Hudson Pacific Properties, Inc.

Good afternoon and welcome to the Hudson Pacific Properties fourth quarter 2021 conference call. Our participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To enter the question queue at any time, please press the star key followed by one on your touchtone phone. If you are using a speakerphone, note you will need to pick up your handset before pressing the keys. Please note this event is being recorded. I will now like to turn the conference over to Laura Campbell, Executive Vice President, Investor Relations and Marketing. Please go ahead.

Good morning, everyone. Thanks for joining us. With me on the call today are Victor Coleman, CEO and Chairman, Mark Lamas, President, Harut Dhiramarian, CFO, and Art Suazo, EVP of Leasing. Yesterday, we filed our earnings release and supplemental on an 8K with the SEC and and both are now available on our website. An audio webcast of this call will be available for replay on our website. Some of the information we'll share on the call today is forward-looking in nature. Please reference our earnings release and supplemental for statements regarding forward-looking information, as well as the reconciliation of non-GAAP financial measures used on this call and in those materials. This morning, Victor will discuss macro trends across our markets and our 2022 priorities. Mark will review 2021 business highlights along with upcoming opportunities, and Harut will discuss our fourth quarter financial results and provide initial guidance for 2022. Thereafter, we'll be happy to take your questions. Victor?

Thank you, Laura. Good morning, everyone, and thanks for joining us. Hudson Pacific accomplished a great deal in 2021, staying true to our core strategy. We further expanded our office and studio portfolios within global centers of innovation. We delivered On exceptional value of creating redevelopment opportunities like One West Side, we grew our studio platform by acquiring new production service lines, as well as by adding another large-scale, purpose-built studio to our development pipeline, and all this while successfully capitalizing on our office leasing expirations and maintaining a strong and flexible balance sheet. The long-term outlook for the unique type of properties and experience Hudson Pacific provides includes for its studio and office tenants has never been brighter. For over a decade, we've remained diligent in our focus on high barrier to entry markets propelled by growth of tech and media, where the related industry infrastructure, be it capital flows, talent or services, is entrenched. We've also put ourselves at the forefront of owning and operating production studios, which operational complexity and unique relationships also create significant barriers to building a platform at scale. Our strategy has proven out and remains well intact as the pandemic has only accelerated pre-leasing demand trends, driving abundant amount of capital to the tech and media industries. Venture capital investment reached $330 billion in the United States last year. This is the highest year on record and almost double the prior year. With California receiving the lion's share more than three times any other market, We expect this to continue, with venture funds raising nearly $130 billion last year, up 50% year-over-year, and eclipsing the $100 billion mark for the first time ever. Software and other non-biotech investments surged in 2021, which coupled with increased early-stage fundings are poised to further drive leasing velocity at our smaller tenant-focused Peninsula and Silicon Valley office assets, where we're already seeing demand accelerate. Content production spend for the addressable U.S., U.K., and Canadian markets totaled approximately $175 billion in 2021. That's a 14% increase from the prior year, with studios like Comcast, Disney, Netflix, Apple, and Amazon spending more than $100 billion. Production spend is anticipated to increase again this year as the battle for streaming service subscribers further intensifies the U.S. and global markets alike. This bodes very well for the demand at both our studios and our strategically located office assets. Several of these companies have sizable requirements, not only for Los Angeles, where the location, quality, and studio adjacency of our office portfolio and development pipeline is unmatched, but within our other markets as well. Improving the public commentary around return to work is beginning to reflect the reality of our tenant discussions and has accelerated leasing activity across all of our markets. For media and tech tenants, and creative office companies where culture and collaboration is essential, the terms hybrid and flexible are not translating into less workspace. In fact, Fang-type tenants, which have long been the bellwether on workplace trends, have been accumulating large blocks of space throughout the pandemic. This activity has accelerated in the most recent months as meta-platforms, LinkedIn, Pinterest, Upstart, Zillow, Amazon, Twitter, Indeed, Riot Games, and Roku have all signed significant leases across our markets. Big picture, with this favorable backdrop in 2022, Hudson will continue to do what does best, creating significant shareholder value by transforming underperforming real estate in global tech and media markets and leasing that space to meet the modern workspace needs of today's and tomorrow's leading companies. We are specifically focused on five key objectives this year. First, to successfully address our 2022 office lease expirations while capturing double-digit mark-to-market on rents. Second, to execute successfully on our near-term value creation office and studio developments, including Sunset Glen Oaks and Washington 1000. Third, to recycle capital from non-strategic asset sales into high-yielding strategically aligned acquisition opportunities be it office or studio assets, production service businesses, or repurchase shares. Fourth, to maintain a strong, flexible balance sheet with ample liquidity to run and grow our business. And finally, to continue to undertake innovative and impactful ESG endeavors that further differentiate our company, Hudson Pacific, in the areas of sustainability, health, and equity. With that, now I'm going to turn it over to Mark.