HPP - Earnings call transcript Q2 2019 | Hudson Pacific Properties, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to Hudson Pacific Properties Second Quarter 2019 Earnings Conference Call. [Operator Instructions] And as a reminder, this conference is being recorded. I would now like to turn the conference over to Laura Campbell. Thank you. Please go ahead.

Laura Campbell

operator. you, Thank everyone. Good morning, Hudson Pacific XXXX to Second Properties Call. Earnings Welcome Quarter supplemental press on our today, were release SEC. Earlier the and filed with an X-K website, available section now the hudsonpacificproperties.com. our are Both on of Investor over will An webcast available by and our section of the call Web the audio also site. week next this for be replay Investor of on phone

During we will press are GAAP our to in this discuss our which call, financial and release supplemental. reconciled non-GAAP financial results measures,

current making our forward-looking We to statements statements events forward-looking expectations. will duty our and in These from statements, subject on discussed could be no undertake SEC to risks to these also we differ materially results are based update. Actual which cause uncertainties our filings.

Chairman markets Art highlights. by our will and management an call. and will in CEO; With Mark portion our of like touch discuss Victor? Suazo, joined be and will overview that, Victor our I'd Mark financial CFO; of COO our our on to other will the and of Coleman, they Q&A welcome Leasing. activity EVP leasing performance, give during our Lammas, Art senior Note Victor

Victor Coleman

XXX,XXX leases, very GAAP Thanks, pace putting for office feet, to on We million feet ever our respectively, a quarter signing rent within our XX% our and spreads, strong one with best brings us GAAP X.X portfolio. XX% cash and an office cash square leasing over square activity activity spreads, second this year-to-date and rent of leasing to years XXXX for Laura. had the of exceptional XX% quarter, XX% call. second everyone, Welcome, and And respectively.

square projects our of leased. improvements, is foot pipeline redevelopment development With Maxwell active now delivered tenant nearly XX% and X for million

and leasing which ended XX.X% our activity quarter basis As respectively. for quarter and assets, and stabilized the such, points the up at both lease XX.X%, XXX percentages around about in-service centered our this

Bay were deals Area or XXX,XXX of and Valley throughout we we square of While Silicon assets, XX% deals signed Peninsula feet had our XX% all we our markets, of our assets. the great activity were and signed

square-foot Notable Concourse Building the with as approximately the backfilling North with balance mark-to-market. at a Bank San space XX,XXX as deals Google XX% XX,XXX include Jose, lease of square-foot Heritage at in SS&C the lease Ferry well with

Further, in accounting for deals currently LOIs below renewed, feet addressed our remaining proposals, XXXX had of successfully currently market. expirations, XXX,XXX are leases, or our which backfilled, of we XX% square XX%

recently from to content stages agreements. offices In supply terms of we lock demand look Sunset had of production our as production on ABC, Disney, actively leases, an basis. continue from benefit increase new even providers and WarnerMedia, Viacom studios in for we increasingly major and producers and under stage existing up Studio's as Angeles accommodate clients Los for excess portfolio, office long-term to ongoing two to CBS, work well in Amazon like TV HBO, long-term We

portfolio with to with Our XX.X% X.X% studio square in were months foot. last rates Los over leased average the months, over last was up per studio market the XX $XX same-store the overall Angeles XX line

to of development of terms new added acquisitions quarter and and value had also We in creation our a repositioning opportunities busy several projects. pipeline

sites of approximately We XXX,XXX capture of Vancouver. will modernizing million foot we in both with the Bentall closed of Downtown one from foot square last remaining existing Blackstone, our prime the purchase upside Centre collection X.XX and where square assets development building

which on from we Blackstone, could partnership in studio led Vancouver other other opened estate We, Vancouver the be real our local presence opportunities the markets. executive We're all the possibly looking native office, and in side. that us seasoned benefit with formally by both actively with our of same strong Chuck for also providing We office and Vancouver

square-foot expansion XXX,XXX of Center totaling it is funded condo feet. an which as an an of X.X office tower particularly Triangle we're site construction billion We calling adjacent Denny deposit purchase another State is XXXX. million $XX Washington exceptional million to Seattle's This Convention the square in in also approximately of rights Washington neighborhood, $X.X build a

