Hudson Pacific Properties Reports Second Quarter 2025 Financial Results

Hudson Pacific Properties Reports Second Quarter 2025 Financial Results

– 1.2 Million Sq Ft Leased in 1H25, including 558,000 Signed in 2Q –

– $1.0 Billion of Liquidity at Quarter End –

– $13.5 Million of Recurring G&A, 35% Improved Over Last Year –

– Provides 3Q FFO Outlook and Updates Full-Year Assumptions –

LOS ANGELES–(BUSINESS WIRE)–Hudson Pacific Properties, Inc. (NYSE: HPP) (the “Company,” “Hudson Pacific,” or “HPP”), a unique provider of end-to-end real estate solutions for dynamic tech and media tenants,today announced financial results for the second quarter 2025.

Victor Coleman, Hudson Pacific’s CEO and Chairman, commented, “We are energized that one of our key initiatives, leasing our high-quality west coast portfolio located in key primary markets, produced 1.2 million square feet of office leases signed in the first half of the year. We have a robust pipeline in excess of 2.0 million square feet, and significantly lower expirations going forward. Portfolio stabilization is close, which will enable us to begin to grow office occupancy as we move ahead.

“Importantly, we are continuing to benefit from the ongoing west coast focused investments into AI, as both new companies and industry leaders are adding office space in many of our core markets. Additionally, we are starting to experience positive traction in our studio business as total and stage leased percentages for in-service studios increased to 74.3% and 80.0%, respectively, excluding our studio development Sunset Glenoaks.

“With a capital structure that now provides $1.0 billion of liquidity, along with emerging growth drivers from AI and a media industry that is finally beginning to ramp production, we are poised to capture additional value and drive cash flow. We appreciate that this will take time, but we are confident in our team’s ability to strengthen Hudson Pacific’s position as a preeminent owner of west coast office and studio real estate.”

Financial Results Compared to Second Quarter 2024

Total revenue of $190.0 million compared to $218.0 million, primarily due to asset sales and lower office occupancy

General and administrative expenses of $13.5 million (excluding $14.3 million of one-time expenses associated with the cancellation of non-cash compensation agreements) compared to $20.7 million

Net loss attributable to common stockholders of $(83.1) million, or $(0.41) per diluted share, compared to net loss of $(47.0) million, or $(0.33) per diluted share, largely attributable to items affecting revenue, as well as accelerated depreciation resulting from Quixote lease terminations and disposal of obsolete fleet

FFO, excluding specified items, of $8.0 million, or $0.04 per diluted share, compared to $24.5 million, or $0.17 per diluted share, mostly attributable to the items affecting revenue. Specified items consisted of the one-time cancellation of non-cash compensation agreements of $14.3 million, or $0.07 per diluted share; one-time expenses associated with early debt repayment of $3.2 million, or $0.02 per diluted share; one-time Quixote cost-cutting expenses of $1.2 million, or $0.01 per diluted share; and transaction-related expenses of $0.5 million, or $0.00 per diluted share. Specified items for the second quarter of 2024 consisted of transaction-related income of $0.1 million, or $0.00 per diluted share; and a one-time derivative fair value adjustment of $1.3 million, or $0.01 per diluted share

FFO of $(11.2) million, or $(0.05) per diluted share, compared to $23.3 million, or $0.16 per diluted share

AFFO of $(6.1) million, or $(0.03) per diluted share, compared to $24.2 million, or $0.17 per diluted share, primarily the result of items affecting FFO along with increased recurring capital expenditures

Same-store cash NOI of $87.1 million, compared to $104.1 million, primarily due to lower office occupancy

Leasing

Executed 72 new and renewal leases totaling 558,055 square feet, including:

77,000-square-foot renewal lease with a cybersecurity company at Metro Center with a 6-year term

65,000-square-foot new lease with a mining company at Bentall Centre with an approximately 4-year term

41,000-square-foot renewal and expansion lease with a digital sports company at 11601 Wilshire with an approximately 9-year term

36,000-square-foot new lease with a gaming company at Bentall Centre with an approximately 13-year term

32,000-square-foot new lease with a bio-tech company at Page Mill Hill with an approximately 6-year term

GAAP and cash rents increased 4.9% and decreased 1.8%, respectively, from prior levels

In-service office portfolio ended the quarter at 75.1% occupied and 76.2% leased, compared to 75.1% occupied and 76.5% leased in the first quarter this year

