 | $ (17,357) | 4,430 | $ (17,357) |
Derivative Instruments | Hudson Pacific Partners L.P. | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | (1,260) | |||
Unrealized gains recognized in AOCI | 17,943 | |||
Reclassification from AOCI into income | (2,258) | |||
Net change in AOCI | 15,685 | |||
Ending balance | 14,425 | 14,425 | ||
Currency Translation Adjustments | Hudson Pacific Partners L.P. | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax | ||||
Beginning balance | (10,200) | |||
Unrealized gains recognized in AOCI | 205 | |||
Reclassification from AOCI into income | 0 | |||
Net change in AOCI | 205 | |||
Ending balance | $ (9,995) | $ (9,995) |
Equity - Non-controlling Intere
Equity - Non-controlling Interests (Details) | 9 Months Ended | |
Sep. 30, 2023 shares | Dec. 31, 2022 shares | |
Class of Stock | ||
Company-owned common units in the operating partnership (in shares) | 140,937,702 | 141,054,478 |
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) | 1,967,493 | 1,640,873 |
Hudson Pacific Partners L.P. | ||
Class of Stock | ||
Company’s ownership interest percentage | 98.20% | 98.50% |
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) | 140,937,702 | 141,054,478 |
Noncontrolling interest in operating partnership | ||
Class of Stock | ||
Non-controlling ownership interest percentage | 1.80% | 1.50% |
Noncontrolling interest in operating partnership | Common units | ||
Class of Stock | ||
Non-controlling units in the operating partnership (in shares) | 2,518,462 | 2,191,842 |
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) - ATM Program | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 USD ($) shares | Sep. 30, 2023 USD ($) shares | |
Class of Stock | ||
Number of share authorized, value | $ 125,000,000 | |
Sales of stock, shares issued (shares) | shares | 0 | 0 |
Cumulative total of sales of common stock | $ 65,800,000 | $ 65,800,000 |
Equity - Share Repurchase Progr
Equity - Share Repurchase Program (Details) - Common units | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 USD ($) shares | Sep. 30, 2023 USD ($) shares | |
Class of Stock | ||
Stock repurchase program authorized | $ 250,000,000 | $ 250,000,000 |
Repurchase of common units (in shares) | shares | 0 | 1,400,000 |
Repurchase of common stock, cumulative | $ 214,700,000 | $ 214,700,000 |
Equity - Accelerated Share Repu
Equity - Accelerated Share Repurchase Agreements (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) shares | Mar. 31, 2022 USD ($) shares | Sep. 30, 2023 USD ($) shares | Sep. 30, 2022 USD ($) | Feb. 25, 2022 USD ($) | |
Class of Stock | |||||
Payments for repurchase of common stock | $ 1,369,000 | $ 37,206,000 | |||
Common units | |||||
Class of Stock | |||||
Stock repurchase program authorized | $ 250,000,000 | $ 250,000,000 | |||
Repurchase of common units (in shares) | shares | 0 | 1,400,000 | |||
ASR | Common units | |||||
Class of Stock | |||||
Stock repurchase program authorized | $ 100,000,000 | ||||
Payments for repurchase of common stock | $ 100,000,000 | ||||
Repurchase of common units (in shares) | shares | 3,300,000 | ||||
Shares repurchased (in percentage) | 0.85 | ||||
Collared Accelerated Share Repurchase Agreements | Common units | |||||
Class of Stock | |||||
Stock repurchase program authorized | $ 100,000,000 | ||||
Payments for repurchase of common stock | $ 100,000,000 | ||||
Repurchase of common units (in shares) | shares | 3,300,000 |
Equity - Series C Cumulative Re
Equity - Series C Cumulative Redeemable Preferred Stock (Details) - 4.750% Series C Cumulative Redeemable Preferred Stock - $ / shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2023 | Mar. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss) | ||||