transform the residential we and podium. of $XX across With construction three Triangle would new for retail Denny mid-XXXX neighborhood, square to delivery XXXX, in million portfolio more million project bringing be a assets. It amenities this both this upon commence over totals office X literally than towers our Washington improvements. and position of all streetscape And feet would

our the capital to represents provide call. dispositions, by these transactions sales of of and And in both additional some terms land successful later on million, Campus we for improvements another front. closed the more commentary recycling Center $XXX the which In team execution combined going a Mark's on

Sustainability week, I'd expand of the Year with like and highlighting milestones Responsibility team XXXX of We Social we going ESG our ESG-related the values. recently Corporate core and platform year-to-date. our to to of And mention to strategy Partner added President for accolades. company our all inaugural our welcomed our working and Finally, several published to find to business further strong and she's Lease ENERGY last ways our Teear innovative And and accomplishments, Vice Report, STAR XXXX Leader to Natalie organization be as levels with Impact. our alignment Green

on to our it I'm going for over end further to leasing markets. With now commentary that, Art turn

Art Suazo

even fundamentals, market for vie of space. quarter picture characterized large blocks positive the tech record-setting media was across global terms as by significant, firms Thanks, absorption of in Victor. net and Big our second

X deal with leasing over remains million half even in at office robust square Our our feet activity strong first XXXX. the pipeline of

rent had square feet expand QX. quarter, Class square for Hollywood, basis the absorption. and usage XXX,XXX and In media in per XXX A Angeles, with of vacancy dropped points increased positive to X X.X% Los feet In and the market XX,XXX to to $XX square net tech over deals X.X% continued foot,

tenants, both building delivers and quarter We interested year. users Harlow, which first in multiple partial next in have full the of

building square of are and below and Angeles a foot known at users. comprised is proactively asset in XXXX partial vacate and lease the expirations marketing Saatchi Los Del market Amo. XXX,XXX square feet XX% mostly XXX,XXX we to are Our Saatchi's & of remaining full Saatchi

leased Angeles and Our market. in-place Los XX.X% portfolio are XX% stabilized below rents is

San Francisco through large-block in the deals pre-leasing driving the with first of for and development signed pipeline still the This in fully city's XXX,XXX XX asking exemplifies half rent projects demand of planning is as even tenant feet square leased XXXX. abundance stages the is XXXX. over

points XX to square In net vacancy quarter, per feet X.X% the basis A increased XXX,XXX city, positive for rent X.X% and Class foot, the $XX with square of dropped absorption. to

terms that We have to in market of virtually nothing in address expiration. left

market. rents San below are portfolio Our XX.X% is Francisco and stabilized leased in-place XX%

Francisco Peninsula $XX this in includes rent by square increased was discussion had the foot, vacancy Alto, the the slightly another Class A of Shores per of with feet for XXX,XXX basis and and to strong square quarter, The purposes City Palo submarket. positive Peninsula, down net led XX quarter, the in Foster which Redwood to X.X% Along San notable activity points absorption.

along our of market. XX% have XXXX XXX,XXX which on expirations feet square Peninsula, the coverage below are We of remaining XX%

square-foot the at XX,XXX We are Page of tenant And the Center. X/X we XX,XXX are leases the now with foot Baker former negotiating in renewing building, with after Mill tenant Class space. to backfill square A former another McKenzie backfill Stanford at space to Health

leases is Peninsula market. XX.X% stabilized below XX% in-place leased, and portfolio Our are

history. to of particularly square continue positive and with like Silicon of Google San assets had Uber valley occupancy feet all net now And quarter. located, of that quarter technology market's Jose, in Valley take the global are but million a Adobe, of largest our space. had gains North an exceptional large absorption, blocks quarter X.X one where firms down strong

A net vacancy to foot, with In points North XX% X.X% Class San per to dropped positive of quarter, $XX XXX,XXX feet XXX the rents absorption. Jose, increased and square in basis square

coverage remaining our XXX,XXX XXXX just of square in XX% have on expirations Valley. of than over more We Silicon feet

