Biggest changePercent leased for same-store studio is the average percent leased for the 12 months ended December 31, 2024. 50 The following table gives further detail on our consolidated NOI (in thousands): Year Ended December 31, 2024 2023 Same-store Non-same-store Total Same-store Non-same-store Total REVENUES Office Rental revenues $ 608,289 $ 69,331 $ 677,620 $ 660,606 $ 136,489 $ 797,095 Service and other revenues 14,023 633 14,656 14,704 576 15,280 Total office revenues 622,312 69,964 692,276 675,310 137,065 812,375 Studio Rental revenues 41,733 12,164 53,897 48,422 10,854 59,276 Service and other revenues 28,440 67,469 95,909 21,981 58,665 80,646 Total studio revenues 70,173 79,633 149,806 70,403 69,519 139,922 Total revenues 692,485 149,597 842,082 745,713 206,584 952,297 OPERATING EXPENSES Office operating expenses 269,366 36,283 305,649 265,606 46,412 312,018 Studio operating expenses 45,437 102,993 148,430 41,160 97,287 138,447 Total operating expenses 314,803 139,276 454,079 306,766 143,699 450,465 Office NOI 352,946 33,681 386,627 409,704 90,653 500,357 Studio NOI 24,736 (23,360) 1,376 29,243 (27,768) 1,475 NOI $ 377,682 $ 10,321 $ 388,003 $ 438,947 $ 62,885 $ 501,832 51 The following table gives further detail on our change in consolidated NOI (in thousands, except percentage change): Year Ended December 31, 2024 as compared to the Year Ended December 31, 2023 Same-store Non-same-store Total Dollar change Percentage change Dollar change Percentage change Dollar change Percentage change REVENUES Office Rental revenues $ (52,317) (7.9) % $ (67,158) (49.2) % $ (119,475) (15.0) % Service and other revenues (681) (4.6) 57 9.9 (624) (4.1) Total office revenues (52,998) (7.8) (67,101) (49.0) (120,099) (14.8) Studio Rental revenues (6,689) (13.8) 1,310 12.1 (5,379) (9.1) Service and other revenues 6,459 29.4 8,804 15.0 15,263 18.9 Total studio revenues (230) (.3) 10,114 14.5 9,884 7.1 Total revenues (53,228) (7.1) (56,987) (27.6) (110,215) (11.6) OPERATING EXPENSES Office operating expenses 3,760 1.4 (10,129) (21.8) (6,369) (2.0) Studio operating expenses 4,277 10.4 5,706 5.9 9,983 7.2 Total operating expenses 8,037 2.6 (4,423) (3.1) 3,614 0.8 Office NOI (56,758) (13.9) (56,972) (62.8) (113,730) (22.7) Studio NOI (4,507) (15.4) 4,408 (15.9) (99) (6.7) NOI $ (61,265) (14.0) % $ (52,564) (83.6) % $ (113,829) (22.7) % NOI decreased $113.8 million, or 22.7%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily resulting from: • a $61.3 million decrease in same-store NOI driven by: • a decrease in office NOI of $56.8 million primarily due to: • a $52.3 million decrease in rental revenues related to a decrease in the average occupancy in our same-store portfolio from 82.9% during the year ended December 31, 2023 to 76.9% during the year ended December 31, 2024, primarily driven by lease expirations at several properties in the San Francisco Bay Area during the last twelve months and a straight-line rent reserve related to transitioning a tenant to cash basis reporting; and • a $3.8 million increase in operating expenses predominantly driven by a prior-period property tax reimbursement at our ICON property in 2023 and higher engineering, utility, insurance and tax expenses at several properties in 2024. • a decrease in studio NOI of $4.5 million primarily due to: • a $6.7 million decrease in rental revenues primarily driven by lower occupancy at our Sunset Las Palmas Studios property; and • a $4.3 million increase in operating expenses driven by increased production activity at our Sunset Gower Studios property; partially offset by • a $6.5 million increase in service and other revenues related to increased production activity at our Sunset Gower Studios property that was partially offset by decreased activity at our Sunset Las Palmas Studios property. • a $52.6 million decrease in non-same-store NOI driven by: • a decrease in office NOI of $57.0 million primarily due to the sales of our One Westside and Westside Two properties in December 2023 and our 604 Arizona and 3401 Exposition properties in August 2023, partially offset by an increase due to new leases commencing at our Metro Center property in 2024; partially offset by • a $4.4 million increase in studio NOI mainly driven by increased activity at Quixote in 2024 following the 2023 WGA and SAG-AFTRA strikes. 52 Other Income (Expenses) Loss from unconsolidated real estate entities Loss from our unconsolidated real estate entities increased by $3.4 million, or 87.3%, to $7.3 million for the year ended December 31, 2024 compared to $3.9 million for the year ended December 31, 2023.
Biggest changePercent leased for same-store studio is the average percent leased for the 12 months ended December 31, 2025. 51 The following table gives further detail on our consolidated NOI (in thousands): Year Ended December 31, 2025 2024 Same-store Non-same-store Total Same-store Non-same-store Total REVENUES Office Rental revenues $ 585,470 $ 96,323 $ 681,793 $ 621,013 $ 56,607 $ 677,620 Service and other revenues 14,064 203 14,267 13,872 784 14,656 Total office revenues 599,534 96,526 696,060 634,885 57,391 692,276 Studio Rental revenues 42,366 12,489 54,855 41,733 12,164 53,897 Service and other revenues 23,820 56,370 80,190 28,440 67,469 95,909 Total studio revenues 66,186 68,859 135,045 70,173 79,633 149,806 Total revenues 665,720 165,385 831,105 705,058 137,024 842,082 OPERATING EXPENSES Office operating expenses 275,224 8,792 284,016 281,802 23,847 305,649 Studio operating expenses 43,336 100,390 143,726 45,437 102,993 148,430 Total operating expenses 318,560 109,182 427,742 327,239 126,840 454,079 Office NOI 324,310 87,734 412,044 353,083 33,544 386,627 Studio NOI 22,850 (31,531) (8,681) 24,736 (23,360) 1,376 NOI $ 347,160 $ 56,203 $ 403,363 $ 377,819 $ 10,184 $ 388,003 52 The following table gives further detail on our change in consolidated NOI (in thousands, except percentage change): Year Ended December 31, 2025 as compared to the Year Ended December 31, 2024 Same-store Non-same-store Total Dollar change Percentage change Dollar change Percentage change Dollar change Percentage change REVENUES Office Rental revenues $ (35,543) (5.7) % $ 39,716 70.2 % $ 4,173 .6 % Service and other revenues 192 1.4 (581) (74.1) (389) (2.7) Total office revenues (35,351) (5.6) 39,135 68.2 3,784 0.5 Studio Rental revenues 633 1.5 325 2.7 958 1.8 Service and other revenues (4,620) (16.2) (11,099) (16.5) (15,719) (16.4) Total studio revenues (3,987) (5.7) (10,774) (13.5) (14,761) (9.9) Total revenues (39,338) (5.6) 28,361 20.7 (10,977) (1.3) OPERATING EXPENSES Office operating expenses (6,578) (2.3) (15,055) (63.1) (21,633) (7.1) Studio operating expenses (2,101) (4.6) (2,603) (2.5) (4,704) (3.2) Total operating expenses (8,679) (2.7) (17,658) (13.9) (26,337) (5.8) Office NOI (28,773) (8.1) 54,190 161.5 25,417 6.6 Studio NOI (1,886) (7.6) (8,171) 35.0 (10,057) (730.9) NOI $ (30,659) (8.1) % $ 46,019 451.9 % $ 15,360 4.0 % NOI increased $15.4 million, or 4.0%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024, primarily resulting from: • a $46.0 million increase in non-same-store NOI driven by: • an increase in office NOI of $54.2 million primarily due to: • a $39.7 million increase in rental revenues attributable to an early termination fee received at Element LA in 2025, partially offset by the write-off of straight-line rent due to the same lease termination and further offset by the effect of the sales of our 3176 Porter property in late 2024 and our Foothill Research, 625 Second and Maxwell properties in 2025; and • a $15.1 million decrease in operating expenses due to the sales of our 3176 Porter property in late 2024 and our Foothill Research, 625 Second, Maxwell and Element LA properties in 2025. • partially offset by an $8.2 million decrease in studio NOI due to lower stage and production activity at Quixote, offset in part by higher operating expenses at the Sunset Glenoaks Studios property for the period during which it was a consolidated entity in 2025. • partially offset by a $30.7 million decrease in same-store NOI driven by: • a decrease in office NOI of $28.8 million primarily due to: • a $35.5 million decrease in rental revenues driven by lease terminations at our 1455 Market, Met Park North, Concourse, Hill 7, 83 King, Towers at Shore Center and 901 Market properties; partially offset by lease termination fees received at 6040 Sunset and Fourth and Traction; and • partially offset by a $6.6 million decrease in operating expenses due to the above mentioned lease terminations, as well an employee retention credit tax refund received in 2025. • a decrease in studio NOI of $1.9 million primarily due to to lower production activity at our Sunset Gower Studios and Sunset Bronson Studios, partially offset by higher production activity at our Sunset Las Palmas Studios property. 53 Other Expenses Loss from unconsolidated real estate entities We recorded a $0.1 million loss from unconsolidated real estate entities for the year ended December 31, 2025 compared to a loss of $7.3 million for the year ended December 31, 2024.
