Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Entity Information [Line Items] | ||
Entity Registrant Name | Hudson Pacific Properties, Inc. | |
Entity Central Index Key | 1,482,512 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 156,051,418 | |
Hudson Pacific Partners L.P. | ||
Entity Information [Line Items] | ||
Entity Registrant Name | Hudson Pacific Properties, L.P. | |
Entity Central Index Key | 1,496,264 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
REAL ESTATE ASSETS | ||
Land | $ 1,265,399 | $ 1,265,399 |
Building and improvements | 4,628,355 | 4,502,235 |
Tenant improvements | 393,525 | 373,778 |
Furniture and fixtures | 4,231 | 4,276 |
Property under development | 216,499 | 295,239 |
Total real estate held for investment | 6,508,009 | 6,440,927 |
Accumulated depreciation and amortization | (463,882) | (419,368) |
Investment in real estate, net | 6,044,127 | 6,021,559 |
Cash and cash equivalents | 115,690 | 83,015 |
Restricted cash | 18,000 | 25,177 |
Accounts receivable, net | 2,009 | 6,852 |
Straight-line rent receivables, net | 84,850 | 87,281 |
Deferred leasing costs and lease intangible assets, net | 296,645 | 309,962 |
Derivative assets | 8,558 | 5,935 |
Goodwill | 8,754 | 8,754 |
Prepaid expenses and other assets, net | 84,582 | 27,153 |
Investment in unconsolidated entities | 0 | 66,082 |
Assets associated with real estate held for sale | 38,546 | 37,228 |
TOTAL ASSETS | 6,701,761 | 6,678,998 |
LIABILITIES AND EQUITY | ||
Notes payable, net | 2,388,388 | 2,688,010 |
Accounts payable and accrued liabilities | 135,198 | 120,444 |
Lease intangible liabilities, net | 73,033 | 80,130 |
Security deposits | 33,019 | 31,495 |
Prepaid rent | 34,779 | 40,755 |
Derivative liabilities | 967 | 1,303 |
Liabilities associated with real estate held for sale | 0 | 3,934 |
TOTAL LIABILITIES | 2,665,384 | 2,966,071 |
6.25% Series A cumulative redeemable preferred units of the operating partnership | 10,177 | 10,177 |
Hudson Pacific Properties, Inc. stockholders’ equity: | ||
Common stock, $0.01 par value, 490,000,000 authorized, 155,279,629 shares and 136,492,235 shares outstanding at March 31, 2017 and December 31, 2016, respectively | 1,553 | 1,364 |
Additional paid-in capital | 3,691,819 | 3,109,394 |
Accumulated other comprehensive income | 8,710 | 9,496 |
Accumulated income (deficit) | 3,784 | (16,971) |
Total Hudson Pacific Properties, Inc. stockholders’ equity | 3,705,866 | 3,103,283 |
Partners’ capital: | ||
TOTAL EQUITY | 4,026,200 | 3,702,750 |
TOTAL LIABILITIES AND EQUITY | 6,701,761 | 6,678,998 |
Hudson Pacific Partners L.P. | ||
REAL ESTATE ASSETS | ||
Land | 1,265,399 | 1,265,399 |
Building and improvements | 4,628,355 | 4,502,235 |
Tenant improvements | 393,525 | 373,778 |
Furniture and fixtures | 4,231 | 4,276 |
Property under development | 216,499 | 295,239 |
Total real estate held for investment | 6,508,009 | 6,440,927 |
Accumulated depreciation and amortization | (463,882) | (419,368) |
Investment in real estate, net | 6,044,127 | 6,021,559 |
Cash and cash equivalents | 115,690 | 83,015 |
Restricted cash | 18,000 | 25,177 |
Accounts receivable, net | 2,009 | 6,852 |
Straight-line rent receivables, net | 84,850 | 87,281 |
Deferred leasing costs and lease intangible assets, net | 296,645 | 309,962 |
Derivative assets | 8,558 | 5,935 |
Goodwill | 8,754 | 8,754 |
Prepaid expenses and other assets, net | 84,582 | 27,153 |
Investment in unconsolidated entities | 0 | 66,082 |
Assets associated with real estate held for sale | 38,546 | 37,228 |
TOTAL ASSETS | 6,701,761 | 6,678,998 |
LIABILITIES AND EQUITY | ||
Notes payable, net | 2,388,388 | 2,688,010 |
Accounts payable and accrued liabilities | 135,198 | 120,444 |
Lease intangible liabilities, net | 73,033 | 80,130 |
Security deposits | 33,019 | 31,495 |
Prepaid rent | 34,779 | 40,755 |
Derivative liabilities | 967 | 1,303 |
Liabilities associated with real estate held for sale | 0 | 3,934 |
TOTAL LIABILITIES | 2,665,384 | 2,966,071 |
6.25% Series A cumulative redeemable preferred units of the operating partnership | 10,177 | 10,177 |
Partners’ capital: | ||
Common units, 155,848,674 and 145,942,855 issued and outstanding at March 31, 2017 and December 31, 2016, respectively. | 3,718,762 | 3,398,142 |
Non-controlling interest—members in consolidated entities | 307,438 | 304,608 |
TOTAL CAPITAL | 4,026,200 | 3,702,750 |
TOTAL LIABILITIES AND EQUITY | 6,701,761 | 6,678,998 |
Non-controlling interest—members in consolidated entities | ||
Partners’ capital: | ||
Non-controlling interest—members in Consolidated Entities and Non-controlling units in the Operating Partnership | 307,438 | 304,608 |
Non-controlling interest—units in the operating partnership | ||
Partners’ capital: | ||
Non-controlling interest—members in Consolidated Entities and Non-controlling units in the Operating Partnership | 12,896 | 294,859 |
TOTAL EQUITY | $ 12,896 | $ 294,859 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Common Stock: | ||
Common Stock, par value per share (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, shares authorized (in shares) | 490,000,000 | 490,000,000 |
Common Stock, shares outstanding (in shares) | 155,279,629 | 136,492,235 |
6.25% series A cumulative redeemable preferred units of the Operating Partnership | ||
Series A Cumulative Redeemable Preferred units of the Operating Partnership | ||
Temporary Equity, dividend rate percentage (as a percent) | 6.25% | 6.25% |
6.25% series A cumulative redeemable preferred units of the Operating Partnership | Hudson Pacific Partners L.P. | ||
Series A Cumulative Redeemable Preferred units of the Operating Partnership | ||
Temporary Equity, dividend rate percentage (as a percent) | 6.25% | 6.25% |
Common Units | Hudson Pacific Partners L.P. | ||
Common Stock: | ||
Common Stock, shares outstanding (in shares) | 155,848,674 | 145,942,855 |
Common Units, shares issued (in shares) | 155,848,674 | 145,942,855 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
REVENUES | ||
TOTAL REVENUES | $ 168,285 | $ 153,537 |
OPERATING EXPENSES | ||
General and administrative | 13,810 | 12,503 |
Depreciation and amortization | 70,767 | 68,368 |
TOTAL OPERATING EXPENSES | 139,782 | 134,526 |
INCOME FROM OPERATIONS | 28,503 | 19,011 |
OTHER EXPENSE (INCOME) | ||
Interest expense | 21,930 | 17,251 |
Interest income | (30) | (13) |
Unrealized (gain) loss on ineffective portion of derivative instruments | (6) | 2,125 |
Other (income) expense | (678) | 24 |
TOTAL OTHER EXPENSES | 21,216 | 19,387 |
INCOME (LOSS) BEFORE GAINS ON SALE OF REAL ESTATE | 7,287 | (376) |
Gains on sale of real estate | 16,866 | 6,352 |
NET INCOME | 24,153 | 5,976 |
Net income attributable to preferred units | (159) | (159) |
Net income attributable to participating securities | (240) | (197) |
Net income attributable to non-controlling interest in consolidated entities | (3,037) | (1,945) |
Net income attributable to units in the operating partnership | (202) | (1,422) |
Net income (loss) attributable to common stockholders | $ 20,515 | $ 2,253 |
Net income attributable to common stockholders - basic (in dollars per share) | $ 0.14 | $ 0.03 |
Net income attributable to common stockholders - diluted (in dollars per share) | $ 0.14 | $ 0.03 |
Weighted average shares of common stock outstanding—basic (in shares) | 147,950,594 | 89,190,803 |
Weighted average shares of common stock outstanding - diluted (in shares) | 149,950,346 | 89,597,803 |
Dividends declared per common stock/unit (in dollars per share) | $ 0.25 | $ 0.200 |
Hudson Pacific Partners L.P. | ||
REVENUES | ||
TOTAL REVENUES | $ 168,285 | $ 153,537 |
OPERATING EXPENSES | ||
General and administrative | 13,810 | 12,503 |
Depreciation and amortization | 70,767 | 68,368 |
TOTAL OPERATING EXPENSES | 139,782 | 134,526 |
INCOME FROM OPERATIONS | 28,503 | 19,011 |
OTHER EXPENSE (INCOME) | ||
Interest expense | 21,930 | 17,251 |
Interest income | (30) | (13) |
Unrealized (gain) loss on ineffective portion of derivative instruments | (6) | 2,125 |
Other (income) expense | (678) | 24 |
TOTAL OTHER EXPENSES | 21,216 | 19,387 |
INCOME (LOSS) BEFORE GAINS ON SALE OF REAL ESTATE | 7,287 | (376) |
Gains on sale of real estate | 16,866 | 6,352 |
NET INCOME | 24,153 | 5,976 |
Net income attributable to non-controlling interest in consolidated entities | (3,037) | (1,945) |
Net income (loss) attributable to common stockholders | $ 21,116 | $ 4,031 |
Dividends declared per common stock/unit (in dollars per share) | $ 0.250 | $ 0.2000 |
Series A preferred units distributions | $ (159) | $ (159) |
Net income attributable to participating securities | (240) | (197) |
Net income available to common unitholders | $ 20,717 | $ 3,675 |
Net income attributable to common unitholders —basic (in dollars per share) | $ 0.14 | $ 0.03 |
Net income attributable to common unitholders —diluted (in dollars per share) | $ 0.14 | $ 0.03 |
Weighted average shares of common units outstanding—basic (in shares) | 149,407,796 | 145,487,118 |
Weighted average shares of common units outstanding—diluted (in shares) | 150,334,796 | 145,894,118 |
Office | ||
REVENUES | ||
Rental | $ 133,516 | $ 116,227 |
Tenant recoveries | 17,401 | 20,533 |
Parking and other | 5,899 | 5,532 |
TOTAL REVENUES | 156,816 | 142,292 |
OPERATING EXPENSES | ||
Operating expenses | 47,954 | 47,703 |
Office | Hudson Pacific Partners L.P. | ||
REVENUES | ||
Rental | 133,516 | 116,227 |
Tenant recoveries | 17,401 | 20,533 |
Parking and other | 5,899 | 5,532 |
TOTAL REVENUES | 156,816 | 142,292 |
OPERATING EXPENSES | ||
Operating expenses | 47,954 | 47,703 |
Media & Entertainment | ||
REVENUES | ||
Rental | 6,685 | 6,028 |
Tenant recoveries | 665 | 199 |
Parking and other | 77 | 49 |
Other property-related revenue | 4,042 | 4,969 |
TOTAL REVENUES | 11,469 | 11,245 |
OPERATING EXPENSES | ||
Operating expenses | 7,251 | 5,952 |
Media & Entertainment | Hudson Pacific Partners L.P. | ||
REVENUES | ||
Rental | 6,685 | 6,028 |
Tenant recoveries | 665 | 199 |
Parking and other | 77 | 49 |
Other property-related revenue | 4,042 | 4,969 |
TOTAL REVENUES | 11,469 | 11,245 |
OPERATING EXPENSES | ||
Operating expenses | $ 7,251 | $ 5,952 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Net income | $ 24,153 | $ 5,976 |
Other comprehensive income (loss): change in fair value of derivative instruments | 2,864 | (15,475) |
Comprehensive income (loss) | 27,017 | (9,499) |
Comprehensive income attributable to preferred units | (159) | (159) |
Comprehensive income attributable to participating securities | (240) | (197) |
Comprehensive income attributable to non-controlling interest in consolidated entities | (3,037) | (1,945) |
Comprehensive (income) loss attributable to units in the operating partnership | (230) | 4,566 |
Comprehensive income (loss) attributable to Hudson Pacific Properties, Inc. stockholders | 23,351 | (7,234) |
Hudson Pacific Partners L.P. | ||
Net income | 24,153 | 5,976 |
Other comprehensive income (loss): change in fair value of derivative instruments | 2,864 | (15,475) |
Comprehensive income (loss) | 27,017 | (9,499) |
Comprehensive income attributable to preferred units | (159) | (159) |
Comprehensive income attributable to participating securities | (240) | (197) |
Comprehensive income attributable to non-controlling interest in consolidated entities | (3,037) | (1,945) |
Comprehensive income (loss) attributable to Hudson Pacific Properties, Inc. stockholders | $ 23,581 | $ (11,800) |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Thousands | Total | Common Stock/Units | Additional Paid-in Capital | Accumulated Income (Deficit) | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interest—Units in the Operating Partnership | Non-controlling Interest—Members in Consolidated Entities |
Beginning Balance at Dec. 31, 2015 | $ 3,729,037 | $ 891 | $ 1,710,979 | $ (44,955) | $ (1,081) | $ 1,800,578 | $ 262,625 |
Beginning balance (in shares) at Dec. 31, 2015 | 89,153,780 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Contributions | 33,996 | 33,996 | |||||
Distributions | (1,303) | (1,303) | |||||
Proceeds from sale of common stock, net of underwriters’ discount and transaction costs | 1,449,581 | $ 470 | 1,449,111 | ||||
Proceeds from sale of common stock, net of underwriters' discount and transaction costs (in shares) | 47,010,695 | ||||||
Issuance of unrestricted stock | 6 | $ 6 | |||||
Issuance of unrestricted stock (in shares or units) | 590,520 | ||||||
Shares withheld to satisfy tax withholding | (8,427) | $ (3) | (8,424) | ||||
Shares withheld to satisfy tax withholding (in shares) | (262,760) | ||||||
Declared dividend | (117,819) | (90,005) | (27,814) | ||||
Amortization of stock-based compensation | 14,654 | 13,609 | 1,045 | ||||
Net income | 43,122 | 27,984 | 5,848 | 9,290 | |||
Change in fair value of derivatives | 5,942 | 10,577 | (4,635) | ||||
Redemption of common units in the operating partnership | (1,446,039) | 34,124 | (1,480,163) | ||||
Ending Balance at Dec. 31, 2016 | $ 3,702,750 | $ 1,364 | 3,109,394 | (16,971) | 9,496 | 294,859 | 304,608 |
Ending balance (in shares) at Dec. 31, 2016 | 136,492,235 | 136,492,235 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Contributions | $ 103 | 103 | |||||
Distributions | (310) | (310) | |||||
Proceeds from sale of common stock, net of underwriters’ discount and transaction costs | 647,675 | $ 187 | 647,488 | ||||
Proceeds from sale of common stock, net of underwriters' discount and transaction costs (in shares) | 18,656,575 | ||||||
Issuance of unrestricted stock | 0 | $ 3 | (3) | ||||
Issuance of unrestricted stock (in shares or units) | 251,080 | ||||||
Shares withheld to satisfy tax withholding | (4,203) | $ (1) | (4,202) | ||||
Shares withheld to satisfy tax withholding (in shares) | (120,261) | ||||||
Declared dividend | (39,919) | (39,755) | (164) | ||||
Amortization of stock-based compensation | 4,101 | 3,432 | 669 | ||||
Net income | 23,994 | 20,755 | 202 | 3,037 | |||
Change in fair value of derivatives | 2,864 | 2,836 | 28 | ||||
Redemption of common units in the operating partnership | (310,855) | (24,535) | (3,622) | (282,698) | |||
Ending Balance at Mar. 31, 2017 | $ 4,026,200 | $ 1,553 | $ 3,691,819 | $ 3,784 | $ 8,710 | $ 12,896 | $ 307,438 |
Ending balance (in shares) at Mar. 31, 2017 | 155,279,629 | 155,279,629 |
CONSOLIDATED STATEMENTS OF CAPI
CONSOLIDATED STATEMENTS OF CAPITAL - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Beginning balance (in shares) | 136,492,235 | ||
Contributions | $ 103 | $ 33,996 | |
Distributions | (310) | (1,303) | |
Proceeds from sale of common units, net of underwriters’ discount and transaction costs | 647,675 | 1,449,581 | |
Issuance of unrestricted units | 0 | 6 | |
Units withheld to satisfy tax withholding | (4,203) | (8,427) | |
Declared distributions | (39,919) | (117,819) | |
Amortization of unit-based compensation | 4,101 | 14,654 | |
Net income | 23,994 | 43,122 | |
Change in fair value of derivatives | 2,864 | $ (15,475) | 5,942 |
Redemption of common units | $ (310,855) | $ (1,446,039) | |
Ending balance (in shares) | 155,279,629 | 136,492,235 | |
Hudson Pacific Partners L.P. | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Beginning balance | $ 3,702,750 | 3,729,037 | $ 3,729,037 |
Contributions | 103 | 33,996 | |
Distributions | (310) | (1,303) | |
Proceeds from sale of common units, net of underwriters’ discount and transaction costs | 647,675 | 1,449,581 | |
Issuance of unrestricted units | 6 | ||
Units withheld to satisfy tax withholding | (4,203) | (8,427) | |
Declared distributions | (39,919) | (117,819) | |
Amortization of unit-based compensation | 4,101 | 14,654 | |
Net income | 23,994 | 43,122 | |
Change in fair value of derivatives | 2,864 | (15,475) | 5,942 |
Redemption of common units | (310,855) | (1,446,039) | |
Ending balance | 4,026,200 | 3,702,750 | |
Hudson Pacific Partners L.P. | Common Units | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Beginning balance | $ 3,398,142 | $ 3,466,412 | $ 3,466,412 |
Beginning balance (in shares) | 145,942,855 | 145,450,095 | 145,450,095 |
Proceeds from sale of common units, net of underwriters’ discount and transaction costs | $ 647,675 | $ 1,449,581 | |
Proceeds from sale of common stock, net of underwriters' discount and transaction costs (in shares) | 18,656,575 | 47,010,695 | |
Issuance of unrestricted units | $ 6 | ||
Issuance of unrestricted units (in shares) | 251,080 | 590,520 | |
Units withheld to satisfy tax withholding | $ (4,203) | $ (8,427) | |
Units withheld to satisfy tax withholding (in shares) | (120,261) | (262,760) | |
Declared distributions | $ (39,919) | $ (117,819) | |
Amortization of unit-based compensation | 4,101 | 14,654 | |
Net income | 20,957 | 33,832 | |
Change in fair value of derivatives | 2,864 | 5,942 | |
Redemption of common units | $ (310,855) | $ (1,446,039) | |
Redemption of common units (in shares) | (8,881,575) | (46,845,695) | |
Ending balance | $ 3,718,762 | $ 3,398,142 | |
Ending balance (in shares) | 155,848,674 | 145,942,855 | |
Hudson Pacific Partners L.P. | Non-controlling Interest—Members in Consolidated Entities | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Beginning balance | $ 304,608 | $ 262,625 | $ 262,625 |
Contributions | 103 | 33,996 | |
Distributions | (310) | (1,303) | |
Net income | 3,037 | 9,290 | |
Ending balance | $ 307,438 | $ 304,608 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 24,153 | $ 5,976 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 70,767 | 68,368 |
Amortization of deferred financing costs and loan premium, net | 1,186 | 871 |
Amortization of stock-based compensation | 3,902 | 3,342 |
Straight-line rents | 2,366 | (5,658) |
Straight-line rent expenses | 381 | 529 |
Amortization of above- and below-market leases, net | (5,732) | (4,851) |
Amortization of above- and below-market ground lease, net | 637 | 535 |
Amortization of lease incentive costs | 379 | 328 |
Bad debt expense | 545 | 537 |
Amortization of discount and net origination fees on purchased and originated loans | 0 | (104) |
Unrealized (gain) loss on ineffective portion of derivative instruments | (6) | 2,125 |
Gains on sale of real estate | (16,866) | (6,352) |
Change in operating assets and liabilities: | ||
Restricted cash | 7,177 | (2,001) |
Accounts receivable | 4,650 | 4,412 |
Deferred leasing costs and lease intangibles | (6,635) | (5,420) |
Prepaid expenses and other assets | (1,072) | (935) |
Accounts payable and accrued liabilities | 12,378 | 3,084 |
Security deposits | 1,031 | 430 |
Prepaid rent | (6,344) | (6,319) |
Net cash provided by operating activities | 92,897 | 58,897 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Additions to investment property | (76,225) | (54,415) |
Proceeds from sales of real estate | 81,707 | 212,629 |
Contributions to unconsolidated entities | (1,071) | 0 |
Deposits for property acquisitions | (56,323) | 0 |
Net cash (used in) provided by investing activities | (51,912) | 158,214 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from notes payable | 0 | 30,000 |
Payments of notes payable | (300,642) | (210,906) |
Proceeds from issuance of common stock, net | 647,675 | 0 |
Payments for redemption of common units in the operating partnership | (310,855) | 0 |
Dividends paid to common stock and unitholders | (39,919) | (29,802) |
Dividends paid to preferred unitholders | (159) | (159) |
Contributions from non-controlling member in consolidated entities | 103 | 103 |
Distributions to non-controlling member in consolidated entities | (310) | (326) |
Payments to satisfy tax withholding | (4,203) | (1,683) |
Payments of loan costs | 0 | (522) |
Net cash used in financing activities | (8,310) | (213,295) |
Net increase in cash and cash equivalents | 32,675 | 3,816 |