Preferred stock, outstanding (in shares) | 17,000,000 | 17,000,000 | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Interest rate of preferred stock | 4.75% | 4.75% | ||
Liquidation preference (in dollars per share) | $ 25 | $ 25 | ||
Temporary equity, dividend rate (in dollar per share) | 1.1875 | $ 1.1875 | $ 1.1875 | $ 1.1875 |
Liquidation preference of preferred stock (in dollars per share) | $ 25 |
Equity - Dividends (Details)
Equity - Dividends (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | |
Class of Stock | |||||||
Common stock, dividends (in dollars per share) | $ 0 | $ 0.25 | $ 0.375 | $ 0.75 | |||
Common stock, dividends, cash paid (in dollars per share) | 0 | 0.25 | 0.375 | 0.75 | |||
Common units, dividends (in dollars per share) | 0 | 0.25 | 0.375 | 0.75 | |||
Common units, dividends, cash paid (in dollars per share) | 0 | 0.25 | 0.375 | 0.75 | |||
Preferred units/stock, dividends, cash paid (in dollars per share) | 0.3906 | 0.3906 | |||||
Performance units, dividends, cash paid (in dollars per share) | 0 | 0.25 | 0.375 | 0.75 | |||
Performance units, dividends (in dollars per share) | 0 | 0.25 | 0.375 | 0.75 | |||
Series A preferred units | |||||||
Class of Stock | |||||||
Preferred units/stock, dividends (in dollars per share) | 0.3906 | 0.3906 | 1.1718 | 1.1718 | |||
Preferred units/stock, dividends, cash paid (in dollars per share) | 1.1718 | 1.1718 | |||||
Series C preferred stock | |||||||
Class of Stock | |||||||
Preferred units/stock, dividends (in dollars per share) | 0.2968750 | 0.2968750 | $ 0.2968750 | $ 0.2968750 | $ 0.1484375 | 0.8906250 | 1.0390625 |
Preferred units/stock, dividends, cash paid (in dollars per share) | $ 0.2968750 | $ 0.2968750 | $ 0.8906250 | $ 1.0390625 |
Segment Reporting - Operating A
Segment Reporting - Operating Activity (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | |
Segment Reporting [Abstract] | ||||
Number of reportable segments | segment | 2 | |||
Segment Reporting Information | ||||
Revenues | $ 231,443,000 | $ 260,354,000 | $ 728,874,000 | $ 756,297,000 |
Operating expenses | (112,176,000) | (105,028,000) | (334,920,000) | (296,886,000) |
TOTAL PROFIT FROM ALL SEGMENTS | 119,267,000 | 155,326,000 | 393,954,000 | 459,411,000 |
Net loss | (35,752,000) | (6,792,000) | (82,046,000) | (10,861,000) |
General and administrative | 17,512,000 | 19,795,000 | 55,177,000 | 62,178,000 |
Depreciation and amortization | 98,580,000 | 93,070,000 | 294,654,000 | 276,701,000 |
Loss (income) from unconsolidated real estate entities | 759,000 | 352,000 | 2,219,000 | (1,731,000) |
Fee income | (340,000) | (911,000) | (5,026,000) | (3,122,000) |
Interest expense | 53,581,000 | 37,261,000 | 162,036,000 | 101,816,000 |
Interest income | (800,000) | (196,000) | (1,407,000) | (2,026,000) |
Management services reimbursement income—unconsolidated real estate entities | (1,015,000) | (983,000) | (3,138,000) | (3,159,000) |
Management services expense—unconsolidated real estate entities | 1,015,000 | 983,000 | 3,138,000 | 3,159,000 |
Transaction-related expenses | 0 | 9,331,000 | (1,344,000) | 10,713,000 |
Unrealized loss on non-real estate investments | 2,265,000 | 894,000 | 2,269,000 | 1,062,000 |
(Gain) loss on sale of real estate | (16,108,000) | 180,000 | (23,154,000) | 180,000 |
Impairment loss | 0 | 4,795,000 | 0 | 28,548,000 |
Gain on extinguishment of debt | 0 | 0 | (10,000,000) | 0 |
Other income | (5,000) | (1,147,000) | (139,000) | (1,138,000) |