In-service studio portfolio and stages were 63.0% and 63.6% leased, respectively, over the trailing 12-months, compared to 73.8% and 78.7% for the same metrics as of the first quarter this year. Excluding studio development Sunset Glenoaks (which contributed to the in-service trailing 12-month results for the first time this quarter), total and stage leased percentages would have increased to 74.3% and 80.0%, respectively

Transactions

Sold office property 625 Second in San Francisco for $28.0 million before prorations and closing costs, with net proceeds used to repay amounts outstanding on the unsecured revolving credit facility

Balance Sheet as of June 30, 2025

Repaid all private placement notes (Series B, C, and D) totaling $465.0 million, addressing significant maturities in 2025, 2026 and 2027

Raised $690.0 million of gross proceeds through a common equity offering with net proceeds used to fully repay the unsecured revolving credit facility and for general corporate purposes

Secured commitments to increase capacity under the unsecured revolving credit facility by $20.0 million to $795.0 million through December 2026 (including extensions), and to extend $462.0 million of capacity through December 2029 (including extensions)

$1.0 billion of total liquidity comprised of $236.0 million of unrestricted cash and cash equivalents and $775.0 million of undrawn capacity under the unsecured revolving credit facility

$87.4 million, or $22.3 million at HPP’s share, of undrawn capacity under the construction loan secured by Sunset Pier 94 Studios

HPP’s share of net debt to HPP’s share of undepreciated book value was 31.3% with 99.2% of debt fixed or capped with weighted average interest rate of 5.0% and no maturities until December 2025

Dividend

The Company’s Board of Directors declared and paid a dividend on its 4.750% Series C cumulative preferred stock of $0.296875 per share

2025 Outlook

Hudson Pacific is providing an FFO outlook for the third quarter of $0.01 to $0.05 per diluted share along with updated full-year assumptions (see table below). There are no specified items in connection with this outlook. Third quarter FFO outlook assumes fully diluted weighted average common stock/units of approximately 456.75 million.

This outlook reflects management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of events referenced in this press release and in earlier announcements. This outlook otherwise excludes any impact from new acquisitions, dispositions, debt financings, amendments or repayments, recapitalizations, capital markets activity or similar matters. There can be no assurance that actual results will not differ materially from these estimates.

Below are some of the assumptions the Company used in providing this outlook:

Unaudited, in thousands, except share data

Full Year 2025

Assumptions

Metric

Low

High

Growth in same-store property cash NOI⁽¹⁾⁽²⁾

(12.50)%

(11.50)%

GAAP non-cash revenue (straight-line rent and above/below-market rents)⁽³⁾

$5,500

$10,500

GAAP non-cash expense (straight-line rent expense and above/below-market ground rent)

$(6,500)

$(8,500)

General and administrative expenses⁽⁴⁾

$(57,500)

$(63,500)

Interest expense⁽⁵⁾

$(168,000)

$(178,000)

Non-real estate depreciation and amortization

$(33,000)

$(35,000)

FFO from unconsolidated joint ventures

$600

$2,600

FFO attributable to non-controlling interests

$(13,000)

$(17,000)

FFO attributable to preferred units/shares

$(21,000)

$(21,000)

Weighted average common stock/units outstanding—diluted⁽⁶⁾

319,000,000

321,000,000

(1)

Same-store for the full year 2025 is defined as the 39 office properties and three studio properties, as applicable, owned and included in the Company’s stabilized portfolio as of January 1, 2024, and anticipated to still be owned and included in the stabilized portfolio through December 31, 2025. Beginning this quarter, Metro Center is included within the same-store office properties. Same-store property cash NOI growth outlook would have been in-line with last quarter at (12.50)% to (13.50)% without Metro Center.

(2)

Please see non-GAAP information below for definition of cash NOI.

(3)

Includes non-cash straight-line rent associated with the studio and office properties.

(4)

Includes share/unit-based compensation expense, which the Company estimates at $16,000 in 2025. General and administrative expenses and the share/unit-based compensation exclude the impact of the one-time voluntary cancellation of non-cash compensation agreements of $14,280.

(5)

Includes non-cash interest expense, which the Company estimates at $8,500 in 2025. Interest expense excludes the one-time expenses associated with early repayment of indebtedness of $3,213.

(6)

Diluted shares represent ownership in the Company through shares of common stock, OP Units and other convertible or exchangeable instruments. The weighted average fully diluted common stock/units outstanding for 2025 includes an estimate for the dilution impact of stock grants to the Company’s executives under its long-term incentive programs. This estimate is based on the projected award potential of such programs as of the end of the most recently completed quarter, as calculated in accordance with the ASC 260, Earnings Per Share.