Impairment loss During the year ended December 31, 2024, we recognized an impairment loss of $149.7 million related to the impairment of goodwill associated with the Quixote reporting unit as well as the impairment of certain office properties.
During the year ended December 31, 2024, we recognized an impairment loss of $149.7 million related to the impairment of goodwill associated with the Quixote reporting unit as well as the impairment of certain office properties.
Income tax provision During the year ended December 31, 2024, we recorded an income tax provision of $1.6 million primarily related to a valuation allowance recorded against certain deferred tax assets and a change in Canadian tax legislation resulting in an increase in current tax expense.
During the year ended December 31, 2024, we recorded an income tax provision of $1.6 million primarily related to a valuation allowance recorded against certain deferred tax assets and a change in Canadian tax legislation resulting in an increase in current tax expense.
Positive or negative changes in economic or other conditions in any of the markets in which we own real estate and/or operate, including state budgetary shortfalls, employment rates, natural hazards and other factors, may impact our overall performance. 42 Operating Expenses Our operating expenses generally consist of utilities, cleaning, engineering, administrative, property, ad valorem taxes and site maintenance costs.
Positive or negative changes in economic or other conditions in any of the markets in which we own real estate and/or operate, including state budgetary shortfalls, employment rates, natural hazards and other factors, may impact our overall performance. Operating Expenses Our operating expenses generally consist of utilities, cleaning, engineering, administrative, property, ad valorem taxes and site maintenance costs.
Tenant improvement ownership is determined based on various factors including, but not limited to: • whether the lease stipulates how and on what a tenant improvement allowance may be spent; • whether the tenant or landlord retains legal title to the improvements at the end of the lease term; • whether the tenant improvements are unique to the tenant or general-purpose in nature; and • whether the tenant improvements are expected to have any residual value at the end of the lease.
Tenant improvement ownership is determined based on various factors including, but not limited to: • whether the lease stipulates how and on what a tenant improvement allowance may be spent; • whether the tenant or landlord retains legal title to the improvements at the end of the lease term; • whether the tenant improvements are unique to the tenant or general-purpose in nature; and 46 • whether the tenant improvements are expected to have any residual value at the end of the lease.
In addition, growth in rental revenue will also partially depend on our ability to acquire additional properties that meet our investment criteria. Market Conditions We own real estate primarily in California, the Pacific Northwest and Western Canada. We operate our production services business in key US media markets in California, New Mexico, Atlanta and New York.
In addition, growth in rental revenue will also partially depend on our ability to acquire additional properties that meet our investment criteria. Market Conditions We own real estate in California, the Pacific Northwest, New York and Western Canada. We operate our production services business in key US media markets in California, New York, Atlanta and New Mexico.
Costs previously capitalized related to abandoned acquisitions or developments are charged to earnings. Expenditures for repairs and maintenance are expensed as they are incurred. 44 Operating Properties The properties are generally carried at cost less accumulated depreciation and amortization.
Costs previously capitalized related to abandoned acquisitions or developments are charged to earnings. Expenditures for repairs and maintenance are expensed as they are incurred. Operating Properties The properties are generally carried at cost less accumulated depreciation and amortization.
Given the level of sensitivity in the inputs, a change in the value of any one input, in isolation or in combination, could significantly affect the overall estimation of the undiscounted future cash flows and fair value of an asset group.
Given the level of sensitivity in the inputs, a change in the value of any one input, in isolation or in combination, could affect the overall estimation of the undiscounted future cash flows and fair value of an asset group.
We currently expect that our principal sources of funds to meet our short-term and long-term liquidity requirements for working capital, strategic acquisitions, capital expenditures, tenant improvements, leasing costs, dividends and distributions, share repurchases and repayments of outstanding debt financing will include: • cash on hand, cash reserves and net cash provided by operations; • strategic dispositions of real estate; • sales of non-real estate investments; • proceeds from additional equity securities; • our ATM program; • borrowings under the operating partnership’s unsecured revolving credit facility; • proceeds from joint venture partners; • proceeds from the Sunset Glenoaks construction loan, Sunset Pier 94 Studios construction loan (unconsolidated joint venture) and Bentall Centre loan (unconsolidated joint venture); and • proceeds from additional secured, unsecured debt financings or offerings.
We currently expect that our principal sources of funds to meet our short-term and long-term liquidity requirements for working capital, strategic acquisitions, capital expenditures, tenant improvements, leasing costs, dividends and distributions, share repurchases and repayments of outstanding debt financing will include: • cash on hand, cash reserves and net cash provided by operations; • strategic dispositions of real estate; • sales of non-real estate investments; • proceeds from additional equity securities; • our ATM program; • borrowings under the operating partnership’s unsecured revolving credit facility; • proceeds from joint venture partners; • proceeds from the Sunset Pier 94 Studios construction loan (unconsolidated joint venture); and • proceeds from additional secured, unsecured debt financings or offerings.
For all expiration years, ABR is calculated as (i) cash base rents at expiration under commenced leases divided by (ii) square footage under commenced leases as of December 31, 2024. The methodology is the same when calculating ABR per square foot either in place or at expiration for uncommenced leases. Rent data is presented without regard to cancellation options.
For all expiration years, ABR is calculated as (i) cash base rents at expiration under commenced leases divided by (ii) square footage under commenced leases as of December 31, 2025. The methodology is the same when calculating ABR per square foot either in place or at expiration for uncommenced leases. Rent data is presented without regard to cancellation options.
