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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________

FORM 10-Q

______________________________________

x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019 

or

o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number: 001-34789 (Hudson Pacific Properties, Inc.)

Commission File Number: 333-202799-01 (Hudson Pacific Properties, L.P.)

______________________________________

11601 Wilshire Blvd., Ninth Floor Los Angeles, California 90025
(Address of principal executive offices) (Zip Code)

(310) 445-5700

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

______________________________________ 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    

Hudson Pacific Properties, Inc. Yes  x   No  o			Hudson Pacific Properties, L.P. Yes  x   No  o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    

Hudson Pacific Properties, Inc. Yes  x   No  o			Hudson Pacific Properties, L.P. Yes  x   No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Hudson Pacific Properties, Inc.

Hudson Pacific Properties, L.P.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Hudson Pacific Properties, Inc. o			Hudson Pacific Properties, L.P. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   

Hudson Pacific Properties, Inc.  Yes  o    No  x			Hudson Pacific Properties, L.P. Yes  o    No  x

The number of shares of common stock of Hudson Pacific Properties, Inc. outstanding at May 1, 2019 was 154,375,000.

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended March 31, 2019 of Hudson Pacific Properties, Inc., a Maryland corporation, and Hudson Pacific Properties, L.P., a Maryland limited partnership. Unless otherwise indicated or unless the context requires otherwise, all references in this report to “we,” “us,” “our,” or “our 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 “our operating partnership” or “the operating partnership” refer to Hudson Pacific Properties, L.P. together with its consolidated subsidiaries.

Hudson Pacific Properties, Inc. is a real estate investment trust, or REIT, and the sole general partner of our operating partnership. As of March 31, 2019, Hudson Pacific Properties, Inc. owned approximately 99.2% of the ownership interest in our operating partnership (including unvested restricted units). The remaining approximately 0.8% interest was owned by certain of our executive officers, directors and outside investors, including unvested operating partnership performance units. As the sole general partner of our operating partnership, Hudson Pacific Properties, Inc. has the full, exclusive and complete responsibility for our operating partnership’s day-to-day management and control.

We believe combining the quarterly reports on Form 10-Q of Hudson Pacific Properties, Inc. and the operating partnership into this single report results in the following benefits:

•enhancing investors’ understanding of our Company and our operating partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

•eliminating duplicative disclosure and providing a more streamlined and readable presentation because a substantial portion of the disclosures apply to both our Company and our operating partnership; and

•creating time and cost efficiencies through the preparation of one combined report instead of two separate reports.

There are a few differences between our Company and our operating partnership, which are reflected in the disclosures in this report. We believe it is important to understand the differences between our Company and our operating partnership in the context of how we operate as an interrelated, consolidated company. Hudson Pacific Properties, Inc. is a REIT, the only material assets of which are the units of partnership interest in our operating partnership. As a result, Hudson Pacific Properties, Inc. does not conduct business itself, other than acting as the sole general partner of our operating partnership, issuing equity from time to time and guaranteeing certain debt of our operating partnership. Hudson Pacific Properties, Inc. itself does not issue any indebtedness but guarantees some of the debt of our operating partnership. Our operating partnership, which is structured as a partnership with no publicly traded equity, holds substantially all of the assets of our Company and conducts substantially all of our business. Except for net proceeds from equity issuances by Hudson Pacific Properties, Inc., which are generally contributed to our operating partnership in exchange for units of partnership interest in our operating partnership, our operating partnership generates the capital required by our Company’s business through its operations, its incurrence of indebtedness or through the issuance of units of partnership interest in our operating partnership.

Non-controlling interest, stockholders’ equity and partners’ capital are the main areas of difference between the consolidated financial statements of our Company and those of our operating partnership. The common units in our operating partnership are accounted for as partners’ capital in our operating partnership’s consolidated financial statements and, to the extent not held by our Company, as a non-controlling interest in our Company’s consolidated financial statements. The differences between stockholders’ equity, partners’ capital and non-controlling interest result from the differences in the equity issued by our Company and our operating partnership.

To help investors understand the significant differences between our Company and our operating partnership, this report presents the consolidated financial statements and Note 14—Earnings Per Share separately for our Company and our operating partnership. All other sections of this report, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk,” are presented together for our Company and our operating partnership.

In order to establish that the Chief Executive Officer and the Chief Financial Officer of each entity have made the requisite certifications and that our Company and our operating partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, or the Exchange Act and 18 U.S.C. §1350, this report also includes separate Part I, Item 4 “Controls and Procedures” sections and separate Exhibit 31 and 32 certifications for each of Hudson Pacific Properties, Inc. and our operating partnership.

Page

PART I—FINANCIAL INFORMATION

ITEM 1.

Financial Statements of Hudson Pacific Properties, Inc.

Consolidated Balance Sheets as of March 31, 2019 (unaudited) and December 31, 2018

5

Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2019 and 2018

6

Consolidated Statements of Comprehensive (Loss) Income (unaudited) for the three months ended March 31, 2019 and 2018

7

Consolidated Statements of Equity (unaudited) for the three months ended March 31, 2019 and 2018

8

Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2019 and 2018

9

ITEM 1.

Financial Statements of Hudson Pacific Properties, L.P.

Consolidated Balance Sheets as of March 31, 2019 (unaudited) and December 31, 2018

10

Consolidated Statements of Operations (unaudited) for the three months ended March 31, 2019 and 2018

11

Consolidated Statements of Comprehensive (Loss) Income (unaudited) for the three months ended March 31, 2019 and 2018

12

Consolidated Statements of Capital (unaudited) for the three months ended March 31, 2019 and 2018

13

Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2019 and 2018

14

Notes to Unaudited Consolidated Financial Statements

15

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

40

ITEM 3.

