Hudson Pacific Properties, Inc.

Good morning, and welcome to the Hudson Pacific Properties Second Quarter 2022 Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star key followed by zero. To answer questions, 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 key. Please note, this event is being recorded. I would 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 Jarmirian, CFO, and Art Suazo, EVP of Leasing. Yesterday, we filed our earnings release and supplemental on an 8K with the SEC, and both are now available on our website. The audio webcast of this call will be available for replay on our website. Some of the information we'll share on this 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. Today, Victor will touch on our strategy and the macro environment. Mark will discuss progress on leasing, development, and asset sales. And Harut will provide more detail on our second quarter financial results and outlook Thereafter, we'll be happy to take your questions. Victor?

Thank you, Laura, and thank you, everyone, for joining us today. Day in and day out, every level of our organization is committed and focused as we work to make the right decisions that move our business forward in alignment with our core investment theses. We'll continue to evolve in line with the synergistic, converging, and secular nature of the tech and media industries, leveraging our unique ability to deliver world-class office and studio facilities that position us to outperform over the long term. The fact that we're making progress against the persistent pandemic backdrop and rapidly evolving economic environment is a testament to our team's efforts and dedication. Office utilization throughout our portfolio continues to rise and is now in the mid 40s to 50% range, up from its low at about 5% to 10% in the height of the pandemic. For most of our office tenants, it's clear executives want employees back in the office in some capacity. Not only are they witnessing the deterioration of culture, collaboration, and mentorship, but there's also growing evidence of reduced productivity and accuracy among key functional groups. Companies including Google, Amazon, and Netflix, three of our largest tenants, operate with a very long-term perspective and have continued to lease, build out, and or occupy well-located, high-quality, sustainable, and collaborative workspace. like we have in our portfolio. We believe that for competitive reasons, our leading tech, media, and creative companies, if they have not already, will ultimately follow suit. Despite historically low unemployment, it's challenging to predict the precise near-term net impact that hybrid work, capital constraints, and potential layoffs could have on office demand. For the second quarter overall, in several of our markets, we saw tenant requirements and gross leasing grow, sublease space stabilize or decline, and positive net absorption in the six figures. Yet the swelling demand and activity we witnessed at the beginning of the second quarter tempered in June and July as some of the companies paused to digest the impact of increased market volatility and the possibility of a recession. Benefiting from our diversification at our studio assets, we continue to see robust demand for our integrated offering of Class A office, high-quality stages, support space, and production services. While our on-lot ancillary production office space is leasing up, albeit slowly, our stages and support spaces are essentially fully occupied. Our studio facilities are ideal for the type of original content that streaming and other media companies will continue to rely on to win subscribers. Currently, we can accommodate only a fraction of the inbound stage and support space related inquiries, which ultimately bodes well for our on-lot Class A and production office space. Pro-business leadership and policies appear to be gaining momentum across all of our markets, and this is very positive in terms of development. Most recently, California has proposed to establish an annual property tax surcharge on properties valued at over $4 million. The latest effort to repeal Prop 13 failed to garner the requisite signatures to be included on the November ballot. From Seattle to San Francisco to Los Angeles, we're seeing greater support for pro-business candidates with an emphasis on cleaning up cities, supporting police, and ensuring urban centers remain open for business. At the end of the day, regardless of the changing macro or regulatory environments, we're doing what is within our control and what we do best, leveraging our expertise and relationships, staying laser-focused on leasing, and making strategic enhancements and additions to our portfolio to capture tenant demand now and in the future. We're in front of every relevance-based requirement in our markets. We're effectively determining where repositioning and other capital improvement dollars can have the greatest impact, and we're recycling out non-strategic assets while executing on select projects within our development pipeline. And we're pursuing only studio and studio-related acquisitions that are synergistic and accretive to our existing platform. Finally, I encourage all of our investors to check out our latest corporate responsibility report, which we've published during the quarter. I'm proud of our continued accomplishments and of the value of our Better Blueprint ESG platform and its creating value for our stakeholders. Today, we have the highest percentage of LEED certified properties among our major office REITs. Our operations are carbon neutral and we have further reduced emissions by 25%. And to address homelessness, we've invested and donated a total of $4 million towards supportive housing solutions in our communities. And we've also strengthened our commitment to diversity, equity, and inclusion, hiring a DEI head and launching an innovative impact fund, EquiBlue, to support these efforts within our industries and our communities. With that, I'm gonna turn it over to Mark.