The future cash flows utilized in the evaluation of recoverability and the measurement of fair value are highly subjective and are based on assumptions regarding anticipated hold periods, future occupancy, future rental rates, future capital requirements, discount rates and capitalization rates, which are considered Level 2 and Level 3 inputs within the fair value hierarchy.
The future cash flows utilized in the evaluation of recoverability and the measurement of fair value are subjective and are based on assumptions regarding anticipated hold periods, future occupancy, future rental rates, future capital requirements, discount rates 45 and capitalization rates, which are considered Level 2 and Level 3 inputs within the fair value hierarchy.
ABR per leased square foot calculated as (i) annual base rent divided by (ii) square footage under lease as of December 31, 2024. 4. Includes office properties owned and included in our stabilized portfolio as of January 1, 2023 and still owned and included in the stabilized portfolio as of December 31, 2024. 5.
ABR per leased square foot calculated as (i) annual base rent divided by (ii) square footage under lease as of December 31, 2025. 4. Includes office properties owned and included in our stabilized portfolio as of January 1, 2024 and still owned and included in the stabilized portfolio as of December 31, 2025. 5.
Annualized base rent per square foot for office properties is calculated by multiplying (i) cash base rents under commenced leases excluding tenant reimbursements as of December 31, 2024 by (ii) 12. On a per square foot basis, ABR is divided by square footage under commenced leases as of December 31, 2024.
Annualized base rent per square foot for office properties is calculated by multiplying (i) cash base rents under commenced leases excluding tenant reimbursements as of December 31, 2025 by (ii) 12. On a per square foot basis, ABR is divided by square footage under commenced leases as of December 31, 2025.
Where applicable, rental rates converted to USD using the foreign currency exchange rate as of December 31, 2024. Annualized base rent per square foot for studio properties reflects actual base rent for the 12 months ended December 31, 2024, excluding tenant reimbursements.
Where applicable, rental rates converted to USD using the foreign currency exchange rate as of December 31, 2025. Annualized base rent per square foot for studio properties reflects actual base rent for the 12 months ended December 31, 2025, excluding tenant reimbursements.
In the case of the Bentall Centre property and the Sunset Waltham Cross Studios development, the Company owns its interest in the properties through non-U.S. entities treated as taxable REIT subsidiaries (“TRS”) for federal income tax purposes.
In the case of the Bentall Centre property and the Sunset Waltham Cross Studios development, the Company owns its interest in the properties through non-U.S. entities treated as taxable REIT subsidiaries (“TRSs”) for federal income tax purposes.
Percent leased for studio properties is calculated as (i) average square footage under commenced leases for the 12 months ended December 31, 2024, divided by (ii) total square feet, expressed as a percentage. 3.
Percent leased for studio properties is calculated as (i) average square footage under commenced leases for the 12 months ended December 31, 2025, divided by (ii) total square feet, expressed as a percentage. 3.
Impairment of Long-Lived Assets In accordance with GAAP, we assess the carrying value of real estate assets and related intangibles for impairment on a quarterly basis and whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable over the life of the asset or its intended holding period.
Impairment of Investment in Real Estate In accordance with GAAP, we assess the carrying value of real estate assets and related intangibles for impairment on a quarterly basis and whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable over the life of the asset or its intended holding period.
Percent occupied for office properties is calculated as (i) square footage under commenced leases as of December 31, 2024, divided by (ii) total square feet, expressed as a percentage. Percent leased for office properties includes uncommenced leases.
Percent occupied for office properties is calculated as (i) square footage under commenced leases as of December 31, 2025, divided by (ii) total square feet, expressed as a percentage. Percent leased for office properties includes uncommenced leases.
We believe that the average rental rates for our office properties are generally below the current average quoted market rate. We believe the average rental rates for our studio properties are generally equal to current average quoted market rates. Negative trends in one or more of these factors could adversely affect our rental revenue in future periods.
We believe the average rental rates for our studio properties are generally equal to current average quoted market rates. Negative trends in one or more of these factors could adversely affect our rental revenue in future periods.
Unrealized loss on non-real estate investments We recognized an unrealized loss on non-real estate investments of $4.0 million for the year ended December 31, 2024 compared to an unrealized loss on non-real estate investments of $3.1 million for the year ended December 31, 2023.
Unrealized loss on non-real estate investments We recognized an unrealized loss on non-real estate investments of $3.0 million for the year ended December 31, 2025 compared to an unrealized loss on non-real estate investments of $4.0 million for the year ended December 31, 2024.
The loan was transacted in Canadian dollars. Amounts are shown in U.S. dollars using the foreign currency exchange rate as of December 31, 2024. Our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders.
Amounts are shown in U.S. dollars using the foreign currency exchange rate as of December 31, 2025. Our ability to incur additional debt will be dependent on a number of factors, including our degree of leverage, the value of our unencumbered assets and borrowing restrictions that may be imposed by lenders.
Please refer to Part IV, Item 15 (a) “Exhibits, Financial Statement Schedules—Note 4 to the Consolidated Financial Statements—Investment in Real Estate” for details. 40 Under Construction and Future Development Projects The following table summarizes the properties currently under construction and future development pipelines as of December 31, 2024: Type Submarket Estimated Square Feet (1) Estimated Completion Date Estimated Stabilization Date Under Construction: New York, New York Sunset Pier 94 Studios (2) Studio Manhattan 232,000 Q4-2025 Q3-2026 TOTAL 232,000 Recently Completed: Seattle, Washington Washington 1000 Office Denny Triangle 546,000 Q4-2024 Q3-2026 TOTAL 546,000 Future Development Pipeline: Los Angeles, California Sunset Las Palmas Studios—Development (3) Studio Hollywood 617,581 TBD TBD Sunset Gower Studios—Development (3) Office/Studio Hollywood 478,845 TBD TBD Sunset Bronson Studios Lot D—Development (4) Residential Hollywood 33 units/19,816 TBD TBD Element LA—Development Office West Los Angeles 500,000 TBD TBD 10900/10950 Washington (4) Residential West Los Angeles N/A TBD TBD Vancouver, British Columbia Burrard Exchange (5) Office Downtown Vancouver 450,000 TBD TBD Greater London, United Kingdom Sunset Waltham Cross Studios (6) Studio Broxbourne 1,167,347 TBD TBD TOTAL 3,233,589 TOTAL UNDER CONSTRUCTION AND FUTURE DEVELOPMENT 4,011,589 _____________ 1.
Please refer to Part IV, Item 15 (a) “Exhibits, Financial Statement Schedules—Note 4 to the Consolidated Financial Statements—Investment in Real Estate” for details. 40 Under Construction and Future Development Projects The following table summarizes the properties currently under construction and future development pipelines as of December 31, 2025: Type Submarket Estimated Square Feet (1) Estimated Completion Date Estimated Stabilization Date Recently Completed: Seattle, Washington Washington 1000 Office Denny Triangle 546,000 Q4-2024 Q3-2027 New York, New York Sunset Pier 94 Studios (2) Studio Manhattan 232,000 Q4-2025 Q3-2026 TOTAL 778,000 Future Development Pipeline: Los Angeles, California Sunset Las Palmas Studios—Development (3) Office/Studio Hollywood 617,581 TBD TBD Sunset Gower Studios—Development (3) Office/Studio Hollywood 478,845 TBD TBD Sunset Bronson Studios Lot D—Development (4) Residential Hollywood 19,816 (33 units) TBD TBD 10900/10950 Washington Residential West Los Angeles 428,623 (508 units) TBD TBD Vancouver, British Columbia Burrard Exchange (4) Office Downtown Vancouver 450,000 TBD TBD Greater London, United Kingdom Sunset Waltham Cross Studios (5) Studio Broxbourne 1,167,347 TBD TBD TOTAL 3,162,212 TOTAL UNDER CONSTRUCTION AND FUTURE DEVELOPMENT 3,940,212 _____________ 1.