The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact net income attributable to common stockholders per diluted share, which is the most directly comparable forward-looking GAAP financial measure. This includes, for example, acquisition costs and other non-core items that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

Supplemental Information

Supplemental financial information regarding Hudson Pacific’s second quarter 2025 results may be found on the Investors section of the Company’s website at HudsonPacificProperties.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.

Conference Call

The Company will hold a conference call to discuss second quarter 2025 financial results at 2:00 p.m. PT / 5:00 p.m. ET on August 5, 2025. The conference call will be available via live audio webcast on the Investors section of the Company’s website at HudsonPacificProperties.com. A replay of the audio webcast will also be available following the call.

About Hudson Pacific Properties

Hudson Pacific Properties (NYSE: HPP) is a real estate investment trust serving dynamic tech and media tenants in global epicenters for these synergistic, converging and secular growth industries. Hudson Pacific’s unique and high-barrier tech and media focus leverages a full-service, end-to-end value creation platform forged through deep strategic relationships and niche expertise across identifying, acquiring, transforming and developing properties into world-class amenitized, collaborative and sustainable office and studio space. For more information visit HudsonPacificProperties.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events, or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company’s control, which may cause actual results to differ significantly from those expressed in any forward-looking statement. All forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, and other risks described in documents subsequently filed by the Company from time to time with the SEC.

(FINANCIAL TABLES FOLLOW)

Consolidated Balance Sheets

In thousands, except share data

6/30/25

12/31/24

(Unaudited)

ASSETS

Investment in real estate, at cost

$

8,211,478

$

8,233,286

Accumulated depreciation and amortization

(1,895,060

)

(1,791,108

)

Investment in real estate, net

6,316,418

6,442,178

Non-real estate property, plant and equipment, net

129,253

127,067

Cash and cash equivalents

236,025

63,256

Restricted cash

31,102

35,921

Accounts receivable, net

13,454

14,505

Straight-line rent receivables, net

204,031

199,748

Deferred leasing costs and intangible assets, net

351,278

327,514

Operating lease right-of-use assets

347,698

370,826

Prepaid expenses and other assets, net

97,479

90,114

Investment in unconsolidated real estate entities

242,785

221,468

Goodwill

156,529

156,529

Assets associated with real estate held for sale

—

83,113

TOTAL ASSETS

$

8,126,052

$

8,132,239

LIABILITIES AND EQUITY

Liabilities

Unsecured and secured debt, net

$

3,690,429

$

4,176,844

Joint venture partner debt

66,136

66,136

Accounts payable, accrued liabilities and other

222,645

193,861

Operating lease liabilities

358,528

380,004

Intangible liabilities, net

19,790

21,838

Security deposits, prepaid rent and other

83,408

84,708

Liabilities associated with real estate held for sale

—

31,117

Total liabilities

4,440,936

4,954,508

Redeemable preferred units of the operating partnership

5,894

9,815

Redeemable non-controlling interest in consolidated real estate entities

48,890

49,279

Equity

HPP stockholders’ equity:

4.750% Series C cumulative redeemable preferred stock, $0.01 par value, $25.00 per share liquidation preference, 18,400,000 authorized; 17,000,000 shares outstanding at 6/30/25 and 12/31/24

425,000

425,000

Common stock, $0.01 par value, 722,400,000 authorized and 379,150,864 shares outstanding at 6/30/25; 481,600,000 authorized and 141,279,102 shares outstanding at 12/31/24

3,779

1,403

Additional paid-in capital

2,935,476

2,437,484

Accumulated other comprehensive income (loss)

2,160

(8,417

)

Total HPP stockholders’ equity

3,366,415

2,855,470

Non-controlling interest—members in consolidated real estate entities

153,574

169,452

Non-controlling interest—units in the operating partnership

110,343

93,715

Total equity

3,630,332

3,118,637

TOTAL LIABILITIES AND EQUITY

$

8,126,052

$

8,132,239

Consolidated Statements of Operations

Unaudited, in thousands, except per share data

Three Months Ended

Six Months Ended

6/30/25

6/30/24

6/30/25

6/30/24

REVENUES

Office

Rental revenues

$

150,533

$

172,596

$

308,926

$

344,023

Service and other revenues

5,300

3,443

12,118

7,091

Total office revenues

155,833

176,039

321,044

351,114

Studio

Rental revenues

13,889

14,441

27,541

28,041

Service and other revenues

20,280

27,520

39,876

52,868

Total studio revenues

34,169

41,961

67,417

80,909

Total revenues

190,002

218,000

388,461

432,023

OPERATING EXPENSES

Office operating expenses

71,501

75,304

143,778

148,251

Studio operating expenses

36,552

37,952

77,533

75,061

General and administrative

27,776

20,705

46,259

40,415

Depreciation and amortization

94,751

86,798

187,836

178,652

Total operating expenses

230,580

220,759

455,406

442,379

OTHER (EXPENSES) INCOME

Loss from unconsolidated real estate entities

(205

)