Income tax (benefit) provision | (425,000) | (1,306,000) | 715,000 | (2,909,000) |
Office | ||||
Segment Reporting Information | ||||
Revenues | 203,587,000 | 213,491,000 | 617,511,000 | 641,135,000 |
Operating expenses | (80,521,000) | (78,340,000) | (231,342,000) | (230,529,000) |
TOTAL PROFIT FROM ALL SEGMENTS | 123,066,000 | 135,151,000 | 386,169,000 | 410,606,000 |
Studio | ||||
Segment Reporting Information | ||||
Revenues | 27,856,000 | 46,863,000 | 111,363,000 | 115,162,000 |
Operating expenses | (31,655,000) | (26,688,000) | (103,578,000) | (66,357,000) |
TOTAL PROFIT FROM ALL SEGMENTS | $ (3,799,000) | $ 20,175,000 | $ 7,785,000 | $ 48,805,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Related Party Transaction | |||||
Management services reimbursement income—unconsolidated real estate entities | $ 1,015 | $ 983 | $ 3,138 | $ 3,159 | |
Operating lease right-of-use assets | 391,177 | 391,177 | $ 401,051 | ||
Operating lease liabilities | 393,773 | 393,773 | 399,801 | ||
Management services expense—unconsolidated real estate entities | 1,015 | 983 | 3,138 | 3,159 | |
Related Party | Related Party Leases | |||||
Related Party Transaction | |||||
Operating lease right-of-use assets | 6,300 | 6,300 | 6,100 | ||
Operating lease liabilities | 6,400 | 6,400 | $ 6,200 | ||
Management services expense—unconsolidated real estate entities | $ 300 | $ 200 | $ 800 | $ 700 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended |
Nov. 03, 2023 | Sep. 30, 2023 | |
Capital Addition Purchase Commitments | ||
Loss Contingencies | ||
Commitment to fund amount | $ 170.3 | |
Revolving credit facility | Unsecured debt | ||
Loss Contingencies | ||
Letters of credit outstanding | 3.1 | |
Revolving credit facility | Unsecured debt | Subsequent Event | ||
Loss Contingencies | ||
Letters of credit issued, additional | $ 1.4 | |
Real estate technology venture capital fund | ||
Loss Contingencies | ||
Commitment to fund amount | 51 | |
Contributions to date | 37.3 | |
Amount remaining to be contributed | $ 13.7 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Components of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest, net of capitalized interest | $ 134,478 | $ 68,821 |
Non-cash investing and financing activities | ||
Accounts payable and accrued liabilities for real estate investments | 116,478 | 181,689 |
Ground lease remeasurements | 5,751 | 23,177 |
Note payable issued as consideration in a business combination | 0 | 160,000 |
Lease liabilities recorded in connection with right-of-use assets | 2,117 | 94,447 |
Hudson Pacific Partners L.P. | ||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest, net of capitalized interest | 134,478 | 68,821 |
Non-cash investing and financing activities | ||
Accounts payable and accrued liabilities for real estate investments | 116,478 | 181,689 |
Ground lease remeasurements | 5,751 | 23,177 |
Note payable issued as consideration in a business combination | 0 | 160,000 |
Lease liabilities recorded in connection with right-of-use assets | $ 2,117 | $ 94,447 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Reconciliation of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2021 |
Cash and Cash Equivalents | ||||
Cash and cash equivalents | $ 75,040 | $ 255,761 | $ 161,667 | $ 96,555 |
Restricted cash | 19,054 | 29,970 | 42,401 | 100,321 |
TOTAL | 94,094 | 285,731 | 204,068 | 196,876 |
Hudson Pacific Partners L.P. | ||||
Cash and Cash Equivalents | ||||
Cash and cash equivalents | 75,040 | 255,761 | 161,667 | 96,555 |
Restricted cash | 19,054 | 29,970 | 42,401 | 100,321 |
TOTAL | $ 94,094 | $ 285,731 | $ 204,068 | $ 196,876 |