Hudson Pacific: Occupancy Soars, Debt Plummets

Hudson Pacific Properties (HPP) has concluded its third quarter with significant leasing progress and enhanced financial standing. The company achieved its fifth consecutive quarter of occupancy growth, with in-service office occupancy climbing to 85.6%. This positive trend was accompanied by a substantial 14% year-over-year reduction in total debt, now standing at $2.7 billion, achieved through strategic asset dispositions and note repurchases.

Leasing activity was robust, driven largely by the San Francisco Bay Area, with tech tenants comprising a notable portion of the demand. This led to an 8.3% year-over-year increase in same-store cash Net Operating Income (NOI). HPP also reported improved Core FFO per share of $0.28 and raised its full-year guidance to $1.15-$1.21 per diluted share, reflecting a narrowed and increased outlook.

The studio segment showed signs of stabilization, with improved production spending in New York and potential legislative support in California. Proposed increases to film and television tax credits aim to bolster production activity. HPP also made progress on converting office space to residential units in San Francisco, with 164,000 square feet entitled for conversion at 901 Market.