Outstanding Indebtedness The following table sets forth information as of December 31, 2024 and December 31, 2023 with respect to our outstanding indebtedness, excluding unamortized deferred financing costs and loan discounts (in thousands): December 31, 2024 December 31, 2023 Unsecured debt $ 2,435,000 $ 2,307,000 Secured debt $ 1,752,667 $ 1,653,067 Joint venture partner debt $ 66,136 $ 66,136 The operating partnership was in compliance with its financial covenants as of December 31, 2024.
Outstanding Indebtedness The following table sets forth information as of December 31, 2025 and December 31, 2024 with respect to our outstanding indebtedness, excluding unamortized deferred financing costs and loan discounts (in thousands): December 31, 2025 December 31, 2024 Unsecured debt $ 1,650,000 $ 2,435,000 Secured debt $ 1,717,850 $ 1,752,667 Joint venture partner debt $ 66,136 $ 66,136 The operating partnership was in compliance with its financial covenants as of December 31, 2025.
We periodically evaluate our tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of December 31, 2024, we have not established a liability for uncertain tax positions.
We periodically evaluate our tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits.
(our operating partnership) and its subsidiaries, at December 31, 2024, our portfolio of owned real estate included office properties comprising approximately 14.6 million square feet, studio properties comprising approximately 45 sound stages and 1.7 million square feet and land properties comprising approximately 3.2 million square feet of undeveloped density rights.
(our operating partnership) and its subsidiaries, at December 31, 2025, our portfolio of owned real estate included office properties comprising approximately 13.9 million square feet, studio properties comprising approximately 45 sound stages and 1.7 million square feet and land properties comprising approximately 3.2 million square feet of undeveloped density rights.
Includes interest on the Company’s debt and hedging activities. 2. Includes the amortization of deferred financing costs and fair market value adjustments for our mark-to-market interest rate derivatives. Gross interest expense decreased by $14.8 million, or 6.6%, to $210.0 million for the year ended December 31, 2024 compared to $224.8 million for the year ended December 31, 2023.
Includes interest on the Company’s debt and hedging activities. 2. Includes the amortization of deferred financing costs and fair market value adjustments for our mark-to-market interest rate derivatives. Gross interest expense decreased by $12.8 million, or 6.1%, to $197.3 million for the year ended December 31, 2025 compared to $210.0 million for the year ended December 31, 2024.
No gain or loss on sale of bonds was recognized during the year ended December 31, 2024. Loss (gain) on sale of real estate During the year ended December 31, 2024, we recognized a $2.5 million loss on sale of real estate attributable to the sale of our 3176 Porter property.
During the year ended December 31, 2024, we recognized a $2.5 million loss on sale of real estate attributable to the sale of our 3176 Porter property.
Includes studio properties owned and included in our portfolio as of January 1, 2023 and still owned and included in our portfolio as of December 31, 2024. 8. Refer to Repositioning table in this document for the office and studio projects under repositioning as of December 31, 2024. 9.
Includes studio properties owned and included in our portfolio as of January 1, 2024 and still owned and included in our portfolio as of December 31, 2025. 6. Refer to Repositioning table in this document for the office and studio projects under repositioning as of December 31, 2025. 7.
Our production services assets include vehicles, lighting and grip, production supplies and other equipment and the lease rights t o 24 sound stages. As of December 31, 2024, our in-service office portfolio was 78.9% leased (including leases not yet commenced). Our same-store studio properties average percent leased for the twelve months ended December 31, 2024 was 73.8%.
Our production services assets include vehicles, lighting and grip, production supplies and other equipment and the lease rights t o 20 sound stages. As of December 31, 2025, our in-service office portfolio was 77.0% leased (including leases not yet commenced). Our in-service studio properties average percent leased for the twelve months ended December 31, 2025 was 78.8%.
Liquidity Sources We had approximately $63.3 million of cash and cash equivalents at December 31, 2024. Our principal source of operating cash flow is related to leasing and operating the properties in our portfolio.
Liquidity Sources We had approximately $138.4 million of cash and cash equivalents at December 31, 2025. Our principal source of operating cash flow is related to leasing and operating the properties in our portfolio.
Equity capitalization represents the shares of common stock outstanding (including unvested restricted shares), OP and LTIP units outstanding, restricted performance units and dilutive shares multiplied by the closing price of $3.03, as reported by the NYSE, on December 31, 2024 as well as the aggregate value of the Series C preferred stock liquidation preference as of December 31, 2024.
Equity capitalization represents the shares of common stock outstanding (including unvested restricted shares), pre-funded warrants, OP and LTIP units outstanding, restricted performance units and dilutive shares multiplied by the closing price of $10.83, as reported by the NYSE, on December 31, 2025 as well as the aggregate value of the Series C preferred stock liquidation preference as of December 31, 2025.
Projection of future cash flows is based upon various factors, including, but not limited to, our strategic plans in regard to our business and operations, internal forecasts, terminal year residual revenue multiples, operating profit margins, pricing of similar businesses and comparable 45 transactions where applicable, and risk-adjusted discount rates to present value future cash flows.
Projection of future cash flows is based upon various factors, including, but not limited to, our strategic plans in regard to our business and operations, internal forecasts, terminal year residual revenue multiples, operating profit margins, pricing of similar businesses and comparable transactions where applicable, and risk-adjusted discount rates to present value future cash flows, which are typically considered Level 3 inputs within the fair value hierarchy.
The Company has entered into a number of construction agreements related to capital improvement activities at various properties. As of December 31, 2024, the Company had $98.6 million in outstanding obligations under the agreements, of which $94.5 million is expected to be incurred within one year from December 31, 2024.
The Company has entered into a number of construction agreements related to capital improvement activities at various properties. As of December 31, 2025, the Company had $96.7 million in outstanding obligations under the agreements, of which $92.0 million is expected to be incurred within one year from December 31, 2025.
The Company invests in several non-real estate funds with an aggregate commitment to contribute up $51.0 million. As of December 31, 2024, the Company has contributed $41.1 million, net of recallable distributions, with $9.9 million remaining to be contributed.
The Company invests in several non-real estate funds with an aggregate commitment to contribute up $51.0 million. As of December 31, 2025, the Company has contributed $42.3 million, net of recallable distributions, with $8.7 million remaining to be contributed.
The dollar amounts included in the tables in this discussion of our results of operations are presented in thousands. 48 Comparison of the year ended December 31, 2024 to the year ended December 31, 2023 Net Loss Net loss increased $210.7 million, or 123%, to $381.4 million for the year ended December 31, 2024 compared to $170.7 million for the year ended December 31, 2023.
The dollar amounts included in the tables in this discussion of our results of operations are presented in thousands. 49 Comparison of the year ended December 31, 2025 to the year ended December 31, 2024 Net Loss Net loss increased $210.9 million, or 55.3%, to $592.3 million for the year ended December 31, 2025 compared to $381.4 million for the year ended December 31, 2024.
