Cohen & Steers believes that the time is ripe for a comeback for the West Coast’s beleaguered office market.
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The global asset manager invested $300M on behalf of its clients in Hudson Pacific Properties, a real estate investment trust focused on West Coast office properties and film studio space.
HPP announced last week it was looking to sell $600M in a public stock offering, and Cohen & Steers bought up 43% of the available shares.
“The West Coast office market recovery is underway and poised to gain momentum over the coming years,” Cohen & Steers Executive Vice President and Head of Listed Real Estate Jason Yablon said in a statement. “Hudson Pacific Properties stands to benefit from this trend.”
The recapitalization will allow HPP to reduce its debt, extend existing maturities and fund occupancy in its portfolio, Yablon said.
The REIT has been in the red in recent years as occupancy has fallen at its studio and office properties. It reported a $381M net loss in 2024 after losing $171M in 2023.
The drop in income prompted HPP to announce plans to execute between $100M and $150M of office property dispositions in February.
It sold off office properties Foothill Research Center in Palo Alto, California, and Maxwell in Los Angeles, the REIT told investors in May. The sales generated $69M before closing costs, and HPP used the proceeds to pay down its debt. The REIT was also in contract to sell 625 Second St. in San Francisco for $28M.
HPP also closed on $475M of CMBS loans to refinance a six-property office portfolio at the end of March in addition to signing more than 630K SF of leases during the first quarter, making the period its busiest quarter in three years.
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