These small square-foot XX% leases below are comprised market. of mostly and aggregate, in sub-XX,XXX

leased, XX.X% Our market. stabilized Silicon X% are below leases Valley and in-place portfolio is

for foot, quarter, $XX XXX,XXX feet sought In are of pre-leased. tenants, stable large Downtown Class amenities which with absorption. assets block X.X% vacancy existing And its block net to square by positive substantially with increased of $XX access rents and in mix with talent the A and available to are companies to XXX,XXX at requirement under-construction square and of X.X% essentially was after Downtown, projects, must look -- There Seattle per square-foot at market. no the retail. remains

While confident about the very there we are project's as two the Bellevue the years square out and Seattle XXXX, from requirements starting its prospects for feel our on location combined million construction square-foot markets. feet given as plus leasing Washington well of XX,XXX X.X design and

We have very in of in expirations Seattle. remaining the way XXXX little

in anticipated well-leased constraint continue with months. a city based both development with and Vancouver, is Seattle portfolio Supply XX% several to Canadian see In stabilized market. absorption Our X% the U.S. XX.X% to in-place major below tenants leases the in technology and we vacancy deal sub is strong pipeline. major interest announcements from are and coming leased, the

Downtown, A square points, For net the square absorption. X.X% and XX vacancy with in quarter, fell of XX per Class rents foot, feet increased positive CAD to X.X% XX,XXX basis

leased And the on market. floor in below million that at X.X users XX% and market. we lease about XX% XXX,XXX Bentall our vacate. well that good feet below space requirement market. has are interest tenants which leases of on coverage all overall is of have Bentall single as essentially feel known Centre, of feet We expiration square a XX.X% active that, is and remaining full the Deloitte's square as in-place are square-foot Centre XX,XXX

the at leased, I'd up basis our Dolphin On we and small basis, a status percentage assets, rolled XXXXX either by we and up over, stabilized. Traction, XX% X,XXX properties, Dolphin. and Pico, almost lease lease since the Metro Jackson square portfolio. has essentially or remaining assets, purchased, ShoreBreeze, Center combined up Twin Other to XX and Three footage had of like Finally, shy than Twin yet redevelopment Center in just have of XX% Plaza two Metro just & XXX repositioning increased the frame of lease two are points. Metro Fourth

in by have In NOI aggregate. at we XXX% two those addition, properties increased over

I continue of call highlights. So Mark for with over fully be to financial stabilized, NOI to while turn a source the not meaningful And growth. we're both that, will

Mark Lammas

Thanks, Art.

Higher For drivers no across and share second Pico of were There quarter, or we year-over-year primary studio both Building, portfolios, share XXXX. of the diluted items rates this XXXX compared FFO, increase. together and rental quarter second office ago. were of diluted per $X.XX Ferry the XXXXX specified year in asset the the with items, and occupancy the per specified a specifically $X.XX generated to acquisitions, excluding

at second the and office increased on NOI a quarter, In our basis GAAP XX.X% XX.X% properties on a same-store cash XX basis.

midpoint. results cash office from NOI full same-store performance our guidance end, are we X.X% that year the to a as a strong of X.X% consecutive our these year expectation well for portfolio's quarter through continued as Given second increasing

X.X% X.X% by decreased NOI on a studio and same-store cash basis. GAAP a Our basis on

NOI guidance year increased of While studio X% studio's expectation same-store in year second the studio came our guidance range, quarter we midpoint same-store in the cash cash NOI the full below XXXX. midpoint full previous our of X.X% of to through remainder given our performance fact have

during on partnership terms we offering terms. quarter, activity April X.XX% June of of Both million substantially operating additional In indenture, of the $XXX senior XXXX. notes identical have to an senior February public issued issuances under XXXX, capital due XX, XX, XXX the of had our previously million market completed pursuant which notes

additional which facility. million down the revolving $XXX.X of used million, credit proceeds to offering our for $XXX were Net pay approximately we

this Centre. From successfully Bentall on our unconsolidated purchase marks an X, our investment. acquisition mentioned, closed first estate we June Victor joint As perspective, significant of accounting real venture