Quantitative and Qualitative Disclosures About Market Risk

56

ITEM 4.

Controls and Procedures

56

PART II—OTHER INFORMATION

ITEM 1.

Legal Proceedings

58

ITEM 1A.

Risk Factors

58

ITEM 2.

Unregistered Sales of Equity Securities and Use of Proceeds

58

ITEM 3.

Defaults Upon Senior Securities

59

ITEM 4.

Mine Safety Disclosures

59

ITEM 5.

Other Information

59

ITEM 6.

Exhibits

60

Signatures

61

PART I—FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS OF HUDSON PACIFIC PROPERTIES, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

 

			March 31, 2019 (unaudited)						December 31, 2018
ASSETS
Investment in real estate, at cost			$	6,990,420					$	7,059,537
Accumulated depreciation and amortization			(739,334)						(695,631)
Investment in real estate, net			6,251,086						6,363,906
Cash and cash equivalents			52,445						53,740
Restricted cash			13,626						14,451
Accounts receivable, net			17,969						14,004
Straight-line rent receivables, net			159,004						142,369
Deferred leasing costs and lease intangible assets, net			280,193						279,896
U.S. Government securities			144,992						146,880
Operating lease right-of-use asset			272,051						—
Prepaid expenses and other assets, net			82,441						55,633
Assets associated with real estate held for sale			99,821						—
TOTAL ASSETS			$	7,373,628					$	7,070,879
LIABILITIES AND EQUITY
Liabilities
Unsecured and secured debt, net			$	2,711,632					$	2,623,835
In-substance defeased debt			137,417						138,223
Joint venture partner debt			66,136						66,136
Accounts payable, accrued liabilities and other			208,047						175,300
Operating lease liability			274,626						—
Lease intangible liabilities, net			41,112						45,612
Security deposits and prepaid rent			69,251						68,687
Liabilities associated with real estate held for sale			732						—
Total liabilities			3,508,953						3,117,793
Redeemable preferred units of the operating partnership			9,815						9,815
Redeemable non-controlling interest in consolidated real estate entities			114,616						113,141
Equity
Hudson Pacific Properties, Inc. stockholders’ equity
Common stock, $0.01 par value, 490,000,000 authorized, 154,373,581 shares and 154,371,538 shares outstanding at March 31, 2019 and December 31, 2018, respectively			1,543						1,543
Additional paid-in capital			3,485,307						3,524,502
Accumulated other comprehensive income			9,674						17,501
Accumulated deficit			(41,189)						—
Total Hudson Pacific Properties, Inc. stockholders’ equity			3,455,335						3,543,546
Non-controlling interest—members in consolidated entities			267,039						268,246
Non-controlling interest—units in the operating partnership			17,870						18,338
Total equity			3,740,244						3,830,130
TOTAL LIABILITIES AND EQUITY			$	7,373,628					$	7,070,879

The accompanying notes are an integral part of these consolidated financial statements.

HUDSON PACIFIC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except share data)

			Three Months Ended March 31,
			2019						2018
REVENUES
Office
Rental (Note 2)			$	170,197					$	130,082
Tenant recoveries (Note 2)			—						20,904
Service revenues (Note 2)			5,661						5,546
Total office revenues			175,858						156,532
Studio
Rental (Note 2)			12,394						10,383
Tenant recoveries (Note 2)			—						354
Service revenues and other (Note 2)			9,137						6,849
Total studio revenues			21,531						17,586
Total revenues			197,389						174,118
OPERATING EXPENSES
Office operating expenses			60,815						53,240
Studio operating expenses			11,109						9,664
General and administrative			18,094						15,564
Depreciation and amortization			68,505						60,553
Total operating expenses			158,523						139,021
OTHER EXPENSE (INCOME)
Interest expense			24,350						20,503
Interest income			(1,024)						(9)
Transaction-related expenses			128						118
Other expense (income)			106						(404)
Gains on sale of real estate			—						(37,674)
Impairment loss			52,201						—
Total other expense (income)			75,761						(17,466)
Net (loss) income			(36,895)						52,563
Net income attributable to preferred units			(153)						(159)
Net income attributable to participating securities			(308)						(327)
Net income attributable to non-controlling interest in consolidated real estate entities			(2,821)						(3,323)
Net loss attributable to redeemable non-controlling interest in consolidated real estate entities			600						—
Net loss (income) attributable to non-controlling interest in the operating partnership			185						(177)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS			$	(39,392)					$	48,577
BASIC AND DILUTED PER SHARE AMOUNTS
Net (loss) income attributable to common stockholders—basic			$	(0.26)					$	0.31
Net (loss) income attributable to common stockholders—diluted			$	(0.26)					$	0.31
Weighted average shares of common stock outstanding—basic			154,396,159						155,626,055
Weighted average shares of common stock outstanding—diluted			154,396,159						156,714,822

The accompanying notes are an integral part of these consolidated financial statements.

HUDSON PACIFIC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(unaudited, in thousands)

			Three Months Ended March 31,
			2019						2018
Net (loss) income			$	(36,895)					$	52,563
Other comprehensive (loss) income: change in fair value of derivatives			(7,864)						9,513
Comprehensive (loss) income			(44,759)						62,076
Comprehensive income attributable to preferred units			(153)						(159)
Comprehensive income attributable to participating securities			(308)						(391)
Comprehensive income attributable to non-controlling interest in consolidated entities			(2,821)						(3,323)
Comprehensive loss attributable to redeemable non-controlling interest in consolidated real estate entities			600						—
Comprehensive loss (income) attributable to non-controlling interest in the operating partnership			222						(211)
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS			$	(47,219)					$	57,992

The accompanying notes are an integral part of these consolidated financial statements.