Cash and cash equivalents—beginning of period | 83,015 | 53,551 |
Cash and cash equivalents—end of period | 115,690 | 57,367 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest, net of amounts capitalized | 16,172 | 12,101 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Accounts payable and accrued liabilities for investment in property | 3,501 | 6,868 |
Hudson Pacific Partners L.P. | ||
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | 24,153 | 5,976 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 70,767 | 68,368 |
Amortization of deferred financing costs and loan premium, net | 1,186 | 871 |
Amortization of stock-based compensation | 3,902 | 3,342 |
Straight-line rents | 2,366 | (5,658) |
Straight-line rent expenses | 381 | 529 |
Amortization of above- and below-market leases, net | (5,732) | (4,851) |
Amortization of above- and below-market ground lease, net | 637 | 535 |
Amortization of lease incentive costs | 379 | 328 |
Bad debt expense | 545 | 537 |
Amortization of discount and net origination fees on purchased and originated loans | 0 | (104) |
Unrealized (gain) loss on ineffective portion of derivative instruments | (6) | 2,125 |
Gains on sale of real estate | (16,866) | (6,352) |
Change in operating assets and liabilities: | ||
Restricted cash | 7,177 | (2,001) |
Accounts receivable | 4,650 | 4,412 |
Deferred leasing costs and lease intangibles | (6,635) | (5,420) |
Prepaid expenses and other assets | (1,072) | (935) |
Accounts payable and accrued liabilities | 12,378 | 3,084 |
Security deposits | 1,031 | 430 |
Prepaid rent | (6,344) | (6,319) |
Net cash provided by operating activities | 92,897 | 58,897 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Additions to investment property | (76,225) | (54,415) |
Proceeds from sales of real estate | 81,707 | 212,629 |
Contributions to unconsolidated entities | (1,071) | 0 |
Deposits for property acquisitions | (56,323) | 0 |
Net cash (used in) provided by investing activities | (51,912) | 158,214 |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from notes payable | 0 | 30,000 |
Payments of notes payable | (300,642) | (210,906) |
Proceeds from issuance of common stock, net | 647,675 | 0 |
Payments for redemption of common units in the operating partnership | (310,855) | 0 |
Dividends paid to common stock and unitholders | (39,919) | (29,802) |
Dividends paid to preferred unitholders | (159) | (159) |
Contributions from non-controlling member in consolidated entities | 103 | 103 |
Distributions to non-controlling member in consolidated entities | (310) | (326) |
Payments to satisfy tax withholding | (4,203) | (1,683) |
Payments of loan costs | 0 | (522) |
Net cash used in financing activities | (8,310) | (213,295) |
Net increase in cash and cash equivalents | 32,675 | 3,816 |
Cash and cash equivalents—beginning of period | 83,015 | 53,551 |
Cash and cash equivalents—end of period | 115,690 | 57,367 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for interest, net of amounts capitalized | 16,172 | 12,101 |
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Accounts payable and accrued liabilities for investment in property | $ 3,501 | $ 6,868 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Hudson Pacific Properties, Inc. is a Maryland corporation formed on November 9, 2009 that did not have any meaningful operating activity until the consummation of its initial public offering and the related acquisition of its predecessor and certain other entities on June 29, 2010 (“IPO”). Since the completion of the IPO, the concurrent private placement, and the related formation transactions, Hudson Pacific Properties, Inc. has been 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 media and entertainment 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 the “our operating partnership” or “the operating partnership” refer to Hudson Pacific Properties, L.P. together with its consolidated subsidiaries. On April 1, 2015, the Company completed the acquisition of the EOP Northern California Portfolio (“EOP Acquisition”) from Blackstone Real Estate Partners V and VI (“Blackstone”). The EOP Acquisition consisted of 26 high-quality office assets totaling approximately 8.2 million square feet and two development parcels located throughout the San Francisco Peninsula, Redwood Shores, Palo Alto, Silicon Valley and North San Jose submarkets. The total consideration paid for the EOP Acquisition before certain credits, prorations, and closing costs included a cash payment of $1.75 billion and an aggregate of 63,474,791 shares of common stock of Hudson Pacific Properties, Inc. and common units in the operating partnership. As of March 31, 2017 , the Company owned a portfolio of 52 office properties and two media and entertainment properties. These properties are located throughout Northern and Southern California and the Pacific Northwest. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
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 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 ended December 31, 2017 . The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in the 2016 Annual Report on Form 10-K of Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. and the notes thereto. Certain amounts in the consolidated financial statements for the prior period have been reclassified to conform to the current period presentation. Specifically, in the Consolidated Balance Sheets for the prior period, certain amounts have been reclassified to held for sale. These amounts relate to 3402 Pico Boulevard, which was sold on March 21, 2017. 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 subsidiaries and variable interest entities (“VIEs”), of which the Company is the primary beneficiary. The unaudited interim consolidated financial statements of the operating partnership include the accounts of the operating partnership, and all wholly owned subsidiaries and VIEs of which the operating partnership is the primary beneficiary. All intercompany balances and transactions have been eliminated in the consolidated financial statements. The Company consolidates all VIEs of which the Company is considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. Four of the Company’s joint ventures and its operating partnership meet the definition of a VIE. The Company is the primary beneficiary of and consolidates three of the joint ventures and the operating partnership. Refer to Note 16 for details. Substantially all of the assets and liabilities of the Company are related to these VIEs. The Company is not consolidating one of its joint ventures, of which it is not the primary beneficiary, and an interest in land. Due to its significant influence over these entities, the Company accounts for them using the equity method of accounting. Refer to Note 7 for details. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate properties, its accrued liabilities and its performance-based equity compensation awards. The Company bases its estimates on historical experience, current market conditions and various other assumptions that are believed to be reasonable under the circumstances. Actual results could materially differ from these estimates. Recently Issued Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of Accounting Standards Update (“ASU”). The following ASUs were adopted by the Company in the first quarter of 2017: Standard Description Effect on the financial statements or other significant matters ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings (SEC Update) The guidance in this ASU is based on two SEC staff announcements made at the September 2016 and November 2016 EITF meetings. In the September meeting, the SEC announced that a registrant should disclose the potential material effects of the ASUs related to revenues, leases and credit losses on financial instruments. As a result of the November meeting, the ASU conforms Accounting Standards Codification (“ASC”) 323 to the guidance issued in ASU 2014-01 related to investments in qualified affordable housing projects. With the adoption of this guidance, the Company is required to provide updates on its implementation of the ASUs related to revenue, leases and credit losses on financial instruments. Please refer to the table below for updates on the revenue and lease ASUs. The credit losses on financial instruments ASU is not anticipated to have a material impact on the Company. ASU 2016-19, Technical Corrections and Improvements The technical corrections make minor change to certain aspects of the FASB ASC, including changes to resolve differences between current and pre-Codification guidance, updates to wording, references to avoid misapplication and textual simplifications to increase the Codification’s utility and understandability and minor amendments to guidance that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control This guidance outlines how a single decisionmaker of a VIE should treat indirect interests held through other related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The adoption did not have a material impact on the Company’s consolidated financial statements and did not change the consolidation conclusion. ASU 2016-07, Investments—Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting The guidance eliminates the requirement that an investor retrospectively apply equity method accounting when an investment that it had accounted for by another method initially qualifies for use of the equity method. The guidance also requires an investor that has an available-for-sale security that subsequently qualifies for the equity method to recognize in net income the unrealized holding gains or losses in accumulated other comprehensive income related to that security when it begins applying the equity method. The adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2016-05, Derivatives and Hedging (Topic 815), Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships The guidance states that the novation of a derivative contract (e.g., a change in the counterparty) in a hedge accounting relationship does not, in and of itself, require dedesignation of that hedge accounting relationship. The hedge accounting relationship could continue uninterrupted if all of the other hedge accounting criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterparty to the derivative contract is considered. The adoption did not have a material impact on the Company’s consolidated financial statements. As required by ASU 2017-03, the Company is providing updates to the revenue and lease standard on a quarterly basis, as follows: Standard Description Effect on the financial statements or other significant matters ASU related to Revenue from Contracts with Customers (Topic 606) The new revenue standard was amended through various ASU’s. The ASU’s that impact the Company are ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) and ASU 2014-09, Revenue from Contracts with Customers. ASU 2016-08 clarifies certain aspects of the principal-versus-agent guidance in its new revenue recognition standard related to the determination of whether an entity is a principal-versus-agent and the determination of the nature of each specified good or service. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and specifically notes that lease contracts with customers are a scope exception. The Company does not expect this guidance to have a material effect on revenue recognition as it relates to its leasing contracts until the adoption of ASU 2016-02, at which time the standard may affect revenue recognition as it relates to certain non-lease revenue components that are part of its leasing contracts. The Company has formed an implementation work team, completed training of the new standards with the implementation team, and begun review and documentation. The Company is currently evaluating this standard as it relates to media and entertainment other property-related revenue. The Company has the option of adopting this standard on either the full retrospective basis (to the beginning of its contracts) or modified retrospective method (from the beginning of the latest fiscal year of adoption). The Company plans on adopting the standard January 1, 2018 using the modified retrospective method. ASU 2016-02, Leases This guidance requires all lessees to record a lease liability at lease inception, with a corresponding right of use asset, except for short-term leases. Lessor accounting will not be fundamentally changed. The Company has formed an implementation work team, completed training of the new standards with the implementation team, and begun review and documentation. The Company is currently in the process of evaluating the amount of assets and liabilities relating to right of use that will need to be recorded with respect to its leases where it is the lessee. Additionally, the standard will impact the way the Company will record revenue and leasing costs where it is the lessor. For leasing costs, the Company will no longer be able to capitalize internal leasing costs to the extent they are not directly attributable to the lease transaction. Accordingly, the Company anticipates that internal leasing costs will be expensed with the adoption of this standard. With respect to the lease revenue, the Company will need to break down its current revenue streams between leasing and non-leasing components. To the extent there are non-leasing components the Company will need to record them in accordance with ASC 606 (see above). The Company is still in the process of evaluating its existing leasing components to determine what effect, if any, this standard will have on its revenue recognition as it relates to its leases. The Company will adopt the standard using the retrospective method from the beginning of the first year presented on the consolidated statement of operations which is January 1, 2017. The Company considers the applicability and impact of all ASUs. The following table lists the recently issued ASUs that have not been disclosed in the Company ’s Annual Report on Form 10-K and have not been adopted by the Company. The list excludes those ASUs that are expected to have an immaterial impact on the Company’s consolidated financial statements. Standard Description Effective Date Effect on the financial statements or other significant matters ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets The guidance clarifies the scope of ASC 610-20 on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. Effective for annual reporting periods (including interim periods) beginning after December 15, 2017 The Company is currently assessing the impact of this update on its consolidated financial statements and notes to the consolidated financial statements and plans to adopt this guidance in the first quarter in 2018. |
Investment in Real Estate
Investment in Real Estate | 3 Months Ended |
Mar. 31, 2017 | |
Real Estate [Abstract] | |
Investment in Real Estate | Investment in Real Estate Acquisitions The Company’s acquisitions are accounted for using the acquisition method. The results of operations for each of these acquisitions are included in the Company’s Consolidated Statements of Operations from the date of acquisition. The Company assesses fair value based on Level 2 and Level 3 inputs within the fair value framework, which includes estimated cash flow projections that utilize appropriate discount, capitalization rates, renewal probability and available market information, which includes market rental rate and market rent growth rates. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it was vacant. The fair value of acquired “above- and below-” market leases are based on the estimated cash flow projections utilizing discount rates that reflect the risks associated with the leases acquired. The amount recorded is based on the present value of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the extended below-market term for any leases with below-market renewal options. Other intangible assets acquired include amounts for in-place lease values that are based on the Company’s evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes estimates of lost rents at market rates during the hypothetical expected lease-up periods, which are dependent on local market conditions. In estimating costs to execute similar leases, the Company considers leasing commissions, and legal and other related costs. The Company had no acquisitions during the three months ended March 31, 2017 . On May 1, 2017, the Company completed its acquisition of Sunset Las Palmas Studios (formerly Hollywood Center Studios) located in Hollywood, California. See Note 19 for details. Dispositions The following table summarizes the properties sold during the three months ended March 31, 2017 . These properties were non-strategic assets to the Company’s portfolio: Property Date of Disposition Square Feet Sales Price (1) (in millions) 222 Kearny Street February 14, 2017 148,797 $ 51.8 3402 Pico Boulevard March 21, 2017 50,687 35.0 Total dispositions 199,484 $ 86.8 _________________ (1) Represents gross sales price before certain credits, prorations and closing costs. The dispositions of these properties resulted in gains of $16.9 million for the three months ended March 31, 2017 . These amounts are included in gains on sale of real estate in the Consolidated Statements of Operations. Held for Sale The Company had two properties held for sale as of December 31, 2016. Both properties were disposed of during the first quarter of 2017. The Company had no properties classified as held for sale as of March 31, 2017. Cost Capitalization The Company recognized the following capitalized costs during the periods presented: Three Months Ended March 31, 2017 2016 Capitalized personnel costs $ 2,737 $ 2,319 Capitalized interest 2,446 2,628 Impairment of Long-Lived Assets No impairment indicators have been noted and the Company recorded no impairment charges for the three months ended March 31, 2017 . |
Deferred Leasing Costs and Leas
Deferred Leasing Costs and Lease Intangibles, net | 3 Months Ended |
Mar. 31, 2017 | |
Leases [Abstract] | |
Deferred Leasing Costs and Lease Intangibles, net | Deferred Leasing Costs and Lease Intangibles, net The following summarizes the Company’s deferred leasing costs and lease intangibles as of: March 31, 2017 December 31, 2016 Above-market leases $ 22,823 $ 23,430 Accumulated amortization (13,738 ) (12,989 ) Above-market leases, net 9,085 10,441 Deferred leasing costs and in-place lease intangibles 376,056 378,540 Accumulated amortization (154,381 ) (145,551 ) Deferred leasing costs and in-place lease intangibles, net 221,675 232,989 Below-market ground leases 71,423 71,423 Accumulated amortization (5,538 ) (4,891 ) Below-market ground leases, net 65,885 66,532 Deferred leasing costs and lease intangible assets, net $ 296,645 $ 309,962 Below-market leases $ 138,549 $ 141,676 Accumulated amortization (66,511 ) (62,552 ) Below-market leases, net 72,038 79,124 Above-market ground leases 1,095 1,095 Accumulated amortization (100 ) (89 ) Above-market ground leases, net 995 1,006 Lease intangible liabilities, net $ 73,033 $ 80,130 The Company recognized the following amortization related to deferred leasing costs and lease intangibles: Three Months Ended March 31, 2017 2016 Above-market leases (1) $ 1,356 $ 3,719 Below-market leases (1) 7,088 8,570 Deferred leasing costs and in-place lease intangibles (2) 19,793 22,568 Above-market ground leases (3) 11 11 Below-market ground leases (3) 648 546 __________________ (1) Amortization is recorded in office rental income in the Consolidated Statements of Operations. (2) Amortization is recorded in depreciation and amortization expense and office rental income in the Consolidated Statements of Operations. (3) Amortization is recorded in office operating expenses in the Consolidated Statements of Operations. |
