Hudson Pacific Properties extends $1.1 billion Hollywood Media Portfolio loan to November 2027
The $1.1 billion CMBS loan tied to Hudson Pacific Properties' Hollywood Media Portfolio has been extended with no principal paydown and the stated interest rate left unchanged. For $HPP holders, the maturity clock now…
Key takeaways
- Hudson Pacific Properties' $1.1 billion CMBS loan on its Hollywood Media Portfolio was extended to a maturity date of November 9, 2027, with no principal paydown and an unchanged stated interest rate.
- The Hollywood Media Portfolio spans 2.2 million square feet, anchored by three studio lots (Sunset Gower, Sunset Las Palmas and Sunset Bronson Studios) and five Class A office properties (ICON, EPIC, Harlow, 6040 Sunset and CUE).
- At closing, partnership funds were reallocated to a $20 million leasing reserve, into which excess portfolio cash flow sweeps for the rest of the loan term.
- Hudson Pacific entered a derivative fixing SOFR at 3.50% through November 2027, and reported interest expense will include fees and costs tied to both the extension and the derivative.
- Hudson Pacific holds a 51% interest in the joint venture and manages day-to-day operations, leasing and development for the portfolio.
The $1.1 billion CMBS loan tied to Hudson Pacific Properties' Hollywood Media Portfolio has been extended with no principal paydown and the stated interest rate left unchanged. For $HPP holders, the maturity clock now runs to November 9, 2027. The leasing reserve established at closing, and how quickly it fills with signed deals, is what the setup turns on from here.
The structure of the deal
The Hollywood Media Portfolio spans 2.2 million square feet. It anchors on three studio lots, Sunset Gower Studios, Sunset Las Palmas Studios and Sunset Bronson Studios, and includes five on-lot or adjacent Class A office properties: ICON, EPIC, Harlow, 6040 Sunset and CUE. Hudson Pacific (NYSE: HPP) holds a 51% interest in the joint venture and runs day-to-day operations, leasing and development. The portfolio also carries rights to build an additional 1.1 million square feet of office and production space.
At closing, partnership funds were reallocated to a $20 million leasing reserve. Excess cash flow from the portfolio sweeps into that reserve for the remainder of the loan term. The company also entered a derivative to fix SOFR at 3.50% through November 2027. Reported interest expense will include fees and costs associated with both the extension and the derivative, meaning the full carry on this deal will show up in coming financial disclosures.
What to watch
CFO Harout Diramerian said the extension gives the company time and flexibility to advance its leasing strategy across the portfolio while managing the broader debt maturity schedule. The operative word is schedule. With the Hollywood loan pushed to November 2027, the question for holders is what else sits in that maturity stack and whether this extension creates room to address it.
Hudson Pacific's in-service portfolio totals approximately 12.8 million square feet of office space and approximately 1.7 million square feet of studio space across Los Angeles, the San Francisco Bay Area, Seattle, Vancouver and New York. Any SEC disclosure detailing the full extension cost matters to the carry math. What to watch beyond that is the leasing line on the Hollywood Media Portfolio assets, measured against the $20 million reserve the joint venture put in place at closing.
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