HUDSON PACIFIC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited, in thousands, except share data)

			Hudson Pacific Properties, Inc. Stockholders’ Equity																														Non-controlling interest
			Shares of Common Stock			Stock Amount			Additional Paid-in Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Income						Units in the operating partnership			Members in Consolidated Entities			Total Equity
Balance, December 31, 2017			155,602,508			$	1,556		$	3,622,988		$	—		$	13,227					$	14,591		$	258,602		$	3,910,964
Cumulative adjustment related to adoption of ASU 2017-12			—			—			—			(231)			230						1			—			—
Contributions			—			—			—			—			—						—			2,691			2,691
Distributions			—			—			—			—			—						—			(1,060)			(1,060)
Proceeds from sale of common stock, net of underwriters discount and transaction costs			—			—			(173)			—			—						—			—			(173)
Issuance of unrestricted stock			43,900			—			—			—			—						—			—			—
Shares withheld to satisfy tax withholding			(20,353)			—			(693)			—			—						—			—			(693)
Declared dividend			—			—			—			(39,173)			—						(178)			—			(39,351)
Amortization of stock-based compensation			—			—			3,551						—						1,019			—			4,570
Net income			—			—			—			48,904			—						177			3,323			52,404
Change in fair value of derivatives			—			—			—			—			9,479						34			—			9,513
Balance, March 31, 2018			155,626,055			$	1,556		$	3,625,673		$	9,500		$	22,936					$	15,644		$	263,556		$	3,938,865
Balance at December 31, 2018			154,371,538			$	1,543		$	3,524,502		$	—		$	17,501					$	18,338		$	268,246		$	3,830,130
Cumulative adjustment related to adoption of ASC 842			—			—			—			(2,105)			—						—			—			(2,105)
Distributions			—			—			—			—			—						—			(4,028)			(4,028)
Issuance of unrestricted stock			128,923			1			(1)			—			—						—			—			—
Shares withheld to satisfy tax withholding			(126,880)			(1)			(3,667)			—			—						—			—			(3,668)
Declared dividend			—			—			(39,241)			—			—						(1,186)			—			(40,427)
Amortization of stock-based compensation			—			—			3,714			—			—						1,465			—			5,179
Net (loss) income			—			—			—			(39,084)			—						(185)			2,821			(36,448)
Change in fair value of derivatives			—			—			—			—			(7,827)						(37)			—			(7,864)
Redemption of common units in the operating partnership			—			—			—			—			—						(525)			—			(525)
Balance at March 31, 2019			154,373,581			$	1,543		$	3,485,307		$	(41,189)		$	9,674					$	17,870		$	267,039		$	3,740,244

The accompanying notes are an integral part of these consolidated financial statements.

HUDSON PACIFIC PROPERTIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

			Three Months Ended March 31,
			2019						2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income			$	(36,895)					$	52,563
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization			68,505						60,553
Non-cash portion of interest expense			1,591						1,658
Amortization of stock-based compensation			5,150						4,338
Straight-line rents			(16,635)						(9,942)
Straight-line rent expenses			366						136
Amortization of above- and below-market leases, net			(4,179)						(3,811)
Amortization of above- and below-market ground lease, net			615						624
Amortization of lease incentive costs			326						303
Other non-cash adjustments			—						256
Impairment loss			52,201						—
Gains on sale of real estate			—						(37,674)
Change in operating assets and liabilities:
Accounts receivable			(4,263)						(1,782)
Deferred leasing costs and lease intangibles			(13,675)						(6,614)
Prepaid expenses and other assets			2,771						3,313
Accounts payable, accrued liabilities and other			33,004						(33)
Security deposits and prepaid rent			564						559
Net cash provided by operating activities			89,446						64,447
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to investment in real estate			(94,615)						(103,512)
Maturities of U.S. Government securities			1,932						—
Proceeds from sale of real estate			—						237,004
Deposits for property acquisitions			(35,584)						—
Net cash (used in) provided by investing activities			(128,267)						133,492
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from unsecured and secured debt			430,001						130,000
Payments of unsecured and secured debt			(335,145)						(308,529)
Payments of in-substance defeased debt			(806)						—
Proceeds from issuance of common stock, net			—						(173)
Repurchase of common units in the operating partnership			(525)						—
Dividends paid to common stock and unit-holders			(40,427)						(39,351)
Dividends paid to preferred unit-holders			(153)						(159)
Contribution of redeemable non-controlling member in consolidated real estate entities			2,075						—
Contribution of non-controlling member in consolidated real estate entities			—						2,691
Distribution to non-controlling member in consolidated real estate entities			(4,028)						(1,060)
Payments to satisfy tax withholding			(3,668)						(693)
Payment of loan costs			(10,623)						(6,965)
Net cash provided by (used in) financing activities			36,701						(224,239)
Net decrease in cash and cash equivalents and restricted cash			(2,120)						(26,300)
Cash and cash equivalents and restricted cash—beginning of period			68,191						101,280
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD			$	66,071					$	74,980

The accompanying notes are an integral part of these consolidated financial statements.

ITEM 1.  FINANCIAL STATEMENTS OF HUDSON PACIFIC PROPERTIES, L.P.

HUDSON PACIFIC PROPERTIES, L.P.