Accounts Receivable, net
Accounts Receivable, net | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Accounts Receivable, net | Accounts Receivable, net The Company’s accounting policy and methodology used to estimate the allowance for doubtful accounts is discussed in the Company's 2016 Annual Report on Form 10-K. The following table summarizes the Company’s accounts receivable, net of allowance for doubtful accounts as of: March 31, 2017 December 31, 2016 Accounts receivable $ 4,306 $ 8,697 Allowance for doubtful accounts (2,297 ) (1,845 ) Accounts receivable, net $ 2,009 $ 6,852 Straight-line Rent Receivables, net The Company’s accounting policy and methodology used to estimate the allowance for doubtful accounts is discussed in the Company’s 2016 Annual Report on Form 10-K. The following table represents the Company’s straight-line rent receivables, net of allowance for doubtful accounts as of: March 31, 2017 December 31, 2016 Straight-line rent receivables $ 87,228 $ 87,417 Allowance for doubtful accounts (2,378 ) (136 ) Straight-line rent receivables, net $ 84,850 $ 87,281 |
Straight-line Rent Receivables,
Straight-line Rent Receivables, net | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Straight-line Rent Receivables, net | Accounts Receivable, net The Company’s accounting policy and methodology used to estimate the allowance for doubtful accounts is discussed in the Company's 2016 Annual Report on Form 10-K. The following table summarizes the Company’s accounts receivable, net of allowance for doubtful accounts as of: March 31, 2017 December 31, 2016 Accounts receivable $ 4,306 $ 8,697 Allowance for doubtful accounts (2,297 ) (1,845 ) Accounts receivable, net $ 2,009 $ 6,852 Straight-line Rent Receivables, net The Company’s accounting policy and methodology used to estimate the allowance for doubtful accounts is discussed in the Company’s 2016 Annual Report on Form 10-K. The following table represents the Company’s straight-line rent receivables, net of allowance for doubtful accounts as of: March 31, 2017 December 31, 2016 Straight-line rent receivables $ 87,228 $ 87,417 Allowance for doubtful accounts (2,378 ) (136 ) Straight-line rent receivables, net $ 84,850 $ 87,281 |
Investment in Unconsolidated En
Investment in Unconsolidated Entity | 3 Months Ended |
Mar. 31, 2017 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Unconsolidated Entity | Investment in Unconsolidated Entities Investment in unconsolidated real estate in which the Company has the ability to exercise significant influence (but not control) is accounted for under the equity method of investment. Under the equity method, the Company initially records the investment at cost, and subsequently adjusts for equity in earnings or losses and cash contributions and distributions. The Company’s net equity investment is reflected within investment in unconsolidated entities on the Consolidated Balance Sheets, and the Company’s share of net income or loss from the entity is included within other (income) expense on the Consolidated Statements of Operations. On June 16, 2016, the Company entered into a joint venture to co-originate a loan secured by land in Santa Clara, California. The Company holds a 21% interest in the joint venture. The assets of the joint venture consist of the notes receivable. The Company’s investment in this joint venture was $30.7 million and $29.4 million as of March 31, 2017 and December 31, 2016 , respectively, which represents the maximum exposure for loss for the Company. The joint venture meets the criteria of a VIE and the Company accounts for this investment under the equity method of accounting since the Company is not the primary beneficiary. On July 1, 2016, the Company entered into an agreement with an unaffiliated third party related to the land on which its 11601 Wilshire property is located. The Company holds a 28% interest in the land. The agreement does not meet the definition of a VIE and the Company accounts for its interest in the land under the equity method of accounting. The Company’s interest in the land was $7.8 million as of March 31, 2017 and December 31, 2016 . On December 27, 2016, the Company entered into an agreement to purchase the remaining interest in the land for $50.0 million (before credits, prorations and closing costs). The transaction is expected to close in the third quarter of 2017, however there can be no guaranty that it will close as expected. |
Goodwill
Goodwill | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill The Company’s goodwill balance as of March 31, 2017 and December 31, 2016 was $8.8 million . The Company does not amortize this asset but instead analyzes it on a quarterly basis for impairment. No impairment indicators have been noted during the three months ended March 31, 2017 . |
Notes Payable, Net
Notes Payable, Net | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Notes Payable, Net | Notes Payable, net The following table summarizes the balances of the Company’s indebtedness as of: March 31, 2017 December 31, 2016 Notes payable $ 2,407,196 $ 2,707,839 Less: deferred financing costs, net (1) (18,808 ) (19,829 ) Notes payable, net $ 2,388,388 $ 2,688,010 ________________ (1) Excludes deferred financing costs related to establishing the Company’s unsecured revolving credit facility of $1.3 million and $1.5 million as of March 31, 2017 and December 31, 2016 , respectively, which are included in prepaid expenses and other assets, net in the Consolidated Balance Sheets. The following table sets forth information with respect to the amounts included in notes payable, net as of: March 31, 2017 December 31, 2016 Principal Amount Deferred Financing Costs, net Principal Amount Deferred Financing Costs, net Interest Rate (1) Contractual Maturity Date UNSECURED LOANS Unsecured Revolving Credit Facility (2) $ — $ — $ 300,000 $ — LIBOR+ 1.15% to 1.85% 4/1/2019 (3) 5-Year Term Loan due April 2020 (2)(4) 450,000 (3,243 ) 450,000 (3,513 ) LIBOR+ 1.30% to 2.20% 4/1/2020 5-Year Term Loan due November 2020 (2) 175,000 (697 ) 175,000 (745 ) LIBOR +1.30% to 2.20% 11/17/2020 7-Year Term Loan due April 2022 (2)(5) 350,000 (2,157 ) 350,000 (2,265 ) LIBOR+ 1.60% to 2.55% 4/1/2022 7-Year Term Loan due November 2022 (2)(6) 125,000 (892 ) 125,000 (931 ) LIBOR +1.60% to 2.55% 11/17/2022 Series A Notes 110,000 (891 ) 110,000 (930 ) 4.34% 1/2/2023 Series E Notes 50,000 (289 ) 50,000 (300 ) 3.66% 9/15/2023 Series B Notes 259,000 (2,207 ) 259,000 (2,271 ) 4.69% 12/16/2025 Series D Notes 150,000 (874 ) 150,000 (898 ) 3.98% 7/6/2026 Series C Notes 56,000 (527 ) 56,000 (539 ) 4.79% 12/16/2027 TOTAL UNSECURED LOANS 1,725,000 (11,777 ) 2,025,000 (12,392 ) MORTGAGE LOANS Mortgage Loan secured by Rincon Center (7) 99,897 (158 ) 100,409 (198 ) 5.13% 5/1/2018 Mortgage Loan secured by Sunset Gower Studios/Sunset Bronson Studios 5,001 (1,357 ) 5,001 (1,534 ) LIBOR+2.25% 3/4/2019 (3) Mortgage Loan secured by Met Park North (8) 64,500 (370 ) 64,500 (398 ) LIBOR+1.55% 8/1/2020 Mortgage Loan secured by 10950 Washington (7) 27,798 (337 ) 27,929 (354 ) 5.32% 3/11/2022 Mortgage Loan secured by Pinnacle I (9)(10) 129,000 (567 ) 129,000 (593 ) 3.95% 11/7/2022 Mortgage Loan secured by Element LA 168,000 (2,256 ) 168,000 (2,321 ) 4.59% 11/6/2025 Mortgage Loan secured by Pinnacle II (10) 87,000 (701 ) 87,000 (720 ) 4.30% 6/11/2026 Mortgage Loan secured by Hill7 (11) 101,000 (1,285 ) 101,000 (1,319 ) 3.38% 11/6/2026 TOTAL MORTGAGE LOANS 682,196 (7,031 ) 682,839 (7,437 ) TOTAL $ 2,407,196 $ (18,808 ) $ 2,707,839 $ (19,829 ) _________________ (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 March 31, 2017 , which may be different than the interest rates as of December 31, 2016 for corresponding indebtedness. (2) The Company has the option to make an irrevocable election to change the interest rate depending on the Company’s credit rating. As of March 31, 2017 , no such election had been made. (3) The maturity date may be extended once for an additional one -year term. (4) Effective July 2016, $300.0 million of the term loan has been effectively fixed at 2.75% to 3.65% per annum through the use of two interest rate swaps. See Note 10 for details. (5) Effective July 2016, the outstanding balance of the term loan has been effectively fixed at 3.36% to 4.31% per annum through the use of two interest rate swaps. See Note 10 for details. (6) Effective June 1, 2016, the outstanding balance of the term loan has been effectively fixed at 3.03% to 3.98% per annum through the use of an interest rate swap. See Note 10 for details. (7) Monthly debt service includes annual debt amortization payments based on a 30 -year amortization schedule with a balloon payment at maturity. (8) This loan bears interest only. Interest on the full loan amount has been effectively fixed at 3.71% per annum through use of an interest rate swap. See Note 10 for details. (9) This loan bears interest only for the first five years. Beginning with the payment due December 6, 2017, monthly debt service will include annual debt amortization payments based on a 30 -year amortization schedule with a balloon payment at maturity. (10) The Company owns 65% of the ownership interests in the consolidated joint venture that owns the Pinnacle I and II properties. The full amount of the loan is shown. (11) The Company owns 55% of the ownership interest in the consolidated joint venture that owns the Hill7 property. The full amount of the loan is shown. The maturity date of this loan can be extended for an additional two years at a higher interest rate and with principal amortization. Indebtedness The Company presents its financial statements on a consolidated basis. Notwithstanding such presentation, except to the extent expressly indicated, such as in the case of the project financing for Sunset Gower Studios and Sunset Bronson Studios, the Company’s separate property-owning subsidiaries are not obligors of 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 loan and transactions of this type. As of the date of this filing, there have been no events of default associated with the Company’s loans. The following table summarizes the minimum future principal payments due (before the impact of extension options, if applicable) on the operating partnership’s secured and unsecured notes payable as of March 31, 2017 : Year Annual Principal Payments Remaining 2017 $ 2,071 2018 101,157 2019 7,886 2020 692,493 2021 3,142 Thereafter 1,600,447 Total $ 2,407,196 Unsecured Revolving Credit Facility The operating partnership’s unsecured revolving credit facility is amended from time to time. The terms of the arrangement are more fully described in the Company’s 2016 Annual Report on Form 10-K. Under the unsecured revolving credit facility, as amended and restated to date (“Amended and Restated Credit Facility”), the Company has $400.0 million of total capacity. The maturity date of April 1, 2019 can be extended with a one -year extension option. The Company uses the unsecured revolving credit facility to finance the acquisition of other properties, to provide funds for tenant improvements and capital expenditures, and to provide for working capital and other corporate purposes. Interest on the Amended and Restated Credit Facility is generally based upon, at our option, either (i) LIBOR plus the applicable LIBOR margin or (ii) a specified base rate plus the applicable base rate margin, dependent on the operating partnership’s leverage ratio. The applicable LIBOR margin will range from 1.15% to 1.85% for the Amended and Restated Credit Facility, 1.30% to 2.20% for the 5 -Year Term Loan due April 2020, depending on the operating partnership’s leverage ratio and 1.60% to 2.55% for the 7 -Year Term Loan due April 2022, depending on the operating partnership’s leverage ratio. The Amended and Restated Credit Facility requires a facility fee in an amount equal to 0.20% or 0.35% of the operating partnership’s revolving credit commitments depending on the operating partnership’s leverage ratio. Unused amounts under the Amended and Restated Credit Facility are not subject to a separate fee. Subject to the satisfaction of certain conditions and lender commitments, the operating partnership may increase the availability of the Amended and Restated Credit Facility so long as the aggregate commitments under the Amended and Restated Credit Facility do not exceed $2.0 billion. If the Company obtains a credit rating for the Company’s senior unsecured long-term indebtedness, the operating partnership may make an irrevocable election to change the interest rate and facility fee. During 2016, the Company’s senior unsecured long-term indebtedness was assigned an investment grade rating. The Company has not made the credit rating election. The operating partnership continues to be the borrower under the Amended and Restated Credit Facility, and the Company and all subsidiaries that own unencumbered properties will continue to provide guarantees unless the Company obtains and maintains a credit rating of at least BBB- from S&P or Baa3 from Moody’s, in which case such guarantees are not required except under limited circumstances. 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, including, when considering the most restrictive terms, maintaining a leverage ratio (maximum of 0.60 :1.00), unencumbered leverage ratio (maximum of 0.60 :1.00), fixed charge coverage ratio (minimum of 1.50 :1.00), secured indebtedness leverage ratio (maximum of 0.45 :1.00), and unsecured interest coverage ratio (minimum 2.00 :1.00). 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 operating partnership was in compliance with its financial covenants as of March 31, 2017 . Repayment Guaranties Sunset Gower Studios and Sunset Bronson Studios Loan In connection with the loan secured by the Sunset Gower Studios and Sunset Bronson Studios properties, the Company has guaranteed in favor of and promised to pay to the lender 19.5% of the principal payable under the loan in the event the borrower, a wholly-owned entity of the operating partnership, does not do so. As of March 31, 2017 , the outstanding balance was $5.0 million , which results in a maximum guarantee amount for the principal under this loan of $1.0 million . Furthermore, the Company agreed to guarantee the completion of the construction improvements, including tenant improvements, as defined in the agreement, in the event of any default of the borrower. If the borrower fails to complete the remaining required work, the guarantor agrees to perform timely all of the completion obligations, as defined in the agreement. As of the date of this filing, there has been no event of default associated with this loan. Other Loans Although the rest of the operating partnership’s loans are secured and non-recourse, the operating partnership provides limited customary secured debt guarantees for items such as voluntary bankruptcy, fraud, misapplication of payments and environmental liabilities. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company enters into derivative instruments in order to hedge interest rate risk. The Company had six interest rate swaps with aggregate notional amounts of $839.5 million as of March 31, 2017 and December 31, 2016 . These derivative instruments were designated as effective cash flow hedges for accounting purposes. There is no impact on the Company’s Consolidated Statements of Cash Flows. The Company’s derivative instruments are classified as Level 2 and their fair values are derived from estimated values obtained from observable market data for similar instruments. 5 -Year Term Loan due April 2020 and 7 -Year Term Loan due April 2022 On April 1, 2015, the Company effectively hedged $300.0 million of the 5 -Year Term Loan due April 2020 through two interest rate swaps, each with a notional amount of $150.0 million , which, effective as of May 1, 2015, swapped one-month LIBOR to a fixed rate of 1.36% through the loan’s maturity. Therefore the interest rate is effectively fixed at 2.66% to 3.56% , depending on the Company’s leverage ratio. The unhedged portion bears interest at a rate equal to one-month LIBOR plus 1.30% to 2.20% , depending on the Company’s leverage ratio. The Company also effectively hedged its $350.0 million 7 -Year Term Loan due April 2022 through two interest rate swaps, which, effective as of May 1, 2015, swapped one-month LIBOR to a fixed rate of 1.61% through the loan’s maturity. Therefore the interest rate is effectively fixed at 3.21% to 4.16% depending on the Company’s leverage ratio. In July 2016, the derivative instruments described above were amended to include a 0.00% floor to one-month LIBOR, and then de-designated the original swap and designated the amended swap as a hedge in order to minimize the ineffective portion of the original derivative instruments. Therefore, the effective interest rate increased to a range of 2.75% to 3.65% with respect to $300.0 million of the 5 -Year Term Loan due April 2020 and 3.36% to 4.31% with respect to the 7 -year Term Loan due April 2022, in each case, per annum. The interest rate within the range is based on the operating partnership’s leverage ratio. The amount included in accumulated other comprehensive income (loss) prior to the de-designation is amortized into interest expense over the remaining original terms of the derivative instruments. The Company recognized an unrealized gain of $6 thousand and an unrealized loss of $2.1 million for the three months ended March 31, 2017 and 2016, respectively, on the Consolidated Statement of Operations related to the ineffective portion of these derivative instruments. 7 -Year Term Loan due November 2022 On May 3, 2016, the Company entered into a derivative instrument with respect to $125.0 million of the 7 -Year Term Loan due November 2022. This derivative instrument became effective on June 1, 2016 and swapped one-month LIBOR, which includes a 0.00% floor, to a fixed rate of 1.43% through the loan’s maturity. Met Park North On July 31, 2013, the Company closed a seven -year loan totaling $64.5 million with Union Bank, N.A., secured by the Met Park North property. The loan bears interest at a rate equal to one-month LIBOR plus 1.55% . The full loan is subject to an interest rate contract that swaps one -month LIBOR to a fixed rate of 2.16% through the loan’s maturity on August 1, 2020. Overall The fair market value of derivative instruments is presented on a gross basis in the Consolidated Balance Sheets. The derivative assets as of March 31, 2017 and December 31, 2016 were $8.6 million and $5.9 million , respectively. The derivative liabilities as of March 31, 2017 and December 31, 2016 were $1.0 million and $1.3 million , respectively. The Company reclassifies into earnings in the same period during which the hedged forecasted transaction affects earnings. As of March 31, 2017 , the Company expects $3.0 million of unrealized loss included in accumulated other comprehensive loss will be reclassified to interest expense in the next 12 months. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