Acquisitions of real estate will generally not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e., land, buildings and improvements and related intangible assets or liabilities) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. 43 Acquisitions that do not meet the definition of a business When we acquire properties that are considered asset acquisitions, the purchase price, which includes transaction-related expenses, is allocated based on relative fair value of the assets acquired and liabilities assumed.
Acquisitions of real estate will generally not meet the definition of a business because substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets (i.e., land, buildings and improvements and related intangible assets or liabilities) or because the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay.
We own 51% of the ownership interests in the consolidated joint venture that owns Sunset Bronson Studios, Sunset Gower Studios and Sunset Las Palmas Studios. 4. Pending entitlement to develop approximately 500 residential units. 5. We own 20% of the ownership interests in the unconsolidated joint venture that owns Burrard Exchange. 6.
We own 51% of the ownership interests in the consolidated joint venture that owns Sunset Bronson Studios, Sunset Gower Studios and Sunset Las Palmas Studios. 4. We own 20% of the ownership interests in the unconsolidated joint venture that owns Burrard Exchange. 5.
Factors That May Influence Our Operating Results Business and Strategy We invest in Class-A office properties in West Coast technology hubs and world-class studio properties and studio-related operating businesses in global media markets.
The gross proceeds from the offering amounted to $689.3 million. Factors That May Influence Our Operating Results Business and Strategy We invest in Class-A office properties in West Coast technology hubs and world-class studio properties and studio-related operating businesses in global media markets.
Includes 546,000 square feet related to the office development Washington 1000 and 232,000 square feet related to Sunset Pier 94 Studios. 10. Includes pending entitlement to develop approximately 500 residential units at 10900-10950 Washington.
Includes 546,000 square feet related to the office development Washington 1000 and 232,000 square feet related to Sunset Pier 94 Studios. 8. Includes entitlement to develop up to 428,623 square feet (508 residential units) at 10900-10950 Washington.
Subsequently, when the square footage offline for a full building reaches 92.0% occupancy, it would be included in our in-service population. 41 The following table summarizes the portions of office and studio projects currently under repositioning as of December 31, 2024: Location Submarket Square Feet Repositioning: 899 Howard San Francisco 96,240 Page Mill Center Palo Alto 79,056 Rincon Center San Francisco 36,905 Sunset Las Palmas Studios Hollywood 18,594 Palo Alto Square Palo Alto 12,740 Metro Plaza North San Jose 10,382 Sunset Gower Studios Hollywood 6,650 TOTAL REPOSITIONING 260,567 Financings During the year ended December 31, 2024, there were $128.0 million of borrowings on the unsecured revolving credit facility, net of repayments.
Subsequently, when the square footage offline for a full building reaches 92.0% occupancy, it would be included in our in-service population. 41 The following table summarizes the portions of office and studio projects currently under repositioning as of December 31, 2025: Location Submarket Square Feet Repositioning: 899 Howard San Francisco 96,240 1455 Market San Francisco 49,272 Rincon Center San Francisco 38,514 Sunset Las Palmas Studios Hollywood 18,594 Bentall Centre Downtown Vancouver 18,559 Palo Alto Square Palo Alto 12,740 Sunset Gower Studios Hollywood 6,650 TOTAL REPOSITIONING 240,569 Financings During the year ended December 31, 2025, there were $320.0 million of repayments on the unsecured revolving credit facility, net of borrowings.
To qualify as a REIT, we are required to distribute at least 90% of our REIT taxable income, excluding net capital gains, to our stockholders and meet the various other requirements imposed by the Code relating to such matters as operating results, asset holdings, distribution levels and diversity of stock ownership. 46 Provided that we continue to qualify for taxation as a REIT, we are generally not subject to corporate level income tax on the earnings distributed currently to our stockholders.
To qualify as a REIT, we are required to distribute at least 90% of our REIT taxable income, excluding net capital gains, to our stockholders and meet the various other requirements imposed by the Code relating to such matters as operating results, asset holdings, distribution levels and diversity of stock ownership.
Investing Activities Net cash used in investing activities increased by $718.4 million, or 153.6%, to $250.5 million for the year ended December 31, 2024 as compared to $467.8 million of cash provided by investing activities for the year ended December 31, 2023.
Investing Activities Net cash provided by investing activities increased by $293.4 million, or 117.1%, to $42.8 million for the year ended December 31, 2025 as compared to $250.5 million of cash used in investing activities for the year ended December 31, 2024.
Amounts are shown in U.S. dollars using the foreign currency exchange rate as of December 31, 2024. This loan is interest-only through its term. (2) This loan has an initial interest rate of SOFR + 4.75% per annum until stabilization of the project, at which time the effective interest rate will decrease to SOFR + 4.00%.
Amounts are shown in U.S. dollars using the foreign currency exchange rate as of December 31, 2025. This loan is interest-only through its term. (2) This loan has an initial interest rate of SOFR + 3.10% per annum until certain performance targets have been met, at which time the effective interest rate will decrease to SOFR + 2.50%.
Refer to Part IV, Item 15(a) “Exhibits, Financial Statement Schedules—Note 10 to the Consolidated Financial Statements—Debt” for details. 2. Interest rates with respect to indebtedness are calculated on the basis of a 360-day year for the actual days elapsed. 56 3.
Refer to Part IV, Item 15(a) “Exhibits, Financial Statement Schedules—Note 10 to the Consolidated Financial Statements—Debt” for details. 2. Interest rates with respect to indebtedness are calculated on the basis of a 360-day year for the actual days elapsed. 3. Reflects our projected interest obligations for fixed rate debts, including those that are effectively fixed as a result of derivatives.
Fee income Fee income decreased by $0.9 million, or 14.8%, to $5.3 million for the year ended December 31, 2024 compared to $6.2 million for the year ended December 31, 2023. Fee income represents the management fee income earned from the unconsolidated real estate entities.
Fee income Fee income increased by $0.1 million, or 2.5%, to $5.4 million for the year ended December 31, 2025 compared to $5.3 million for the year ended December 31, 2024. Fee income represents the management fee income earned from our unconsolidated real estate entities.
The following table provides information about joint venture indebtedness as of December 31, 2024 (in thousands): Ownership Interest Amount Drawn Undrawn Capacity Total Capacity Interest Rate Contractual Maturity Date Bentall Centre (1) 20 % $ 450,551 $ 9,355 $ 459,906 CORRA + 2.30% 7/1/2027 Sunset Pier 94 Studios (2) 26 % 29,783 153,417 183,200 SOFR + 4.75% 9/9/2028 _____________ (1) The loan was transacted in Canadian dollars.
The following table provides information about joint venture indebtedness as of December 31, 2025 (in thousands): Ownership Interest Amount Drawn Undrawn Capacity Total Capacity Interest Rate Contractual Maturity Date Bentall Centre (1) 20 % $ 482,622 $ — $ 482,622 CORRA + 2.30% 7/1/2027 Sunset Glenoaks Studios (2)(3) 50 % 102,430 — 102,430 SOFR + 3.10% 1/9/2027 Sunset Pier 94 Studios (4) 26 % 143,870 39,330 183,200 SOFR + 4.75% 9/9/2028 _____________ (1) The loan was transacted in Canadian dollars.
General and administrative expenses General and administrative expenses increased by $4.5 million, or 6.0%, to $79.5 million for the year ended December 31, 2024 compared to $75.0 million for the year ended December 31, 2023.
General and administrative expenses General and administrative expenses decreased by $6.5 million, or 8.2%, to $73.0 million for the year ended December 31, 2025 compared to $79.5 million for the year ended December 31, 2024.