CONSOLIDATED BALANCE SHEETS

(in thousands, except unit data)

			March 31, 2019 (unaudited)						December 31, 2018
ASSETS
Investment in real estate, at cost			$	6,990,420					$	7,059,537
Accumulated depreciation and amortization			(739,334)						(695,631)
Investment in real estate, net			6,251,086						6,363,906
Cash and cash equivalents			52,445						53,740
Restricted cash			13,626						14,451
Accounts receivable, net			17,969						14,004
Straight-line rent receivables, net			159,004						142,369
Deferred leasing costs and lease intangible assets, net			280,193						279,896
U.S. Government securities			144,992						146,880
Operating lease right-of-use asset			272,051						—
Prepaid expenses and other assets, net			82,441						55,633
Assets associated with real estate held for sale			99,821						—
TOTAL ASSETS			$	7,373,628					$	7,070,879
LIABILITIES AND CAPITAL
Liabilities
Unsecured and secured debt, net			$	2,711,632					$	2,623,835
In-substance defeased debt			137,417						138,223
Joint venture partner debt			66,136						66,136
Accounts payable, accrued liabilities and other			208,047						175,300
Operating lease liability			274,626						—
Lease intangible liabilities, net			41,112						45,612
Security deposits and prepaid rent			69,251						68,687
Liabilities associated with real estate held for sale			732						—
Total liabilities			3,508,953						3,117,793
Redeemable preferred units of the operating partnership			9,815						9,815
Redeemable non-controlling interest in consolidated real estate entities			114,616						113,141
Capital
Hudson Pacific Properties, L.P. partners’ capital
Common units, 155,094,354 and 154,940,583 issued and outstanding at March 31, 2019 and December 31, 2018, respectively.			3,463,504						3,544,319
Accumulated other comprehensive income			9,701						17,565
Total Hudson Pacific Properties, L.P. partners’ capital			3,473,205						3,561,884
Non-controlling interest—members in consolidated entities			267,039						268,246
Total capital			3,740,244						3,830,130
TOTAL LIABILITIES AND CAPITAL			$	7,373,628					$	7,070,879

The accompanying notes are an integral part of these consolidated financial statements.

HUDSON PACIFIC PROPERTIES, L.P.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except unit data)

			Three Months Ended March 31,
			2019						2018
REVENUES
Office
Rental (Note 2)			$	170,197					$	130,082
Tenant recoveries (Note 2)			—						20,904
Service revenues (Note 2)			5,661						5,546
Total office revenues			175,858						156,532
Studio
Rental (Note 2)			12,394						10,383
Tenant recoveries (Note 2)			—						354
Service revenues and other (Note 2)			9,137						6,849
Total studio revenues			21,531						17,586
Total revenues			197,389						174,118
OPERATING EXPENSES
Office operating expenses			60,815						53,240
Studio operating expenses			11,109						9,664
General and administrative			18,094						15,564
Depreciation and amortization			68,505						60,553
Total operating expenses			158,523						139,021
OTHER EXPENSE (INCOME)
Interest expense			24,350						20,503
Interest income			(1,024)						(9)
Transaction-related expenses			128						118
Other expense (income)			106						(404)
Gains on sale of real estate			—						(37,674)
Impairment loss			52,201						—
Total other expense (income)			75,761						(17,466)
Net (loss) income			(36,895)						52,563
Net income attributable to non-controlling interest in consolidated real estate entities			(2,821)						(3,323)
Net loss attributable to redeemable non-controlling interest in consolidated real estate entities			600						—
Net (loss) income attributable to Hudson Pacific Properties, L.P.			(39,116)						49,240
Net income attributable to preferred units			(153)						(159)
Net income attributable to participating securities			(308)						(327)
NET (LOSS) INCOME AVAILABLE TO COMMON UNITHOLDERS			$	(39,577)					$	48,754
BASIC AND DILUTED PER UNIT AMOUNTS
Net (loss) income attributable to common unitholders—basic			$	(0.26)					$	0.31
Net (loss) income attributable to common unitholders—diluted			$	(0.26)					$	0.31
Weighted average shares of common units outstanding—basic			155,120,144						156,195,100
Weighted average shares of common units outstanding—diluted			155,120,144						157,283,867

The accompanying notes are an integral part of these consolidated financial statements.

HUDSON PACIFIC PROPERTIES, L.P.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME

(unaudited, in thousands)

			Three Months Ended March 31,
			2019						2018
Net (loss) income			$	(36,895)					$	52,563
Other comprehensive (loss) income: change in fair value of derivatives			(7,864)						9,513
Comprehensive (loss) income			(44,759)						62,076
Comprehensive income attributable to preferred units			(153)						(159)
Comprehensive income attributable to participating securities			(308)						(391)
Comprehensive income attributable to non-controlling interest in consolidated entities			(2,821)						(3,323)
Comprehensive loss attributable to redeemable non-controlling interest in consolidated real estate entities			600						—
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO PARTNERS’ CAPITAL			$	(47,441)					$	58,203

The accompanying notes are an integral part of these consolidated financial statements.

HUDSON PACIFIC PROPERTIES, L.P.