As historically you unconsolidated for provided and the company's report, investment. financial information for addition our added consolidated both to share hope supplemental find property and and portfolio of consolidated the have this useful. our information We in such, we

provide Before guidance, want sale. the Campus further I completed turning regarding recently to to Center details

$XX.X As sold down revolving prorations costs facility. the million the credits, applied and our approximately Center $XX July Campus mentioned, improvements of on proceeds and XX, closing credit Victor before for pay company to million

and prorations before $XX On an our July facility. closing we revolving on paid costs additional XX, credits, sold $XX.X million approximately land and the million down for Center Campus credit

sales, offset we the for with associated quarter, we these the both gain the first reclassified of sale to recognize now impairment sales impact anticipated essentially recall with the both the associated earnings land land. these associated gain in complete, you the loss. may loss with the improvement quarter the held With but not properties us required as that anticipated for As to expect which first the

for accounting final the provide will filings quarter third Our dispositions. these

Turning to guidance.

$X items, to increasing XXXX and thus our excluding the diluted from raising guidance are FFO specified narrowing specified to $X.XX per diluted $X.XX midpoint $X.XX range $X.XX from We $X.XX full share excluding items, share. to to year per share per diluted

activity. items financing otherwise of connection It or and consist in impact speculative of dispositions, identified unannounced excludes first capital the market Specified acquisitions, our results. those with quarter

As our to respectively. cash NOI I'll increased noted the earlier, midpoint X.X% Victor. same-store to over studio and X.X%, back we growth office have again and call that, assumption turn With

Victor Coleman

Thanks, remain bullish media year-end. runway through the our portfolios Mark. our studio or with by us of and the recycling, capital leasing, the strength growth To tenants whether close, on on of and perfect markets markets outsized driven priorities, office we business provide across to tech otherwise. The performance our board of execute continued capital the

to recognition team. the to like call Pacific I'd close special Hudson giving the by

organization exceptional the so on remarkable. across talent Pacific's how markets head to embody back strive we proud day-to-day as responsibilities. a public company, have and mission us our our throughout and into our that the extraordinary borders. at of unique growth of look our the As vibrant I'm XXth year and truly Hudson I vision we It's culture, all assets, and

To updating And with your forward next everyone that, listening, operator, support. questions. We we line you look for appreciate open to the quarter. let's

Operator

first of America. you the [Operator line Instructions] questions Thank from of with are Feldman Jamie Bank Our

Jamie Feldman

the just clean I what X to and to talk service. apple-to-apple I'm know I in you studio portfolio going number the same-store you. guess NOI comparison. is curious just thank in year-over-year? can had like of a decline Great you start, out look kind of the studio about

Victor Coleman

Well, service, the the simple sort Jamie, same-store. on explanation everything was but in of focused

Eleanor. which you're correct. flowing partly of are year-over-year the through small difference running cost. That's X.X XX,XXX million Those what is properties not same-store, roughly the driven I the the But think through square feet largely feet. same-store, saying is the two is elevated off fixed

it expense expenses. that's a in not for happens MD&A, quarter quarter, million a parking the R&M to we've services with our regularly elevate at in though call happen that. wanting finding about and to operating contributing longer-term recurring. associated security have on these $X.X that's current with services, the run service janitorial like example, be to in so our certain rate just of higher look level you also basis, keeping we higher enhanced kind If probably as And of deals It services, services, going

that. So we had somewhat higher with elevated expenses associated

see activity It lower with keeping million Meanwhile, the quarter was lower slowing to which revenue to the not less in a second but other last to property is of property related relative happened We last year quarter of second production year, than the related in uncommon. in considerably typically cycles. the just in that tune other be revenue. $X production about

lower the So on of decline year-over-year NOI in and revenue studios. expenses combination the higher elevated that the the to production contributed