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. The Company has elected, together with one of its subsidiaries, to treat such subsidiary as a taxable REIT subsidiary (“TRS”) for federal income tax purposes. The Company’s property-owning subsidiaries are limited liability companies and are treated as pass-through entities or disregarded entities (or, in the case of the entities that own the 1455 Market Street and Hill7 properties, REITs) for federal income tax purposes. Accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements for the activities of these entities. The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of March 31, 2017 , the Company has not established a liability for uncertain tax positions. The Company and its TRS file income tax returns with the U.S. federal government and various state and local jurisdictions. The Company and its TRS are no longer subject to tax examinations by tax authorities for years prior to 2012. Generally, the Company has assessed its tax positions for all open years, which include 2012 to 2016, and concluded that there are no material uncertainties to be recognized. |
Future Minimum Base Rents and L
Future Minimum Base Rents and Lease Payments Future Minimum Rents | 3 Months Ended |
Mar. 31, 2017 | |
Future Minimum Base Rents and Lease Payments Future Minimum Rents [Abstract] | |
Future Minimum Base Rents and Lease Payments Future Minimum Rents | Future Minimum Base Rents and Lease Payments Future Minimum Rents The Company’s properties are leased to tenants under operating leases with initial term expiration dates ranging from 2017 to 2033 . The following table summarizes the future minimum base rents (excluding tenant reimbursements for operating expenses and without regard to cancellation options) for properties as of March 31, 2017 : Year Noncancellable Subject to Early Termination Options Total (1) Remaining 2017 $ 365,799 $ 380 $ 366,179 2018 457,963 23,024 480,987 2019 415,324 29,301 444,625 2020 340,628 20,368 360,996 2021 284,972 28,062 313,034 Thereafter 884,701 138,486 1,023,187 Total $ 2,749,387 $ 239,621 $ 2,989,008 _________________ (1) Excludes rents under leases at the Company’s media and entertainment properties with terms of one year or less. Future Minimum Lease Payments The following table summarizes the Company’s ground lease terms related to properties that are held subject to long-term noncancellable ground lease obligations: Property Expiration Date Notes 11601 Wilshire 10/31/2064 Subject to a $50 thousand increase every 5 years. Commencing on August 1, 2026, minimum rent is adjusted to reflect changes in Consumer Price Index (“CPI”). On December 27, 2016, the Company entered into an agreement to purchase the land related to this ground lease for $50.0 million (before credits, prorations and closing costs). The transaction is expected to close in the third quarter of 2017, however there can be no guaranty that it will close as expected. 3400 Hillview 10/31/2040 The ground rent is the greater of the minimum annual rent or percentage annual rent. The minimum annual rent until October 31, 2017 is the lesser of 10% of Fair Market Value (“FMV”) of the land or $1.0 million grown at 75% of the cumulative increases in CPI from October 1989. Thereafter, minimum annual rent is the lesser of 10% of FMV of the land or the minimum annual rent as calculated as of November 1, 2017 plus 75% of subsequent cumulative CPI changes. Percentage annual rent is gross income multiplied by 24.125%. This lease has been prepaid through October 31, 2017. 9300 Wilshire 8/14/2032 The ground rent is the greater of minimum annual rent or percentage annual rent. Percentage annual rent is gross income multiplied by 6%. Clocktower Square 9/26/2056 Minimum annual rent (adjusted every 10 years) plus 25% of adjusted gross income (“AGI”) less minimum annual rent. Del Amo Office 6/30/2049 Rent under the ground sublease is $1.00 per year, with the sublessee being responsible for all impositions, insurance premiums, operating charges, maintenance charges, construction costs and other charges, costs and expenses that arise or may be contemplated under any provisions of the ground sublease. Foothill Research Center 6/30/2039 The ground rent is the greater of the minimum annual rent or percentage annual rent. The minimum annual rent is the lesser of 10% of FMV of the land or the previous year’s minimum annual rent plus 75% of CPI increase. Percentage annual rent is gross income multiplied by 24.125%. Lockheed 7/31/2040 The ground rent is the greater of the minimum annual rent or percentage annual rent. The minimum annual rent is the lesser of 10% of FMV of the land or the previous year’s minimum annual rent plus 75% of consumer price index, or CPI, increase. Percentage annual rent is Lockheed’s base rent multiplied by 24.125%. Metro Center 4/29/2054 Every 10 years rent adjusts to 7.233% of FMV of the land (since 2008) and rent also adjusts every 10 years to reflect the change in CPI from the preceding FMV adjustment date (since 2013). Page Mill Center 11/30/2041 Minimum annual rent (adjusted on 1/1/2019 and 1/1/2029) plus 25% of AGI, less minimum annual rent. Page Mill Hill 11/17/2049 Minimum annual rent (adjusted every 10 years) plus 60% of the average of the percentage annual rent for the previous 7 lease years. Palo Alto Square 11/30/2045 Minimum annual rent (adjusted every 10 years starting 1/1/2022) plus 25% of AGI less minimum annual rent. Sunset Gower Studios 3/31/2060 Every 7 years rent adjusts to 7.5% of FMV of the land. Techmart Commerce Center 5/31/2053 Subject to a 10% increase every 5 years. Contingent rental expense is recorded in the period in which the contingent event becomes probable. The Company recognized rent for ground leases and a corporate office lease as follows: Three Months Ended March 31, 2017 2016 Contingent rental expense $ 2,184 $ 2,337 Minimum rental expense 3,196 3,497 The following table provides information regarding the Company’s future minimum lease payments for its ground leases (before the impact of extension options, if applicable) as of March 31, 2017 : Years Ground Leases (1)(2) Remaining 2017 $ 9,837 2018 14,613 2019 14,663 2020 14,663 2021 14,684 Thereafter 429,386 Total $ 497,846 _________________ (1) In situations where ground lease obligation adjustments are based on third-party appraisals of fair market land value, CPI adjustments, and/or percentage of gross income that exceeds the minimum annual rent, the future minimum lease amounts above include the lease rental obligations in effect as of March 31, 2017 . (2) Balance includes future minimum ground lease obligation for 11601 Wilshire. On December 27, 2016, the Company entered into an agreement to purchase the land related to the 11601 Wilshire ground lease. This transaction is expected to close in the third quarter of 2017, however, there can be no guaranty that the transaction will close. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
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 requires inputs that are both significant to the fair value measurement and unobservable. The Company measures fair value of financial instruments using Level 2 inputs categorized within the fair value framework. The Company’s financial assets and liabilities measured and reported at fair value on a recurring basis include the following as of: March 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative assets $ — $ 8,558 $ — $ 8,558 $ — $ 5,935 $ — $ 5,935 Derivative liabilities — 967 — 967 — 1,303 — 1,303 Other Financial Instruments The carrying values of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities are reasonable estimates of fair value, using Level 1 inputs, because of the short-term nature of these instruments. Fair values for notes payable 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 notes payable as of: March 31, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Notes payable (1) $ 2,407,196 $ 2,381,057 $ 2,707,839 $ 2,681,134 _________________ (1) Amounts represent total notes payable excluding net deferred financing costs. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The Company has various stock compensation arrangements, which are more fully described in the 2016 Annual Report on Form 10-K. Under the 2010 Incentive Plan, as amended (the “2010 Plan”), the Company’s board of directors (the “Board”) has the ability to grant, among other things, restricted stock, restricted stock units and performance-based awards. The Board awards restricted shares to non-employee board members on an annual basis as part of such board members’ annual compensation and to newly elected non-employee board members in accordance with the Board compensation program. The time-based awards are generally issued in the second quarter, and the individual share awards vest in equal annual installments over the applicable service vesting period, which is three years. The Board awards time-based restricted shares to employees on an annual basis as part of the employees’ annual compensation. The time-based awards are generally issued in the fourth quarter, and the individual share awards vest in equal annual installments over the applicable service vesting period, which is generally three years. Additionally, certain restricted share awards are subject to a mandatory holding period upon vesting if the grantee is a named executive officer. In December 2015, the Compensation Committee of the Board awarded a one-time special retention award to certain executives. The grants consist of time-based awards and performance-based awards. The time-based awards vest in equal 25% installments over four years, subject to the participant’s continued employment. The performance-based awards vest over a four -year period, subject to the achievement of applicable performance goals and the participant’s continued employment. The Compensation Committee of the Board annually adopts a Hudson Pacific Properties, Inc. Outperformance Program (“OPP Plan”) under the 2010 Plan. An award under the OPP Plan is ultimately earned to the extent the Company outperforms a predetermined total shareholder return (“TSR”) goal and/or achieves goals with respect to the outperformance of its peers in a particular REIT index. The ultimate aggregate award cannot exceed the predetermined maximum bonus pool. With respect to OPP Plan awards granted prior to 2017, to the extent an award is earned following the completion of a three -year performance period, 50% of the earned award will vest in full at the end of the three -year performance period and 25% of the earned award will vest in equal annual installments over the two years thereafter, subject to the participant’s continued employment. OPP Plan awards granted are settled in common stock and in the case of certain executives, awards are settled in performance units in the operating partnership. In February 2017, the Compensation Committee adopted the 2017 OPP Plan. The 2017 OPP Plan is substantially similar to the previous OPP Plans except for (i) the performance period is January 1, 2017 to December 31, 2019 (ii) the maximum bonus pool is $20.0 million and (iii) the two -year post-performance vesting period was replaced with a two -year mandatory holding period upon vesting. The per unit fair value of 2017 OPP award granted was estimated on the date of grant using the following assumptions in the Monte Carlo valuation: Expected price volatility for the Company 24.00% Expected price volatility for the particular REIT index 17.00% Risk-free rate 1.47% Dividend yield 2.30% The following table presents the classification and amount recognized for stock-based compensation related to the Company’s awards: Three Months Ended March 31, Consolidated Financial Statement Classification 2017 2016 Expensed stock compensation $ 3,902 $ 3,342 General and administrative expenses Capitalized stock compensation 199 82 Deferred leasing costs and lease intangibles, net and tenant improvements Total stock compensation $ 4,101 $ 3,424 Additional paid-in capital and non-controlling interest—units in the operating partnership |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The Company calculates basic earnings per share by dividing the net income available to common stockholders for the period by the weighted average number of common shares outstanding during the period. The Company calculates diluted earnings per share by dividing the diluted net income available to common stockholders for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method or the if-converted method, whichever is more dilutive. Unvested time-based RSUs and unvested OPP awards that contain nonforfeitable rights to dividends are participating securities and are included in the computation of earnings per share pursuant to the two-class method. The following table reconciles the numerator and denominator in computing the Company’s basic and diluted earnings per share for net income available to common stockholders: Three Months Ended March 31, 2017 2016 Numerator: Net income $ 24,153 $ 5,976 Income attributable to preferred units (159 ) (159 ) Income attributable to participating securities (240 ) (197 ) Income attributable to non-controlling interest in consolidated entities (3,037 ) (1,945 ) Income attributable to non-controlling units of the operating partnership (202 ) (1,422 ) Basic net income available to common stockholders 20,515 2,253 Effect of dilutive instruments 149 — Diluted net income available to common stockholders $ 20,664 $ 2,253 Denominator: Basic weighted average common shares outstanding 147,950,594 89,190,803 Effect of dilutive instruments (1) 1,999,752 407,000 Diluted weighted average common shares outstanding 149,950,346 89,597,803 Basic earnings per common share $ 0.14 $ 0.03 Diluted earnings per common share $ 0.14 $ 0.03 ________________ (1) The Company includes unvested awards and convertible common units as contingently issuable shares in the computation of diluted earnings per share once the market criteria are met, assuming that the end of the reporting period is the end of the contingency period. Any anti-dilutive securities are excluded from the diluted earnings per share calculation. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Equity | Equity The table below present the effect of the Company’s derivative instruments on accumulated other comprehensive income (“OCI”): Hudson Pacific Properties, Inc. Stockholders ’ Equity Non-controlling Interest—Units in the Operating Partnership Total Equity Balance at January 1, 2017 $ 9,496 $ (3,618 ) $ 5,878 Unrealized gain recognized in OCI due to change in fair value 1,148 11 1,159 Loss reclassified from OCI into income (as interest expense) 1,688 17 1,705 Net change in OCI related to derivative instruments 2,836 28 2,864 Reclassification related to redemption of common units in the operating partnership (3,622 ) 3,622 — Balance at March 31, 2017 $ 8,710 $ 32 $ 8,742 Non-controlling Interests Common units in the operating partnership Common units of the operating partnership and shares of common stock of the Company have essentially the same economic characteristics, as they share equally in the total net income or loss distributions of the operating partnership. Investors who own common units have the right to cause the operating partnership to repurchase any or all of their common units for cash equal to the then-current market value of one share of common stock or, at the Company’s election, issue shares of the Company’s common stock in exchange for common units on a one-for-one basis. There were 569,045 and 9,450,620 common units outstanding as of March 31, 2017 and December 31, 2016 , respectively. On January 10, 2017, common unitholders required the operating partnership to repurchase 8,881,575 common units and the Company elected, in accordance with the limited partnership agreement of the operating partnership, to settle in cash to satisfy the repurchase. The Company funded the repurchase using the proceeds from a registered underwritten public offering of common stock. Performance units are partnership interests in the operating partnership. Each performance unit awarded will be deemed equivalent to an award of one unit 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. The operating partnership meets the criteria of a VIE and the Company is the primary beneficiary of the operating partnership. Non-controlling interest—members in consolidated entities The Company has an interest in a joint venture with Media Center Partners, LLC (the “Pinnacle JV”). The Pinnacle JV owns the Pinnacle, a two -building (Pinnacle I and Pinnacle II), 625,640 -square-foot office property located in Burbank, California. The Company initially owned a 98.25% interest in the Pinnacle JV. Beginning June 2013, the Company owns a 65% interest in the Pinnacle JV. In January 2015, the Company entered into a joint venture with Canada Pension Plan Investment Board, (“CPPIB”) through which CPPIB purchased a 45% interest in the 1455 Market Street office property located in San Francisco, California, for a purchase price of $219.2 million (before certain credits, proration and closing costs). The Company owns a 55% interest in the 1455 Market Street office property. In October 2016, the Company entered into another joint venture with CPPIB to purchase the Hill7 office property located in Seattle, Washington for a purchase price of $179.8 million (before credits, prorations and closing costs). The Company owns a 55% interest in the Hill7 office property. These joint ventures, of which the Company is the primary beneficiary, meet the criteria of a VIE. 6.25% Series A cumulative redeemable preferred units of the operating partnership 6.25% Series A cumulative redeemable preferred units of the operating partnership are 407,066 Series A preferred units of partnership interest in the operating partnership, or Series A preferred units, which are not owned by the Company. These Series A preferred units are entitled to preferential distributions at a rate of 6.25% per annum on the liquidation preference of $25.00 per unit and became convertible at the option of the holder into common units or redeemable into cash or, at the Company’s election, exchangeable for registered shares of common stock, after June 29, 2013. For a description of the conversion and redemption rights of the Series A preferred units, please see “Description of the Partnership Agreement of Hudson Pacific Properties, L.P. — Material Terms of Our Series A Preferred Units” in the Company’s June 23, 2010 Prospectus. Common Stock Activity On January 10, 2017, the Company completed a public offering of 8,881,575 shares of common stock of Hudson Pacific Properties, Inc. Proceeds from the offering were used to repurchase common units in the operating partnership. On March 3, 2017, the Company completed another public offering of 9,775,000 shares of common stock. Proceeds from the offering were used to fully repay a $255.0 million balance outstanding under its unsecured revolving credit facility, with the remaining proceeds used for general corporate purposes. The Company’s at-the-market, or ATM, program permits sales of up to $125.0 million of stock, $20.1 million of which has been sold as of March 31, 2017 . The Company did not utilize the ATM program in the first quarter of 2017 . Share repurchase program On January 20, 2016, the Board authorized a share repurchase program to buy up to $100.0 million of the outstanding common stock of Hudson Pacific Properties, Inc. No share repurchases have been made as of March 31, 2017 . Dividends During the first quarter of 2017 , the Company declared dividends on its common stock and non-controlling common partnership interests of $0.250 per share and unit. The Company also declared dividends on its Series A preferred partnership interests of $0.3906 per unit. The first quarter dividends were paid on March 30, 2017 to holders of record on March 20, 2017. 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, and compensation expense and in the basis of depreciable assets and estimated useful lives used to compute depreciation. