Hudson Pacific considers $250M stock buyback

Move would be a way to increase the firm’s public valuation

Nov.November 01, 2018 03:30 PM
Victor Coleman, Epic and Icon buildings

Hudson Pacific Properties could buy back as much as $250 million worth of its outstanding stock as early as next week.

In an earnings call Thursday, Victor Coleman, HPP Chairman and CEO, said the firm had already received board approval for the repurchase.

A stock buyback on the open market would drive up the company’s stock price, which is currently trading at about $30 per share.

Coleman said HPP is “keenly aware of a disconnect between private and public valuations.” The firm is currently trading at a 30 percent discount, “much wider than its peer set,” an analyst from Citigroup noted.

“From a valuation standpoint, we are hurting dramatically in the public markets,” Coleman said. “That does not go unnoticed in this company or private investors. We performed poorly this year, and we’re not happy about it.”

The company has a market cap of roughly $4.7 billion.

Otherwise, the firm had a strong quarter overall. While revenue decreased to $180.7 million, a 4.9 percent drop from the same time last year, net income rose 57 percent to $17.4 million, from $11.1 million.

HPP closed 1.2 million square feet of office leases, a quarterly record for the company. It also sold the remaining properties of the San Mateo Office Park for $210 million.

In Los Angeles, the firm’s headquarters, the company closed its largest and third-largest leases this quarter. Netflix inked the largest deal, leasing all 302,000 square feet of commercial space at the Epic building until 2031. Hudson also signed Honey to its Fourth & Traction redevelopment in the Arts District, reflecting the third largest deal this quarter.

On the Westside, Hudson said it is making progress on securing entitlements for the redevelopment of the Westside Pavilion, a project slated to bring 500,000 square feet of new office space. The firm also said it has received interest from several tenants considering full or partial uses.

Hudson also completed its acquisition of the ground lease of the historic Ferry Building in San Francisco this quarter, adding a fully leased property to its portfolio. Hudson took a 55 percent stake in the deal, while Germany-based Allianz claimed the remaining 45 percent stake.

Related Articles

Victor Coleman and Bentall Centre in Vancouver

Hudson Pacific adds another 500K sf of leases in Q2; pushes into new markets

From left: Saeed Nourmand, Michael Nourmand, Grant King and Richard Heyman

Relevant Group sues Nourmand & Associates’ founder, alleging extortion over hotel projects

Centennial founder and CEO Steven Levin with a rendering of the project

Centennial Real Estate approved for sprawling $300M mixed-use village

Apartment complex at 1435 Stanley Avenue and Raintree Partners CEO Jeffrey Allen (Credit: Apartment Finder)

Raintree Partners spends $79M on Glendale multifamily portfolio

LA Mayor Eric Garcetti

Down goes Measure EE: Property tax referendum routed at polls

CIM Group Founders, Shaul Kuba, Richard Ressler, and Avi Shemesh and 4750 Wilshire Boulevard (Credit: Google Maps)

CIM Group lists part of its Miracle Mile office campus

Arman Gabay and The Springs shopping center in Palm Springs, part of the 14-property portfolio

Charles Co. secures $215M refi for retail portfolio

Joon Choi, principal at Harbor Associates, and 2400 Conejo Spectrum Street (Credit: Google Maps)

Harbor Associates leases up then sells off its Thousand Oaks office park