Jamie Feldman

very what a occupancy year of gears in that of follow-through And this can market market the you to think or looks like? pickup out and kind you next you Peninsula look I two the quarter improved long than much, continue? in nice upbeat do is in you do how conditions more And then Valley if How sound mean guys think the here? the market lot Silicon What peers. certainly, switching your some

Victor Coleman

Peninsula Jamie, in subleased the a rent I quarter-over-quarter growth the currently in massive and XX% seen has mean any marketplace. decline space today

down happening. are aerospace, And we demand shortly. on cyber what going there. a side. we said the the There's coming to going investment mean VC is no With pre-leased about exactly this so we've on long the on still for city, But space demand to ending new growth And the was time. it's logistics, it's the moving currently a we're happen still if tremendous There's is AI. basis. It's I been anytime the online, product security, prospects in talking see Peninsula. XX% there this looking, don't tremendous

mean facilities, growth XX and don't Facebook future. seeing the next all. future as the At well at foreseeable Google around the in we're also I it's expansion for months, campus so any decline see positive we the least

Jamie Feldman

stake? And then submarkets expand to are other there a for value-add of more want you'd into

Victor Coleman

No. California? In

Jamie Feldman

in or on the Even Peninsula Valley? the

Victor Coleman

No. Francisco. pretty centers I comfortable think we're mean San improving in I

the continually focus seems going that we're be that to think area to I on.

Jamie Feldman

for me; And Washington? details XXXX some and timing can and you in finally terms of spend Bentall then for provide

Victor Coleman

is disclosure Well, XXXX Washington, page there which document on XX. right in the

there. right it's So

We the going demand vacancy very the square I current now. in X.X as feet. X.X that we And mean it's we're of it's Downtown sort heard. you there be are are feet high earliest, The sub-X% remarks the Vancouver, in to late is right the early in terms demand it's not starting in Bentall, of million phases 'XX. prepared of evaluating of million demand. square And of CBD terms

a months approved which something could is, know, so guess, XX that guess I 'XX, fully we of quarter now to My have is I first We break maybe, round. effect. don't site, from like

Operator

Our are Scotiabank. line from Nick the of next questions with Yulico

Nick Yulico

mind And on overall, other XX, update the the thinking as Sunset those up that thinking just following you development of could projects about all future we're development I Gower, couple a and start, Do funding you're there, these giving Cloud Just development. when additional pipeline projects, an on how about start? those. guess might

Victor Coleman

Nick, The Let I as of phases ground square reiterate. now. that's we said, me to just unless sort but is, there feet, break design XX leasing. not a substantial We're going in that build-to-suit. know, we're it's project, what going percentage don't But to Cloud XXX,XXX-plus be

say pre-leased do we would before would that. XX%-plus I So

well We design of have a right that that you market And a know, final asset. now. of there lot has as demand

or probably process through should And the so entitlement we days right there. we're now. completed so, In I the think XXX be next

be Gower, of for completed XXXX Sunset assets. should both terms the entitlement of In by QX

today, I a number our open to think a filming. a other interest studio to of accommodate of issues it's also and transaction That There we the things in before that. feet there's and square leasing we're will parking on also well. has to be the on on XXX,XXX moving happen that And And Gower be as pre-leased in team another that with at on ground currently square XXX,XXX feet in recall, terms some lot got one you has then the If is working that. break facilities around Sunset. that of space building of energy some tower needs

substantially So optimistic pre-leased. that can by that I of we're the should take ready at time. said, XXXX out, combination or same development where the time go, us We're with getting we'll have But we to that that, all though. as the to start

Mark sheet, balance into Our can it. dig

As got, other, we today. of look capacity as balance a or going We're sheet closed, also at the just you said, looking We've category. forward. we're lot two maybe in We're got on may terms of our an that very comfortable that into disposition looking at and know, leverage asset we've we campus. with at capacity fall

need we so we're projects any current that don't at looking now. the equity, And for equity, right additional

Nick Yulico

we like earnings think just sounds look mean I you that It kind I how some mean about that? thinking of about it's of prefund are as you would to development? managing dilution,

Victor Coleman

You other cost mean I some nothing well, soft else. architectural mean entitlements. and than No, architectural

