Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Hudson Pacific Properties, Inc. | hppq420128-k.htm |
| EX-99.1 - EXHIBIT - Hudson Pacific Properties, Inc. | q42012ex991.htm |
HUDSON PACIFIC PROPERTIES, INC.
FOURTH QUARTER 2012
Supplemental Operating and Financial Data
This Supplemental Operating and Financial Data contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements. You should not rely on forward-looking statements as predictions of future events. Forward-looking statements involve numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statement made by us. These risks and uncertainties include, but are not limited to: adverse economic and real estate developments in Southern and Northern California; decreased rental rates or increased tenant incentives and vacancy rates; defaults on, early terminations of, or non-renewal of leases by tenants; increased interest rates and operating costs; failure to generate sufficient cash flows to service our outstanding indebtedness; difficulties in identifying properties to acquire and completing acquisitions; failure to successfully integrate pending and recent acquisitions; failure to successfully operate acquired properties and operations; failure to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended; possible adverse changes in laws and regulations; environmental uncertainties; risks related to natural disasters; lack or insufficient amount of insurance; inability to successfully expand into new markets or submarkets; risks associated with property development; conflicts of interest with our officers; changes in real estate and zoning laws and increases in real property tax rates; the consequences of any possible future terrorist attacks; and other risks and uncertainties detailed in our Prospectus filed with the Securities and Exchange Commission on April 27, 2011. You are cautioned that the information contained herein speaks only as of the date hereof and Hudson Pacific Properties, Inc. assumes no obligation to update any forward-looking information, whether as a result of new information, future events or otherwise. For a discussion of important risks related to Hudson Pacific Properties, Inc.'s business, and an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information, see the discussion under the caption “Risk Factors” in Hudson Pacific Properties, Inc.'s Prospectus dated April 27, 2011. In light of these risks and uncertainties, any forward-looking events described herein or in Hudson Pacific Properties, Inc.'s August 2012 conference call may not occur.
Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
TABLE OF CONTENTS
PAGE | |
COMPANY BACKGROUND AND CORPORATE DATA | |
CONSOLIDATED FINANCIAL RESULTS | |
Consolidated Balance Sheets | |
Consolidated Statements of Operations | |
Funds from Operations and Adjusted Funds from Operations | |
Debt Summary | |
PORTFOLIO DATA | |
Same-Store Analysis | |
Reconciliation to net income | |
Stabilized Office Portfolio Summary, Occupancy and In-place Rents | |
Development, Redevelpment, and Lease-up Properties and Land Properties | |
Media & Entertainment Portfolio Summary, Occupancy and In-place Rents | |
Ten Largest Office Tenants | |
Office Portfolio Leasing Activity | |
Office Lease Expirations — Annual | |
Quarterly Office Lease Expirations — Next Four Quarters | |
Office Portfolio Diversification | |
DEFINITIONS | |
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Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
COMPANY BACKGROUND
CORPORATE 11601 Wilshire Boulevard, Suite 1600, Los Angeles, California 90025 (310) 445-5700 | |||||
BOARD OF DIRECTORS | |||||
Victor J. Coleman | Theodore R. Antenucci | Jonathan M. Glaser | |||
Chairman of the Board and Chief Executive Officer, Hudson Pacific Properties, Inc. | President and Chief Executive Officer, Catellus Development Corporation | Managing Member, JMG Capital Management LLC | |||
Richard B. Fried | Mark D. Linehan | Robert M. Moran, Jr. | |||
Managing Member, Farallon Capital Management, L.L.C. | President and Chief Executive Officer, Wynmark Company | Co-founder and Co-owner, FJM Investments LLC | |||
Barry A. Porter | Howard S. Stern | Patrick Whitesell | |||
Managing General Partner, Clarity Partners L.P. | President, Hudson Pacific Properties, Inc. | Co-Chief Executive, WME Entertainment | |||
EXECUTIVE AND SENIOR MANAGEMENT | |||||
Victor J. Coleman | Howard S. Stern | Mark T. Lammas | |||
Chief Executive Officer | President | Chief Financial Officer | |||
Christopher Barton | Dale Shimoda | Kay Tidwell | |||
EVP, Operations and Development | EVP, Finance | EVP, General Counsel and Secretary | |||
Alexander Vouvalides | Drew Gordon | Harout Diramerian | |||
SVP, Acquisitions | SVP, Northern California | Chief Accounting Officer | |||
Arthur X. Suazo | Elva Hernandez | ||||
Director of Leasing | Operational Controller | ||||
INVESTOR RELATIONS | |||||
Addo Communications (310) 829-5400 Email Contact: lasseg@addocommunications.com Please visit our corporate Web site at: www.hudsonpacificproperties.com | |||||
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Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
CORPORATE DATA
(unaudited, $ in thousands, except per share data)
Hudson Pacific Properties, Inc. (NYSE: HPP) (also referred to herein as the “Company,” “we,” “us,” or “our”) is a full-service, vertically integrated real estate company focused on owning, operating and acquiring high-quality office properties in select growth markets primarily in Northern and Southern California. Our investment strategy is focused on high barrier-to-entry, in-fill locations with favorable, long-term supply demand characteristics. These markets include Los Angeles, Orange County, San Diego, San Francisco, Silicon Valley and the East Bay, which we refer to as our target markets. This Supplemental Operating and Financial Data supplements the information provided in our reports filed with the Securities and Exchange Commission. We maintain a Web site at www.hudsonpacificproperties.com.
