Hudson Pacific Properties, Inc. Q2 FY2025 earnings call

• Leasing & Market Trends: Leasing resulted in 1.2M sq ft of office leases year-to-date, on pace for strongest office leasing year since 2019. West Coast markets, led by AI and tech, showing recovery. AI tenants represent 10% of ABR in Bay Area, with runway to expand. - Studio Business: Pilot shoot days up, 134 productions in active development in CA second quarter. CA film tax credit doubled, expect increased allocation activity. - Asset Sales: Completed sale of 625 Second for $28M, pursuing disposition of noncore assets. - Financial Actions: Over $1B liquidity, refinancing 2025 maturity underway, executed on cost profile enhancements, including G&A improvement and studio business streamlining.

Office Segment: Signed 558,000 square feet of office leases in the quarter, 60% new leases and 60% in Bay Area. Improved occupancy across major markets; SF had largest quarter occupancy increase in 7 years. Silicon Valley occupancy improved for third consecutive quarter. Year-to-date, 1.2 million square feet of office leases signed, on pace for strongest office leasing year since 2019. Studio Segment: Pilot shoot days up 11% year-to-date and 48% trailing 12-month. 134 productions in active development in CA second quarter. $375 million allocated under previous CA film tax credit in first half 2025, with 51 allocations in June. California tax credit doubled to $750 million, expect increased allocation activity. Revenue from studios increased 3% to $34.2 million quarter-over-quarter, expenses decreased 11% to $36.6 million, resulting in $5.4 million improvement in studio NOI.

• Third Quarter: Expect FFO per diluted share to range from $0.01 to $0.05 per share, driven by full quarter impact of deleveraging post-equity offering, partially diluted by higher weighted average share count. - Full Year: Anticipate interest expense $168M - $178M, G&A expense $57.5M - $63.5M. Same-store cash NOI range negative 11.5% to 12.5% (includes Metro Center office property).

• Potential tenant credit issues affecting occupancy recovery. - Market uncertainties, including tariff impacts on AI and tech sectors. - Variability in studio production activity impacting studio revenue and NOI.

Q: Third quarter guidance and studio business impact?

A: Studio business activity a key X factor; stronger activity can push towards higher end of FFO guidance, weaker activity towards lower end.

Q: Washington 1000 activity and differentiation?

A: Exploring multifloor tenants, 3 - 5 tenants over 100k sq ft in negotiations, building is state-of-the-art new construction with no immediate competition, favorable for multi-tenant deals.

Q: Same-store NOI guidance and occupancy correlation?

A: Occupancy bottomed out, steady march of positive net absorption expected to first materialize in GAAP same-store NOI, then cash rents.