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Employment Agreements The Company has entered into employment agreements with certain executive officers, effective January 1, 2016, that provide for various severance and change in control benefits and other terms and conditions of employment. Lease and Subsequent Purchase of Corporate Headquarters from Blackstone On July 26, 2006, the Company’s predecessor, Hudson Capital, LLC, entered into a lease agreement and subsequent amendments with landlord Trizec Holdings Cal, LLC (an affiliate of Blackstone) for the Company’s corporate headquarters at 11601 Wilshire Boulevard. The Company amended the lease to increase its occupancy to 40,120 square feet commencing on September 1, 2015. On December 16, 2015, the Company entered into an amendment of that lease to expand the space to approximately 42,371 square feet and to extend the term by an additional three years, to a total of ten years, through August 31, 2025. On July 1, 2016, the Company purchased the 11601 Wilshire property from funds managed by Blackstone for $311.0 million (before credits, prorations and closing costs). JMG Capital Lease at 11601 Wilshire JMG Capital Management LLC leases approximately 6,638 square feet at the Company’s 11601 Wilshire property pursuant to an eight -year lease at an aggregate rate of approximately $279 thousand annualized rent per year. Jonathan M. Glaser, a director on the Board, is the founder and managing member of JMG Capital Management LLC. JMG Capital Management LLC was a tenant of the property at the time it was purchased by the Company. 222 Kearny Street Disposition On February 14, 2017, the Company sold its 222 Kearny Street property to a joint venture, a partner of which is an affiliate of the Farallon Funds. Richard B. Fried, a director on the Board, is a managing member of the Farallon Funds. Agreements Related to EOP Acquisition On April 1, 2015, the Company completed the EOP Acquisition from certain affiliates of Blackstone, which consisted of 26 high-quality office assets totaling approximately 8.2 million square feet and two development parcels located throughout the San Francisco Peninsula, Redwood Shores, Palo Alto, Silicon Valley and North San Jose submarkets. The total consideration paid for the EOP Acquisition before certain credits, prorations and closing costs included a cash payment of $1.75 billion and an aggregate of 63,474,791 shares of common stock of Hudson Pacific Properties, Inc. and common units in the operating partnership. In connection with the EOP Acquisition, the Company, the operating partnership and Blackstone entered into a stockholders agreement, which conferred Blackstone certain rights, including the right to nominate up to three of the Company’s directors. Additionally, the Company entered into a registration rights agreement with Blackstone providing for customary registration rights with respect to the equity consideration paid in the EOP Acquisition. Following a common stock offering and common unit repurchase on January 10, 2017, the stockholders agreement and the registration rights agreement automatically terminated on that date. Common Stock Offerings and Common Unit Redemptions On January 10, 2017, the Company, Blackstone and the Farallon Funds completed a public offering of 18,673,808 shares of common stock, consisting of 8,881,575 shares offered by the Company and 9,792,233 shares offered by the selling stockholders. The offering generated net proceeds for the Company and the selling stockholders of approximately $310.9 million and $342.7 million , respectively, before expenses. The Company used the net proceeds that it received from the offering to redeem 8,881,575 common units held by Blackstone and the Farallon Funds. The Company did not receive any proceeds from the sale of the common stock by the selling stockholders in the offerings described above but it paid approximately half of the expenses of the offerings with respect to the shares of common stock sold by the Farallon Funds and all of the expenses with respect to the shares of common stock sold by Blackstone, in each case, other than underwriting discounts, which were borne by the selling stockholders. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal From time to time, the Company is party to various lawsuits, claims and other legal proceedings arising out of, or incident to, the ordinary course of business. Management believes, based in part upon consultation with legal counsel, that the ultimate resolution of all such claims will not have a material adverse effect on the Company’s results of operations, financial position or cash flows. As of March 31, 2017 , the risk of material loss from such legal actions impacting the Company’s financial condition or results from operations has been assessed as remote. Concentrations As of March 31, 2017 , the majority of the Company’s properties were located in California, which exposes the Company to greater economic risks than if it owned a more geographically dispersed portfolio. A significant portion of the Company’s rental revenue is derived from tenants in the media and entertainment and technology industries. As of March 31, 2017 , approximately 15.8% and 28.5% of rentable square feet were related to the media and entertainment and technology industries, respectively. As of March 31, 2017 , the Company’s 15 largest tenants represented approximately 23.4% of its rentable square feet and no single tenant accounted for more than 10% . Letters of Credit As of March 31, 2017 , the Company has outstanding letters of credit totaling approximately $2.6 million under the unsecured revolving credit facility. The letters of credit are primarily related to utility company security deposit requirements. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On May 1, 2017, the Company completed its acquisition of Sunset Las Palmas Studios (formerly Hollywood Center Studios), a 369,000 -square-foot media and entertainment campus located in Hollywood, California, for $200.0 million (before credits, prorations and closing costs). In April 2017, the Company drew $150.0 million under the unsecured revolving credit facility to fund the acquisition. The Company is currently in the process of determining the purchase price allocation. |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying consolidated financial statements of the Company and the operating partnership are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) applicable to interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and footnote disclosures required for annual financial statements have been condensed or excluded pursuant to 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 ended December 31, 2017 . The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in the 2016 Annual Report on Form 10-K of Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. and the notes thereto. Certain amounts in the consolidated financial statements for the prior period have been reclassified to conform to the current period presentation. Specifically, in the Consolidated Balance Sheets for the prior period, certain amounts have been reclassified to held for sale. These amounts relate to 3402 Pico Boulevard, which was sold on March 21, 2017. |
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 subsidiaries and variable interest entities (“VIEs”), of which the Company is the primary beneficiary. The unaudited interim consolidated financial statements of the operating partnership include the accounts of the operating partnership, and all wholly owned subsidiaries and VIEs of which the operating partnership is the primary beneficiary. All intercompany balances and transactions have been eliminated in the consolidated financial statements. The Company consolidates all VIEs of which the Company is considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE’s economic performance and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. Four of the Company’s joint ventures and its operating partnership meet the definition of a VIE. The Company is the primary beneficiary of and consolidates three of the joint ventures and the operating partnership. Refer to Note 16 for details. Substantially all of the assets and liabilities of the Company are related to these VIEs. The Company is not consolidating one of its joint ventures, of which it is not the primary beneficiary, and an interest in land. Due to its significant influence over these entities, the Company accounts for them using the equity method of accounting. Refer to Note 7 for details. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate properties, its accrued liabilities and its performance-based equity compensation awards. The Company bases its estimates on historical experience, current market conditions and various other assumptions that are believed to be reasonable under the circumstances. Actual results could materially differ from these estimates. |
Recently Issued Accounting Pronouncements | Changes to GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of Accounting Standards Update (“ASU”). The following ASUs were adopted by the Company in the first quarter of 2017: Standard Description Effect on the financial statements or other significant matters ASU 2017-03, Accounting Changes and Error Corrections (Topic 250) and Investments—Equity Method and Joint Ventures (Topic 323): Amendments to SEC Paragraphs Pursuant to Staff Announcements at the September 22, 2016 and November 17, 2016 EITF Meetings (SEC Update) The guidance in this ASU is based on two SEC staff announcements made at the September 2016 and November 2016 EITF meetings. In the September meeting, the SEC announced that a registrant should disclose the potential material effects of the ASUs related to revenues, leases and credit losses on financial instruments. As a result of the November meeting, the ASU conforms Accounting Standards Codification (“ASC”) 323 to the guidance issued in ASU 2014-01 related to investments in qualified affordable housing projects. With the adoption of this guidance, the Company is required to provide updates on its implementation of the ASUs related to revenue, leases and credit losses on financial instruments. Please refer to the table below for updates on the revenue and lease ASUs. The credit losses on financial instruments ASU is not anticipated to have a material impact on the Company. ASU 2016-19, Technical Corrections and Improvements The technical corrections make minor change to certain aspects of the FASB ASC, including changes to resolve differences between current and pre-Codification guidance, updates to wording, references to avoid misapplication and textual simplifications to increase the Codification’s utility and understandability and minor amendments to guidance that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. The adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control This guidance outlines how a single decisionmaker of a VIE should treat indirect interests held through other related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The adoption did not have a material impact on the Company’s consolidated financial statements and did not change the consolidation conclusion. ASU 2016-07, Investments—Equity Method and Joint Ventures (Topic 323), Simplifying the Transition to the Equity Method of Accounting The guidance eliminates the requirement that an investor retrospectively apply equity method accounting when an investment that it had accounted for by another method initially qualifies for use of the equity method. The guidance also requires an investor that has an available-for-sale security that subsequently qualifies for the equity method to recognize in net income the unrealized holding gains or losses in accumulated other comprehensive income related to that security when it begins applying the equity method. The adoption did not have a material impact on the Company’s consolidated financial statements. ASU 2016-05, Derivatives and Hedging (Topic 815), Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships The guidance states that the novation of a derivative contract (e.g., a change in the counterparty) in a hedge accounting relationship does not, in and of itself, require dedesignation of that hedge accounting relationship. The hedge accounting relationship could continue uninterrupted if all of the other hedge accounting criteria are met, including the expectation that the hedge will be highly effective when the creditworthiness of the new counterparty to the derivative contract is considered. The adoption did not have a material impact on the Company’s consolidated financial statements. As required by ASU 2017-03, the Company is providing updates to the revenue and lease standard on a quarterly basis, as follows: Standard Description Effect on the financial statements or other significant matters ASU related to Revenue from Contracts with Customers (Topic 606) The new revenue standard was amended through various ASU’s. The ASU’s that impact the Company are ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) and ASU 2014-09, Revenue from Contracts with Customers. ASU 2016-08 clarifies certain aspects of the principal-versus-agent guidance in its new revenue recognition standard related to the determination of whether an entity is a principal-versus-agent and the determination of the nature of each specified good or service. ASU 2014-09 outlines a single comprehensive model for entities to use in accounting for revenues arising from contracts with customers and specifically notes that lease contracts with customers are a scope exception. The Company does not expect this guidance to have a material effect on revenue recognition as it relates to its leasing contracts until the adoption of ASU 2016-02, at which time the standard may affect revenue recognition as it relates to certain non-lease revenue components that are part of its leasing contracts. The Company has formed an implementation work team, completed training of the new standards with the implementation team, and begun review and documentation. The Company is currently evaluating this standard as it relates to media and entertainment other property-related revenue. The Company has the option of adopting this standard on either the full retrospective basis (to the beginning of its contracts) or modified retrospective method (from the beginning of the latest fiscal year of adoption). The Company plans on adopting the standard January 1, 2018 using the modified retrospective method. ASU 2016-02, Leases This guidance requires all lessees to record a lease liability at lease inception, with a corresponding right of use asset, except for short-term leases. Lessor accounting will not be fundamentally changed. The Company has formed an implementation work team, completed training of the new standards with the implementation team, and begun review and documentation. The Company is currently in the process of evaluating the amount of assets and liabilities relating to right of use that will need to be recorded with respect to its leases where it is the lessee. Additionally, the standard will impact the way the Company will record revenue and leasing costs where it is the lessor. For leasing costs, the Company will no longer be able to capitalize internal leasing costs to the extent they are not directly attributable to the lease transaction. Accordingly, the Company anticipates that internal leasing costs will be expensed with the adoption of this standard. With respect to the lease revenue, the Company will need to break down its current revenue streams between leasing and non-leasing components. To the extent there are non-leasing components the Company will need to record them in accordance with ASC 606 (see above). The Company is still in the process of evaluating its existing leasing components to determine what effect, if any, this standard will have on its revenue recognition as it relates to its leases. The Company will adopt the standard using the retrospective method from the beginning of the first year presented on the consolidated statement of operations which is January 1, 2017. The Company considers the applicability and impact of all ASUs. The following table lists the recently issued ASUs that have not been disclosed in the Company ’s Annual Report on Form 10-K and have not been adopted by the Company. The list excludes those ASUs that are expected to have an immaterial impact on the Company’s consolidated financial statements. Standard Description Effective Date Effect on the financial statements or other significant matters ASU 2017-05, Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets The guidance clarifies the scope of ASC 610-20 on the sale or transfer of nonfinancial assets and in substance nonfinancial assets to noncustomers, including partial sales. Effective for annual reporting periods (including interim periods) beginning after December 15, 2017 The Company is currently assessing the impact of this update on its consolidated financial statements and notes to the consolidated financial statements and plans to adopt this guidance in the first quarter in 2018. |
Investment in Real Estate (Tabl
Investment in Real Estate (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Real Estate [Abstract] | |
Schedule of properties sold | The following table summarizes the properties sold during the three months ended March 31, 2017 . These properties were non-strategic assets to the Company’s portfolio: Property Date of Disposition Square Feet Sales Price (1) (in millions) 222 Kearny Street February 14, 2017 148,797 $ 51.8 3402 Pico Boulevard March 21, 2017 50,687 35.0 Total dispositions 199,484 $ 86.8 _________________ (1) Represents gross sales price before certain credits, prorations and closing costs. |
Schedule of costs capitalized | The Company recognized the following capitalized costs during the periods presented: Three Months Ended March 31, 2017 2016 Capitalized personnel costs $ 2,737 $ 2,319 Capitalized interest 2,446 2,628 |
Deferred Leasing Costs and Le30
Deferred Leasing Costs and Lease Intangibles, net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Leases [Abstract] | |
Schedule of deferred leasing cost and lease intangibles | The following summarizes the Company’s deferred leasing costs and lease intangibles as of: March 31, 2017 December 31, 2016 Above-market leases $ 22,823 $ 23,430 Accumulated amortization (13,738 ) (12,989 ) Above-market leases, net 9,085 10,441 Deferred leasing costs and in-place lease intangibles 376,056 378,540 Accumulated amortization (154,381 ) (145,551 ) Deferred leasing costs and in-place lease intangibles, net 221,675 232,989 Below-market ground leases 71,423 71,423 Accumulated amortization (5,538 ) (4,891 ) Below-market ground leases, net 65,885 66,532 Deferred leasing costs and lease intangible assets, net $ 296,645 $ 309,962 Below-market leases $ 138,549 $ 141,676 Accumulated amortization (66,511 ) (62,552 ) Below-market leases, net 72,038 79,124 Above-market ground leases 1,095 1,095 Accumulated amortization (100 ) (89 ) Above-market ground leases, net 995 1,006 Lease intangible liabilities, net $ 73,033 $ 80,130 |