Number of office properties owned | 19 | ||
Total office properties square feet (in thousands) | 4,454 | ||
Stabilized office properties leased rate as of December 31, 2012(1) | 93.5 | % | |
Stabilized office properties occupied rate as of December 31, 2012(1) (2) | 88.3 | % | |
Number of media & entertainment properties owned | 2 | ||
Media & entertainment square feet (in thousands) | 884,117 | ||
Media & entertainment occupied rate as of December 31, 2012(3) | 73.7 | % | |
Number of land assets owned | 5 | ||
Land assets square feet (in thousands)(4) | 1,947 | ||
Market capitalization (in thousands): | |||
Total debt(5) | $ | 580,884 | |
Series A Preferred Units | 12,475 | ||
Series B Preferred Stock | 145,000 | ||
Common equity capitalization(6) | 1,050,458 | ||
Total market capitalization | $ | 1,788,817 | |
Debt/total market capitalization | 32.5 | % | |
Series A preferred units & debt/total market capitalization | 33.2 | % | |
Common stock data (NYSE:HPP): | |||
Range of closing prices(7) | $ 18.12-21.06 | ||
Closing price at quarter end | $ | 21.06 | |
Weighted average fully diluted shares\units outstanding (in thousands)(8) | 49,679 | ||
Shares of common stock\units outstanding on December 31, 2012 (in thousands)(9) | 49,879 | ||
__________________________
(1) | Stabilized office properties leased rate and occupied rate excludes the development, redevelopment, and lease-up properties described on page 14. |
(2) | Represents percent leased less signed leases not yet commenced. |
(3) | Percent occupied for media and entertainment properties is the average percent occupied for the 12 months ended December 31, 2012. |
(4) | Square footage for land assets represents management’s estimate of developable square feet, the majority of which remains subject to receipt of entitlement approvals that have not yet been obtained. |
(5) | Total debt excludes non-cash loan premium/discount. |
(6) | Common equity capitalization represents the shares of common stock (including unvested restricted shares) and OP units outstanding multiplied by the closing price of our stock at the end of the period. |
(7) | For the quarter ended December 31, 2012. |
(8) | For the quarter ended December 31, 2012. Diluted shares represent ownership in our Company through shares of common stock, OP Units and other convertible instruments. Diluted shares do not include shares issuable upon exchange of our series A preferred units, which do not become exchangeable until June 29, 2013. |
(9) | This amount represents fully diluted common shares and OP units (including unvested restricted shares) at December 31, 2012, and does not include shares issuable upon exchange of our series A preferred units, which do not become exchangeable until June 29, 2013. |
4
CONSOLIDATED FINANCIAL RESULTS
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Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
Consolidated Balance Sheets
(In thousands, except share data)
December 31, 2012 | December 31, 2011 | ||||||
ASSETS | (Unaudited) | (Audited) | |||||
Total investment in real estate, net | $ | 1,390,771 | $ | 1,007,175 | |||
Cash and cash equivalents | 18,904 | 13,705 | |||||
Restricted cash | 14,322 | 9,521 | |||||
Accounts receivable, net | 12,442 | 8,963 | |||||
Notes receivable | 4,000 | — | |||||
Straight-line rent receivables | 14,165 | 10,801 | |||||
Deferred leasing costs and lease intangibles, net | 83,498 | 84,131 | |||||
Deferred finance costs, net | 8,175 | 5,079 | |||||
Interest rate contracts | 71 | 164 | |||||
Goodwill | 8,754 | 8,754 | |||||
Prepaid expenses and other assets | 4,588 | 4,498 | |||||
TOTAL ASSETS | $ | 1,559,690 | $ | 1,152,791 | |||
LIABILITIES AND EQUITY | |||||||
Notes payable | $ | 582,085 | $ | 399,871 | |||
Accounts payable and accrued liabilities | 18,833 | 12,469 | |||||
Below-market leases | 31,560 | 22,861 | |||||
Security deposits | 6,234 | 5,651 | |||||
Prepaid rent | 11,281 | 10,795 | |||||
TOTAL LIABILITIES | 649,993 | 451,647 | |||||
6.25% series A cumulative redeemable preferred units of the Operating Partnership | 12,475 | 12,475 | |||||
EQUITY | |||||||
Hudson Pacific Properties, Inc. stockholders’ equity: | |||||||
Preferred stock, $0.01 par value, 10,000,000 authorized; 8.375% series B cumulative redeemable preferred stock, $25.00 liquidation preference, 5,800,000 shares and 3,500,000 shares outstanding at December 31, 2012 and 2011, respectively | 145,000 | 87,500 | |||||
Common Stock, $0.01 par value, 490,000,000 authorized, 47,496,732 shares and 33,840,854 shares outstanding at December 31, 2012 and 2011, respectively | 475 | 338 | |||||
Additional paid-in capital | 726,605 | 552,043 | |||||
Accumulated other comprehensive loss | (1,287 | ) | (883 | ) | |||
Accumulated deficit | (30,580 | ) | (13,685 | ) | |||
Total Hudson Pacific Properties, Inc. stockholders’ equity | 840,213 | 625,313 | |||||
Non-controlling interest - members in Consolidated Entities | 1,460 | — | |||||
Non-controlling common units in the Operating Partnership | 55,549 | 63,356 | |||||
TOTAL EQUITY | 897,222 | 688,669 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 1,559,690 | $ | 1,152,791 | |||
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Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
Consolidated Statements of Operations (Unaudited, in thousands, except share and per share data) | |||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues | |||||||||||||||
Office | |||||||||||||||
Rental | $ | 25,423 | $ | 21,058 | $ | 93,945 | $ | 75,343 | |||||||
Tenant recoveries | 6,215 | 5,979 | 22,157 | 22,102 | |||||||||||
Parking and other | 2,818 | 1,766 | 9,921 | 7,763 | |||||||||||
Total office revenues | 34,456 | 28,803 | 126,023 | 105,208 | |||||||||||
Media & entertainment | |||||||||||||||
Rental | 6,267 | 5,357 | 23,598 | 21,617 | |||||||||||
Tenant recoveries | 527 | 278 | 1,598 | 1,539 | |||||||||||
Other property-related revenue | 3,936 | 2,546 | 14,733 | 13,638 | |||||||||||
Other | 58 | 76 | 204 | 187 | |||||||||||
Total media & entertainment revenues | 10,788 | 8,257 | 40,133 | 36,981 | |||||||||||
Total revenues | 45,244 | 37,060 | 166,156 | 142,189 | |||||||||||
Operating expenses | |||||||||||||||
Office operating expenses | 15,401 | 12,147 | 53,577 | 44,740 | |||||||||||
Media & entertainment operating expenses | 6,347 | 5,373 | 24,340 | 22,446 | |||||||||||
General and administrative | 3,675 | 3,986 | 16,497 | 13,038 | |||||||||||
Depreciation and amortization | 17,602 | 11,637 | 57,024 | 44,660 | |||||||||||
Total operating expenses | 43,025 | 33,143 | 151,438 | 124,884 | |||||||||||
Income from operations | 2,219 | 3,917 | 14,718 | 17,305 | |||||||||||
Other expense (income) | |||||||||||||||
Interest expense | 5,094 | 4,235 | 19,071 | 17,480 | |||||||||||