Nick Yulico

just with like could Or could asset-scale for could pipeline? you look development you ahead and development an sell the that capital standpoint, spend. the assets larger be from required to try tie meant I up spend of what

Victor Coleman

They're exclusive. not mutually

they're we're or opportunities exclusive. look we're the in demand an I we'll if those going going in around and not going to as the not there's that. assets. mutually at future the I said, And to think we there's are the going -- we're don't accretion that for think leasing marketplaces, forward assets the opportunity development Nick, grow portfolio But that sell to

Nick Yulico

that are we with now at deals it And want we And follow And should I in office helpful, other some, looking looking could studio markets? partnership? How Victor. additional that only I Vancouver. right mentioned Vancouver Blackstone think What's, you're relationship is that in at about that's should you up. mean just some you Okay. you have to view and how

Victor Coleman

relationship. do it in Hey, a the listen. mutually transaction us I mean Obviously, synergistic But lot sense Vancouver. of Blackstone appetite agreeable makes a think to together. and Hudson great have is for I

looking other two in Seattle in have the deals and partners and Allianz We JV that with CPP are us. for in Area more great Bay

project-by-project do business be capital fortunate driven. not engaged have going Hudson. standpoint And It's But want so to partners it's going we're and some forward. more with I transactional think some great who programmatic to to are

Nick Yulico

right All appreciate it.

Operator

line Our questions of with Goldfarb Alexander O'Neill. from next are Sandler the

Alexander Goldfarb

out morning good there. Hey

that's an a Just land first, the questions, that not entry, few including just right? FFO, part quick in really gain but it's in right? not as of it's Mark, you just that That's accounting FFO, about, you're spoke

Mark Lammas

Correct.

Alexander Goldfarb

think to And are production you do a Jamie's schedule. a more then getting elevated two term. the consistent push And of you're out. have They thought cost. that do the the renting understand you those annualized guys having with that were in, question I to each other would the sort leasing don't of level studio move that I and studios, big increasing expenses. making they revenue -- just annualized raises and to offset full offset more more would the service that's back I the But shoot, move would But going

will level comment it's more. maybe next expenses that little can year So bit and up you're curious if just you ramping But year-over-year a out. those just

Mark Lammas

Well, providing that downtime steadying though from year-over-year whether point. is look in increases higher decline rental is and not nice second on. and had associated which that actually, long-term property-related even if that the year-over-year quarter you're, at lack the longer-term basis other on benefits agreements rental of your actually substantial all the Those revenue is tenant And revenue, we revenue. a and different I slightly It's results, production. a you'll is were you're actually different the are and actually the with of those just annual mean in or stability for dead in quarterly contracts a see revenues exactly you

that the revenue. the item, other other property-related that one production it's line And drives activity

clearly That overall production. will, not no decline associated lift, get you if revenue. that to we It's did with So saw is in it the the revenue providing is the we of just benefit. higher say

Alexander Goldfarb

and articles is your seem that others back the And market Bellevue investment will But Victor, the come then finally, just mentioned Bellevue. a presumably that in quarter, doing to the it last growth Amazon you on big make going do out, market. comments just

there set is in change at look So your potential invest? versus would would it Seattle that versus that make there are that as doesn't it a that certain to in guys as what point starting that things of as the Or compare far Seattle are limitations competitive to your attractive you Bellevue to make view focus?

Victor Coleman

so we last I at Seattle. quarter, independent as Alex, Well, are mentioned Bellevue looking of

not So that did at other. the right it's one We a currently traded. there evaluate or a now. project actually looking We're transactions couple of have the

a it's because so our will in at look And Northwest. of Pacific consistently marketplace that we presence the

I asking would preference think which if in opportunities are There is be more you the were preference, Bellevue. in Seattle, limited opportunities.

competitive in so are going seeing be more Seattle to see it's we limited there's are opportunities. given fact lot more continue and going and opportunities And that the work There on. to a we're that to