(2,481

)

(1,459

)

(3,224

)

Fee income

1,476

1,371

2,835

2,496

Interest expense

(48,137

)

(44,159

)

(91,642

)

(88,248

)

Interest income

2,123

579

2,558

1,433

Management services reimbursement income—unconsolidated real estate entities

1,123

1,042

2,098

2,198

Management services expense—unconsolidated real estate entities

(1,123

)

(1,042

)

(2,098

)

(2,198

)

Transaction-related expenses

(451

)

113

(451

)

(2,037

)

Unrealized gain (loss) on non-real estate investments

212

(1,045

)

(237

)

(1,943

)

(Loss) gain on sale of real estate, net

(16

)

—

10,007

Impairment loss

—

—

(18,476

)

—

Loss on extinguishment of debt

(1,637

)

—

(3,495

)

—

Other (expense) income

(93

)

1,334

(85

)

1,477

Total other expenses

(46,728

)

(44,288

)

(100,445

)

(90,046

)

Loss before income tax provision

(87,306

)

(47,047

)

(167,390

)

(100,402

)

Income tax provision

(454

)

(510

)

(648

)

(510

)

Net loss

(87,760

)

(47,557

)

(168,038

)

(100,912

)

Net income attributable to Series A preferred units

(121

)

(153

)

(267

)

(306

)

Net income attributable to Series C preferred shares

(5,047

)

(5,047

)

(10,094

)

(10,094

)

Net income attributable to participating securities

—

(207

)

—

(409

)

Net loss attributable to non-controlling interest in consolidated real estate entities

6,675

3,751

14,142

7,920

Net loss attributable to redeemable non-controlling interest in consolidated real estate entities

895

961

1,797

2,118

Net loss attributable to common units in the operating partnership

2,209

1,225

4,603

2,454

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$

(83,149

)

$

(47,027

)

$

(157,857

)

$

(99,229

)

BASIC AND DILUTED PER SHARE AMOUNTS

Net loss attributable to common stockholders—basic

$

(0.41

)

$

(0.33

)

$

(0.92

)

$

(0.70

)

Net loss attributable to common stockholders—diluted

$

(0.41

)

$

(0.33

)

$

(0.92

)

$

(0.70

)

Weighted average shares of common stock outstanding—basic

202,666

141,181

172,196

141,152

Weighted average shares of common stock outstanding—diluted

202,666

141,181

172,196

141,152

Funds from Operations⁽¹⁾

Unaudited, in thousands, except per share data

Three Months Ended

Six Months Ended

6/30/25

6/30/24

6/30/25

6/30/24

RECONCILIATION OF NET LOSS TO FUNDS FROM OPERATIONS (“FFO”)⁽¹⁾:

Net loss

$

(87,760

)

$

(47,557

)

$

(168,038

)

$

(100,912

)

Adjustments:

Depreciation and amortization—consolidated

94,751

86,798

187,836

178,652

Depreciation and amortization—non-real estate assets

(8,785

)

(8,211

)

(18,434

)

(16,192

)

Depreciation and amortization—HPP’s share from unconsolidated real estate entities⁽²⁾

1,113

2,006

2,158

3,157

Loss (gain) on sale of real estate, net

16

—

(10,007

)

—

Impairment loss—real estate assets

—

—

18,476

—

Unrealized (gain) loss on non-real estate investments

(212

)

1,045

237

1,943

FFO attributable to non-controlling interests

(5,152

)

(5,576

)

(10,005

)

(10,996

)

FFO attributable to preferred shares and units

(5,168

)

(5,200

)

(10,361

)

(10,400

)

FFO to common stock/unit holders

(11,197

)

23,305

(8,138

)

45,252

Specified items impacting FFO:

Transaction-related expenses

451

(113

)

451

2,037

Forfeiture of non-cash compensation agreements

14,280

—

14,280

—

One-time termination of Quixote leases (cost-cutting initiatives)

