- Hudson Pacific posted a $277.9M Q4 net loss despite higher leasing and revenue.
- Leased office occupancy hit 77% after 518K SF of new Q4 leasing.
- Studio unit challenges persist, with Quixote operations underperforming post-pandemic.
- $1B CMBS loan maturity looms, partially secured by Netflix-leased properties.
Leasing Momentum Offsets Studio Struggles
According to Bisnow, Hudson Pacific Properties (HPP), a Los Angeles office and studio REIT, reported $256M in Q4 revenue, up sharply from 2024. Revenue gains were bolstered by a lease termination fee when Riot Games bought Element LA. HPP leased 518K SF in Q4, bringing leased office occupancy to 77%—its strongest metric in recent years.
Studio Segment Still A Drag
Despite gains in Los Angeles office leasing, Hudson Pacific’s studio segment continues to lag. The Quixote business, acquired for $360M in 2022, remains challenged by industry-wide production slowdowns. Total trailing 12-month occupancy across all HPP studios was 69.1%, with some Hollywood locations faring better than others.
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Sales, Lending, and Future Outlook
HPP projects $200M to $300M in portfolio sales for 2026, following $330M of asset sales in 2025. The REIT has just 1M SF of office leases expiring in 2026, its lowest expiring volume in four years. Executives said they have significant coverage on upcoming expirations through signed leases or LOIs.
Debt, Netflix Relationship in Focus
HPP faces an upcoming $1B CMBS debt maturity in August 2026, with half the debt on its balance sheet. The loan is secured by prime Hollywood office and studio assets, including over 722K SF fully leased to Netflix. The streaming giant’s growing real estate footprint—including a recently announced 110K SF immersive entertainment concept slated for Galleria Dallas—underscores its evolving space needs even as it evaluates long-term options in Los Angeles. Netflix has a purchase option and is reportedly considering alternatives, but HPP is working to secure a long-term commitment. The Los Angeles office portfolio remains the foundation of HPP’s business as it seeks stability amid studio sector headwinds.