Operator

next Heck from the are Our questions line with of Fargo. Blaine Wells

Blaine Heck

be Victor, the in seem great Fundamentals in market. to I to strategy ask about wanted Vancouver. longer-term the just

the more of space But renovation guys I in opportunity how a little work of do seeing some past market? the to that, tightly office think And held a build. have are guys small the you you have to deals happening to many on and You of kind about Bentall there. you that's going the such guess acquire bit market? opportunity I And guess be activity at do with to

Victor Coleman

question. a great It's

As said, office a we're of deals. I today looking currently at couple

right there deals studio the of some on time now. more spending are We

opportunity equally as acquire the excellent think we're The do have more be to will Blaine, there. are I to And that on we that. weighing fundamentals, energy so in mentioned, our you going Vancouver.

of think of has to this, I the I going in think because going some my be a as we us I it, Bentall. do resting their in marketplace dare tremendous publicly being be to do it's laurels. work low-hanging I is differentiator And prior fruit. mentioned to really But comments been a on amount have part some competition, on at the say, of it's

And we're see going make facto will to doing we by deals. impact. an And so, to de try

there. confident our of you now. you portfolio. a marketplace, going we'll sort new guys going both marketplace, we're on. we're studio enter confident know, gets a right office new it at that that well I'm that think what's grow the grow as And side. I'm when I any active and So And that's on the at shot the advantage to And

Blaine Heck

And then a just quick one. second

I didn't we that guess of the to Mill out third quarter quarter? little move come bit be think in I expect an Stanford this a occupancy but to occupancy Health had down. headwind at Page should

Victor Coleman

So yes, you're They repositioning right? space, didn't out, the process right. move in the We're of

our space, We're market ready. kind making exterior the interior, areas, of we've to like common the it space done advertising and the doing improvements the an also across portfolio.

two-third on feet feel to activity have about We XX,XXX good that We of space right pretty property, now. XX,XXX square of that prospect.

Blaine Heck

guys. it Got thanks

Operator

Citi. from next line with our of And questions Korchman Emmanuel the are

Emmanuel Korchman

Netflix markets. has studio about there been out talking their increasing exposure in other

any the interest two You at see if Day? Investor and have spoke outside of guys ones in your in the those thoughts past last going tie spoke about expanding for you we the market. about together you Can

Victor Coleman

is interested than not conversations We're mean going such relationship them. that Manny, spending be think looking clearly, And sure we beyond no. be markets, right continue I three some in studio expanding talked markets. we the we've York. looking in Well, have those conversations. that said just we're looking that with to in we're Netflix And same that Vancouver looking are Toronto. in if I is mean, will of in and But Vancouver, would to publicly they're all And it's other markets, because look three to Netflix of in. markets, I'm are there markets. know those I we're that on. those markets now, we're those in energy in in going I New

of definitely Vancouver them. desire, is On the one immediate

moving do is here they it some going to as whether being L.A. United Atlanta to And current not and deter us It's the want some going impact Toronto, those it's of to It's in It's the to in move Atlanta, Vancouver. not. interesting now from we markets, to changes in to of New There States to had such moving the like York. or markets projected.

us. impact, going seeing that to that's only and benefit you're So

Emmanuel Korchman

the time with capital of think think it much And best and how a to about just second and going about it can think to take what's you to that then into have own will that sort do if for commitment for investing you about Bentall a that, reposition and we fund market? work asset the the while we are another and the there for

Victor Coleman

are own while? going say for we you little Do a it to

Emmanuel Korchman

going Are -? to No. you

Victor Coleman

Yes.

and some listen, immediate be need is immediate in need, it. the So have office the the repositioning we're the because now going we lease-up, right But we're lobbies. doing on the side doing and on to detail some

X about looks $XX million. spend like smaller, year about roughly is then $X so around the is year And million. And much three same. two Year

typical of that's what we're doing. So

think retail, a in because plan our of go we down. a portion going the to we're don't in plan decide of build, It's of to when retail. terms take I terms to going we budgetary the straight have

So do we now of on would not tower space and a and build way in is out either because then it not tower have as that portion that work actually retail it. tear we going the the the

by a and of the plan is out think year. the team in already So is with for of the the areas. on common that overall And budget probably end retail the come what process I the we'll

Operator

Daniel questions of Ismail line Street next Our from Green Instructions] [Operator Advisors. are with the

Daniel Ismail

you Just those rent markets? growth then concession call gave in the Can comment at rents of the the maybe more the markets. rental on information you out and frame of you in effective on terms net year-over-year beginning gave the

Victor Coleman

Yes.

