Hudson Pacific Properties reported Q3 2025 revenue of $186.6 million, a 7% decline from $200.4 million in the same quarter last year, and a funds‑from‑operations (FFO) of $0.04 per diluted share, beating the consensus estimate of $0.02 by 100%. The revenue dip is largely attributable to a 4% decline in office‑portfolio revenue driven by asset sales and lower occupancy, while the FFO beat reflects disciplined cost management and a robust leasing pipeline that offset the revenue shortfall.
The company leased 1.7 million square feet of office space year‑to‑date, including 515,450 sq ft in Q3, the strongest leasing activity since 2019. A marquee 106,000‑sq‑ft lease from an AI firm at Page Mill Center in Palo Alto added to the portfolio, underscoring the firm’s focus on high‑growth tech tenants and contributing to positive office absorption in the quarter.
Cash and cash equivalents rose to $1.0 billion at quarter‑end, comprising $190.4 million in unrestricted cash and $795.3 million of undrawn capacity under the unsecured revolving credit facility. The liquidity cushion, combined with no debt maturities until the second half of 2026, gives HPP a comfortable buffer to navigate market volatility and fund future acquisitions.
General‑and‑administrative expenses improved 30% year‑over‑year, falling to $13.7 million from $19.5 million in Q3 2024. The reduction is a result of targeted cost‑control initiatives and a leaner operating structure, which helped preserve profitability despite revenue pressure.
Management updated its full‑year guidance, projecting a Q4 FFO outlook of $0.01 to $0.05 per diluted share and maintaining confidence in the office‑portfolio recovery and the stabilization of the studio segment. The guidance reflects expectations of continued leasing momentum and a gradual rebound in West Coast office demand.
Segment analysis shows the office portfolio achieved positive absorption, while the studio segment’s net operating income approached breakeven thanks to cost‑saving measures. The mix shift toward tech and media tenants is a key driver of the company’s resilience in a challenging real‑estate environment.
Victor Coleman, CEO and Chairman, said the quarter demonstrated “strong operational execution” and that the company’s “strategic positioning in the epicenters of innovation is resulting in unprecedented demand from exactly the tenant types our portfolio was designed to attract.” He added that the balance‑sheet strength and liquidity give HPP confidence to capitalize on the expected rebound in office and studio demand.
The results reinforce HPP’s narrative of a turning point in its core markets, with leasing momentum, cost discipline, and a robust liquidity position positioning the company for continued growth as West Coast office demand recovers.
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