Interest income | (157 | ) | (6 | ) | (306 | ) | (73 | ) | |||||||
Acquisition-related expenses | 236 | 932 | 1,051 | 1,693 | |||||||||||
Other expenses (income) | 17 | 74 | (92 | ) | 443 | ||||||||||
5,190 | 5,235 | 19,724 | 19,543 | ||||||||||||
Net loss | $ | (2,971 | ) | $ | (1,318 | ) | $ | (5,006 | ) | $ | (2,238 | ) | |||
Less: Net income attributable to preferred stock and units | (3,231 | ) | (2,027 | ) | (12,924 | ) | (8,108 | ) | |||||||
Less: Net income attributable to restricted shares | (69 | ) | (54 | ) | (295 | ) | (231 | ) | |||||||
Less: Net loss (income) attributable to non-controlling interest in consolidated real estate entities | 21 | — | 21 | (803 | ) | ||||||||||
Add: Net loss attributable to common units in the Operating Partnership | 310 | 248 | 1,014 | 946 | |||||||||||
Net loss attributable to Hudson Pacific Properties, Inc. common shareholders | $ | (5,940 | ) | $ | (3,151 | ) | $ | (17,190 | ) | $ | (10,434 | ) | |||
Net loss attributable to common shareholders’ per share — basic and diluted | $ | (0.13 | ) | $ | (0.10 | ) | $ | (0.41 | ) | $ | (0.35 | ) | |||
Weighted average shares of common stock outstanding — basic and diluted | 46,690,196 | 33,150,491 | 41,640,691 | 29,392,920 | |||||||||||
Dividends declared per common share | $ | 0.125 | $ | 0.125 | $ | 0.500 | $ | 0.500 | |||||||
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Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS
(unaudited, in thousands, except per share data)
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Funds From Operations (FFO)(1) | ||||||||||||||||
Net (loss) income | $ | (2,971 | ) | $ | (1,318 | ) | $ | (5,006 | ) | $ | (2,238 | ) | ||||
Adjustments: | ||||||||||||||||
Depreciation and amortization of real estate assets | 17,602 | 11,637 | 57,024 | 44,660 | ||||||||||||
Less: Net income attributable to non-controlling interest in consolidated real estate entities | (17 | ) | — | (17 | ) | (803 | ) | |||||||||
Less: Net income attributable to preferred stock and units | (3,231 | ) | (2,027 | ) | (12,924 | ) | (8,108 | ) | ||||||||
FFO to common shareholders and unit holders | $ | 11,383 | $ | 8,292 | $ | 39,077 | $ | 33,511 | ||||||||
Specified items impacting FFO: | ||||||||||||||||
Acquisition-related expenses | 236 | 932 | 1,051 | 1,693 | ||||||||||||
One-time property tax expenses | — | — | 918 | — | ||||||||||||
FFO (excluding specified items) to common shareholders and unit holders | $ | 11,619 | $ | 9,224 | $ | 41,046 | $ | 35,204 | ||||||||
Weighted average common shares/units outstanding - diluted | 49,679 | 36,196 | 44,693 | 32,466 | ||||||||||||
FFO per common share/unit — diluted | $ | 0.23 | $ | 0.23 | $ | 0.87 | $ | 1.03 | ||||||||
FFO (excluding specified items) per common share/unit — diluted | $ | 0.23 | $ | 0.25 | $ | 0.92 | $ | 1.08 | ||||||||
Adjusted Funds From Operations (AFFO)(1) | ||||||||||||||||
$ | 11,383 | $ | 8,292 | $ | 39,077 | $ | 33,511 | |||||||||
Adjustments: | ||||||||||||||||
Straight-line rent | (119 | ) | (218 | ) | (3,365 | ) | (2,247 | ) | ||||||||
Amortization of prepaid rent(2) | 327 | 288 | 1,294 | 842 | ||||||||||||
Amortization of above market and below market leases, net | (1,209 | ) | (151 | ) | (3,564 | ) | (365 | ) | ||||||||
Amortization of below market ground lease | 62 | 62 | 247 | 204 | ||||||||||||
Amortization of lease buy-out costs | 23 | 23 | 91 | 384 | ||||||||||||
Amortization of deferred financing costs and loan premium/discount, net | 250 | 379 | 1,126 | 747 | ||||||||||||
Recurring capital expenditures, tenant improvements and lease commissions | (7,906 | ) | (1,770 | ) | (17,844 | ) | (4,275 | ) | ||||||||
Non-cash compensation expense | 1,014 | 691 | 4,212 | 2,004 | ||||||||||||
AFFO | $ | 3,825 | $ | 7,596 | $ | 21,274 | $ | 30,805 | ||||||||
Dividends paid to common stock and unit holders | $ | 6,207 | $ | 4,523 | $ | 23,199 | $ | 12,179 | ||||||||
AFFO payout ratio | 162.3 | % | 59.5 | % | 109.0 | % | 39.5 | % | ||||||||
______________________________
(1) | See page 18 for Management's Statements on Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO). |
(2) | Represents the difference between rental revenue recognize in accordance with accounting principles generally accepted in the United States (GAAP) based on the amortization of the prepaid rent liability relating to the KTLA lease at our Sunset Bronson property compared to scheduled cash rents received in connection with such prepayment. |
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Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
DEBT SUMMARY
(In thousands)
The following table sets forth information with respect to our outstanding indebtedness as of December 31, 2012.
Annual | Balance at | |||||||||||||
Debt | Outstanding | Interest Rate(1) | Debt Service(1) | Maturity Date | Maturity | |||||||||
Secured Revolving Credit Facility | $ | 55,000 | LIBOR+1.55% to 2.20% | $ — | 8/3/2016 | $ | 10,000 | |||||||
Mortgage loan secured by 625 Second Street(2) | 33,700 | 5.85% | 1,999 | 2/1/2014 | 33,700 | |||||||||
Mortgage loan secured by 6922 Hollywood Boulevard(3) | 41,243 | 5.58% | 3,230 | 1/1/2015 | 39,422 | |||||||||
Mortgage loan secured by 275 Brannan(4) | 138 | LIBOR+2.00% | 0 | 10/5/2015 | 138 | |||||||||
Mortgage loan secured by Sunset Gower/Sunset Bronson(5) | 92,000 | LIBOR+3.50% | 0 | 2/11/2016 | 89,681 | |||||||||
Mortgage loan secured by 901 Market(6) | 49,600 | LIBOR+2.25% | 0 | 10/31/2016 | 0 | |||||||||
Mortgage loan secured by Rincon Center | 107,492 | 5.134% | 7,195 | 5/1/2018 | 97,673 | |||||||||
Mortgage loan secured by First Financial(7) | 43,000 | 4.58% | 2,002 | 2/1/2022 | 36,799 | |||||||||
Mortgage loan secured by 10950 Washington | 29,711 | 5.316% | 2,639 | 3/11/2022 | 24,632 | |||||||||
Mortgage loan secured by Pinnacle I(8) | 129,000 | 3.954% | 5,172 | 11/7/2022 | 117,190 | |||||||||
Subtotal | $ | 580,884 | ||||||||||||
Unamortized loan premium, net(9) | 1,201 | |||||||||||||
Total | $ | 582,085 | ||||||||||||
______________________________
(1) | Interest rate and annual debt service with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed, excluding the amortization of loan fees and costs. |
(2) | This loan was assumed on September 1, 2011 in connection with the closing of our acquisition of 625 Second Street property. |
(3) | This loan was assumed on November 22, 2011 in connection with the closing of our acquisition of the 6922 Hollywood Boulevard property. |
(4) | On October 5, 2012, we obtained a loan for our 275 Brannan property pursuant to which we have the ability to draw up to $15,000 for budgeted base building, tenant improvements, and other costs associated with the renovation and lease-up of that property. |