Schedule of amortization during period | The Company recognized the following amortization related to deferred leasing costs and lease intangibles: Three Months Ended March 31, 2017 2016 Above-market leases (1) $ 1,356 $ 3,719 Below-market leases (1) 7,088 8,570 Deferred leasing costs and in-place lease intangibles (2) 19,793 22,568 Above-market ground leases (3) 11 11 Below-market ground leases (3) 648 546 __________________ (1) Amortization is recorded in office rental income in the Consolidated Statements of Operations. (2) Amortization is recorded in depreciation and amortization expense and office rental income in the Consolidated Statements of Operations. (3) Amortization is recorded in office operating expenses in the Consolidated Statements of Operations. |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Schedule of accounts receivable, net | The following table summarizes the Company’s accounts receivable, net of allowance for doubtful accounts as of: March 31, 2017 December 31, 2016 Accounts receivable $ 4,306 $ 8,697 Allowance for doubtful accounts (2,297 ) (1,845 ) Accounts receivable, net $ 2,009 $ 6,852 The following table represents the Company’s straight-line rent receivables, net of allowance for doubtful accounts as of: March 31, 2017 December 31, 2016 Straight-line rent receivables $ 87,228 $ 87,417 Allowance for doubtful accounts (2,378 ) (136 ) Straight-line rent receivables, net $ 84,850 $ 87,281 |
Straight-line Rent Receivable32
Straight-line Rent Receivables, net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Schedule of straight-line rent receivables, net | The following table summarizes the Company’s accounts receivable, net of allowance for doubtful accounts as of: March 31, 2017 December 31, 2016 Accounts receivable $ 4,306 $ 8,697 Allowance for doubtful accounts (2,297 ) (1,845 ) Accounts receivable, net $ 2,009 $ 6,852 The following table represents the Company’s straight-line rent receivables, net of allowance for doubtful accounts as of: March 31, 2017 December 31, 2016 Straight-line rent receivables $ 87,228 $ 87,417 Allowance for doubtful accounts (2,378 ) (136 ) Straight-line rent receivables, net $ 84,850 $ 87,281 |
Notes Payable, Net (Tables)
Notes Payable, Net (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt instruments | The following table summarizes the balances of the Company’s indebtedness as of: March 31, 2017 December 31, 2016 Notes payable $ 2,407,196 $ 2,707,839 Less: deferred financing costs, net (1) (18,808 ) (19,829 ) Notes payable, net $ 2,388,388 $ 2,688,010 ________________ (1) Excludes deferred financing costs related to establishing the Company’s unsecured revolving credit facility of $1.3 million and $1.5 million as of March 31, 2017 and December 31, 2016 , respectively, which are included in prepaid expenses and other assets, net in the Consolidated Balance Sheets. The following table sets forth information with respect to the amounts included in notes payable, net as of: March 31, 2017 December 31, 2016 Principal Amount Deferred Financing Costs, net Principal Amount Deferred Financing Costs, net Interest Rate (1) Contractual Maturity Date UNSECURED LOANS Unsecured Revolving Credit Facility (2) $ — $ — $ 300,000 $ — LIBOR+ 1.15% to 1.85% 4/1/2019 (3) 5-Year Term Loan due April 2020 (2)(4) 450,000 (3,243 ) 450,000 (3,513 ) LIBOR+ 1.30% to 2.20% 4/1/2020 5-Year Term Loan due November 2020 (2) 175,000 (697 ) 175,000 (745 ) LIBOR +1.30% to 2.20% 11/17/2020 7-Year Term Loan due April 2022 (2)(5) 350,000 (2,157 ) 350,000 (2,265 ) LIBOR+ 1.60% to 2.55% 4/1/2022 7-Year Term Loan due November 2022 (2)(6) 125,000 (892 ) 125,000 (931 ) LIBOR +1.60% to 2.55% 11/17/2022 Series A Notes 110,000 (891 ) 110,000 (930 ) 4.34% 1/2/2023 Series E Notes 50,000 (289 ) 50,000 (300 ) 3.66% 9/15/2023 Series B Notes 259,000 (2,207 ) 259,000 (2,271 ) 4.69% 12/16/2025 Series D Notes 150,000 (874 ) 150,000 (898 ) 3.98% 7/6/2026 Series C Notes 56,000 (527 ) 56,000 (539 ) 4.79% 12/16/2027 TOTAL UNSECURED LOANS 1,725,000 (11,777 ) 2,025,000 (12,392 ) MORTGAGE LOANS Mortgage Loan secured by Rincon Center (7) 99,897 (158 ) 100,409 (198 ) 5.13% 5/1/2018 Mortgage Loan secured by Sunset Gower Studios/Sunset Bronson Studios 5,001 (1,357 ) 5,001 (1,534 ) LIBOR+2.25% 3/4/2019 (3) Mortgage Loan secured by Met Park North (8) 64,500 (370 ) 64,500 (398 ) LIBOR+1.55% 8/1/2020 Mortgage Loan secured by 10950 Washington (7) 27,798 (337 ) 27,929 (354 ) 5.32% 3/11/2022 Mortgage Loan secured by Pinnacle I (9)(10) 129,000 (567 ) 129,000 (593 ) 3.95% 11/7/2022 Mortgage Loan secured by Element LA 168,000 (2,256 ) 168,000 (2,321 ) 4.59% 11/6/2025 Mortgage Loan secured by Pinnacle II (10) 87,000 (701 ) 87,000 (720 ) 4.30% 6/11/2026 Mortgage Loan secured by Hill7 (11) 101,000 (1,285 ) 101,000 (1,319 ) 3.38% 11/6/2026 TOTAL MORTGAGE LOANS 682,196 (7,031 ) 682,839 (7,437 ) TOTAL $ 2,407,196 $ (18,808 ) $ 2,707,839 $ (19,829 ) _________________ (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 March 31, 2017 , which may be different than the interest rates as of December 31, 2016 for corresponding indebtedness. (2) The Company has the option to make an irrevocable election to change the interest rate depending on the Company’s credit rating. As of March 31, 2017 , no such election had been made. (3) The maturity date may be extended once for an additional one -year term. (4) Effective July 2016, $300.0 million of the term loan has been effectively fixed at 2.75% to 3.65% per annum through the use of two interest rate swaps. See Note 10 for details. (5) Effective July 2016, the outstanding balance of the term loan has been effectively fixed at 3.36% to 4.31% per annum through the use of two interest rate swaps. See Note 10 for details. (6) Effective June 1, 2016, the outstanding balance of the term loan has been effectively fixed at 3.03% to 3.98% per annum through the use of an interest rate swap. See Note 10 for details. (7) Monthly debt service includes annual debt amortization payments based on a 30 -year amortization schedule with a balloon payment at maturity. (8) This loan bears interest only. Interest on the full loan amount has been effectively fixed at 3.71% per annum through use of an interest rate swap. See Note 10 for details. (9) This loan bears interest only for the first five years. Beginning with the payment due December 6, 2017, monthly debt service will include annual debt amortization payments based on a 30 -year amortization schedule with a balloon payment at maturity. (10) The Company owns 65% of the ownership interests in the consolidated joint venture that owns the Pinnacle I and II properties. The full amount of the loan is shown. (11) The Company owns 55% of the ownership interest in the consolidated joint venture that owns the Hill7 property. The full amount of the loan is shown. The maturity date of this loan can be extended for an additional two years at a higher interest rate and with principal amortization. |
Schedule of maturities of long-term debt | The following table summarizes the minimum future principal payments due (before the impact of extension options, if applicable) on the operating partnership’s secured and unsecured notes payable as of March 31, 2017 : Year Annual Principal Payments Remaining 2017 $ 2,071 2018 101,157 2019 7,886 2020 692,493 2021 3,142 Thereafter 1,600,447 Total $ 2,407,196 |
Future Minimum Base Rents and34
Future Minimum Base Rents and Lease Payments Future Minimum Rents (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Future Minimum Base Rents and Lease Payments Future Minimum Rents [Abstract] | |
Schedule of future minimum rental payments for operating leases | The following table summarizes the future minimum base rents (excluding tenant reimbursements for operating expenses and without regard to cancellation options) for properties as of March 31, 2017 : Year Noncancellable Subject to Early Termination Options Total (1) Remaining 2017 $ 365,799 $ 380 $ 366,179 2018 457,963 23,024 480,987 2019 415,324 29,301 444,625 2020 340,628 20,368 360,996 2021 284,972 28,062 313,034 Thereafter 884,701 138,486 1,023,187 Total $ 2,749,387 $ 239,621 $ 2,989,008 _________________ (1) Excludes rents under leases at the Company’s media and entertainment properties with terms of one year or less. |
Schedule of acquired ground lease agreements | The following table summarizes the Company’s ground lease terms related to properties that are held subject to long-term noncancellable ground lease obligations: Property Expiration Date Notes 11601 Wilshire 10/31/2064 Subject to a $50 thousand increase every 5 years. Commencing on August 1, 2026, minimum rent is adjusted to reflect changes in Consumer Price Index (“CPI”). On December 27, 2016, the Company entered into an agreement to purchase the land related to this ground lease for $50.0 million (before credits, prorations and closing costs). The transaction is expected to close in the third quarter of 2017, however there can be no guaranty that it will close as expected. 3400 Hillview 10/31/2040 The ground rent is the greater of the minimum annual rent or percentage annual rent. The minimum annual rent until October 31, 2017 is the lesser of 10% of Fair Market Value (“FMV”) of the land or $1.0 million grown at 75% of the cumulative increases in CPI from October 1989. Thereafter, minimum annual rent is the lesser of 10% of FMV of the land or the minimum annual rent as calculated as of November 1, 2017 plus 75% of subsequent cumulative CPI changes. Percentage annual rent is gross income multiplied by 24.125%. This lease has been prepaid through October 31, 2017. 9300 Wilshire 8/14/2032 The ground rent is the greater of minimum annual rent or percentage annual rent. Percentage annual rent is gross income multiplied by 6%. Clocktower Square 9/26/2056 Minimum annual rent (adjusted every 10 years) plus 25% of adjusted gross income (“AGI”) less minimum annual rent. Del Amo Office 6/30/2049 Rent under the ground sublease is $1.00 per year, with the sublessee being responsible for all impositions, insurance premiums, operating charges, maintenance charges, construction costs and other charges, costs and expenses that arise or may be contemplated under any provisions of the ground sublease. Foothill Research Center 6/30/2039 The ground rent is the greater of the minimum annual rent or percentage annual rent. The minimum annual rent is the lesser of 10% of FMV of the land or the previous year’s minimum annual rent plus 75% of CPI increase. Percentage annual rent is gross income multiplied by 24.125%. Lockheed 7/31/2040 The ground rent is the greater of the minimum annual rent or percentage annual rent. The minimum annual rent is the lesser of 10% of FMV of the land or the previous year’s minimum annual rent plus 75% of consumer price index, or CPI, increase. Percentage annual rent is Lockheed’s base rent multiplied by 24.125%. Metro Center 4/29/2054 Every 10 years rent adjusts to 7.233% of FMV of the land (since 2008) and rent also adjusts every 10 years to reflect the change in CPI from the preceding FMV adjustment date (since 2013). Page Mill Center 11/30/2041 Minimum annual rent (adjusted on 1/1/2019 and 1/1/2029) plus 25% of AGI, less minimum annual rent. Page Mill Hill 11/17/2049 Minimum annual rent (adjusted every 10 years) plus 60% of the average of the percentage annual rent for the previous 7 lease years. Palo Alto Square 11/30/2045 Minimum annual rent (adjusted every 10 years starting 1/1/2022) plus 25% of AGI less minimum annual rent. Sunset Gower Studios 3/31/2060 Every 7 years rent adjusts to 7.5% of FMV of the land. Techmart Commerce Center 5/31/2053 Subject to a 10% increase every 5 years. |
Schedule of rent expense | Contingent rental expense is recorded in the period in which the contingent event becomes probable. The Company recognized rent for ground leases and a corporate office lease as follows: Three Months Ended March 31, 2017 2016 Contingent rental expense $ 2,184 $ 2,337 Minimum rental expense 3,196 3,497 |
Schedule of future minimum lease payments | The following table provides information regarding the Company’s future minimum lease payments for its ground leases (before the impact of extension options, if applicable) as of March 31, 2017 : Years Ground Leases (1)(2) Remaining 2017 $ 9,837 2018 14,613 2019 14,663 2020 14,663 2021 14,684 Thereafter 429,386 Total $ 497,846 _________________ (1) In situations where ground lease obligation adjustments are based on third-party appraisals of fair market land value, CPI adjustments, and/or percentage of gross income that exceeds the minimum annual rent, the future minimum lease amounts above include the lease rental obligations in effect as of March 31, 2017 . (2) Balance includes future minimum ground lease obligation for 11601 Wilshire. On December 27, 2016, the Company entered into an agreement to purchase the land related to the 11601 Wilshire ground lease. This transaction is expected to close in the third quarter of 2017, however, there can be no guaranty that the transaction will close. |
Fair Value of Financial Instr35
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of estimated fair value of derivatives measured by level of fair value hierarchy | The Company’s financial assets and liabilities measured and reported at fair value on a recurring basis include the following as of: March 31, 2017 December 31, 2016 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Derivative assets $ — $ 8,558 $ — $ 8,558 $ — $ 5,935 $ — $ 5,935 Derivative liabilities — 967 — 967 — 1,303 — 1,303 |
Schedule of carrying value and fair value of notes payable | The table below represents the carrying value and fair value of the Company’s notes payable as of: March 31, 2017 December 31, 2016 Carrying Value Fair Value Carrying Value Fair Value Notes payable (1) $ 2,407,196 $ 2,381,057 $ 2,707,839 $ 2,681,134 _________________ (1) Amounts represent total notes payable excluding net deferred financing costs. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value assumptions | The per unit fair value of 2017 OPP award granted was estimated on the date of grant using the following assumptions in the Monte Carlo valuation: Expected price volatility for the Company 24.00% Expected price volatility for the particular REIT index 17.00% Risk-free rate 1.47% Dividend yield 2.30% |
Schedule of classification and amount recognized for stock-based compensation | The following table presents the classification and amount recognized for stock-based compensation related to the Company’s awards: Three Months Ended March 31, Consolidated Financial Statement Classification 2017 2016 Expensed stock compensation $ 3,902 $ 3,342 General and administrative expenses Capitalized stock compensation 199 82 Deferred leasing costs and lease intangibles, net and tenant improvements Total stock compensation $ 4,101 $ 3,424 Additional paid-in capital and non-controlling interest—units in the operating partnership |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 for net income available to common stockholders: Three Months Ended March 31, 2017 2016 Numerator: Net income $ 24,153 $ 5,976 Income attributable to preferred units (159 ) (159 ) Income attributable to participating securities (240 ) (197 ) Income attributable to non-controlling interest in consolidated entities (3,037 ) (1,945 ) Income attributable to non-controlling units of the operating partnership (202 ) (1,422 ) Basic net income available to common stockholders 20,515 2,253 Effect of dilutive instruments 149 — Diluted net income available to common stockholders $ 20,664 $ 2,253 Denominator: Basic weighted average common shares outstanding 147,950,594 89,190,803 Effect of dilutive instruments (1) 1,999,752 407,000 Diluted weighted average common shares outstanding 149,950,346 89,597,803 Basic earnings per common share $ 0.14 $ 0.03 Diluted earnings per common share $ 0.14 $ 0.03 ________________ (1) The Company includes unvested awards and convertible common units as contingently issuable shares in the computation of diluted earnings per share once the market criteria are met, assuming that the end of the reporting period is the end of the contingency period. Any anti-dilutive securities are excluded from the diluted earnings per share calculation. |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Comprehensive income (loss) | The table below present the effect of the Company’s derivative instruments on accumulated other comprehensive income (“OCI”): Hudson Pacific Properties, Inc. Stockholders ’ Equity Non-controlling Interest—Units in the Operating Partnership Total Equity Balance at January 1, 2017 $ 9,496 $ (3,618 ) $ 5,878 Unrealized gain recognized in OCI due to change in fair value 1,148 11 1,159 Loss reclassified from OCI into income (as interest expense) 1,688 17 1,705 Net change in OCI related to derivative instruments 2,836 28 2,864 Reclassification related to redemption of common units in the operating partnership (3,622 ) 3,622 — Balance at March 31, 2017 $ 8,710 $ 32 $ 8,742 |
Organization - Narrative (Detai
Organization - Narrative (Details) $ in Millions | Apr. 01, 2015USD ($)ft²projectpropertyshares | Mar. 31, 2017ft²property |
Business Acquisition [Line Items] | ||
Number of real estate properties acquired (in properties) | 0 | |
Area of real estate property (in square feet) | ft² | 199,484 | |
Office Properties | ||
Business Acquisition [Line Items] | ||
Number of real estate properties (in properties) | 52 | |
Media and Entertainment Properties | ||
Business Acquisition [Line Items] | ||
Number of real estate properties (in properties) | 2 | |
EOP Northern California Portfolio | ||
Business Acquisition [Line Items] | ||
Area of real estate property (in square feet) | ft² | 8,200,000 | |
Gross payments to acquire business | $ | $ 1,750 | |
Consideration transferred, common units (in shares) | shares | 63,474,791 | |
EOP Northern California Portfolio | Office Building | ||
Business Acquisition [Line Items] | ||
Number of real estate properties acquired (in properties) | 26 | |
EOP Northern California Portfolio | Development Parcel | ||
Business Acquisition [Line Items] | ||
Number of development projects acquired (in projects) | project | 2 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended |
Mar. 31, 2017joint_venture | |
Variable Interest Entity [Line Items] | |
Number of joint ventures consolidated (in joint ventures) | 4 |
Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Number of joint ventures consolidated (in joint ventures) | 3 |
Not Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
Number of joint ventures consolidated (in joint ventures) | 1 |
Investment in Real Estate - Sum
Investment in Real Estate - Summary of Property Sold (Details) $ in Thousands | Mar. 21, 2017USD ($)ft² | Feb. 14, 2017USD ($)ft² | Mar. 31, 2017USD ($)ft²property | Mar. 31, 2016USD ($) | Dec. 31, 2016property |
Real Estate [Abstract] | |||||
Number of real estate properties acquired (in properties) | property | 0 | ||||
Real Estate [Line Items] | |||||
Area of real estate property (in square feet) | ft² | 199,484 | ||||
Sales Price | $ 86,800 | ||||
Gains on sale of real estate | $ 16,866 | $ 6,352 | |||
Number of properties held for sale (in properties) | property | 0 | 2 | |||
222 Kearny Street | |||||
Real Estate [Line Items] | |||||
Area of real estate property (in square feet) | ft² | 148,797 | ||||
Sales Price | $ 51,800 | ||||
3402 Pico Boulevard | |||||
Real Estate [Line Items] | |||||
Area of real estate property (in square feet) | ft² | 50,687 | ||||
Sales Price | $ 35,000 |
Investment in Real Estate - Cos
Investment in Real Estate - Cost Capitalized (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Real Estate [Abstract] | ||
Capitalized personnel costs | $ 2,737,000 | $ 2,319,000 |
Capitalized interest | 2,446,000 | $ 2,628,000 |
Long-lived asset impairment charges | $ 0 |
Deferred Leasing Costs and Le43
Deferred Leasing Costs and Lease Intangibles, net - Schedule of Finite-Lived Intangible Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Deferred leasing costs and lease intangibles, net | $ 296,645 | $ 309,962 | |
