Hudson Pacific Properties, Inc.

Greetings and welcome to the Hudson Pacific Properties Incorporated second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Laura Campbell, Executive Vice President of Investor Relations and Marketing, Thank you. You may begin.

Thank you, operator. Good morning, everyone, and welcome to Hudson Pacific Properties' second quarter 2021 earnings call. Yesterday, our press release and supplemental were filed on an 8K with the SEC. Both are available on the investor section of our website, HudsonPacificProperties.com. An audio webcast of this call will also be available for replay by phone over the next week and on the investor section of our website. During this call, we will discuss non-GAAP financial measures which are reconciled to our GAAP financial results in our press release and supplemental. We'll also be making forward-looking statements based on our current expectations. These statements are subject to risks and uncertainties discussed in our SEC filings, including those associated with the COVID-19 pandemic. Actual events could cause our results to differ materially from these forward-looking statements, which we undertake no duty to update. Moreover, this quarter, we've once again included certain disclosure prompted by COVID-19 business changes, which we won't maintain once business operations normalize. With that, I'd like to welcome Victor Coleman, our chairman and CEO, Mark Lamas, our president, and Harut Dhirumirian, our CFO. They will be joined by other senior management during the Q&A portion of the call. Victor?

Thank you, Laura. Good morning, everyone. Welcome to our second quarter 2021 call. We had a very strong second quarter in terms of our financial results. We've also had a very busy start to our third quarter, executing on our growth strategy for Sunset Studios, and I'll talk a little bit about that more in a moment. The big picture, the tech and media industries continue to flourish in our markets. Venture investment and fundraising are at record levels. The IPO market is strong. Tech employment and hiring have recovered to essentially pre-pandemic levels. and media companies are spending billions to produce a backlog of content. Over the last few months, we've seen a real momentum towards the return of office, and we're optimistic that's going to continue. Growing vaccination rates combined with statewide reopenings in California in mid-June, in Washington at the end of June, and forthcoming in Vancouver after Labor Day led companies to begin implementing and formalizing plans. We are still in a wait-and-see mode regarding any major adjustments space configurations or needs. But even with variants, we're expecting heading into fall, most companies will move forward towards at least a partial occupancy of existing space, potentially coupled with vaccine mandates. We're already seeing this from a few of our larger office tenants. Essentially, all of our major studio tenants, Netflix, HBO, CBS, Disney, ABC, Amazon have resumed and are scheduled to imminently resume active production or on our lots with safety protocols in place. Production is now in overdrive given content demand and pandemic related shutdowns, particularly here in Los Angeles, where we are building a state-of-the-art global studio portfolio to meet that demand. To that end, I'm sure many of you saw we made two very exciting major announcements over the last week around our expansion of our Sunset Studio platform. The first, Sunset Glen Oaks will be the largest purpose-built studio in the Los Angeles area in over 20 years. The project is in Sun Valley, minutes from Burbank, where Disney, NBC Universal, and WarnerMedia are headquartered, and many other production companies like Netflix are located. We're going to build approximately 240,000 square feet, adding another seven stages to our portfolio for a total investment of approximately $170 to $190 million. We're finalizing plans and budgets that could start construction as early as fourth quarter of this year and complete the project in the third quarter of 2023. This is a 50-50 joint venture with Blackstone, and we're on point for development, leasing, and property management. The second transaction, which we announced on Monday, marks Sunset Studios' first expansion out of the U.S. into the U.K., something I've often noted was on our agenda. The UK has a long history of global production in a media center. It is a deep pool of talent, crews, and services to support productions, regional infrastructure, and generous and longstanding tax credits. Further, investment in the UK film and TV investment has grown dramatically over the last five to seven years, while supply and purpose-built studios remains limited. We're in the entitlement and planning stages to build what will ultimately be one of the three largest purpose-built studios in the UK and one of the highest quality production facilities globally for TV and film. The site comprises 91 acres on undeveloped land about 17 miles north of London in Boxbourne, Hertfordshire, minutes from public transit and close to the Heathrow Airport as well as central London. This facility will provide great access to other major studios, production houses, crew, and talent. We purchased the site for 120 million pounds through a 3565 JV with Blackstone. And although it's early, we anticipate a total investment of around 700 million pounds. We'll be responsible for development, oversight, leasing, and property management. And we're setting up a local office and a small team to manage the day-to-day reporting to our team here in Los Angeles. Part of what's so exciting about the Sunset Studios' newest LA and UK locations is we're reimagining how studio facilities can best support future productions, be it through architectural design, high-tech infrastructure, or sustainable buildings and operations. We're at the very positive preliminary marketing conversations with major production companies related to both projects, and we can either master lease or multi-tenant these facilities. It's still early, and we have a lot of interest and flexibility so far. Finally, I want to congratulate the Hudson Pacific team on winning the NAOP's 2021 Development of the Year Award. It's one of the industry's most prestigious awards and NAOP's highest honor. It's also a reflection of our company's leadership and innovation across every aspect of our business. NAOP's recognition is especially meaningful given it's based mostly on our exceptional performance throughout 2020, which of course was a very atypical and challenging year. So again, very, very proud of the Hudson Pacific team. With that, I'm going to turn it over to Mark.