Hudson Pacific Posts $278M Loss Despite Leasing Bump

Hudson Pacific Properties reported revenue growth year-over-year and positive leasing metrics but notched a net loss of $277.9M in Q4 as it copes with ongoing trouble from its studio business.

Total revenues for the Los Angeles-based REIT were $256M in the fourth quarter, compared to roughly $210M in the same period in 2024. HPP’s gains in the last three months of 2025 were driven by the termination fee on the lease for Element LA, paid by tenant Riot Games, which bought the property from HPP in December. 

HPP signed 518K SF of leases in the fourth quarter, pushing its office portfolio occupancy to 76.3%, and increased its leased percentage to 77%.

HPP has approximately 1M SF of leases expiring in 2026, the lowest office expiration schedule it has had in four years.

It already has 60% coverage on its first-quarter expirations in the form of signed leases or letters of intent and 55% coverage on the the leases expiring in the remainder of the year, Hudson Pacific Properties President Mark Lammas said on a fourth-quarter earnings call. 

Executives emphasized the improved leasing momentum during the call.

“We're not hoping for recovery, we're already capturing it,” Hudson Pacific Properties CEO Victor Coleman said.

The loss was “primarily due to the items affecting revenue and a non-cash, non-real-estate impairment of Quixote,” according to financial disclosures filed with the Securities and Exchange Commission. 

For its studios, HPP’s trailing 12-month stage occupancy increased quarter-over-quarter to 69.1%, due largely to the full lease-up of stages at Sunset Las Palmas. At the in-service Hollywood stages, trailing 12-month occupancy was up to 86.2%, but Quixote stages were at just 53.3%, also a quarter-over-quarter increase, Lammas said. 

The entire studio business has struggled to fully rebound since the pandemic and has most recently been shaken up by industrywide restructurings that have changed the way many streaming media companies produce their content. 

The company is considering cost reductions to offset the drag on earnings caused by Quixote, Lammas said.

At worst, according to the forecast given by executives on the earnings call, the business would be flat by the end of the year. 

HPP bought Quixote, which rents studios and offers production services to film and television productions, in 2022 for $360M. But the broad slowdown in the entertainment business has posed challenges to Quixote, which has struggled to perform financially. 

“This business has no debt on it, so it's a unique opportunity for the company to retain certain assets that are debt-free and get out of certain obligations that we can get out of in a clean manner,” Coleman said. 

Coleman underscored that HPP is “a pure-play office company with a studio component” and telegraphed that the studio arm was likely to remain a small part of HPP’s business in the future. 

“It's less than 15% of the company, and that will be even less a year from now,” Coleman said.

Overall in 2026, HPP is aiming to make $200M to $300M in sales across its portfolio, Coleman said. One property that is up for sale is 10950 Washington Blvd. in Culver City, formerly the offices of the NFL’s media organization. HPP has secured entitlements for 508 residential units at a possible redevelopment of the property. 

“We fundamentally transformed Hudson Pacific in 2025 through $330M of asset sales and $2B of capital transactions,” Coleman said. 

More challenges lie ahead. HPP has an upcoming maturity date in August for a CMBS loan, the Hollywood Media Portfolio, which has an outstanding balance of approximately $1B, with more than $500M identified in financial disclosures as HPP’s share of the debt. The other portion of the debt belongs to Blackstone, which owns a 49% stake in the portfolio. 

The CMBS loan is secured by HPP’s Sunset Gower Studios, Sunset Las Palmas Studios, Sunset Bronson Studios, 6040 Sunset, Harlow, Icon, Cue and Epic. 

Icon, Cue and Epic are Hollywood office buildings that are each fully leased to Netflix for a total of more than 722K SF. Netflix’s lease with HPP at all three properties is scheduled to expire in September 2031. 

Netflix has reportedly been shopping for other potential spaces. It also has an option to buy HPP’s shares of the buildings as terms of its lease, Bloomberg reported. 

HPP Chief Financial Officer Harout Diramerian said the REIT was working with lenders to find a resolution before the loan’s August 2026 maturity date but made it clear it was also working to lock down Netflix. 

“We remain fully engaged with Netflix and believe this portfolio is the optimal long-term solution for their LA office needs, given the quality, location, and expansion potential of these assets,” Diramerian said.