622

—

6,487

—

Write-off of transportation assets (cost-cutting initiatives)

626

—

626

—

One-time termination of Quixote non-compete agreement (cost-cutting initiatives)

—

—

1,402

—

One-time expenses associated with early repayment of debt

3,213

—

5,071

—

Non-cash revaluation associated with a loan swap (unqualified for hedge accounting)

—

1,310

682

1,310

FFO (excluding specified items) to common stock/unit holders

$

7,995

$

24,502

$

20,861

$

48,599

Weighted average common stock/units outstanding—diluted

208,411

145,657

340,837

145,647

FFO per common stock/unit—diluted

$

(0.05

)

$

0.16

$

(0.02

)

$

0.31

FFO (excluding specified items) per common stock/unit—diluted

$

0.04

$

0.17

$

0.06

$

0.33

(1)

We calculate Funds from Operations (“FFO”) in accordance with the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts. The White Paper defines FFO as net income or loss calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), excluding gains and losses from sales of depreciable real estate and impairment write-downs associated with depreciable real estate, plus the HPP’s share of real estate-related depreciation and amortization, excluding amortization of deferred financing costs and depreciation of non-real estate assets. The calculation of FFO includes the HPP’s share of amortization of deferred revenue related to tenant-funded tenant improvements and excludes the depreciation of the related tenant improvement assets.

FFO is a non-GAAP financial measure we believe is a useful supplemental measure of our operating performance. The exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the assets that form the core of our activity and assists in comparing those operating results between periods. Also, because FFO is generally recognized as the industry standard for reporting the operations of REITs, it facilitates comparisons of operating performance to other REITs. However, other REITs may use different methodologies to calculate FFO, and accordingly, our FFO may not be comparable to all other REITs.

Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, we believe that FFO along with the required GAAP presentations provides a more complete measurement of our performance relative to our competitors and a more appropriate basis on which to make decisions involving operating, financing and investing activities than the required GAAP presentations alone would provide. We use FFO per share to calculate annual cash bonuses for certain employees.

However, FFO should not be viewed as an alternative measure of our operating performance because it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, which are significant economic costs and could materially impact our results from operations.

(2)

HPP’s share is a Non-GAAP financial measure calculated as the measure on a consolidated basis, in accordance with GAAP, plus our Operating Partnership’s share of the measure from our unconsolidated joint ventures (calculated based upon the Operating Partnership’s percentage ownership interest), minus our partners’ share of the measure from our consolidated joint ventures (calculated based upon the partners’ percentage ownership interests). We believe that presenting HPP’s share of these measures provides useful information to investors regarding the Company’s financial condition and/or results of operations because we have several significant joint ventures, and in some cases, we exercise significant influence over, but do not control, the joint venture. In such instances, GAAP requires us to account for the joint venture entity using the equity method of accounting, which we do not consolidate for financial reporting purposes. In other cases, GAAP requires us to consolidate the venture even though our partner(s) own(s) a significant percentage interest.

Adjusted Funds from Operations⁽¹⁾

Unaudited, in thousands, except per share data

Three Months Ended

Six Months Ended

6/30/25

6/30/24

6/30/25

6/30/24

FFO (excluding specified items)

$

7,995

$

24,502

$

20,861

$

48,599

Adjustments:

GAAP non-cash revenue (straight-line rent and above/below-market rents)

(3,704

)

(118

)

(4,375

)

1,900

GAAP non-cash expense (straight-line rent expense and above/below-market ground rent)

1,788

1,638

3,492

3,304

Non-real estate depreciation and amortization

8,159

8,211

16,406

16,192

Non-cash interest expense

5,065

1,764

9,174

3,610

Share/unit-based compensation expense

3,584

6,889

8,699

13,421

Recurring capital expenditures, tenant improvements and lease commissions

(28,957

)

(18,645

)

(58,615

)

(34,388

)

AFFO

$

(6,070

)

$

24,241

$

(4,358

)

$

52,638

Weighted average common stock/units outstanding—diluted

208,411

145,657

340,837

145,647

AFFO per common stock/unit—diluted

$

(0.03

)

$

0.17

$

(0.01

)

$

0.36

(1)

Adjusted Funds from Operations (“AFFO”) is a non-GAAP financial measure we believe is a useful supplemental measure of our performance. We compute AFFO by adding to FFO (excluding specified items) HPP’s share of non-cash compensation expense and amortization of deferred financing costs, and subtracting recurring capital expenditures related to HPP’s share of tenant improvements and leasing commissions (excluding pre-existing obligations on contributed or acquired properties funded with amounts received in settlement of prorations), and eliminating the net effect of HPP’s share of straight-line rents, amortization of lease buy-out costs, amortization of above- and below-market lease intangible assets and liabilities, amortization of above- and below-market ground lease intangible assets and liabilities and amortization of loan discounts/premiums. AFFO is not intended to represent cash flow for the period. We believe that AFFO provides useful information to the investment community about our financial position as compared to other REITs since AFFO is a widely reported measure used by other REITs. However, other REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not be comparable to other REITs.

