Hudson Pacific Properties, Inc.

Good afternoon, my name is Alex and I will be your conference operator today. At this time, I'd like to welcome everyone to the Hudson Pacific Properties second quarter 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there'll be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. At this time, I'd like to turn the call over to Laura Campbell, Executive Vice President, Investor Relations and Marketing. Please go ahead.

Good afternoon, everyone. Thanks for joining us. With me on the call today are Victor Coleman, CEO and Chairman, Mark Lamas, President, Harut Dhirumiriam, CFO, and Art Suazo, EVP of Leasing. This afternoon, we filed our earnings release and supplemental on an 8K with the SEC, and both are now available on our website. An audio webcast of this call will also 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. Today, Victor will discuss industry and market trends. Mark will provide an update on our office and studio operations and development. And Harut will review our financial results in 2025 outlook. Thereafter, we'll be happy to take your questions. Victor?

Thank you, Laura. Good afternoon, everyone, and welcome to our second quarter call. We are energized by the progress year-to-date on our strategic objectives, as well as the positive trends across our portfolio, sectors, and markets. Importantly, leasing, which is one of our top priorities, resulted in a 1.2 million square feet of office leases signed year-to-date, and we're on pace for our strongest office leasing year since 2019, and poised to grow Occupant C with among the sector's lowest expirations over the next two years. Our studio Occupant C is also improving, and California's significantly expanded film and television tax credit is finally in effect. Since the start of the year, we've also executed on operational enhancements, asset sales, and capital transactions. all of which are contributing to the rebuilding of our foundation to drive future cash flow growth. Following our successful CMBS financing and follow-on capital raise, we have over $1 billion of liquidity and the refinancing of our only 2025 maturity is well underway. We are also starting to realize positive results from our ongoing efforts to enhance the company's cost profile, specifically, we have meaningful improved G&A and further streamlined our studio business to achieve profitability. Moving to the state of our markets, the West Coast ops recovery is taking hold, led by emerging AI and tech companies. Tech and leasing in San Francisco drove the single largest quarter occupancy increase in seven years and a third consecutive quarter of positive net absorption. Given year-to-date leasing activity and demand in the market, The city is also on track to have the highest annual gross leasing since 2019. In Silicon Valley, occupancy also improved for the third consecutive quarter. Over 1 million square feet of positive net absorption was driven by the tech sector, new leasing, and for the first time in a long time, deals of 100,000 plus square feet. AI and AI-enabled businesses are the next wave of economic growth on the West Coast. and billions of venture capital dollars once again flowed into the sector in the second quarter with no signs of stopping despite tariff uncertainty. AI job posting has trended further upwards, and the war for the best talent is on. For AI startups especially, proximity to the broader ecosystem is the key, and this explains the reason that 60% of AI's current footprint is located in the Bay Area, and why we anticipate West Coast gateway markets which have always had a unique mix of talent, networks, funding, and research, will be the primary beneficiaries. Today, core AI tenants, that is companies creating, selling, and licensing AI models, platforms, infrastructure, or chips, represent only 10% of our ABR and are located exclusively throughout the Bay Area. Given the funding available of these companies, their office cultures, and the current offerings within our portfolio, we see a considerable runway to expand both core AI and AI-enabled companies with our tenant mix. On the studio side, there are multiple reasons we are gaining confidence in the business despite weaker overall production activity in the second quarter. Pilot shoot days were up 11% year-to-date and 48% on a trailing 12-month basis. There are 134 productions in active development or prep in California During the second quarter, the most in any quarter since the 2023 strikes. In the first half of 2025, $375 million was allocated under the previous California film and television tax credit program, nearly exceeding total dollars allocated during the entirety of 2024. And of the 110 allocations made so far this year, 51 of them occurred in June alone. Productions are only just beginning to apply for the more than doubled $750 million California tax credit, which among other new features provides for a larger allocations to more types of productions. And we expect to see increased allocation activity in the near term with the potential for show counts to begin to benefit as early as the fourth quarter of this year. Finally, turning to asset sales, we continue to strategically pursue the disposition of non-core assets. Victor Pechaty, We complete the sales 625 second for $20 million during the second quarter and we are in various stages on a handful of other potential dispositions. Victor Pechaty, We evaluate each transaction within the framework of our broader capital allocations priorities season the opportunities to increase liquidity, while optimizing our portfolio to create long term shareholder value and now i'm going to turn the call over to mark thanks Victor.