(5) | On March 16, 2011, we purchased an interest rate cap in order to cap one-month LIBOR at 3.715% with respect to $50.0 million of the loan through its maturity on February 11, 2016. On January 11, 2012 we purchased an interest rate cap in order to cap one-month LIBOR at 2.00% with respect to $42.0 million of the loan through its maturity on February 11, 2016. Beginning with the payment due February 1, 2014, monthly debt service will include principal payments based on a 30-year amortization schedule, for total annual debt amortization of $1,113. |
(6) | On October 29, 2012, we obtained a loan for our 901 Market property pursuant to which we borrowed $49,600 upon closing, with the ability to draw up to an additional $11,900 for budgeted base building, tenant improvements, and other costs associated with the renovation and lease-up of that property. |
(7) | The loan bears interest only for the first two years. Beginning with the payment due March 1, 2014, monthly debt service will include principal payments based on a 30-year amortization schedule, for total annual debt service of $2,639. |
(8) | The loan bears interest only for the first five years. Beginning with the payment due December 6, 2017, monthly debt service will include principal payments based on a 30-year amoritization schedule, for total annual debt service of $7,349. |
(9) | Represents unamortized amount of the non-cash mark-to-market adjustment on debt associated with 625 Second Street and 6922 Hollywood Boulevard. |
9
PORTFOLIO DATA
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Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
SAME-STORE ANALYSIS (1)
(unaudited, $ in thousands)
Same-Store Analysis | |||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||||
2012 | 2011 | % change | 2012 | 2011 | % change | ||||||||||||
Same-store office statistics | |||||||||||||||||
Number of properties | 11 | 11 | 11 | 11 | |||||||||||||
Rentable square feet | 3,144,629 | 3,144,629 | 3,144,629 | 3,144,629 | |||||||||||||
Ending % leased | 93.6 | % | 91.9 | % | 1.8 | % | 93.6 | % | 91.9 | % | 1.8 | % | |||||
Ending % occupied | 88.2 | % | 89.1 | % | (1.0 | )% | 88.2 | % | 89.1 | % | (1.0 | )% | |||||
Quarterly average % occupied | 88.3 | % | 88.9 | % | (0.7 | )% | 89.3 | % | 87.9 | % | 1.6 | % | |||||
Same-store media statistics | |||||||||||||||||
Number of properties | 2 | 2 | 2 | 2 | |||||||||||||
Rentable square feet | 857,432 | 857,432 | 857,432 | 857,432 | |||||||||||||
TTM average % occupied | 73.6 | % | 70.1 | % | 5.0 | % | 73.6 | % | 70.1 | % | 5.0 | % | |||||
Quarterly average % occupied | 76.3 | % | 65.8 | % | 16.0 | % | 76.3 | % | 65.8 | % | 16.0 | % | |||||
Same-property net operating income — GAAP basis | |||||||||||||||||
Total office revenues | 24,000 | 25,556 | (6.1 | )% | 96,894 | 98,502 | (2), (3) | (1.6 | )% | ||||||||
Total media revenues | 10,629 | 8,230 | 29.1 | % | 39,514 | 36,953 | 6.9 | % | |||||||||
Total revenues | 34,629 | 33,786 | 2.5 | % | 136,408 | 135,455 | 0.7 | % | |||||||||
Total office expense | 11,112 | 11,160 | (0.4 | )% | 42,773 | (4) | 44,092 | (5) | (3.0 | )% | |||||||
Total media expense | 6,320 | 5,348 | 18.2 | % | 24,205 | 22,721 | (6) | 6.5 | % | ||||||||
Total property expense | 17,432 | 16,508 | 5.6 | % | 66,978 | 66,813 | 0.2 | % | |||||||||
Same-store total property Net Operating Income — GAAP basis | 17,197 | 17,278 | (0.5 | )% | 69,430 | 68,642 | 1.1 | % | |||||||||
Same-property net operating income — Cash basis | |||||||||||||||||
Total office revenues | 24,025 | 24,256 | (1.0 | )% | 93,843 | 93,929 | (2), (3) | (0.1 | )% | ||||||||
Total media revenues | 10,624 | 7,698 | 38.0 | % | 39,467 | 36,916 | 6.9 | % | |||||||||
Total revenues | 34,649 | 31,954 | 8.4 | % | 133,310 | 130,845 | 1.9 | % | |||||||||
Total office expense | 11,050 | 11,595 | (4.7 | )% | 42,526 | (4) | 43,826 | (5) | (3.0 | )% | |||||||
Total media expense | 6,320 | 5,624 | 12.4 | % | 24,205 | 22,721 | (6) | 6.5 | % | ||||||||
Total property expense | 17,370 | 17,219 | 0.9 | % | 66,731 | 66,547 | 0.3 | % | |||||||||
Same-store total property Net Operating Income — Cash basis | 17,279 | 14,735 | 17.3 | % | 66,579 | 64,298 | 3.5 | % | |||||||||
______________________________
(1) | Same store defined as all of the properties owned and included in our stabilized portfolio as of January 1, 2011 and still owned and included in the stabilized portfolio as of December 31, 2012. |
(2) | Amount excludes a one-time $2,744 cash early lease termination fee income disclosed in the Q1-2011 earnings release. |
(3) | Amount excludes a one-time $716 GAAP (non-cash) early lease termination fee charge disclosed in the Q1-2011 earnings release. |
(4) | Amount excludes a one-time $918 tax charge disclosed in the Q2-2012 earnings release. |
(5) | Amount excludes a one-time $497 property tax savings disclosed in the Q2-2011 earnings release. |
(6) | Amount excludes a one-time $276 property tax savings disclosed in the Q2-2011 earnings release. |
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Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
RECONCILIATION OF SAME-STORE PROPERTY NOI TO GAAP NET INCOME (LOSS)
(unaudited, $ in thousands)
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||
Reconciliation to net income | |||||||||||
Same-property office revenues — cash basis | 24,025 | 24,256 | 93,843 | 93,929 | |||||||
GAAP adjustments per definition of NOI-Cash basis | (25 | ) | 1,300 | 3,051 | 3,857 | ||||||
One time revenue adjustments per definition | — | — | — | 2,744 | |||||||
Same-property office revenues — GAAP basis | 24,000 | 25,556 | 96,894 | 100,530 | |||||||
Same-property media revenues — cash basis | 10,624 | 7,698 | 39,467 | 36,916 | |||||||
GAAP adjustments per definition of NOI-Cash basis | 5 | 532 | 47 | 37 | |||||||
One time expense adjustments per definition | — | — | — | — | |||||||
Same-property media revenues — GAAP basis | 10,629 | 8,230 | 39,514 | 36,953 | |||||||
Same-store property revenues — GAAP basis | 34,629 | 33,786 | 136,408 | 137,483 | |||||||
Same-property office expenses — cash basis | 11,050 | 11,595 | 42,526 | 43,826 | |||||||
GAAP adjustments per definition of NOI-Cash basis | 62 | 62 | 247 | 266 | |||||||
One time expense adjustments per definition | — | (497 | ) | 918 | (497 | ) | |||||
Same-property office expenses — GAAP basis | 11,112 | 11,160 | 43,691 | 43,595 | |||||||
Same-property media expenses — cash basis | 6,320 | 5,624 | 24,205 | 22,721 | |||||||
GAAP adjustments per definition of NOI-Cash basis | — | — | — | — | |||||||
One time expense adjustments per definition | — | (276 | ) | — | (276 | ) | |||||
Same-property media revenues — GAAP basis | 6,320 | 5,348 | 24,205 | 22,445 | |||||||
Same-store property NOI — GAAP basis | 17,432 | 16,508 | 67,896 | 66,040 | |||||||
Same-store NOI — GAAP basis | 17,197 | 17,278 | 68,512 | 71,443 | |||||||