Other Liabilities, Unclassified [Abstract] | |||
Below and above market ground leases, net | 73,033 | 80,130 | |
Amortization of above- and below-market leases, net | (5,732) | $ (4,851) | |
Below Market Leases | |||
Other Liabilities, Unclassified [Abstract] | |||
Below and above market ground leases | 138,549 | 141,676 | |
Below and above market ground leases, accumulated amortization | (66,511) | (62,552) | |
Below and above market ground leases, net | 72,038 | 79,124 | |
Amortization of above- and below-market leases, net | 7,088 | 8,570 | |
Above Market Ground Leases | |||
Other Liabilities, Unclassified [Abstract] | |||
Below and above market ground leases | 1,095 | 1,095 | |
Below and above market ground leases, accumulated amortization | (100) | (89) | |
Below and above market ground leases, net | 995 | 1,006 | |
Amortization of above- and below-market leases, net | 11 | 11 | |
Above-market leases | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Deferred leasing costs and lease intangibles | 22,823 | 23,430 | |
Accumulated amortization | (13,738) | (12,989) | |
Deferred leasing costs and lease intangibles, net | 9,085 | 10,441 | |
Other Liabilities, Unclassified [Abstract] | |||
Amortization of above- and below-market leases, net | 1,356 | 3,719 | |
Deferred leasing costs and in-place lease intangibles | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Deferred leasing costs and lease intangibles | 376,056 | 378,540 | |
Accumulated amortization | (154,381) | (145,551) | |
Deferred leasing costs and lease intangibles, net | 221,675 | 232,989 | |
Other Liabilities, Unclassified [Abstract] | |||
Amortization of above- and below-market leases, net | 19,793 | 22,568 | |
Below-market ground leases | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Deferred leasing costs and lease intangibles | 71,423 | 71,423 | |
Accumulated amortization | (5,538) | (4,891) | |
Deferred leasing costs and lease intangibles, net | 65,885 | $ 66,532 | |
Other Liabilities, Unclassified [Abstract] | |||
Amortization of above- and below-market leases, net | $ 648 | $ 546 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Accounts receivable | $ 4,306 | $ 8,697 |
Allowance for doubtful accounts | (2,297) | (1,845) |
Accounts receivable, net | $ 2,009 | $ 6,852 |
Straight-line Rent Receivable45
Straight-line Rent Receivables, net (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts | $ (2,297) | $ (1,845) |
Straight-line rent receivables, net | 84,850 | 87,281 |
Allowance for Straight-Line Receivables | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Straight-line rent receivables | 87,228 | 87,417 |
Allowance for doubtful accounts | $ (2,378) | $ (136) |
Investment in Unconsolidated 46
Investment in Unconsolidated Entity (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 27, 2016 | Jul. 01, 2016 | Jun. 16, 2016 |
Schedule of Equity Method Investments [Line Items] | |||||
Assets associated with real estate held for sale | $ 38,546,000 | $ 37,228,000 | |||
11601 Wilshire Boulevard Office Building | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Real estate property, ownership (as a percent) | 28.00% | ||||
Assets associated with real estate held for sale | 7,800,000 | 7,800,000 | |||
Agreement to purchase outstanding interest in land | $ 50,000,000 | ||||
Santa Clara, CA Joint Venture | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Real estate property, ownership (as a percent) | 21.00% | ||||
Assets associated with real estate held for sale | $ 30,700,000 | $ 29,400,000 |
Goodwill (Details)
Goodwill (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 8,754,000 | $ 8,754,000 |
Goodwill impairment during period | $ 0 |
Notes Payable, Net - Summary of
Notes Payable, Net - Summary of Notes Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Notes payable | $ 2,407,196 | $ 2,707,839 |
Less: deferred financing costs, net | (18,808) | (19,829) |
Notes payable, net | 2,388,388 | 2,688,010 |
Prepaid expenses and other assets, net | ||
Short-term Debt [Line Items] | ||
Deferred financing costs | $ 1,300 | $ 1,500 |
Notes Payable, Net - Summary 49
Notes Payable, Net - Summary of Outstanding Indebtedness (Details) - USD ($) $ in Thousands | Apr. 01, 2015 | Jul. 31, 2013 | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||||
Principal Amount | $ 2,407,196 | $ 2,707,839 | ||
Deferred Financing Costs, net | (18,808) | (19,829) | ||
Met Park North | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 64,500 | |||
Met Park North | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.55% | |||
Unsecured Debt | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | 1,725,000 | 2,025,000 | ||
Deferred Financing Costs, net | (11,777) | (12,392) | ||
Unsecured Debt | Revolving Credit Facility 2014 | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | 0 | 300,000 | ||
Deferred Financing Costs, net | $ 0 | 0 | ||
Unsecured Debt | Revolving Credit Facility 2014 | LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.15% | 1.15% | ||
Unsecured Debt | Revolving Credit Facility 2014 | LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.85% | 1.85% | ||
Unsecured Debt | 5-Year Term Loan due April 2020 | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 450,000 | 450,000 | ||
Deferred Financing Costs, net | $ (3,243) | (3,513) | ||
Unsecured Debt | 5-Year Term Loan due April 2020 | LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.30% | |||
Unsecured Debt | 5-Year Term Loan due April 2020 | LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 2.20% | |||
Unsecured Debt | 5-Year Term Loan due November 2020 | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 175,000 | 175,000 | ||
Deferred Financing Costs, net | $ (697) | (745) | ||
Unsecured Debt | 5-Year Term Loan due November 2020 | LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.30% | |||
Unsecured Debt | 5-Year Term Loan due November 2020 | LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 2.20% | |||
Unsecured Debt | 7-Year Term Loan due April 2022 | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 350,000 | 350,000 | ||
Deferred Financing Costs, net | $ (2,157) | (2,265) | ||
Unsecured Debt | 7-Year Term Loan due April 2022 | LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.60% | |||
Unsecured Debt | 7-Year Term Loan due April 2022 | LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 2.55% | |||
Unsecured Debt | 7-Year Term Loan due November 2022 | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 125,000 | 125,000 | ||
Deferred Financing Costs, net | $ (892) | (931) | ||
Unsecured Debt | 7-Year Term Loan due November 2022 | LIBOR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.60% | |||
Unsecured Debt | 7-Year Term Loan due November 2022 | LIBOR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 2.55% | |||
Unsecured Debt | Series A Notes | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 110,000 | 110,000 | ||
Deferred Financing Costs, net | $ (891) | (930) | ||
Interest Rate (as a percent) | 4.34% | |||
Unsecured Debt | Series E Notes | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 50,000 | 50,000 | ||
Deferred Financing Costs, net | $ (289) | (300) | ||
Interest Rate (as a percent) | 3.66% | |||
Unsecured Debt | Series B Notes | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 259,000 | 259,000 | ||
Deferred Financing Costs, net | $ (2,207) | (2,271) | ||
Interest Rate (as a percent) | 4.69% | |||
Unsecured Debt | Series D Notes | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 150,000 | 150,000 | ||
Deferred Financing Costs, net | $ (874) | (898) | ||
Interest Rate (as a percent) | 3.98% | |||
Unsecured Debt | Series C Notes | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 56,000 | 56,000 | ||
Deferred Financing Costs, net | $ (527) | (539) | ||
Interest Rate (as a percent) | 4.79% | |||
Secured Debt | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 682,196 | 682,839 | ||
Deferred Financing Costs, net | (7,031) | (7,437) | ||
Secured Debt | Rincon Center | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | 99,897 | 100,409 | ||
Deferred Financing Costs, net | $ (158) | (198) | ||
Interest Rate (as a percent) | 5.13% | |||
Secured Debt | Sunset Gower/Sunset Bronson | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 5,001 | 5,001 | ||
Deferred Financing Costs, net | $ (1,357) | (1,534) | ||
Secured Debt | Sunset Gower/Sunset Bronson | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 2.25% | |||
Secured Debt | Met Park North | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 64,500 | 64,500 | ||
Deferred Financing Costs, net | $ (370) | (398) | ||
Secured Debt | Met Park North | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (as a percent) | 1.15% | |||
Secured Debt | 10950 Washington | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 27,798 | 27,929 | ||
Deferred Financing Costs, net | $ (337) | (354) | ||
Interest Rate (as a percent) | 5.32% | |||
Secured Debt | Pinnacle I | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 129,000 | 129,000 | ||
Deferred Financing Costs, net | $ (567) | (593) | ||
Interest Rate (as a percent) | 3.95% | |||
Secured Debt | Element LA | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 168,000 | 168,000 | ||
Deferred Financing Costs, net | $ (2,256) | (2,321) | ||
Interest Rate (as a percent) | 4.59% | |||
Secured Debt | Pinnacle II | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 87,000 | 87,000 | ||
Deferred Financing Costs, net | $ (701) | (720) | ||
Interest Rate (as a percent) | 4.30% | |||
Secured Debt | Hill7 | ||||
Debt Instrument [Line Items] | ||||
Principal Amount | $ 101,000 | 101,000 | ||
Deferred Financing Costs, net | $ (1,285) | $ (1,319) | ||
Interest Rate (as a percent) | 3.38% |
Notes Payable, Net - Schedule o
Notes Payable, Net - Schedule of Maturities of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Remaining 2,017 | $ 2,071 | |
2,018 | 101,157 | |
2,019 | 7,886 | |
2,020 | 692,493 | |
2,021 | 3,142 | |
Thereafter | 1,600,447 | |
Total | $ 2,407,196 | $ 2,707,839 |
Notes Payable, Net - Narrative
Notes Payable, Net - Narrative (Details) | May 03, 2016USD ($) | Apr. 01, 2015USD ($)derivative | Jul. 31, 2013USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jul. 31, 2016USD ($)derivative | Jun. 01, 2016 | May 01, 2015 |
Debt Instrument [Line Items] | ||||||||
Duration used in interest rate calculation (in days) | 360 days | |||||||
Notes payable | $ 2,407,196,000 | $ 2,707,839,000 | ||||||
Joint Venture That Owns Pinnacle I and II | ||||||||
Debt Instrument [Line Items] | ||||||||
Real estate property, ownership (as a percent) | 65.00% | |||||||
Joint Venture With The Canadian Pension Plan Investment Board | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, extension period (in years) | 2 years | |||||||
Real estate property, ownership (as a percent) | 55.00% | |||||||
Interest Rate Contract | ||||||||
Debt Instrument [Line Items] | ||||||||
Notional amount | $ 300,000,000 | $ 300,000,000 | ||||||
Number of derivative instruments held (in derivatives) | derivative | 2 | 2 | ||||||
7-Year Term Loan due November 2022 | Interest Rate Contract | ||||||||
Debt Instrument [Line Items] | ||||||||
Notional amount | $ 125,000,000 | |||||||
Rincon Center And 10950 Washington | ||||||||
Debt Instrument [Line Items] | ||||||||
Service payment term (in years) | 30 years | |||||||
Met Park North | ||||||||
Debt Instrument [Line Items] | ||||||||
Adjusted interest rate (as a percent) | 3.71% | |||||||
Debt instrument, term (in years) | 7 years | |||||||
Notes payable | $ 64,500,000 | |||||||
Met Park North | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.55% | |||||||
Pinnacle I | ||||||||
Debt Instrument [Line Items] | ||||||||
Service payment term (in years) | 30 years | |||||||
Debt instrument, term (in years) | 5 years | |||||||
A & R Credit Facilities | Hudson Pacific Partners L.P. | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | $ 2,000,000,000 | |||||||
Maximum leverage ratio | 0.60 | |||||||
Maximum unencumbered leverage ratio | 0.60 | |||||||
Minimum fixed charge coverage ratio | 1.50 | |||||||
Minimum unsecured interest coverage ratio | 2 | |||||||
Sunset Gower/Sunset Bronson | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount guaranteed (as a percent) | 19.50% | |||||||
Maximum exposure for guarantee | $ 1,000,000 | |||||||
Line of Credit | Hudson Pacific Partners L.P. | Revolving Credit Facility 2014 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, extension period (in years) | 1 year | |||||||
Maximum borrowing capacity | 400,000,000 | |||||||
Line of Credit | Credit Facility 2015 | Hudson Pacific Partners L.P. | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, facility fee (as a percent) | 0.20% | |||||||
Line of Credit | Credit Facility 2015 | Hudson Pacific Partners L.P. | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility, facility fee (as a percent) | 0.35% | |||||||
Unsecured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes payable | $ 1,725,000,000 | 2,025,000,000 | ||||||
Unsecured Debt | Revolving Credit Facility 2014 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, extension period (in years) | 1 year | |||||||
Notes payable | $ 0 | 300,000,000 | ||||||
Unsecured Debt | Revolving Credit Facility 2014 | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.15% | 1.15% | ||||||
Unsecured Debt | Revolving Credit Facility 2014 | LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.85% | 1.85% | ||||||
Unsecured Debt | 5 Year Term Loan Facility 2015 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, term (in years) | 5 years | |||||||
Unsecured Debt | 5 Year Term Loan Facility 2015 | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Adjusted interest rate (as a percent) | 2.75% | 2.66% | ||||||
Unsecured Debt | 5 Year Term Loan Facility 2015 | LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Adjusted interest rate (as a percent) | 3.65% | 3.56% | ||||||
Unsecured Debt | 7 Year Term Loan Facility 2015 | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of derivative instruments held (in derivatives) | derivative | 2 | |||||||
Debt instrument, term (in years) | 7 years | |||||||
Unsecured Debt | 7 Year Term Loan Facility 2015 | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Adjusted interest rate (as a percent) | 3.36% | 3.21% | ||||||
Unsecured Debt | 7 Year Term Loan Facility 2015 | LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Adjusted interest rate (as a percent) | 4.31% | 4.16% | ||||||
Unsecured Debt | 5-Year Term Loan due November 2020 | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes payable | $ 175,000,000 | 175,000,000 | ||||||
Unsecured Debt | 5-Year Term Loan due November 2020 | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.30% | |||||||
Unsecured Debt | 5-Year Term Loan due November 2020 | LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.20% | |||||||
Unsecured Debt | 5-Year Term Loan due November 2020 | Hudson Pacific Partners L.P. | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, term (in years) | 5 years | |||||||
Unsecured Debt | 5-Year Term Loan due November 2020 | Hudson Pacific Partners L.P. | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.30% | |||||||
Unsecured Debt | 5-Year Term Loan due November 2020 | Hudson Pacific Partners L.P. | LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.20% | |||||||
Unsecured Debt | 7-Year Term Loan due November 2022 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, term (in years) | 7 years | |||||||
Notes payable | $ 125,000,000 | 125,000,000 | ||||||
Unsecured Debt | 7-Year Term Loan due November 2022 | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Adjusted interest rate (as a percent) | 3.03% | |||||||
Basis spread on variable rate (as a percent) | 1.60% | |||||||
Unsecured Debt | 7-Year Term Loan due November 2022 | LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Adjusted interest rate (as a percent) | 3.98% | |||||||
Basis spread on variable rate (as a percent) | 2.55% | |||||||
Unsecured Debt | 7-Year Term Loan due November 2022 | Hudson Pacific Partners L.P. | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, term (in years) | 7 years | |||||||
Unsecured Debt | 7-Year Term Loan due November 2022 | Hudson Pacific Partners L.P. | LIBOR | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.60% | |||||||
Unsecured Debt | 7-Year Term Loan due November 2022 | Hudson Pacific Partners L.P. | LIBOR | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.55% | |||||||
Unsecured Debt | Senior Notes | Hudson Pacific Partners L.P. | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum secured indebtedness leverage ratio | 0.45 | |||||||
Secured Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes payable | $ 682,196,000 | 682,839,000 | ||||||
Secured Debt | Met Park North | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes payable | $ 64,500,000 | 64,500,000 | ||||||
Secured Debt | Met Park North | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 1.15% | |||||||
Secured Debt | Pinnacle I | ||||||||
Debt Instrument [Line Items] | ||||||||
Notes payable | $ 129,000,000 | 129,000,000 | ||||||
Secured Debt | Sunset Gower/Sunset Bronson | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, extension period (in years) | 1 year | |||||||
Notes payable | $ 5,001,000 | $ 5,001,000 | ||||||
Secured Debt | Sunset Gower/Sunset Bronson | LIBOR | ||||||||
Debt Instrument [Line Items] | ||||||||
Basis spread on variable rate (as a percent) | 2.25% |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) | May 03, 2016USD ($) | Apr. 01, 2015USD ($)derivative | Jul. 31, 2013USD ($) | Mar. 31, 2017USD ($)derivative | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)derivative | Jul. 31, 2016USD ($)derivative | Jun. 01, 2016 | May 01, 2015 |
Derivative | |||||||||
Notes payable | $ 2,407,196,000 | $ 2,707,839,000 | |||||||
Derivative assets | 8,558,000 | 5,935,000 | |||||||
Derivative liabilities | 967,000 | 1,303,000 | |||||||
Cash flow hedge adjustment | 3,000,000 | ||||||||
Level 2 | |||||||||
Derivative | |||||||||
Derivative assets | 8,558,000 | 5,935,000 | |||||||
Derivative liabilities | 967,000 | 1,303,000 | |||||||
Unsecured Debt | |||||||||
Derivative | |||||||||
Notes payable | 1,725,000,000 | 2,025,000,000 | |||||||
5 Year Term Loan Facility 2015 | Unsecured Debt | |||||||||
Derivative | |||||||||
Debt instrument, term (in years) | 5 years | ||||||||
5 Year Term Loan Facility 2015 | Unsecured Debt | LIBOR | Minimum | |||||||||
Derivative | |||||||||
Adjusted interest rate (as a percent) | 2.75% | 2.66% | |||||||
5 Year Term Loan Facility 2015 | Unsecured Debt | LIBOR | Maximum | |||||||||
Derivative | |||||||||
Adjusted interest rate (as a percent) | 3.65% | 3.56% | |||||||
New Credit Agreement - Term Loan | Unsecured Debt | LIBOR | Minimum | |||||||||
Derivative | |||||||||
Basis spread on variable rate (as a percent) | 1.30% | ||||||||
New Credit Agreement - Term Loan | Unsecured Debt | LIBOR | Maximum | |||||||||
Derivative | |||||||||
Basis spread on variable rate (as a percent) | 2.20% | ||||||||
7 Year Term Loan Facility 2015 | Unsecured Debt | |||||||||
Derivative | |||||||||
Number of derivative instruments held (in derivatives) | derivative | 2 | ||||||||
Debt instrument, term (in years) | 7 years | ||||||||
Face amount | $ 350,000,000 | ||||||||
7 Year Term Loan Facility 2015 | Unsecured Debt | LIBOR | Minimum | |||||||||
Derivative | |||||||||
Adjusted interest rate (as a percent) | 3.36% | 3.21% | |||||||
7 Year Term Loan Facility 2015 | Unsecured Debt | LIBOR | Maximum | |||||||||
Derivative | |||||||||
Adjusted interest rate (as a percent) | 4.31% | 4.16% | |||||||
7-Year Term Loan due November 2022 | Unsecured Debt | |||||||||