CONSOLIDATED STATEMENTS OF CAPITAL

(unaudited, in thousands, except unit data)

			Hudson Pacific Properties, L.P. Partners’ Capital
			Number of Common Units			Common Units			Accumulated Other Comprehensive Income			Total Partners’ Capital			Non-controlling Interest—Members in Consolidated Entities			Total Capital
Balance at December 31, 2017			156,171,553			$	3,639,086		$	13,276		$	3,652,362		$	258,602		$	3,910,964
Cumulative adjustment related to adoption of ASU 2017-12			—			(231)			231			—			—			—
Contributions			—			—			—			—			2,691			2,691
Distributions			—			—			—			—			(1,060)			(1,060)
Proceeds from sale of common units, net of underwriters’ discount and transaction costs			—			(173)			—			(173)			—			(173)
Issuance of unrestricted units			43,900			—			—			—			—			—
Units withheld to satisfy tax withholding			(20,353)			(693)			—			(693)			—			(693)
Declared distributions			—			(39,351)			—			(39,351)			—			(39,351)
Amortization of unit-based compensation			—			4,570			—			4,570			—			4,570
Net income			—			49,081			—			49,081			3,323			52,404
Change in fair value of derivatives			—			—			9,513			9,513			—			9,513
Balance at March 31, 2018			156,195,100			$	3,652,289		$	23,020		$	3,675,309		$	263,556		$	3,938,865
Balance at December 31, 2018			154,940,583			3,544,319			17,565			3,561,884			268,246			3,830,130
Cumulative adjustment related to adoption of ASC 842			—			(2,105)			—			(2,105)			—			(2,105)
Distributions			—			—			—			—			(4,028)			(4,028)
Issuance of unrestricted units			298,727			—			—			—			—			—
Units withheld to satisfy tax withholding			(126,880)			(3,668)			—			(3,668)			—			(3,668)
Declared distributions			—			(40,427)			—			(40,427)			—			(40,427)
Amortization of unit-based compensation			—			5,179			—			5,179			—			5,179
Net (loss) income			—			(39,269)			—			(39,269)			2,821			(36,448)
Change in fair value of derivatives			—			—			(7,864)			(7,864)			—			(7,864)
Redemption of common units			(18,076)			(525)			—			(525)			—			(525)
Balance at March 31, 2019			155,094,354			$	3,463,504		$	9,701		$	3,473,205		$	267,039		$	3,740,244

The accompanying notes are an integral part of these consolidated financial statements.

HUDSON PACIFIC PROPERTIES, L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

			Three Months Ended March 31,
			2019						2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income			$	(36,895)					$	52,563
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization			68,505						60,553
Non-cash portion of interest expense			1,591						1,658
Amortization of unit-based compensation			5,150						4,338
Straight-line rents			(16,635)						(9,942)
Straight-line rent expenses			366						136
Amortization of above- and below-market leases, net			(4,179)						(3,811)
Amortization of above- and below-market ground lease, net			615						624
Amortization of lease incentive costs			326						303
Other non-cash adjustments			—						256
Impairment loss			52,201						—
Gains on sale of real estate			—						(37,674)
Change in operating assets and liabilities:
Accounts receivable			(4,263)						(1,782)
Deferred leasing costs and lease intangibles			(13,675)						(6,614)
Prepaid expenses and other assets			2,771						3,313
Accounts payable and accrued liabilities and other			33,004						(33)
Security deposits and prepaid rent			564						559
Net cash provided by operating activities			89,446						64,447
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to investment in real estate			(94,615)						(103,512)
Maturities of U.S. Government securities			1,932						—
Proceeds from sale of real estate			—						237,004
Deposits for property acquisitions			(35,584)						—
Net cash (used in) provided by investing activities			(128,267)						133,492
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from unsecured and secured debt			430,001						130,000
Payments of unsecured and secured debt			(335,145)						(308,529)
Payments of in-substance defeased debt			(806)						—
Proceeds from issuance of common units, net			—						(173)
Repurchase of common units in the operating partnership			(525)						—
Dividends paid to common stock and unit-holders			(40,427)						(39,351)
Dividends paid to preferred unit-holders			(153)						(159)
Contribution of redeemable non-controlling member in consolidated real estate entities			2,075						—
Contribution of non-controlling member in consolidated real estate entities			—						2,691
Distribution to non-controlling member in consolidated real estate entities			(4,028)						(1,060)
Payments to satisfy tax withholding			(3,668)						(693)
Payment of loan costs			(10,623)						(6,965)
Net cash provided by (used in) financing activities			36,701						(224,239)
Net decrease in cash and cash equivalents and restricted cash			(2,120)						(26,300)
Cash and cash equivalents and restricted cash—beginning of period			68,191						101,280
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH—END OF PERIOD			$	66,071					$	74,980

The accompanying notes are an integral part of these consolidated financial statements.

Notes to Unaudited Consolidated Financial Statements

(Unaudited, tabular amounts in thousands, except square footage, share and unit data)

1. Organization

Hudson Pacific Properties, Inc. is a Maryland corporation formed on November 9, 2009 as 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 studio 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 “our operating partnership” or “the operating partnership” refer to Hudson Pacific Properties, L.P. together with its consolidated subsidiaries.

 

The Company’s portfolio consists of properties located throughout Northern and Southern California and the Pacific Northwest. The following table summarizes the Company’s portfolio as of March 31, 2019:

1.Includes redevelopment, development and held for sale properties.

2. 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 the Securities and Exchange Commission (“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. References to number of properties and square-feet are not covered by the auditor’s review procedures.

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, 2019. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in the 2018 Annual Report on Form 10-K of Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. and the notes thereto.

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 and controlled subsidiaries. The consolidated financial statements of the operating partnership include the accounts of the operating partnership and all wholly owned and controlled subsidiaries. All intercompany balances and transactions have been eliminated in the consolidated financial statements.