Dan, typically for sort of where as a the call, growth year. is every state rent project we to sort So give of I

that I year. the we're just go we're rent and So of a we're more the you can numbers, our terms L.A., this of region I'll Obviously, growth of, in we're halfway halfway the to growth a the call, through year. still in through remainder of X%, of year. we San sort consistent at looking for X% is range region, X% at rent X%-plus. through Francisco, were tell

we about think of stuff XX%. X%. the sort we're it's I sort doing like look to said to was will it The growth closer of a more that's rent XX%. X% of projection It year-end Peninsula, right had approaching now, like

forward going to there clearly comfortable pretty was X% X%. that's to on we're seeing a even given bit probably demand Seattle, I a now, I'm basis. it What higher, that think maybe consistent. little with right but X% X% the

rent I could And X% to Vancouver, haven't in that, think I at that of And pegged yet, on think that fact be to it it's marketplace. right now we're the light we X%. given to looking closer X% that vacancy. going it's we an a being growth sort sub-X%

the otherwise, it's X terms a a concession, constant of constant going In tell you concessions on. guys both of rent. forward, I markets, listen, in of what's month levels on regardless it's me all going free year Unless a think

$XX? seen any haven't do that to $XX, it's seeing another just so CBD, to and closer that. on we up $XX, was Francisco movement pushing to Los $X the as guys? think we're think And now, I or $XX Angeles number, specific San closer really which You TIs $XX,

Mark Lammas

That's about it.

Victor Coleman

in moved think haven't consistent I at $XX we move foot. are less that more Peninsula at And think But I Seattle. And a think number benchmark we a substantially that I maybe that, don't Vancouver. in TIs the like new they're been the But the really has TIs, $XX $XX, the $XX. number has like pushing seen TI than in TIs $XX, on all to don't much. put

So gives you of range. that a sort

about which that would that XX-plus is we're new or what de talking Obviously, known old. facto Daniel, space the call new either space it's is we here space, years

than our amount driving in equal for tenants putting the in But what of we're money factor that also putting So putting tremendous greater a tenants in. are the that large putting the most they're because are we're or there's space. part,

So that's that's of going to forward. enhancement where going the go

Daniel Ismail

Maybe switching an Can the at the expectations NOI year maybe I beginning and appreciate the growth helpful. for office your progressing the 'XX you that's in give terms relative non-same-store cash expectations of for portfolio. update of to to how from That's non-same-store it. portfolio?

Mark Lammas

Yes.

in growth. non-same-store tell year-over-year that with were year-over-year as think February. growth level, can maybe is expectations surrounding first in can as our we kind prepared growth. we tracking recollection of are And forecasting remarks the I from I staring even I XX% high around my cash that had we tell the provided we the you non-same-store. the today that at sit I'm And some not in quarter, mid-XX% somewhere non-same-store commentary But you mid-, somewhere consistent

Daniel Ismail

permanent little We the a last for or a And side bit. quick on then declined maybe noticed that the savings? one office expense a a growth me. expense just Was temporary phenomenon

Mark Lammas

board. savings across expense the some were call there No, I temporary. wouldn't Yes. it

quite noticing same-store level say, at be won't will you're as it think lower, I the in, It off a as much year-over-year decline.

Some of all the hold of it balance on it through will the though, year not perhaps though.

Operator

Coleman to our to Victor turn I'd back like question-and-answer closing comments. for the concludes session. This over floor

Victor Coleman

And rest you a we much quarter. next so good the for your forward speaking participation. Have look to you all summer. to of Thank

Operator

This concludes teleconference. today’s

thank You may your for time lines your this disconnect participation. and you at

Hudson Pacific Properties (HPP) 3 Aug 192019 Q2 Earnings call transcript