Non-Same Store GAAP Net Operating Income | 6,299 | 2,261 | 19,727 | 3,560 | |||||||
General and administrative | (3,692 | ) | (3,986 | ) | (16,497 | ) | (13,038 | ) | |||
Depreciation and amortization | (17,601 | ) | (11,637 | ) | (57,024 | ) | (44,660 | ) | |||
Income from operations | 2,203 | 3,916 | 14,718 | 17,305 | |||||||
Interest expense | (5,094 | ) | (4,235 | ) | (19,071 | ) | (17,480 | ) | |||
Interest income | 156 | 7 | 306 | 73 | |||||||
Acquisition-related expenses | (236 | ) | (932 | ) | (1,051 | ) | (1,693 | ) | |||
Other expenses (income) | — | (74 | ) | 92 | (443 | ) | |||||
Net loss | (2,971 | ) | (1,318 | ) | (5,006 | ) | (2,238 | ) | |||
12
Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
STABILIZED OFFICE PORTFOLIO SUMMARY, OCCUPANCY, AND IN-PLACE RENTS(1)
Annualized Base Rent Per Leased Square Foot(5) | Monthly Rent Per Leased Square Foot | |||||||||||||||||||||||
Percent of Total | Percent Occupied(3) | Percent Leased(3) | Annualized Base Rent(4) | |||||||||||||||||||||
County | Square Feet(2) | |||||||||||||||||||||||
San Francisco | ||||||||||||||||||||||||
Rincon Center | 580,850 | 14.7 | % | 78.4 | % | 78.8 | % | $ | 17,195,607 | $ | 37.75 | $ | 3.15 | |||||||||||
1455 Market Street | 1,021,969 | 25.9 | % | 87.9 | % | 99.0 | % | 12,860,847 | 14.32 | 1.19 | ||||||||||||||
875 Howard Street | 286,270 | 7.3 | % | 99.0 | % | 99.0 | % | 6,846,737 | 24.16 | 2.01 | ||||||||||||||
222 Kearny Street | 148,797 | 3.8 | % | 96.2 | % | 97.0 | % | 5,115,845 | 35.75 | 2.98 | ||||||||||||||
625 Second Street | 136,906 | 3.5 | % | 95.0 | % | 95.0 | % | 5,206,116 | 40.02 | 3.34 | ||||||||||||||
Subtotal | 2,174,792 | 55.1 | % | 87.8 | % | 93.2 | % | $ | 47,225,152 | $ | 24.72 | $ | 2.06 | |||||||||||
Los Angeles | ||||||||||||||||||||||||
First Financial | 222,423 | 5.6 | % | 81.9 | % | 96.8 | % | $ | 6,254,030 | $ | 34.35 | $ | 2.86 | |||||||||||
Technicolor Building | 114,958 | 2.9 | % | 100.0 | % | 100.0 | % | 4,395,488 | 38.24 | 3.19 | ||||||||||||||
Del Amo Office Building | 113,000 | 2.9 | % | 100.0 | % | 100.0 | % | 3,069,070 | 27.16 | 2.26 | ||||||||||||||
9300 Wilshire | 61,224 | 1.6 | % | 84.0 | % | 84.0 | % | 2,126,760 | 41.34 | 3.45 | ||||||||||||||
10950 Washington | 159,024 | 4.0 | % | 100.0 | % | 100.0 | % | 4,743,411 | 29.83 | 2.49 | ||||||||||||||
604 Arizona | 44,260 | 1.1 | % | 43.9 | % | 100.0 | % | 781,287 | 40.20 | 3.35 | ||||||||||||||
6922 Hollywood | 205,523 | 5.2 | % | 92.2 | % | 92.2 | % | 7,792,577 | 41.13 | 3.43 | ||||||||||||||
10900 Washington | 9,919 | 0.3 | % | 100.0 | % | 100.0 | % | 331,017 | 33.37 | 2.78 | ||||||||||||||
Pinnacle I | 393,777 | 10.0 | % | 91.7 | % | 91.7 | % | 14,664,791 | 40.6 | 3.38 | ||||||||||||||
Subtotal | 1,324,108 | 33.6 | % | 90.7 | % | 95.1 | % | $ | 44,158,431 | $ | 36.78 | $ | 3.07 | |||||||||||
Orange | ||||||||||||||||||||||||
City Plaza | 333,922 | 8.5 | % | 84.4 | % | 93.3 | % | $ | 6,741,457 | $ | 23.91 | $ | 1.99 | |||||||||||
Subtotal | 333,922 | 8.5 | % | 84.4 | % | 93.3 | % | $ | 6,741,457 | $ | 23.91 | $ | 1.99 | |||||||||||
San Diego | ||||||||||||||||||||||||
Tierrasanta | 112,300 | 2.8 | % | 81.1 | % | 81.1 | % | $ | 1,353,740 | $ | 14.86 | $ | 1.24 | |||||||||||
Subtotal | 112,300 | 2.8 | % | 81.1 | % | 81.1 | % | $ | 1,353,740 | $ | 14.86 | $ | 1.24 | |||||||||||
TOTAL | 3,945,122 | 100.0 | % | 88.3 | % | 93.5 | % | $ | 99,478,780 | $ | 28.55 | $ | 2.38 | |||||||||||
______________________________
(1) | Our stabilized portfolio excludes undeveloped land, development and redevelopment properties currently under construction or committed for construction, “lease-up” properties and properties “held-for-sale”. As of December 31, 2012, we had no office development property under construction, one office redevelopment property (275 Brannan Street) under construction, and two lease-up properties (901 Market Street and Olympic Bundy). We define “lease-up” properties as properties we recently purchased, developed, or redeveloped that have not yet reached 92% occupancy and are within one year following purchase and cessation of major construction activities, as applicable. |
(2) | Square footage for office properties has been determined by management based upon estimated leasable square feet, which may be less or more than the Building Owners and Managers Association, or BOMA, rentable area. Square footage may change over time due to remeasurement or releasing. |
(3) | Percent occupied for office properties is calculated as (i) square footage under commenced leases as of December 31, 2012, divided by (ii) total square feet, expressed as a percentage. Percent leased for office properties includes uncommenced leases. |
(4) | Rent data for our office properties is presented on an annualized basis. Annualized base rent for office properties is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) as of December 31, 2012, by (ii) 12. |
(5) | Annualized base rent per leased square foot for the office properties is calculated as (i) annualized base rent divided by (ii) square footage under lease as of December 31, 2012. |
13
Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
DEVELOPMENT, REDEVELOPMENT, AND LEASE-UP PROPERTIES(1)
Annualized Base Rent Per Leased Square Foot(5) | Monthly Rent Per Leased Square Foot | |||||||||||||||||||||||
Percent of Total | Percent Occupied(3) | Percent Leased(3) | Annualized Base Rent(4) | |||||||||||||||||||||
County | Square Feet(2) | |||||||||||||||||||||||
San Francisco | ||||||||||||||||||||||||
275 Brannan Street | 54,673 | 10.8 | % | — | % | 100.0 | % | $ | — | $ | — | $ | — | |||||||||||
901 Market Street | 212,319 | 41.8 | % | 84.4 | % | 84.4 | % | 4,235,527 | 23.65 | 1.97 | ||||||||||||||
Subtotal | 266,992 | 52.5 | % | 67.1 | % | 87.6 | % | $ | 4,235,527 | $ | 23.65 | $ | 1.97 | |||||||||||
Los Angeles | ||||||||||||||||||||||||
Element LA (Olympic Bundy) | 241,427 | 47.5 | % | 22.4 | % | 22.4 | % | $ | 1,297,200 | $ | 24.02 | $ | 2.00 | |||||||||||
Subtotal | 241,427 | 47.5 | % | 22.4 | % | 22.4 | % | $ | 1,297,200 | $ | 24.02 | $ | 2.00 | |||||||||||
TOTAL | 508,419 | 100.0 | % | 45.9 | % | 56.6 | % | $ | 5,532,727 | $ | 23.73 | $ | 1.98 | |||||||||||
LAND PROPERTIES
County | Square Feet(6) | Percent of Total | ||||
Los Angeles | ||||||
Sunset Bronson—Lot A | 273,913 | 14.1 | % | |||
Sunset Bronson—Redevelopment | 389,740 | 20.0 | % | |||
Sunset Gower— Redevelopment | 423,396 | 21.7 | % | |||
Olympic Bundy | 500,000 | 25.7 | % | |||
Subtotal | 1,587,049 | 81.5 | % | |||
Orange | ||||||
City Plaza | 360,000 | 18.5 | % | |||
Subtotal | 360,000 | 18.5 | % | |||
TOTAL | 1,947,049 | 100.0 | % | |||