Under the consolidation guidance, the Company first evaluates an entity using the variable interest model, then the voting model. The Company ultimately consolidates all entities that the Company controls through either majority ownership or voting rights, including all variable interest entities (“VIEs”) of which the Company is considered the primary beneficiary. The Company accounts for all other unconsolidated joint ventures using the equity method of accounting. In addition, the Company continually evaluates each legal entity that is not wholly owned for reconsideration based on changing circumstances.

VIEs are defined as entities in which equity investors do not have:

•the characteristics of a controlling financial interest;

•sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties; and/or

•the entity is structured with non-substantive voting rights.

The entity that consolidates a VIE is known as its primary beneficiary and is generally the entity with both the power to direct the activities that most significantly affect the VIE’s economic performance and the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE. As of March 31, 2019, the Company has determined its operating partnership and five joint ventures met the definition of a VIE. Four of the joint ventures are consolidated entities and one joint venture is an unconsolidated entity.

As of March 31, 2019 and December 31, 2018, the Company has determined that its operating partnership met the definition of a VIE and is consolidated.

Substantially all of the assets and liabilities of the Company are related to these VIEs.

Unconsolidated Entity

As of March 31, 2019, the Company has determined it is not the primary beneficiary of one joint venture. Due to its significant influence over the unconsolidated entity, the Company accounts for it using the equity method of accounting. 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 share of net income or loss from the entity is included within other income on the Consolidated Statements of Operations. The Company’s net equity investment of the unconsolidated entity of $86 thousand and $86 thousand as of March 31, 2019 and December 31, 2018, respectively, is reflected within prepaid expenses and other assets on the Consolidated Balance Sheets, which represents the Company’s maximum exposure for loss.

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, determining the incremental borrowing rate used in the present value calculations of its new or modified operating lessee agreements, 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.

Lease Accounting

In February 2016, the FASB issued guidance codified in ASC 842, Leases (“ASC 842”), which amends the guidance in former ASC 840, Leases (“ASC 840”). The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a lease agreement (i.e., lessees and lessors). The new standard increases transparency and

comparability most significantly by requiring the recognition by lessees of right-of-use (“ROU”) assets and lease liabilities on the balance sheet for those leases classified as operating leases. The Company adopted ASC 842 on January 1, 2019 using the modified retrospective transition approach that must be applied for leases that exist or are entered into after January 1, 2019.

ASC 842 requires companies to identify lease and non-lease components of a lease agreement. Lease components relate to the right to use the leased asset whereas non-lease components relate to payments for goods or services that are transferred separately from the right to use the underlying asset.

ASC 842 provides transition practical expedients that must be elected together that allow entities to not (i) reassess whether any expired or existing contracts are considered or contain leases; (ii) reassess the lease classification for any expired or existing leases; and (iii) reassess initial direct costs for any existing leases that are in effect as of the date of adoption. Additionally, the guidance allows an entity to elect a practical expedient to not assess whether an existing or expired land easement that was not previously accounted for as a lease under ASC 840 is considered in a lease under ASC 842. For lessors, the guidance provides for a practical expedient, by class of underlying asset, to elect a combined single lease component presentation if (i) the timing and pattern of the transfer of the combined single lease component is the same, and (ii) the related lease component, if accounted for separately, would be classified as an operating lease.

The Company elected the practical expedients above. The lessor practical expedient to combine lease and non-lease components was elected only for the Company’s leases related to the office properties. For the Company’s studio properties, the timing and pattern of the transfer of the lease components and non-lease components for studio properties are not the same and therefore the Company could not elect this practical expedient for the Company’s studio properties. The standalone selling price related to the studio non-lease components is readily available and does not require estimates.

Lessee Accounting

The Company determines if an arrangement is a lease at inception. The Company’s operating lease agreements relate to ground lease assets and are reflected in operating lease ROU assets and operating lease liabilities on the Consolidated Balance Sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the ROU assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date, or the date of the ASC 842 adoption, in determining the present value of lease payments. The weighted average incremental borrowing rate used to calculate the ROU assets and liabilities was 5.7%. ROU assets also include any lease payments made and exclude lease incentives. Many of the Company’s lessee agreements include options to extend the lease, which we do not include in its minimum lease terms unless they are reasonably certain to be exercised. Rental expense for lease payments related to operating leases is recognized on a straight-line basis over the lease term. The weighted average remaining lease term, as of March 31, 2019, was 33 years.

Lessor Accounting

As a lessor, the Company’s recognition of revenue remained consistent with previous guidance, apart from the narrower definition of initial direct costs that can be capitalized. With the election of the lessor practical expedient, the presentation of revenues on the Consolidated Statement of Operations has changed to reflect a single lease component which combines rental, tenant recoveries, and other tenant-related revenues for the office portfolio. For the Company’s rentals at the studio properties, total lease consideration is allocated to lease and non-lease components on a relative standalone basis. The recognition of revenues related to lease components is governed by ASC 842, while revenue related to non-lease components is be subject to ASC 606.

The new standard defines initial direct costs as only the incremental costs of signing a lease. Internal direct compensation costs and external legal fees related to the execution of successful lease agreements that no longer meet the definition of initial direct costs under ASC 842 will be accounted for as office operating expense or studio operating expense in the Company’s Consolidated Statements of Operations. Additionally, the Company may elect the practical expedients only for leases that have commenced before the effective date of the adoption of ASC 842. As a result of the adoption, the Company recognized $1.8

million as a cumulative adjustment to accumulated deficit for costs associated with leases that have not commenced as of January 1, 2019, that were previously capitalized and no longer meet the definition of initial direct costs in accordance with ASC 842. The Company recognized $0.3 million as cumulative adjustments to accumulated deficit related to other transition adjustments.