Reflects our projected interest obligations for variable rate debts, including instances where interest is paid based on an applicable SOFR margin. We used the average December SOFR and the applicable margin as of December 31, 2024. 5.
Also includes $20.2 million of projected interest related to our joint venture partner debt. 57 4. Reflects our projected interest obligations for variable rate debts, including instances where interest is paid based on an applicable SOFR margin. We used the average December SOFR and the applicable margin as of December 31, 2025. 5.
Financing Activities Net cash provided by financing activities increased by $932.6 million, or 107.6%, to $65.9 million for the year ended December 31, 2024 as compared to $866.7 million of cash used in financing activities for the year ended December 31, 2023.
Financing Activities Net cash used in financing activities increased by $166.8 million, or 253.1%, to $100.9 million for the year ended December 31, 2025 as compared to $65.9 million of cash provided by financing activities for the year ended December 31, 2024.
If we incur additional debt, the risks associated with our leverage, including our ability to service our debt, would increase. 55 The following table sets forth our ratio of debt to total market capitalization (counting series A preferred units as debt) as of December 31, 2024 (in thousands, except percentage): Market Capitalization December 31, 2024 Unsecured and secured debt (1) $ 4,187,667 Series A redeemable preferred units 9,815 Total consolidated debt 4,197,482 Equity capitalization (2) 881,851 TOTAL CONSOLIDATED MARKET CAPITALIZATION $ 5,079,333 Total consolidated debt/total consolidated market capitalization 82.6 % _____________ 1.
If we incur additional debt, the risks associated with our leverage, including our ability to service our debt, would increase. 56 The following table sets forth our ratio of debt to total market capitalization (counting series A preferred units as debt) as of December 31, 2025 (in thousands, except percentage): Market Capitalization December 31, 2025 Unsecured and secured debt (1) $ 3,367,850 Series A redeemable preferred units 2,795 Total consolidated debt 3,370,645 Equity capitalization (2) 1,141,187 TOTAL CONSOLIDATED MARKET CAPITALIZATION $ 4,511,832 Total consolidated debt/total consolidated market capitalization 74.7 % _____________ 1.
As of December 31, 2024, the percent leased for our in-service office properties was approximatel y 78.9% (or 78.3% , excluding leases signed but not commenced as of that date).
As of December 31, 2025, the percent leased for our in-service office properties was approximatel y 77.0% (or 76.3% , excluding leases signed but not commenced as of that date). As of December 31, 2025, the percent leased, based on a 12-month trailing average, was approximat ely 78.8% for in- service studio properties.
Under this model, the purchase price is allocated based on the relative fair value of the assets acquired and liabilities assumed. Additionally, acquisition-related expenses associated with an asset acquisition are capitalized as part of the purchase price.
Under this model, the purchase price is allocated based on the relative fair value of the assets acquired and liabilities assumed.
Depreciation and amortization expense Depreciation and amortization expense decreased by $43.4 million, or 10.9%, to $354.4 million for the year ended December 31, 2024 compared to $397.8 million for the year ended December 31, 2023.
Depreciation and amortization expense Depreciation and amortization expense increased by $20.5 million, or 5.8%, to $375.0 million for the year ended December 31, 2025 compared to $354.4 million for the year ended December 31, 2024.
Acquisitions that meet the definition of a business For acquisitions that meet the definition of a business, the Company estimates the fair value of the identifiable assets and liabilities of the acquired entity on the acquisition date.
Additionally, acquisition-related expenses associated with an asset acquisition are capitalized as part of the purchase price. 44 Acquisitions that meet the definition of a business For acquisitions that meet the definition of a business, the Company estimates the fair value of the identifiable assets and liabilities of the acquired entity on the acquisition date.
The change primarily resulted from a $821.6 million decrease in proceeds from the sales of real estate, partially offset by a $99.4 million decrease in additions to investment property during the year ended December 31, 2024 as compared to the year ended December 31, 2023.
The change primarily resulted from a $214.9 million increase in proceeds from sales of real estate, a $55.3 million decrease in additions 58 to investment property and a $29.4 million decrease in contributions to unconsolidated entities during the year ended December 31, 2025 as compared to the year ended December 31, 2024.
In January 2025, the Company amended its credit facility agreement to adjust certain definitions and covenant calculations beginning with the period ending December 31, 2024. The amendment also resulted in a decrease in the total capacity from $900.0 million to $775.0 million. 2. Amounts are presented at HPP’s share. 3. This loan is held by an unconsolidated joint venture. 4.
During the twelve months ended December 31, 2025, the Company amended its unsecured revolving credit facility agreement to adjust certain definitions and covenant calculations beginning with the period ending December 31, 2024. The amendment also resulted in a decrease in the total capacity from $900.0 million to $775.0 million.
Rental Revenue The amount of net rental revenue generated by the properties in our portfolio depends principally on our ability to maintain the occupancy rates of leased space and to lease available space .
Changes in demand for office and/or studio space, capital markets, and other macro-economic factors may impact our business and overall performance. 42 Rental Revenue The amount of net rental revenue generated by the properties in our portfolio depends principally on our ability to maintain the occupancy rates of leased space and to lease available space .
Our ability to access the equity capital markets will be dependent on a number of factors as well, including general market conditions for REITs and market perceptions about us. We have an ATM program that allows us to sell up to $125.0 million of common stock, $65.8 million of which has been sold through December 31, 2024.
We have an ATM program that allows us to sell up to $125.0 million of common stock, $65.8 million of which has been sold through December 31, 2025. Any future sales will depend on several factors, including, but not limited to, market conditions, the trading price of our common stock and our capital needs.
The following table sets forth our borrowing capacity under various loans as of December 31, 2024 (in thousands): Loan Total Borrowing Capacity Amount Drawn Remaining Borrowing Capacity Unsecured revolving credit facility (1) $ 775,000 $ 320,000 $ 455,000 Sunset Glenoaks construction loan (2) $ 50,300 $ 49,800 $ 500 Bentall Centre (2)(3)(4) $ 91,981 $ 90,110 $ 1,871 Sunset Pier 94 Studios construction loan (2)(3) $ 46,810 $ 7,610 $ 39,200 _____________ 1.
The following table sets forth our borrowing capacity under various loans as of December 31, 2025 (in thousands): Loan Total Borrowing Capacity Amount Drawn Remaining Borrowing Capacity Unsecured revolving credit facility $ 795,250 $ — $ 795,250 Sunset Glenoaks Studios construction loan (1)(2)(3) 51,215 51,215 — Bentall Centre (1)(2)(4) 96,524 96,524 — Sunset Pier 94 Studios construction loan (1)(2) 46,810 36,760 10,050 TOTAL $ 989,799 $ 184,499 $ 805,300 _____________ 1.
Non-GAAP Supplemental Financial Measures We calculate FFO in accordance with the White Paper issued in December 2018 on FFO approved by the Board of Governors of NAREIT.
The increase was further offset by $41.0 million spent on the purchase of our partner’s interest in our 1455 Market property during the year ended December 31, 2024. Non-GAAP Supplemental Financial Measures We calculate FFO in accordance with the White Paper issued in December 2018 on FFO approved by the Board of Governors of NAREIT.
Critical Accounting Policies and Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Because a taxable REIT subsidiary is subject to federal income tax, and state and local income tax (where applicable), as a regular C corporation, the income earned by our taxable REIT subsidiaries generally will be subject to an additional level of tax as compared to the income earned by our other subsidiaries. 43 Critical Accounting Policies and Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of commitments and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Given the level of sensitivity in the inputs, a change in the value of any one input, in isolation or in combination, could significantly affect the overall estimation of fair value of the reporting unit.