______________________________
(1) | Our stabilized portfolio excludes undeveloped land, development and redevelopment properties currently under construction or committed for construction, “lease-up” properties and properties “held-for-sale”. As of December 31, 2012, we had no office development property under construction, one office redevelopment property (275 Brannan Street) under construction, and two lease-up properties (901 Market and Olympic Bundy). We define “lease-up” properties as properties we recently purchased, developed, or redeveloped that have not yet reached 92% occupancy and are within one year following purchase and cessation of major construction activities, as applicable. |
(2) | Square footage for office properties has been determined by management based upon estimated leasable square feet, which may be less or more than the Building Owners and Managers Association, or BOMA, rentable area. Square footage may change over time due to remeasurement or releasing. |
(3) | Percent occupied for office properties is calculated as (i) square footage under commenced leases as of December 31, 2012, divided by (ii) total square feet, expressed as a percentage. Percent leased for office properties includes uncommenced leases. |
(4) | Rent data for our office properties is presented on an annualized basis. Annualized base rent for office properties is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) as of December 31, 2012, by (ii) 12. |
(5) | Annualized base rent per leased square foot for the office properties is calculated as (i) annualized base rent divided by (ii) square footage under lease as of December 31, 2012. |
(6) | Square footage for land assets represents management’s estimate of developable square feet, the majority of which remains subject to entitlement approvals that have not yet been obtained. |
14
Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
MEDIA & ENTERTAINMENT PORTFOLIO SUMMARY, OCCUPANCY, AND IN-PLACE RENTS
Property | Square Feet (1) | Percent of Total | Percent Occupied(2) | Annual Base Rent(3) | Annual Base Rent Per Leased Square Foot(4) | ||||||||||||
Sunset Gower | 566,137 | 64.3 | % | 71.2 | % | $ | 12,293,287 | $ | 30.49 | ||||||||
Sunset Bronson | 313,723 | 35.7 | % | 78.1 | % | 10,333,830 | 42.16 | ||||||||||
879,860 | 100.0 | % | 73.7 | % | $ | 22,627,118 | $ | 34.90 | |||||||||
______________________________
(1) | Square footage for media and entertainment properties has been determined by management based upon estimated gross square feet, which management believes is less than the BOMA rentable area. Square footage may change over time due to remeasurement or releasing. On September 21, 2012 we acquired 5,921 square feet of office property located at 1455 Gordon, ancillary to our Sunset Gower property. That acquisition is reflected in the square footage for Sunset Gower as of September 21, 2012 on a weighted average basis. As of December 31, 2012, the square footage for Sunset Gower and Sunset Bronson totaled 884,196 square feet, including that acquisition. Since the percent occupied is determined on a weighted average basis for the 12 months ended December 31, 2012, the square footage for 1455 Gordon is also included in the square footage for the media and entertainment properties on a weighted average basis. |
(2) | Percent occupied for media and entertainment properties is the average percent occupied for the 12 months ended December 31, 2012. |
(3) | Annual base rent for media and entertainment properties reflects actual base rent for the 12 months ended December 31, 2012, excluding tenant reimbursements. |
(4) | Annual base rent per leased square foot for the media and entertainment properties is calculated as (i) annual base rent divided by (ii) square footage under lease as of December 31, 2012. |
15
Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
TEN LARGEST OFFICE TENANTS
Tenant | Number of Leases | Number of Properties | Lease Expiration(1) | Total Leased Square Feet | Percent of Rentable Square Feet | Annualized Base Rent(2) | Percent of Annualized Base Rent | ||||||||||||||
Bank of America(3) | 1 | 1 | Various | 776,812 | 17.4 | % | $ | 8,720,944 | 8.3 | % | |||||||||||
Warner Music Group | 1 | 1 | 12/31/2019 | 195,166 | 4.4 | % | 7,803,146 | 7.4 | % | ||||||||||||
AIG | 1 | 1 | 7/31/2017 | 142,655 | 3.2 | % | 6,134,165 | 5.8 | % | ||||||||||||
AT&T(4) | 1 | 1 | 8/31/2013 | 155,964 | 3.5 | % | 5,850,333 | 5.6 | % | ||||||||||||
GSA(5) | 3 | 2 | Various | 138,712 | 3.1 | % | 4,517,197 | 4.3 | % | ||||||||||||
Fox Interactive Media, Inc. | 1 | 1 | 3/31/2017 | 104,897 | 2.4 | % | 4,489,382 | 4.3 | % | ||||||||||||
Technicolor Creative Services USA, Inc. | 1 | 1 | 5/31/2020 | 114,958 | 2.6 | % | 4,395,488 | 4.2 | % | ||||||||||||
Clear Channel | 1 | 1 | 9/30/2016 | 107,715 | 2.4 | % | 4,392,142 | 4.2 | % | ||||||||||||
NFL Enterprises | 2 | 2 | 3/31/2015 | 115,084 | 2.6 | % | 3,648,749 | 3.5 | % | ||||||||||||
Saatchi & Saatchi North America, Inc. | 1 | 1 | 12/31/2019 | 113,000 | 2.5 | % | 3,069,070 | 2.9 | % | ||||||||||||
Total | 13 | 12 | 1,964,963 | 44.1 | % | $ | 53,020,616 | 50.5 | % | ||||||||||||
______________________________
(1) | GSA and Saatchi & Saatchi North America, Inc. leases are subject to early termination prior to expiration at the option of the tenant. |
(2) | Annualized base rent is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) for the month ended December 31, 2012, by (ii) 12. Annualized base rent does not reflect tenant reimbursements. |
(3) | We have completed leases at our 1455 Market property with the Metro Transit Authority (“MTA”) for 38,894 square feet and with Square, Inc. for 327,432 square feet which backfills certain space currently leased to Bank of America. The following summarizes Bank of America’s early termination rights by square footage as of December 31, 2012, subject to the pending lease commencements with MTA and Square, Inc.: (1) 25,474 square feet at December 31, 2012; (2) 95,656 square feet at January 31, 2013, 92,740 square feet of which was delivered to Square, Inc. in February, 2013 and is scheduled for lease commencement in March, 2013; (3) 56,521 square feet at June 30, 2013, 38,894 square feet of which is scheduled to be delivered to MTA at or around June 30, 2013, subject to satisfaction of certain conditions associated with the lease to MTA, and another 15,741 square feet of which is scheduled to be delivered to Square Inc. in July, 2013 for lease commencement in July, 2013; (4) 152,373 square feet at December 31, 2013, 129,886 square feet of which is scheduled to be delivered to Square, Inc. in January, 2014 for lease commencement in January, 2014; (5) 217,914 square feet at December 31, 2015; and (6) 228,874 square feet at December 31, 2017. In sum, the leases with MTA and Square, Inc. backfill a combined 277,261 square feet of the 776,812 square feet leased to Bank of America as of December 31, 2012. In addition to the 238,367 square feet under the lease with Square, Inc. which backfills space under the Bank of America lease, the lease with Square, Inc. also includes 89,065 square feet of net absorption, scheduled for commencement in March, 2013. |