Net Operating Income⁽¹⁾

Unaudited, in thousands

Three Months Ended

6/30/25

6/30/24

RECONCILIATION OF NET LOSS TO NET OPERATING INCOME (“NOI”) AND SAME-STORE CASH NET OPERATING INCOME (“NOI”)

Net loss

$

(87,760

)

$

(47,557

)

Adjustments:

Loss from unconsolidated real estate entities

205

2,481

Fee income

(1,476

)

(1,371

)

Interest expense

48,137

44,159

Interest income

(2,123

)

(579

)

Management services reimbursement income—unconsolidated real estate entities

(1,123

)

(1,042

)

Management services expense—unconsolidated real estate entities

1,123

1,042

Transaction-related expenses

451

(113

)

Unrealized (gain) loss on non-real estate investments

(212

)

1,045

Loss on sale of real estate, net

16

—

Loss on extinguishment of debt

1,637

—

Other expense (income)

93

(1,334

)

Income tax provision

454

510

General and administrative

27,776

20,705

Depreciation and amortization

94,751

86,798

NOI

$

81,949

$

104,744

Straight-line rent, net

(2,633

)

1,147

Share/unit-based compensation expense

243

62

Amortization of above/below-market leases, net

(1,016

)

(1,284

)

Amortization of lease incentive costs

1,393

361

Amortization of above/below-market ground leases, net

651

662

Cash NOI

80,587

105,692

Less: Non-same-store cash NOI

(6,509

)

1,572

Same-store cash NOI

$

87,096

$

104,120

NOI Detail

Same-store office cash revenues

152,152

166,762

Straight-line rent

3,837

531

Amortization of above/below-market leases, net

1,016

1,147

Amortization of lease incentive costs

(1,384

)

(261

)

Same-store office revenues

155,621

168,179

Same-store studios cash revenues

15,525

20,186

Straight-line rent

111

109

Amortization of lease incentive costs

(9

)

(9

)

Same-store studio revenues

15,627

20,286

Same-store revenues

171,248

188,465

Same-store office cash expenses

70,107

70,288

Straight-line rent

367

371

Share/unit-based compensation expense

12

15

Amortization of above/below-market ground leases, net

641

641

Same-store office expenses

71,127

71,315

Same-store studio cash expenses

10,474

12,540

Share/unit-based compensation expense

113

40

Same-store studio expenses

10,587

12,580

Same-store expenses

81,714

83,895

Same-store NOI

89,534

104,570

Non-same-store NOI

(7,585

)

174

NOI

$

81,949

$

104,744

(1)

We evaluate performance based upon property Net Operating Income (“NOI”) from continuing operations. NOI is not a measure of operating results or cash flows from operating activities or cash flows as measured by GAAP and should not be considered an alternative to income from continuing operations, as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make distributions. All companies may not calculate NOI in the same manner. We consider NOI to be a useful performance measure to investors and management because when compared across periods, NOI reflects the revenues and expenses directly associated with owning and operating our properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing a perspective not immediately apparent from income from continuing operations. We calculate NOI as net income (loss) excluding corporate general and administrative expenses, depreciation and amortization, impairments, gains/losses on sales of real estate, interest expense, transaction-related expenses and other non-operating items. We define NOI as operating revenues (rental revenues, other property-related revenue, tenant recoveries and other operating revenues), less property-level operating expenses (external management fees, if any, and property-level general and administrative expenses). NOI on a cash basis is NOI adjusted to exclude the effect of straight-line rent and other non-cash adjustments required by GAAP. We believe that NOI on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent and other non-cash adjustments to revenue and expenses.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250805313129/en/

Investor Contact

Laura Campbell

Executive Vice President, Investor Relations & Marketing

(310) 622-1702

[email protected]

Media Contact

Laura Murray

Vice President, Communications

(310) 622-1781

[email protected]

KEYWORDS: United States North America California

INDUSTRY KEYWORDS: Commercial Building & Real Estate Construction & Property REIT

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