Given the level of sensitivity in the inputs, a change in the value of any one input, in isolation or in combination, could affect the overall estimation of fair value of the reporting unit. Intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method, which reflects the pattern in which the assets are consumed.
Management further analyzes NOI by evaluating the performance from the following groups: • Same-store properties, which include all of the properties owned and included in our stabilized portfolio as of January 1, 2023 and still owned and included in the stabilized portfolio as of December 31, 2024; and • Non-same-store, which includes: • Stabilized non-same store properties • Lease-up properties • Repositioning properties • Development properties • Redevelopment properties • Held for sale properties • Operating results from studio service-related businesses 49 The following table reconciles net loss to NOI (in thousands, except percentage change): Year Ended December 31, 2024 2023 Dollar Change Percentage Change NET LOSS $ (381,406) $ (170,700) $ (210,706) 123.4 % Adjustments: Loss from unconsolidated real estate entities 7,308 3,902 3,406 87.3 Fee income (5,269) (6,181) 912 (14.8) Interest expense 177,393 214,415 (37,022) (17.3) Interest income (2,467) (2,182) (285) 13.1 Management services reimbursement income—unconsolidated real estate entities (4,119) (4,125) 6 (0.1) Management services expense—unconsolidated real estate entities 4,119 4,125 (6) (0.1) Transaction-related expenses 2,499 (1,150) 3,649 (317.3) Unrealized loss on non-real estate investment 3,958 3,120 838 26.9 Gain on extinguishment of debt — (10,000) 10,000 (100.0) Loss on sale of bonds — 34,046 (34,046) (100.0) Loss (gain) on sale of real estate 2,453 (103,202) 105,655 (102.4) Impairment loss 149,664 60,158 89,506 148.8 Other (income) expense (1,647) 6 (1,653) (27,550.0) Income tax provision 1,641 6,796 (5,155) (75.9) General and administrative 79,451 74,958 4,493 6.0 Depreciation and amortization 354,425 397,846 (43,421) (10.9) NOI $ 388,003 $ 501,832 $ (113,829) (22.7) % Same-store NOI $ 377,682 $ 438,947 $ (61,265) (14.0) % Non-same-store NOI 10,321 62,885 (52,564) (83.6) NOI $ 388,003 $ 501,832 $ (113,829) (22.7) % The following table summarizes certain statistics of our consolidated same-store office and studio properties: Year Ended December 31, 2024 2023 Same-store office Number of properties 38 38 Rentable square feet 11,257,195 11,257,195 Ending % leased 77.0 % 79.9 % Ending % occupied 76.5 % 78.9 % Average % occupied for the period 76.9 % 82.9 % Average annual rental rate per square foot $ 58.31 $ 58.51 Same-store studio Number of properties 3 3 Rentable square feet 1,211,168 1,211,168 Average % leased over period (1) 73.8 % 80.4 % _____________ 1.
Management further analyzes NOI by evaluating the performance from the following groups: • Same-store properties, which include all of the properties owned and included in our stabilized portfolio as of January 1, 2024 and still owned and included in the stabilized portfolio as of December 31, 2025; and • Non-same-store, which includes: • Stabilized non-same store properties • Lease-up properties • Repositioning properties • Development properties • Redevelopment properties • Held for sale properties • Operating results from studio service-related businesses 50 The following table reconciles net loss to NOI (in thousands, except percentage change): Year Ended December 31, 2025 2024 Dollar Change Percentage Change NET LOSS $ (592,298) $ (381,406) $ (210,892) 55.3 % Adjustments: Loss from unconsolidated real estate entities 67 7,308 (7,241) (99.1) Fee income (5,399) (5,269) (130) 2.5 Interest expense 172,218 177,393 (5,175) (2.9) Interest income (6,238) (2,467) (3,771) 152.9 Management services reimbursement income—unconsolidated real estate entities (4,206) (4,119) (87) 2.1 Management services expense—unconsolidated real estate entities 4,206 4,119 87 2.1 Transaction-related expenses 590 2,499 (1,909) (76.4) Unrealized loss on non-real estate investment 2,998 3,958 (960) (24.3) Loss on extinguishment of debt 10,453 — 10,453 — Loss on deconsolidation of real estate entity 77,907 — 77,907 — (Gain) loss on sale of real estate, net (5,714) 2,453 (8,167) (332.9) Impairment loss 299,320 149,664 149,656 100.0 Other expense (income) 1,812 (1,647) 3,459 (210.0) Income tax (benefit) provision (273) 1,641 (1,914) (116.6) General and administrative 72,953 79,451 (6,498) (8.2) Depreciation and amortization 374,967 354,425 20,542 5.8 NOI $ 403,363 $ 388,003 $ 15,360 4.0 % Same-store NOI $ 347,160 $ 377,819 $ (30,659) (8.1) % Non-same-store NOI 56,203 10,184 46,019 451.9 NOI $ 403,363 $ 388,003 $ 15,360 4.0 % The following table summarizes certain statistics of our consolidated same-store office and studio properties: Year Ended December 31, 2025 2024 Same-store office Number of properties 38 38 Rentable square feet 11,649,252 11,590,798 Ending % leased 74.9 % 77.5 % Ending % occupied 74.2 % 76.9 % Average % occupied for the period 72.8 % 77.0 % Average annual rental rate per square foot $ 56.94 $ 58.17 Same-store studio Number of properties 3 3 Rentable square feet 1,204,666 1,204,666 Average % leased over period (1) 78.8 % 73.8 % _____________ 1.
Cash Flows Comparison of the cash flow activity for the year ended December 31, 2024 to the year ended December 31, 2023 is as follows (in thousands, except percentage change): Year Ended December 31, 2024 2023 Dollar Change Percentage Change Net cash provided by operating activities $ 164,657 $ 232,256 $ (67,599) (29.1) % Net cash (used in) provided by investing activities $ (250,539) $ 467,841 $ (718,380) (153.6) % Net cash provided by (used in) financing activities $ 65,903 $ (866,672) $ 932,575 (107.6) % Cash and cash equivalents and restricted cash were $99.2 million and $119.2 million at December 31, 2024 and 2023, respectively. 57 Operating Activities Net cash provided by operating activities decreased by $67.6 million, or 29.1%, to $164.7 million for the year ended December 31, 2024 as compared to $232.3 million for the year ended December 31, 2023.
Cash Flows Comparison of the cash flow activity for the year ended December 31, 2025 to the year ended December 31, 2024 is as follows (in thousands, except percentage change): Year Ended December 31, 2025 2024 Dollar Change Percentage Change Net cash provided by operating activities $ 120,977 $ 164,657 $ (43,680) (26.5) % Net cash provided by (used in) investing activities $ 42,845 $ (250,539) $ 293,384 (117.1) % Net cash (used in) provided by financing activities $ (100,871) $ 65,903 $ (166,774) (253.1) % Cash and cash equivalents and restricted cash were $162.1 million and $99.2 million at December 31, 2025 and 2024, respectively.
The change resulted primarily a $1.2 billion decrease in payments of unsecured and secured debt, partially offset by a $201.6 million decrease in borrowings during the year ended December 31, 2024 as compared to the year ended December 31, 2023, as well as $145.5 million proceeds from the sale of bonds in 2023 that did not recur in 2024.