(4) | We have completed leases at our Rincon Center property with salesforce.com for 235,733 square feet which backfills 148,375 square feet currently leased to AT&T. The following summarizes the scheduled commencement by square footage of the lease with salesforce.com: (1) 93,028 square feet commencing on November 1, 2013, 71,931 square feet of which backfills space currently occupied by AT&T; (2) 59,689 square feet commencing May 1, 2014, 37,230 square feet of which backfills space currently occupied by AT&T; (3) 76,004 square feet commencing August 1, 2014, 39,214 square feet of which backfills space currently occupied by AT&T and 27,604 square feet currently occupied to other tenants; (4) 2,868 square feet commencing August 1, 2015, 2,851 square feet of which backfills space currently occupied by other tenants; and (5) 4,144 square feet commencing May 1, 2017, all of which backfills space currently occupied by other tenants. In addition to the 182,974 square feet under the lease with salesforce.com which backfills space under the lease with AT&T and other tenants, the lease with salesforce.com also includes 13,021 square feet of additional square footage due to BOMA adjustments and 39,738 square feet of net absorption, scheduled for commencement, as follows: 18,062 square feet in November, 2013; 18,075 square feet in May, 2014; and 3,601 square feet in August, 2014. |
(5) | GSA expirations by property and square footage: (1) 89,995 square feet at 1455 Market Street expiring on February 19, 2017; (2) 5,906 square feet at 901 Market Street expiring on April 30, 2017; and (3) 42,811 square feet at 901 Market Street expiring on July 31, 2021. |
16
Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
OFFICE PORTFOLIO LEASING ACTIVITY
Total Gross Leasing Activity | |||
Rentable square feet | 705,905 | ||
Number of leases | 17 | ||
Gross New Leasing Activity | |||
Rentable square feet | 595,911 | ||
New cash rate | $ | 39.41 | |
Number of leases | 11 | ||
Gross Renewal Leasing Activity | |||
Rentable square feet | 109,994 | ||
Renewal cash rate | $ | 9.88 | |
Number of leases | 6 | ||
Net Absorption | |||
Leased rentable square feet | 491,180 | ||
Cash Rent Growth(1) | |||
Expiring Rate | $ | 21.33 | |
New/Renewal Rate | $ | 31.78 | |
Change | 48.9 | % | |
Straight-Line Rent Growth(2) | |||
Expiring Rate | $ | 19.88 | |
New/Renewal Rate | $ | 33.07 | |
Change | 66.3 | % | |
Weighted Average Lease Terms | |||
New (in months) | 129 | ||
Renewal (in months) | 55 | ||
Tenant Improvements and Leasing Commissions(3) | Total Lease Transaction Costs Per Square Foot | Annual Lease Transaction Costs Per Square Foot |
New leases | $74.44 | $6.94 |
Renewal leases | $1.9 | $0.41 |
Blended | $63.13 | $6.46 |
______________________________
(1) | Represents a comparison between initial stabilized cash rents on new and renewal leases as compared to the expiring cash rents in the same space. New leases are only included if the same space was leased within the previous 12 months. |
(2) | Represents a comparison between initial straight-line rents on new and renewal leases as compared to the straight-line rents on expiring leases in the same space. New leases are only included if the same space was leased within the previous 12 months. |
(3) | Represents per square foot weighted average lease transaction costs based on the lease executed in the current quarter in our properties. |
17
Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
OFFICE LEASE EXPIRATIONS — ANNUAL
Year of Lease Expiration | Square Footage of Expiring Leases(1) | Percent of Office Portfolio Square Feet | Annualized Base Rent(2) | Percentage of Office Portfolio Annualized Base Rent | Annualized Base Rent Per Leased Square Foot(3) | Annualized Base Rent Per Lease Square Foot at Expiration(4) | |||||||||||||||
Available | 477,077 | 10.7 | % | $ | — | — | $ | — | $ | — | |||||||||||
2012 | 58,089 | 1.3 | % | 386,049 | 0.3 | % | 6.65 | 6.65 | |||||||||||||
2013 | 789,518 | 17.7 | % | 19,633,620 | 17.2 | % | 24.87 | 24.64 | |||||||||||||
2014 | 149,109 | 3.4 | % | 5,078,656 | 4.4 | % | 34.06 | 35.11 | |||||||||||||
2015 | 404,090 | 9.1 | % | 8,120,591 | 7.1 | % | 20.10 | 21.97 | |||||||||||||
2016 | 338,399 | 7.6 | % | 11,248,475 | 9.8 | % | 33.24 | 36.14 | |||||||||||||
2017 | 768,018 | 17.2 | % | 22,717,744 | 19.9 | % | 29.58 | 30.98 | |||||||||||||
2018 | 272,208 | 6.1 | % | 6,856,905 | 6.0 | % | 25.19 | 28.30 | |||||||||||||
2019 | 558,446 | 12.5 | % | 18,591,470 | 16.3 | % | 33.29 | 38.63 | |||||||||||||
2020 | 238,735 | 5.4 | % | 8,791,014 | 7.7 | % | 36.82 | 45.88 | |||||||||||||
2021 | 42,811 | 1.0 | % | 1,054,723 | 0.9 | % | 24.64 | 28.45 | |||||||||||||
Thereafter | 76,232 | 1.7 | % | 2,532,260 | 2.2 | % | 33.22 | 44.63 | |||||||||||||
Building management use | 21,425 | 0.5 | % | — | — | % | — | — | |||||||||||||
Signed leases not commenced | 259,384 | 5.8 | % | 9,391,766 | 8.2 | % | 36.21 | 47.07 | |||||||||||||
Total/Weighted Average | 4,453,541 | 100.0 | % | $ | 114,403,273 | 100.0 | % | $ | 28.77 | $ | 31.95 | ||||||||||
______________________________
(1) | Please see footnote (3) on page 16 of this Supplemental Operating and Financial Data report for an explanation of the re-leasing status of 304,550 square feet currently leased to Bank of America scheduled to expire in 2013 at our 1455 Market property, and footnote (4) on page 16 of this Supplemental Operating and Financial Data report for an explanation of the re-leasing status of 148,375 square feet currently leased to AT&T scheduled to expire in 2013 at our Rincon Center property. |
(2) | Rent data for our office properties is presented on an annualized basis without regard to cancellation options. Annualized base rent for office properties is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) as of December 31, 2012, by (ii) 12. |
(3) | Annualized base rent per leased square foot for the office properties is calculated as (i) annualized base rent divided by (ii) square footage under lease as of December 31, 2012. |
(4) | Annualized base rent per leased square foot at expiration for the office properties is calculated as (i) annualized base rent at expiration divided by (ii) square footage under lease as of December 31, 2012. |
18
Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
QUARTERLY OFFICE LEASE EXPIRATIONS — NEXT FOUR QUARTERS
Q1 2013 | Q2 2013 | Q3 2013 | Q4 2013 | |||||||||||||||||||||
County | Expiring SF | Rent per SF(1) | Expiring SF | Rent per SF(1) | Expiring SF | Rent per SF(1) | Expiring SF | Rent per SF(1) | ||||||||||||||||
