On November 1, 2023, Hudson Pacific Properties Inc (HPP, Financial), a leading provider of end-to-end real estate solutions for dynamic tech and media tenants, announced its financial results for the third quarter of 2023. The company reported a total revenue of $231.4 million, a decrease from $260.4 million in the same period last year. The decline in revenue was primarily due to the sales of 6922 Hollywood, Skyway Landing, and Northview Center, as well as tenant move-outs at Skyport Plaza and 10900-10950 Washington.
Financial Performance
The company reported a net loss attributable to common stockholders of $37.6 million, or $0.27 per diluted share, compared to a net loss of $17.3 million, or $0.12 per diluted share, in Q3 2022. The increased net loss was due to the aforementioned asset sales and tenant move-outs, higher operating expenses associated with the Quixote acquisition, and higher interest expense.
HPP's Funds from Operations (FFO), excluding specified items, stood at $26.1 million, or $0.18 per diluted share, compared to $74.1 million, or $0.52 per diluted share, in the same period last year. The company's Adjusted Funds from Operations (AFFO) was $28.1 million, or $0.20 per diluted share, compared to $55.8 million, or $0.39 per diluted share, in Q3 2022.
Leasing and Transactions
In Q3 2023, HPP executed 53 new and renewal leases totaling 519,167 square feet. The company's in-service office portfolio ended the quarter at 81.3% occupied and 83.1% leased. The company also sold two office properties in Los Angeles and Santa Monica, California, for $40.0 million and $32.5 million, respectively, before closing adjustments.
Balance Sheet and Dividend
As of September 30, 2023, HPP had total liquidity of $555.0 million, comprised of $75.0 million of unrestricted cash and cash equivalents, and $480.0 million of undrawn capacity under the unsecured revolving credit facility. The company's Board of Directors suspended payment of a quarterly dividend on its common stock and declared and paid a dividend on its 4.750% Series C cumulative preferred stock of $0.296875 per share.
Outlook
Due to continued uncertainty around the duration of the studio-related union strikes, HPP has not reinstated its outlook for 2023 full-year FFO or studio-related assumptions. However, the company continues to focus on deleveraging and further fortifying its balance sheet while proactively managing its debt maturities.
Explore the complete 8-K earnings release (here) from Hudson Pacific Properties Inc for further details.
