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Financial Results

The third quarter 2018 was our most productive quarter ever in terms of office leasing activity, capping our most successful four consecutive quarters of overall leasing. As our results demonstrate, fundamentals in West Coast innovation hubs remain among the best in the nation. We're seeing further rent growth and vacancy compression, and robust absorption driven by expanding tech and media companies. We're successfully addressing availabilities throughout our portfolio, and in the third quarter we signed nearly half-a-million square feet of leases at our priority, large block lease-up assets, including two full-building deals. In addition, we have renewed, backfilled, or are in leases, LOIs or proposals on 64% of our remaining fourth quarter 2018 and 55% of our remaining 2019 expirations.

With third quarter's sale of Peninsula Office Park's remaining buildings, we have sold nearly half-a-billion of non-core assets this year into very strong investment markets. We are re-investing that capital into higher-potential value creation projects and properties, which will accelerate FFO growth in 2019 and beyond. This includes organic growth like EPIC, Harlow, and One Westside. It also includes disciplined external growth like the Ferry Building, which we purchased in the fourth quarter in a joint venture with Allianz Real Estate, where we expect significant upside through strategic re-leasing at market rents as well as our ability to drive more visitors and higher tenant demand.

Victor Coleman

Chairman & CEO, Hudson Pacific Properties

Quarterly & Annual Results