San Francisco | ||||||||||||||||||||||||
Rincon Center(2) | 3,746 | $ | 30.80 | 895 | $ | 29.00 | 155,964 | $ | 37.51 | 2,390 | $ | 33.67 | ||||||||||||
1455 Market Street(3) | 95,656 | 10.25 | 56,521 | 3.21 | 1,511 | 30.23 | 152,373 | 19.57 | ||||||||||||||||
875 Howard Street | — | — | — | — | — | — | 4,307 | 32.00 | ||||||||||||||||
222 Kearny Street | 8,831 | 43.01 | 5,171 | 45.00 | 11,772 | 49.55 | 11,026 | 24.11 | ||||||||||||||||
625 Second Street | — | — | — | — | 25,175 | 28.47 | — | — | ||||||||||||||||
275 Brannan Street | — | — | — | — | — | — | — | — | ||||||||||||||||
901 Market Street | 32,928 | 23.00 | — | — | 2,790 | 21.00 | 43,364 | 29.54 | ||||||||||||||||
Subtotal | 141,161 | $ | 15.82 | 62,587 | $ | 7.03 | 197,212 | $ | 36.79 | 213,460 | $ | 22.24 | ||||||||||||
Los Angeles | ||||||||||||||||||||||||
First Financial | 1,101 | $ | 31.83 | 5,033 | $ | 39.41 | 3,473 | $ | 40.18 | 7,036 | $ | 38.08 | ||||||||||||
Technicolor Building | — | — | — | — | — | — | — | — | ||||||||||||||||
Del Amo Office Building | — | — | — | — | — | — | — | — | ||||||||||||||||
9300 Wilshire | 1,669 | 36.83 | 2,712 | 56.16 | — | — | 1,688 | 44.16 | ||||||||||||||||
10950 Washington | — | — | 20,047 | 28.20 | 2,174 | 27.36 | — | — | ||||||||||||||||
604 Arizona | — | — | — | — | — | — | — | — | ||||||||||||||||
6922 Hollywood | — | — | — | — | — | — | — | — | ||||||||||||||||
10900 Washington | — | — | — | — | — | — | — | — | ||||||||||||||||
Element LA (Olympic Bundy) | — | — | 54,000 | 24.02 | — | — | — | — | ||||||||||||||||
Pinnacle I | — | — | — | — | — | — | 9,005 | 46.35 | ||||||||||||||||
Subtotal | 2,770 | $ | 34.84 | 81,792 | $ | 27.06 | 5,647 | $ | 35.24 | 17,729 | $ | 42.86 | ||||||||||||
Orange | ||||||||||||||||||||||||
City Plaza | 19,827 | $ | 16.60 | 40,388 | $ | 29.56 | 831 | $ | 25.80 | 6,114 | $ | 23.75 | ||||||||||||
Subtotal | 19,827 | $ | 16.60 | 40,388 | $ | 29.56 | 831 | $ | 25.80 | 6,114 | $ | 23.75 | ||||||||||||
San Diego | ||||||||||||||||||||||||
Tierrasanta | — | $ | — | — | $ | — | — | $ | — | — | $ | — | ||||||||||||
Subtotal | — | $ | — | — | $ | — | — | $ | — | — | $ | — | ||||||||||||
Total | 163,758 | $ | 16.24 | 184,767 | $ | 20.82 | 203,690 | $ | 36.70 | 237,303 | $ | 23.82 | ||||||||||||
______________________________
(1) | Rent data for our office properties is presented on an annualized basis without regard to cancellation options. Annualized base rent for office properties is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) as of December 31, 2012, by (ii) 12. |
(2) | Please see footnote (4) on page 16 of this Supplemental Operating and Financial Data report for an explanation of the re-leasing status of the 155,964 square feet scheduled to expire in Q3 2013 at our Rincon Center property. |
(3) | Please see footnote (3) on page 16 of this Supplemental Operating and Financial Data report for an explanation of the re-leasing status of the 95,656 square feet scheduled to expire in Q1 2013, 56,521 square feet scheduled to expire in Q2 2013, and 152,373 square feet scheduled to expire in Q4 2013 at our 1455 Market Street property. |
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Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
OFFICE PORTFOLIO DIVERSIFICATION
Total | Annualized Rent as | |||||
Industry | Square Feet(1) | of Percent of Total | ||||
Business Services | 80,761 | 2.3 | % | |||
Educational | 120,396 | 4.1 | % | |||
Financial Services | 1,030,935 | 15.3 | % | |||
Insurance | 175,921 | 6.4 | % | |||
Legal | 139,019 | 3.9 | % | |||
Media & Entertainment | 777,780 | 27.7 | % | |||
Other | 145,426 | 3.0 | % | |||
Real Estate | 63,484 | 2.1 | % | |||
Retail | 262,738 | 5.7 | % | |||
Technology | 527,529 | 18.4 | % | |||
Advertising | 169,735 | 4.2 | % | |||
Government | 191,290 | 5.9 | % | |||
Healthcare | 32,066 | 1.0 | % | |||
Total | 3,717,080 | 100.0 | % | |||
______________________________
(1) | Does not include signed leases not commenced. |
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Hudson Pacific Properties, Inc.
Fourth Quarter 2012 Supplemental Operating and Financial Data
DEFINITIONS
Funds From Operations (FFO): We calculate funds from operations before non-controlling interest (FFO) in accordance with the standards established by the National Association of Real Estate Investment Trusts (NAREIT). FFO represents net income (loss), computed in accordance with accounting principles generally accepted in the United States of America (GAAP), excluding gains (or losses) from sales of depreciable operating property, real estate depreciation and amortization (excluding amortization of above (below) market rents for acquisition properties and amortization of deferred financing costs and debt discounts) and after adjustments for unconsolidated partnerships and joint ventures. We use FFO as a supplemental performance measure because, in excluding real estate depreciation and amortization and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, captures trends in occupancy rates, rental rates and operating costs.
We also believe that, as a widely recognized measure of the performance of REITs, FFO will be used by investors as a basis to compare our operating performance with that of other REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that results from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations, the utility of FFO as a measure of our performance is limited. Other equity REITs may not calculate FFO in accordance with the NAREIT definition and, accordingly, our FFO may not be comparable to such other REITs' FFO. Accordingly, FFO should be considered only as a supplement to net income as a measure of our performance. FFO should not be used as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends. FFO should not be used as a supplement to or substitute for cash flow from operating activities computed in accordance with GAAP.
Adjusted Funds From Operations (AFFO): 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 the non-cash compensation expense and amortization of deferred financing costs, and subtracting recurring capital expenditures, 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 straight-line rents, amortization of lease buy-out costs, and amortization of above/below market lease intangible assets and liabilities and amortization of loan discounts/premium. We also add to FFO the difference between rental revenue recognize in accordance with accounting principles generally accepted in the United States (GAAP) based on the amortization of the prepaid rent liability relating to the KTLA lease at our Sunset Bronson property compared to scheduled cash rents received in connection with such prepayment. 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.
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