Hudson Pacific launches $600 million stock and warrant offering

LOS ANGELES - Hudson Pacific Properties, Inc. (NYSE: HPP), currently trading at $2.50 per share with a market capitalization of $369 million, announced Wednesday it has commenced a $600 million public offering of common stock and pre-funded warrants to purchase common stock. According to InvestingPro data, the stock has surged over 14% in the past week.

The real estate investment trust, which currently trades at a price-to-book ratio of 0.15x and offers an 8.2% dividend yield, plans to grant underwriters a 30-day option to purchase up to an additional $90 million of common stock. All securities in the offering will be sold by the company, according to a press release statement. For deeper insights into HPP’s valuation metrics and 10+ additional ProTips, consider exploring InvestingPro.

Cohen & Steers Capital Management has indicated interest in purchasing $300 million of the company’s common stock and pre-funded warrants, though this is not a binding commitment.

Hudson Pacific intends to contribute the proceeds to its operating partnership, which will use the funds to repay borrowings under its revolving credit facility, repay other debt, and for general corporate purposes.

BofA Securities, Wells Fargo Securities, and RBC Capital Markets are serving as lead joint book-running managers for the offering.

The offering remains subject to market and other conditions, with no assurance regarding its completion or final terms.

Hudson Pacific Properties is a real estate investment trust focused on properties serving tech and media tenants in major markets. The company specializes in acquiring, transforming and developing properties into collaborative office and studio spaces. While the company maintains a current ratio of 1.67x, InvestingPro’s comprehensive analysis indicates an overall weak financial health score, making it crucial for investors to conduct thorough due diligence using professional tools and research reports.

In other recent news, Hudson Pacific Properties Inc. reported its Q1 2025 earnings, revealing an EPS of -0.53 USD, which missed analyst expectations of -0.45 USD. The company’s revenue also fell short, coming in at 198.5 million USD against a forecast of 202.31 million USD, marking a decrease from 214 million USD in the same quarter of the previous year. S&P Global Ratings downgraded Hudson Pacific’s issuer credit rating to ’B’ from ’BB-’, citing high leverage and ongoing challenges in the office and studio sectors as contributing factors. The rating agency also lowered the issue-level rating on the company’s senior unsecured notes and preferred stock, reflecting concerns over liquidity and refinancing challenges. Additionally, Hudson Pacific announced the expansion of its incentive plan, allowing for the issuance of an additional 7,259,450 shares of common stock, as approved by stockholders at the annual meeting. The stockholders also ratified the appointment of Ernst & Young LLP as the independent registered public accounting firm for 2025, although the advisory resolution on executive compensation was not approved. Despite these challenges, Hudson Pacific secured 475 million USD in CMBS financing for office properties and is targeting 125-150 million USD in non-core asset sales to improve liquidity.

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