Hudson Pacific Loses $218 Million as Leasing Climbs

Hudson Pacific Properties is filling its offices and shrinking its balance sheet at the same time, and the cleanup is showing up as red ink. The Los Angeles office and studio REIT reported a third-quarter net loss of $218.1 million, or $3.38 per diluted share, according to its Nov. 5 earnings release ^[1].

That compares with a $136.5 million loss a year ago. The company blamed noncash impairments and a loss on selling office properties ^[1][2].

The scorecard

• Revenue slipped to $180.9 million from $186.6 million, mostly because the company owns fewer buildings ^[1].
• Core FFO, a REIT cash earnings measure, rose to $0.28 per share from $0.26 ^[1].
• The company signed 74 office leases covering 533,708 square feet, and its year-to-date total of 2.4 million is up 40% ^[1].
• Pro forma debt fell 14% from a year earlier to $2.7 billion, with $840 million of liquidity ^[1].

But the buildings it is selling show how far some office values have fallen. The 875 and 899 Howard St. towers in San Francisco, 284,000 square feet in total, went for $65.5 million, Bisnow reported ^[2]. CFO Harout Diramerian said one was 36% occupied and the other fully empty at sale ^[2]. Studios are lagging too: CEO Victor Coleman said LA on-location shoot days ran 29% below the five-year average ^[2].

What it means for you

By our math, the Howard St. sale works out to about $231 per square foot, a useful benchmark for half-empty or vacant urban offices. Leasing momentum and falling debt can support the stock even while the reported loss grows, since writedowns do not use cash ^[1]. Watch AFFO, which turned negative at $(0.08) a share as the company spent on getting space ready for tenants ^[1].

Zoom out

San Francisco logged its eighth straight quarter of positive net absorption, adding 1.3 million square feet, with much of the demand tied to AI tenants ^[2]. Hudson Pacific is also converting about 164,000 square feet at 901 Market into 136 apartments, a sign of where weaker office space may end up ^[1].