Derivative | |||||||||
Debt instrument, term (in years) | 7 years | ||||||||
Notes payable | $ 125,000,000 | $ 125,000,000 | |||||||
7-Year Term Loan due November 2022 | Unsecured Debt | LIBOR | Minimum | |||||||||
Derivative | |||||||||
Adjusted interest rate (as a percent) | 3.03% | ||||||||
Basis spread on variable rate (as a percent) | 1.60% | ||||||||
7-Year Term Loan due November 2022 | Unsecured Debt | LIBOR | Maximum | |||||||||
Derivative | |||||||||
Adjusted interest rate (as a percent) | 3.98% | ||||||||
Basis spread on variable rate (as a percent) | 2.55% | ||||||||
Met Park North | |||||||||
Derivative | |||||||||
Debt instrument, term (in years) | 7 years | ||||||||
Adjusted interest rate (as a percent) | 3.71% | ||||||||
Notes payable | $ 64,500,000 | ||||||||
Met Park North | LIBOR | |||||||||
Derivative | |||||||||
Basis spread on variable rate (as a percent) | 1.55% | ||||||||
Interest Rate Contract | |||||||||
Derivative | |||||||||
Number of derivative instruments held (in derivatives) | derivative | 2 | 2 | |||||||
Notional amount | $ 300,000,000 | $ 300,000,000 | |||||||
Interest Rate Contract | 5 Year Term Loan Facility 2015 | |||||||||
Derivative | |||||||||
Fixed interest rate (as a percent) | 1.36% | ||||||||
Interest Rate Contract | 7 Year Term Loan Facility 2015 | |||||||||
Derivative | |||||||||
Fixed interest rate (as a percent) | 1.61% | ||||||||
Unrealized gain on ineffective portion of derivative instruments | $ 6,000 | ||||||||
Unrealized loss on ineffective portion of derivative instruments | $ 2,100,000 | ||||||||
Interest Rate Contract | 7-Year Term Loan due November 2022 | |||||||||
Derivative | |||||||||
Notional amount | $ 125,000,000 | ||||||||
Fixed interest rate (as a percent) | 1.43% | ||||||||
Interest Rate Contract | Met Park North | LIBOR | |||||||||
Derivative | |||||||||
Interest rate cap (as a percent) | 2.16% | ||||||||
Interest Rate Contract, Instrument A | 5 Year Term Loan Facility 2015 | |||||||||
Derivative | |||||||||
Notional amount of interest rate cash flow hedge derivatives | $ 150,000,000 | ||||||||
Interest Rate Swap | 7 Year Term Loan Facility 2015 | Unsecured Debt | |||||||||
Derivative | |||||||||
Number of derivative instruments held (in derivatives) | derivative | 2 | ||||||||
Interest Rate Floor | 7-Year Term Loan due November 2022 | LIBOR | |||||||||
Derivative | |||||||||
Derivative, interest rate floor (as a percent) | 0.00% | ||||||||
Designated as Hedging Instrument | LIBOR | |||||||||
Derivative | |||||||||
Derivative, interest rate floor (as a percent) | 0.00% | ||||||||
Designated as Hedging Instrument | Interest Rate Cap | |||||||||
Derivative | |||||||||
Number of derivative instruments held (in derivatives) | derivative | 6 | 6 | |||||||
Notional amount of interest rate cash flow hedge derivatives | $ 839,500,000 | $ 839,500,000 |
Future Minimum Base Rents and53
Future Minimum Base Rents and Lease Payments Future Minimum Rents - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Operating Leased Assets [Line Items] | |
Remaining 2,017 | $ 366,179 |
2,018 | 480,987 |
2,019 | 444,625 |
2,020 | 360,996 |
2,021 | 313,034 |
Thereafter | 1,023,187 |
Total | 2,989,008 |
Noncancellable | |
Operating Leased Assets [Line Items] | |
Remaining 2,017 | 365,799 |
2,018 | 457,963 |
2,019 | 415,324 |
2,020 | 340,628 |
2,021 | 284,972 |
Thereafter | 884,701 |
Total | 2,749,387 |
Subject to Early Termination Options | |
Operating Leased Assets [Line Items] | |
Remaining 2,017 | 380 |
2,018 | 23,024 |
2,019 | 29,301 |
2,020 | 20,368 |
2,021 | 28,062 |
Thereafter | 138,486 |
Total | $ 239,621 |
Future Minimum Base Rents and54
Future Minimum Base Rents and Lease Payments Future Minimum Rents - Schedule of Ground Leases (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 27, 2016 | |
11601 Wilshire | ||
Operating Leased Assets [Line Items] | ||
Agreement to purchase outstanding interest in land | $ 50,000,000 | |
Ground Lease | 11601 Wilshire | ||
Operating Leased Assets [Line Items] | ||
Frequency of rent adjustments (in years) | 5 years | |
Minimum annual rent calculation, annual increase | $ 50,000 | |
Ground Lease | 3400 Hillview | ||
Operating Leased Assets [Line Items] | ||
Minimum annual rent calculation, percent of fair market value (as a percent) | 10.00% | |
Percentage annual rent calculation, percent of AGI less minimum annual rent (as a percent) | 24.125% | |
Minimum annual rent calculation, percent of CPI, next five years (as a percent) | 75.00% | |
Minimum annual rent calculation, percent of CPI, thereafter (as a percent) | 75.00% | |
Minimum annual rent calculation, cumulative increases in consumer price index | $ 1,000,000 | |
Ground Lease | 9300 Wilshire | ||
Operating Leased Assets [Line Items] | ||
Minimum annual rent calculation, percent of increase (as a percent) | 6.00% | |
Ground Lease | Clocktower Square | ||
Operating Leased Assets [Line Items] | ||
Frequency of rent adjustments (in years) | 10 years | |
Percentage annual rent calculation, percent of AGI less minimum annual rent (as a percent) | 25.00% | |
Ground Lease | Del Amo Office | ||
Operating Leased Assets [Line Items] | ||
Lease rent expense | $ 1 | |
Ground Lease | Foothill Research Center | ||
Operating Leased Assets [Line Items] | ||
Minimum annual rent calculation, percent of fair market value (as a percent) | 10.00% | |
Percentage annual rent calculation, percent of AGI less minimum annual rent (as a percent) | 24.125% | |
Minimum annual rent calculation, percent of CPI (as a percent) | 75.00% | |
Ground Lease | Lockheed | ||
Operating Leased Assets [Line Items] | ||
Minimum annual rent calculation, percent of fair market value (as a percent) | 10.00% | |
Percentage annual rent calculation, percent of AGI less minimum annual rent (as a percent) | 24.125% | |
Minimum annual rent calculation, percent of CPI (as a percent) | 75.00% | |
Ground Lease | Metro Center | ||
Operating Leased Assets [Line Items] | ||
Frequency of rent adjustments (in years) | 10 years | |
Minimum annual rent calculation, percent of fair market value (as a percent) | 7.233% | |
Ground Lease | Page Mill Center | ||
Operating Leased Assets [Line Items] | ||
Percentage annual rent calculation, percent of AGI less minimum annual rent (as a percent) | 25.00% | |
Ground Lease | Page Mill Hill | ||
Operating Leased Assets [Line Items] | ||
Frequency of rent adjustments (in years) | 10 years | |
Minimum annual rent calculation, percent of annual rent (as a percent) | 60.00% | |
Ground Lease | Palo Alto Square | ||
Operating Leased Assets [Line Items] | ||
Frequency of rent adjustments (in years) | 10 years | |
Percentage annual rent calculation, percent of AGI less minimum annual rent (as a percent) | 25.00% | |
Ground Lease | Sunset Gower Studios | ||
Operating Leased Assets [Line Items] | ||
Frequency of rent adjustments (in years) | 7 years | |
Minimum annual rent calculation, percent of fair market value (as a percent) | 7.50% | |
Ground Lease | Techmart Commerce Center | ||
Operating Leased Assets [Line Items] | ||
Frequency of rent adjustments (in years) | 5 years | |
Minimum annual rent calculation, percent of increase (as a percent) | 10.00% |
Future Minimum Base Rents and55
Future Minimum Base Rents and Lease Payments Future Minimum Rents - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Future Minimum Base Rents and Lease Payments Future Minimum Rents [Abstract] | ||
Contingent rental expense | $ 2,184 | $ 2,337 |
Minimum rental expense | 3,196 | $ 3,497 |
Ground Lease | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
Remaining 2,017 | 9,837 | |
2,018 | 14,613 | |
2,019 | 14,663 | |
2,020 | 14,663 | |
2,021 | 14,684 | |
Thereafter | 429,386 | |
Total | $ 497,846 |
Fair Value of Financial Instr56
Fair Value of Financial Instruments - Fair Value, Recurring and Nonrecurring (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative assets | $ 8,558 | $ 5,935 |
Derivative liabilities | 967 | 1,303 |
Notes payable | 2,381,057 | 2,681,134 |
Carrying Value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Notes payable | 2,407,196 | 2,707,839 |
Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative assets | 8,558 | 5,935 |
Derivative liabilities | 967 | 1,303 |
Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions | ||
Derivative assets | 0 | 0 |
Derivative liabilities | $ 0 | $ 0 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance period (in years) | 3 years | ||
Vesting percentage after initial performance period (in years) | 50.00% | ||
Risk-free rate (as a percent) | 1.47% | ||
Dividend yield (as a percent) | 2.30% | ||
The Company | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility rate (as a percent) | 24.00% | ||
SNL Equity REIT Index | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility rate (as a percent) | 17.00% | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 2 years | ||
Existing and Newly Elected Board Member | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 3 years | ||
Employees | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 3 years | ||
Employees | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 4 years | ||
One-Time Retention Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting rights (as a percent) | 25.00% | 25.00% | |
Outperformance Program | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum bonus pool | $ 20,000,000 | ||
Mandatory holding period (in years) | 2 years | ||
Outperformance Program | Additional paid-in capital and non-controlling interest—units in the operating partnership | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 4,101,000 | $ 3,424,000 | |
Outperformance Program | General and administrative expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 3,902,000 | 3,342,000 | |
Outperformance Program | Deferred leasing costs and lease intangibles, net and tenant improvements | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 199,000 | $ 82,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Net income | $ 24,153 | $ 5,976 |
Net income attributable to preferred units | (159) | (159) |
Net income attributable to participating securities | (240) | (197) |
Net income attributable to non-controlling interest in consolidated entities | (3,037) | (1,945) |
Income attributable to non-controlling units of the operating partnership | (202) | (1,422) |
Net income (loss) attributable to common stockholders | 20,515 | 2,253 |
Effect of dilutive instruments | 149 | 0 |
Diluted net income available to common stockholders | $ 20,664 | $ 2,253 |
Basic weighted average common shares outstanding (in shares) | 147,950,594 | 89,190,803 |
Effect of dilutive instruments (in shares) | 1,999,752 | 407,000 |
Diluted weighted average common shares outstanding (in shares) | 149,950,346 | 89,597,803 |
Basic earnings per common share (in dollars per share) | $ 0.14 | $ 0.03 |
Diluted earnings per common share (in dollars per share) | $ 0.14 | $ 0.03 |
Equity - Schedule of Other Comp
Equity - Schedule of Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning Balance | $ 3,702,750 | $ 3,729,037 | $ 3,729,037 |
Comprehensive income (loss) | 27,017 | $ (9,499) | |
Reclassification related to redemption of common units in the operating partnership | (310,855) | (1,446,039) | |
Ending Balance | 4,026,200 | 3,702,750 | |
Total Equity | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning Balance | 5,878 | ||
Unrealized gain recognized in OCI due to change in fair value | 1,159 | ||
Loss reclassified from OCI into income (as interest expense) | 1,705 | ||
Comprehensive income (loss) | 2,864 | ||
Reclassification related to redemption of common units in the operating partnership | 0 | ||
Ending Balance | 8,742 | 5,878 | |
Hudson Pacific Properties, Inc. Stockholders’ Equity | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning Balance | 9,496 | ||
Unrealized gain recognized in OCI due to change in fair value | 1,148 | ||
Loss reclassified from OCI into income (as interest expense) | 1,688 | ||
Comprehensive income (loss) | 2,836 | ||
Reclassification related to redemption of common units in the operating partnership | (3,622) | ||
Ending Balance | 8,710 | 9,496 | |
Non-controlling Interest—Units in the Operating Partnership | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning Balance | (3,618) | ||
Unrealized gain recognized in OCI due to change in fair value | 11 | ||
Loss reclassified from OCI into income (as interest expense) | 17 | ||
Comprehensive income (loss) | 28 | ||
Reclassification related to redemption of common units in the operating partnership | 3,622 | ||
Ending Balance | $ 32 | $ (3,618) |
Equity - Narrative (Details)
Equity - Narrative (Details) | Mar. 03, 2017USD ($)shares | Jan. 10, 2017USD ($)shares | Oct. 31, 2016USD ($) | Jan. 31, 2015USD ($) | Mar. 31, 2017USD ($)ft²building$ / sharesshares | Mar. 31, 2016USD ($)$ / shares | Dec. 31, 2016shares | Jan. 20, 2016USD ($) | Jun. 30, 2013 | Jun. 13, 2013 |
Class of Stock [Line Items] | ||||||||||
Shares issued during period (in shares) | shares | 18,673,808 | |||||||||
Area of real estate property (in square feet) | ft² | 199,484 | |||||||||
Proceeds from issuance of common stock, net | $ 647,675,000 | $ 0 | ||||||||
Stock repurchase program authorized | $ 100,000,000 | |||||||||
Common dividends declared (in usd per share) | $ / shares | $ 0.25 | $ 0.200 | ||||||||
At-the-Market | ||||||||||
Class of Stock [Line Items] | ||||||||||
Maximum shares authorized, value | $ 125,000,000 | |||||||||
Proceeds from issuance of common stock, net | $ 20,100,000 | |||||||||
Unsecured Debt | Revolving Credit Facility 2014 | ||||||||||
Class of Stock [Line Items] | ||||||||||
Unsecured revolving credit facility outstanding | $ 255,000,000 | |||||||||
Common Stock/Units | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares issued during period (in shares) | shares | 18,656,575 | 47,010,695 | ||||||||
6.25% series A cumulative redeemable preferred units of the Operating Partnership | ||||||||||
Class of Stock [Line Items] | ||||||||||
Interest rate of preferred stock (as a percent) | 6.25% | |||||||||
Shares outstanding of preferred stock (in shares) | shares | 407,066 | |||||||||
Liquidation preference of preferred stock (dollars per share) | $ / shares | $ 25 | |||||||||
Preferred dividends declared (dollars per share) | $ / shares | $ 0.3906 | |||||||||
Hill7 Office Development | ||||||||||
Class of Stock [Line Items] | ||||||||||
Real estate property, ownership (as a percent) | 55.00% | |||||||||
Pinnacle JV | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of buildings in property (in buildings) | building | 2 | |||||||||
Area of real estate property (in square feet) | ft² | 625,640 | |||||||||
Ownership interest in property (as a percent) | 65.00% | 98.25% | ||||||||
Canada Pension Plan Investment Board | ||||||||||
Class of Stock [Line Items] | ||||||||||
Ownership interest in property (as a percent) | 45.00% | |||||||||
Hill7 Office Development | ||||||||||
Class of Stock [Line Items] | ||||||||||
Total consideration | $ 179,800,000 | |||||||||
Performance units | ||||||||||
Class of Stock [Line Items] | ||||||||||
Conversion ratio | 1 | |||||||||
Hudson Pacific Properties, Inc. | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares issued during period (in shares) | shares | 9,775,000 | 8,881,575 | ||||||||
Proceeds from issuance of common stock, net | $ 310,900,000 | |||||||||
Canada Pension Plan Investment Board | 1455 Market Street | ||||||||||
Class of Stock [Line Items] | ||||||||||
Ownership interest in property (as a percent) | 55.00% | |||||||||
Total consideration | $ 219,200,000 | |||||||||
Common Stock/Units | ||||||||||
Class of Stock [Line Items] | ||||||||||
Common units held by noncontrolling interests (in shares) | shares | 569,045 | 9,450,620 | ||||||||
Common dividends declared (in usd per share) | $ / shares | $ 0.025 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) $ in Thousands | Mar. 03, 2017shares | Jan. 10, 2017USD ($)shares | Jul. 01, 2016USD ($)ft² | Dec. 16, 2015ft² | Apr. 01, 2015USD ($)ft²projectpropertydirectorshares | Mar. 31, 2017USD ($)ft²property | Mar. 31, 2016USD ($) | Sep. 01, 2015ft² |
Related Party Transaction [Line Items] | ||||||||
Area of real estate property (in square feet) | ft² | 199,484 | |||||||
Number of real estate properties acquired (in properties) | property | 0 | |||||||
Shares issued during period (in shares) | shares | 18,673,808 | |||||||
Proceeds from issuance of common stock, net | $ 647,675 | $ 0 | ||||||
Common units redeemed (in shares) | shares | 8,881,575 | |||||||
EOP Northern California Portfolio | ||||||||
Related Party Transaction [Line Items] | ||||||||
Area of real estate property (in square feet) | ft² | 8,200,000 | |||||||
Gross payments to acquire business | $ 1,750,000 | |||||||
Consideration transferred, common units (in shares) | shares | 63,474,791 | |||||||
EOP Northern California Portfolio | Office Building | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of real estate properties acquired (in properties) | property | 26 | |||||||
EOP Northern California Portfolio | Development Parcel | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of development projects acquired (in projects) | project | 2 | |||||||
Hudson Pacific Properties, Inc. | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares issued during period (in shares) | shares | 9,775,000 | 8,881,575 | ||||||
Proceeds from issuance of common stock, net | $ 310,900 | |||||||
Blackstone Real Estate Partners | ||||||||
Related Party Transaction [Line Items] | ||||||||
Number of director nominees to the board (in directors) | director | 3 | |||||||
Blackstone And Farallon Funds | ||||||||
Related Party Transaction [Line Items] | ||||||||
Shares issued during period (in shares) | shares | 9,792,233 | |||||||
Proceeds from issuance of common stock, net | $ 342,700 | |||||||
11601 Wilshire Boulevard Office Building | ||||||||
Related Party Transaction [Line Items] | ||||||||
Operating leases, term of contract (in years) | 8 years | |||||||
Total consideration | $ 311,000 | |||||||
Area of leased property (in square feet) | ft² | 6,638 | |||||||
Annual rent cost per year | $ 279 | |||||||
Blackstone Real Estate Partners | ||||||||
Related Party Transaction [Line Items] | ||||||||
Area of real estate property (in square feet) | ft² | 42,371 | 40,120 | ||||||
Operating leases, renewal term (in years) | 3 years | |||||||
Operating leases, term of contract (in years) | 10 years |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)tenant | |
Unsecured Debt | Revolving Credit Facility | |
Loss Contingencies | |
Letters of credit, amount outstanding | $ | $ 2.6 |
Rentable Square Feet | Customer Concentration Risk | |
Loss Contingencies | |
Concentration risk (as a percent) | 23.40% |
Number of tenants (in tenants) | tenant | 15 |
Rentable Square Feet | Customer Concentration Risk | Media And Entertainment Sector | |
Loss Contingencies | |
Concentration risk (as a percent) | 15.80% |
Rentable Square Feet | Customer Concentration Risk | Technology Sector | |
Loss Contingencies | |
Concentration risk (as a percent) | 28.50% |
Subsequent Events (Details)
Subsequent Events (Details) $ in Millions | May 01, 2017USD ($)ft² | Apr. 30, 2017USD ($) | Mar. 31, 2017ft² |
Subsequent Event [Line Items] | |||
Area of real estate property (in square feet) | ft² | 199,484 | ||
Subsequent Event | Revolving Credit Facility | |||
Subsequent Event [Line Items] | |||
Proceeds from unsecured revolving credit facility | $ | $ 150 | ||
Sunset Las Palmas Studios | Subsequent Event | |||
Subsequent Event [Line Items] | |||
Area of real estate property (in square feet) | ft² | 369,000 | ||
Total consideration | $ | $ 200 |