Hudson Pacific Nabs $475M Refi for West Coast Portfolio

Hudson Pacific Properties has bagged a $475 million commercial mortgage-backed securities loan to refinance six office buildings in Los Angeles, San Francisco and Seattle.

The Brentwood-based real estate investment trust secured the loan linked to two West L.A. buildings, including a 25-story building at 11601 Wilshire Boulevard and a one-story building at 12333 West Olympic Boulevard, Commercial Observer reported.

The five-year CMBS loan was led by Goldman Sachs, supported by Morgan Stanley and Wells Fargo.

The 499,800-square-foot Wilshire Boulevard building, built in 1984 in Brentwood, serves as the firm’s headquarters.

Built in 1953, the 284,000-square-foot Olympic Boulevard building known as Element LA serves as the global hub for Riot Games, a video game unit of China-based Tencent. The financing allows Hudson to pay off a $168 million loan tied to the Sawtelle property.

The remaining funds will be used to repay outstanding debt on the REIT’s unsecured revolving credit facility and for “other general corporate purposes.”

“This financing provides us with nearly half a billion dollars of gross proceeds to fully repay our Element LA secured loan and outstanding amounts on our credit facility,” Harout Diramerian, chief financial officer for Hudson Pacific, said in a statement.

The Riot Games lease, signed in 2015 for 15 years, may be tenuous. Early last year, the company laid off 530 workers, 11 percent of its workforce, after toxic workplace environment allegations and lawsuits, including accusations of sexual harassment and discrimination.

Elsewhere, the REIT is struggling to come to terms with declining office and Hollywood studio occupancy.

In February, Hudson Pacific announced it would sell four office buildings for up to $150 million while facing hundreds of millions in financial losses from low-performing office and studio properties.

The developer manages more than 2 million square feet of soundstages, and is a favorite landlord of Netflix, which fully leases its 13-story Epic office tower in Hollywood.

But the REIT has faced headwinds in the years since the pandemic and the Hollywood labor strikes that largely shut down the industry in 2023, according to CO. Its stock price has plunged 92 percent since its pre-pandemic peak, and it recently canceled plans for a new studio project near London.

The company’s net loss in the fourth quarter was $169.9 million, compared to a $97.9 million loss a year earlier. Hudson lost more than $364 million in 2024, compared to a $192.1 loss in 2023. The firm faces $599.9 million in loans set to mature in November, in both secured and unsecured debt.

— Dana Bartholomew