Hudson Pacific Properties, Inc.

Good morning and welcome to the Hudson Pacific Properties third quarter 2022 conference call. All lines will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. 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 would now like to turn the conference over to Laura Campbell, Executive Vice President of 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 Girimarian, CFO, and Art Suazo, EVP of Leasing. Yesterday, we found our earnings release and supplemental on the 8K with the SEC, 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 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 discuss NAFRA conditions and our third quarter highlights, Mark will provide detail on our office leasing, and Haru will touch on our financial results and outlook. Thereafter, we'll be happy to take your questions. Victor?

Thanks, Laura, and thank you, everyone, for joining us today. At Hudson Pacific, we're leveraging our expertise and relationships and continuing to hustle every day to get leases signed. I'm proud of our team's effort in effectively navigating this very persistent, dynamic macro environment. The confluence of monetary policy, potential recession, tight labor markets, and a hybrid workforce continue to impact supply and demand fundamentals in all of our markets. One offset is that on a positive level, we are finally seeing more companies bringing employees back to the office two to four days a week. And office users are inquiring, touring, and trading paper. Simply though, it's just taking longer to get leases over the finish line as tenants attempt to make mid to long-term real estate decisions in the face of considerable uncertainty. Our strategy has positioned our portfolio optimally for this challenging cycle And strong evidence is that our year-to-date leasing activity of 1.6 million square feet is in line with our historical year-to-date levels and up over 18% over last year. For more than a decade, Hudson Pacific has partnered with tech and media companies to create campuses and workspaces that engage and inspire employees. And these companies defined what the modern workspace could be, and they invested well above and beyond our TIs to ensure that their employees want to spend time at the office. We in turn, invested in the infrastructure upgrades, onsite amenities, the latest technology, and substantial ESG initiatives. As a testament to the latter, we just ranked recently number one of 96 office companies in Gresby's 2022 real estate assessment. We have a unique vertically integrated platform and a modern sustainable portfolio essential to meet tenant demand in the current marketplace. Now let me touch on some of this quarter's highlights. We signed over 380,000 square feet representing 65 new and renewal leases that once again saw a gap in cash rents increase. This activity was largely driven by small to mid-sized tenants averaging 6,000 square feet across a range of industries, including tech, healthcare, and government. The Bay Area comprised approximately 70% of the new and renewal leasing activity, including several large deals, such as renewals of RS Health for 27,000 square feet, Amcor Technology for 23,000 square feet, and a state of California lease for 43,000 square feet. We're staying opportunistic in terms of our acquisitions as we continue to monitor market conditions. In the third quarter, we acquired Kiyoti, a leading stage and production services provider, which was a key component to our strategy to build a premier full-service global studio platform. With its combination of stage lease rights, production gear and vehicles, Kiyoti further enhances our ability to capitalize on robust production spend on and off our own Sunset Studio lots. KEODI is also a strong complement to our purchase of Zio services as well as Star Wagons last year. With the closing, our studio segment now comprises of approximately 13% of our NOI with only one month of contribution from KEODI. If we were former that back to the start of the year, that number would be 15%. In terms of development, we're on time and budget to deliver two under construction projects totaling 790,000 square feet. One, our seven-stage 241,000 square foot Sunset Glen Oak Studio, which we're building in a 50-50 JV with Blackstone, will deliver in the third quarter of next year. As the first purpose-built studio in Los Angeles in over 20 years, Glen Oaks will benefit from the same favorable supply-demand fundamentals as our Hollywood assets, where stages are full and we can only accommodate less than 5% of our current inquiries. We already have interest from a major media company for a multi-stage, multi-year deal. Even as we anticipate, Glen Oaks will follow a more traditional studio model of leasing at least some stages on a show-by-show basis. On the other construction project, Washington 1000 in Seattle, it doesn't deliver until 2024. We continue to ready our 3.6 million square foot future development pipeline, approximately 65% of which are studio or studio-related office properties, So when the timing is right, we can initiate construction. During and subsequent to the quarter, we executed three of our four non-core asset sales, generating total proceeds of $145 million with no seller financing required. And we're in conversations with two separate buyers on the fourth asset. We continually review our portfolio for potential dispositions, that is, assets that no longer align with our strategy based on location and growth potential. We are committed to maintaining a strong, flexible balance sheet with excellent capital access. And following our successful $350 million green bond offering in the third quarter, as well as the sale of 6922 Hollywood last month, we now have over $950 million of liquidity with 93% of our debt fixed or hedged. Time and again, we have demonstrated our ability to adequately navigate the capital markets. Between the green bond and the preferred stock offerings earlier this year, we've raised over $650 million over the past 12 months at rates 150 and 500 basis points inside the current rates, respectively. In summary, as we face current macroeconomic headwinds, we have a team, a platform, and a portfolio to succeed, and we're energized to continue to lease our assets and drive future cash flow. That, now, I will turn over to Mark. Thanks, Victor.