1.The financial statement locations stated above are as of March 31, 2019 after the adoption of ASC 842 and do not reflect the locations as of December 31, 2018.

The Company’s 2018 rental revenues are accounted for under ASC 840. The Company continues to recognize rental revenue from tenants on a straight-line basis over the lease term when collectability is probable and the tenant has taken possession of or controls the physical use of the leased asset.

The Company recognizes tenant recoveries related to reimbursement of real estate taxes, insurance, repairs and maintenance, and other operating expenses are recognized as revenue in the period during which the applicable expenses are incurred. The reimbursements are recognized and presented gross, as the Company is generally the primary obligor with respect to purchasing goods and services from third-party suppliers, has discretion in selecting the supplier and bears the associated credit risk. 

Other tenant-related revenues includes parking stipulated in lease agreements as must-take parking rentals. These revenues are recognized over the term of the lease.

Ancillary revenues and guest parking revenues have been accounted for under ASC 606 since the Company adopted this standard on January 1, 2018. These revenues have single performance obligations and are recognized at the point in time when services are rendered.

The following table summarizes the Company’s revenue streams that are accounted for under ASC 606:

1.Studio related tenant recoveries are accounted for under ASC 606 effective January 1, 2019.

Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P.

Notes to Unaudited Consolidated Financial Statements

(Unaudited, tabular amounts in thousands, except square footage, share and unit data)

The following table summarizes the Company’s receivables that are accounted for under ASC 606:

						March 31, 2019						December 31, 2018
Ancillary revenues						$	5,836					$	3,752
Guest parking revenues						$	1,393					$	959
Studio related tenant recoveries						$	—					N/A

_________________

1.Studio related tenant recoveries are accounted for under ASC 606 effective January 1, 2019.

Sale of real estate has been accounted for under ASC 610, Other Income, since the Company adopted this standard on January 1, 2018. As a result of the adoption, there was no change in respect to the timing and pattern of revenue recognition. This standard requires the Company to apply certain recognition and measurement principles in accordance with ASC 606 when it recognizes nonfinancial assets and in-substance nonfinancial assets, and the counterparty is not a customer. This is the case for the Company’s sales of real estate, and as a result the Company is required to evaluate the sales of real estate based on transfer of control. If a real estate sale contract includes ongoing involvement by the seller with the sold property, the seller must evaluate each promised good or service under the contract to determine whether it represents a performance obligation, constitutes a guarantee or prevents the transfer of control. The timing and pattern of revenue recognition might change as it relates to gains of sale of real estate if the sale includes continued involvement that represents a separate performance obligation.

Other Recently Issued ASUs

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 2018 Annual Report on Form 10-K and have not been adopted by the Company. The list excludes those ASUs that are not expected to have a material impact on the Company’s consolidated financial statements.

3. Investment in Real Estate

The following table summarizes the Company’s investment in real estate, at cost as of:

1.Excludes balances related to properties that have been classified as held for sale.

Acquisitions

The Company had no acquisitions during the three months ended March 31, 2019. On March 26, 2019, the Company entered into an agreement to purchase, through a joint venture with Blackstone Property Partners (“Blackstone”), the 1.45 million-square-foot Bentall Centre property located in Vancouver, Canada. The acquisition is expected to close during the second quarter of 2019.

Dispositions

The Company had no dispositions during the three months ended March 31, 2019.

Held for Sale

The Company had one property, Campus Center, classified as held for sale as of March 31, 2019. The Campus Center property, which includes the office property and developable land, is being sold to two separate, unrelated buyers for a combined amount of approximately $150 million (before certain credits, prorations and closing costs). Both sales are expected to close during the second quarter of 2019. The Company did not have any properties classified as held for sale as of December 31, 2018.

The following table summarizes the components of assets and liabilities associated with real estate held for sale as of:

Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P.

Notes to Unaudited Consolidated Financial Statements

(Unaudited, tabular amounts in thousands, except square footage, share and unit data)

			March 31, 2019
ASSETS
Investment in real estate, net			$	99,703
Deferred leasing costs and lease intangible assets, net			14
Prepaid expenses and other assets, net			104
ASSETS ASSOCIATED WITH REAL ESTATE HELD FOR SALE			$	99,821
LIABILITIES
Accounts payable, accrued liabilities and other			$	732
LIABILITIES ASSOCIATED WITH REAL ESTATE HELD FOR SALE			$	732

Impairment of Long-Lived Assets

The Company assesses the carrying value of real estate assets and related intangibles whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable in accordance with GAAP. Impairment losses are recorded on real estate assets held for investment when indicators of impairment are present and the future undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. The Company recognizes impairment losses to the extent the carrying amount exceeds the fair value, based on Level 1 or Level 2 inputs, less estimated costs to sell. The Company recorded $52.2 million of impairment charges related to the Campus Center office property that was held for sale as March 31, 2019. The Company’s estimated fair value was based on the sale price. The Company did not recognize impairment losses during the three months ended March 31, 2018. 

4. Deferred Leasing Costs and Lease Intangibles, net

The following summarizes the Company’s deferred leasing costs and lease intangibles as of:

1.Excludes balances related to properties that have been classified as held for sale.

Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P.

Notes to Unaudited Consolidated Financial Statements

(Unaudited, tabular amounts in thousands, except square footage, share and unit data)

The Company recognized the following amortization related to deferred leasing costs and lease intangibles:

			Three Months Ended March 31,
			2019						2018
Deferred leasing costs and in-place lease intangibles(1)			$	(11,882)					$	(11,696)
Below-market ground leases(2)			$	(626)					$	(635)
Above-market leases(3)			$	(310)					$	(474)
Below-market leases(3)			$	4,489					$	4,285
Above-market ground leases(2)			$	11					$	11

__________________ 

1.Amortization is recorded in depreciation and amortization expenses and office rental revenues in the Consolidated Statements of Operations.

2.Amortization is recorded in office operating expenses in the Consolidated Statements of Operations. 

3.Amortization is recorded in rental revenues in the Consolidated Statements of Operations.

5. Receivables

The Company’s accounting policy and methodology used to estimate the allowance for doubtful accounts related to service revenues are discussed in the Company’s 2018 Annual Report on Form 10-K.

The Company's accounting policy and methodology used to assess collectibility related to rental revenues changed on January 1, 2019 when the Company adopted ASC 842. The guidance requires the Company to assess, at lease commencement and subsequently, collectibility from its tenants of future lease payments. If the Company determines collectibility is not probable, it recognizes an adjustment to lower income from rentals, whereas previously the Company recognized bad debt expense.

Accounts Receivable

As of March 31, 2019, accounts receivable was $18.3 million and there was an allowance for doubtful accounts of $362 thousand. As of December 31, 2018, accounts receivable was $16.5 million and there was an allowance for doubtful accounts of $2.5 million.

Straight-Line Rent Receivable

As of March 31, 2019, straight-line rent receivable was $159.0 million and there was no allowance for doubtful accounts. As of December 31, 2018, straight-line rent receivables was $142.4 million and there was no allowance for doubtful accounts.

6. Prepaid Expenses and Other Assets, net 

The following table summarizes the Company’s prepaid expenses and other assets, net as of:

1.Includes deposits of $35.6 million for future acquisitions as of March 31, 2019 and no deposits for future acquisitions at December 31, 2018.

2.Excludes balances related to properties that have been classified as held for sale.

Goodwill

No goodwill impairment indicators have been identified during the three months ended March 31, 2019.

Non-Real Estate Investments

The Company holds investments in privately traded companies. The investments require accounting under the equity method unless the interest in the entity is deemed to be so insubstantial such that the Company has virtually no influence over the entity’s operating and financial policies.

The Company holds investments in entities that do not report NAV. The Company marks the these investments to fair value based on Level 2 inputs, whenever fair value is readily available or observable. Changes in fair value are included in the unrealized gain on non-real estate investment line item on the Consolidated Statements of Operations. In the first quarter of 2019 and 2018, there was no gain or loss recognized due to observable changes in fair value. For one of the investments, the Company is committed to funding up to $20.0 million in a real estate technology venture capital fund. During the first quarter of 2019, the Company has contributed $425 thousand to this fund with $19.6 million remaining to be contributed. 

Investment in Unconsolidated Joint Venture

As of March 31, 2019, the Company has determined it is not the primary beneficiary of one joint venture. Due to its significant influence over the unconsolidated entity, the Company accounts for it using the equity method of accounting.

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 owns 21% of the unconsolidated entity. On July 10, 2018, the Company received a return of capital related to its share of the repayment of the notes receivable.

Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P.

Notes to Unaudited Consolidated Financial Statements

(Unaudited, tabular amounts in thousands, except square footage, share and unit data)

7. Debt

The following table sets forth information with respect to the Company’s outstanding indebtedness:

			March 31, 2019						December 31, 2018						Interest Rate(1)						Contractual Maturity Date
UNSECURED AND SECURED DEBT
Unsecured debt
Unsecured revolving credit facility(2)(3)			$	220,000					$	400,000					LIBOR + 1.05% to 1.50%						3/13/2022			(4)
Term loan A(2)(5)			300,000						300,000						LIBOR + 1.20% to 1.70%						4/1/2020			(6)
Term loan B(2)(7)			350,000						350,000						LIBOR + 1.20% to 1.70%						4/1/2022
Term loan D(2)(8)			125,000						125,000						LIBOR + 1.20% to 1.70%						11/17/2022
Series A notes			110,000						110,000						4.34%						1/2/2023
Series E notes			50,000						50,000						3.66%						9/15/2023
Series B notes			259,000						259,000						4.69%						12/16/2025
Series D notes			150,000						150,000						3.98%						7/6/2026
3.95% Registered senior notes			400,000						400,000						3.95%						11/1/2027
Series C notes			56,000						56,000						4.79%						12/16/2027
4.65% Registered senior notes(9)			350,000						—						4.65%						4/1/2029
Term loan C			—						75,000						LIBOR + 1.30% to 2.20%						N/A
Total unsecured debt			2,370,000						2,275,000
Secured debt
Met Park North(10)			64,500						64,500						LIBOR + 1.55%						8/1/2020
10950 Washington(11)			26,736						26,880						5.32%						3/11/2022
Sunset Bronson Studios/ICON/CUE(12)			5,001						—						LIBOR + 1.35%						3/1/2024
Element LA			168,000						168,000						4.59%						11/6/2025
Hill7(13)			101,000						101,000						3.38%						11/6/2028
Sunset Gower Studios/Sunset Bronson Studios			—						5,001						LIBOR + 2.25%						N/A
Total secured debt			365,237						365,381
Total unsecured and secured debt			2,735,237						2,640,381
Unamortized deferred financing costs and loan discounts(14)			(23,605)						(16,546)
TOTAL UNSECURED AND SECURED DEBT, NET			$	2,711,632					$	2,623,835
IN-SUBSTANCE DEFEASED DEBT(15)			$	137,417					$	138,223					4.47%						10/1/2022
JOINT VENTURE PARTNER DEBT(16)			$	66,136					$	66,136					4.50%						10/9/2028