The change resulted primarily from a $2.0 billion increase in payments of unsecured and secured debt, partially offset by a $1.1 billion increase in borrowings and $661.8 million in proceeds from the sale of common stock and pre-funded warrants during the year ended December 31, 2025.
During the year ended December 31, 2023, we recorded an income tax provision of $6.8 million primarily related to a valuation allowance recorded against certain deferred tax assets.
Income tax benefit (provision) During the year ended December 31, 2025, we recorded an income tax benefit of $0.3 million primarily related to the deferred tax effect of impairment losses related to Quixote during the year ended December 31, 2025.
Intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method, which reflects the pattern in which the assets are consumed. The estimated useful lives for acquired intangible assets range from five to seven years. The Company assesses its intangible assets with finite lives for impairment when indicators of impairment are identified.
The estimated useful lives for acquired intangible assets range from five to seven years. The Company assesses its intangible assets with finite lives for impairment when indicators of impairment are identified in a manner similar to the goodwill analysis and the inputs are generally considered Level 3 within the fair value hierarchy.
We and certain of our TRSs file income tax returns with the U.S. federal government and various state and local jurisdictions. We and our TRSs are no longer subject to tax examinations by tax authorities for years prior to 2020.
We and our TRSs are no longer subject to tax examinations by tax authorities for years prior to 2022 for federal purposes and 2021 for state purposes, subject to applicable statutes of limitations.
Comparison of the year ended December 31, 2023 to the year ended December 31, 2022 Refer to Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Comparison of the year ended December 31, 2023 to the year ended December 31, 2022” of the Form 10-K for the fiscal year ended December 31, 2023. 54 Liquidity and Capital Resources We have remained capitalized since our initial public offering through public offerings, private placements, joint ventures and continuous offerings under our at-the-market (“ATM”) program.
Liquidity and Capital Resources We have remained capitalized since our initial public offering through public offerings, private placements, joint ventures and continuous offerings under our at-the-market (“ATM”) program.
However, FFO should not be viewed as an alternative measure of our operating performance because it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, which are significant economic costs and could materially impact our results from operations. 58 The following table presents a reconciliation of net loss to FFO (in thousands): Year Ended December 31, 2024 2023 Net loss $ (381,406) $ (170,700) Adjustments: Depreciation and amortization—consolidated 354,425 397,846 Depreciation and amortization—non-real estate assets (34,716) (33,389) Depreciation and amortization—HPP’s share from unconsolidated real estate entities 5,630 4,779 Loss (gain) on sale of real estate 2,453 (103,202) Loss on sale of bonds — 34,046 Impairment loss—real estate assets 42,049 60,158 Unrealized loss on non-real estate investments 3,958 3,120 FFO attributable to non-controlling interests (12,789) (42,335) FFO attributable to preferred shares and units (20,800) (20,800) FFO TO COMMON STOCKHOLDERS AND UNITHOLDERS $ (41,196) $ 129,523
The following table presents a reconciliation of net loss to FFO (in thousands): Year Ended December 31, 2025 2024 Net loss $ (592,298) $ (381,406) Adjustments: Depreciation and amortization—consolidated 374,967 354,425 Depreciation and amortization—non-real estate assets (35,852) (34,716) Depreciation and amortization—HPP’s share from unconsolidated real estate entities 4,654 5,630 (Gain) loss on sale of real estate, net (5,714) 2,453 Loss on deconsolidation of real estate entity 77,907 — Impairment loss—real estate assets 18,476 42,049 Unrealized loss on non-real estate investments 2,998 3,958 FFO attributable to non-controlling interests (18,092) (12,789) FFO attributable to preferred shares and units (20,552) (20,800) FFO TO COMMON STOCKHOLDERS AND UNITHOLDERS $ (193,506) $ (41,196) 59
This loan is interest-only through its term. The maturity date includes the effect of extension options.
This loan is interest-only through its term. The maturity date includes the effect of extension options. (3) Amount drawn includes principal of $100.6 million and accrued payment-in-kind interest of $1.8 million as of December 31, 2025.
The decrease was partially offset by interest on the loan secured by Sunset Glenoaks Studios, which became a consolidated property as of April 1, 2024. Capitalized interest increased by $8.1 million, or 25.2%, to $40.4 million for the year ended December 31, 2024 compared to $32.3 million for the year ended December 31, 2023.
The decrease was partially offset by the interest expense related to the Office Portfolio CMBS loan, which was obtained in March 2025. Capitalized interest decreased by $1.1 million, or 2.7%, to $39.3 million for the year ended December 31, 2025 compared to $40.4 million for the year ended December 31, 2024.
The increase was primarily driven by the sale of a non-real estate investment during the year ended December 31, 2024.
Other (expense) income During the year ended December 31, 2025, we recognized other expense of $1.8 million primarily due to a loss on the sale of non-real estate property, plant and equipment. During the year ended December 31, 2024 we recognized other income of $1.6 million primarily driven by the sale of a non-real estate investment.
We also look to opportunistically recycle capital to enhance our portfolio or to otherwise further our capital allocation goals. Changes in demand for office and/or studio space, capital markets, and other macro-economic factors may impact our business and overall performance.
We also look to opportunistically recycle capital to enhance our portfolio or to otherwise further our capital allocation goals.
Credit Ratings The following table provides information with respect to our credit ratings at December 31, 2024: Agency Credit Rating Moody’s B2 Standard and Poor’s BB- Fitch BB- Liquidity Uses Contractual Obligations The following table provides information with respect to our commitments at December 31, 2024, including any guaranteed or minimum commitments under contractual obligations (in thousands): Payments Due by Period Contractual Obligation Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Principal payments on unsecured and secured debt (1) $ 4,187,667 $ 741,300 $ 2,095,367 $ 951,000 $ 400,000 Principal payments on joint venture partner debt (1) 66,136 — — — 66,136 Interest payments—fixed rate (1)(2)(3) 375,416 128,974 171,251 66,433 8,758 Interest payments—variable rate (1)(2)(4) 128,620 76,775 51,845 — — Operating leases (5) 712,548 42,072 83,175 78,888 508,413 TOTAL $ 5,470,387 $ 989,121 $ 2,401,638 $ 1,096,321 $ 983,307 _____________ 1.
Credit Ratings The following table provides information with respect to our credit ratings at December 31, 2025: Agency Credit Rating Moody’s B2 Standard and Poor’s B Fitch B+ Liquidity Uses Contractual Obligations The following table provides information with respect to our commitments at December 31, 2025, including any guaranteed or minimum commitments under contractual obligations (in thousands): Payments Due by Period Contractual Obligation Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years Principal payments on unsecured and secured debt (1) $ 3,367,850 $ 1,079,767 $ 871,000 $ 1,417,083 $ — Principal payments on joint venture partner debt (1) 66,136 — — — 66,136 Interest payments—fixed rate (1)(2)(3) 353,258 116,989 173,545 57,442 5,282 Interest payments—variable rate (1)(2)(4) 21,139 17,994 1,922 1,223 — Operating leases (5) 631,934 35,612 69,523 63,725 463,074 TOTAL $ 4,440,317 $ 1,250,362 $ 1,115,990 $ 1,539,473 $ 534,492 _____________ 1.
Generally, we have assessed our tax positions for all open years, which as of December 31, 2024 include 2021 to 2023 for Federal purposes and 2020 to 2023 for state purposes, and concluded that there are no material uncertainties to be recognized. 47 Results of Operations The following table summarizes our portfolio as of December 31, 2024 : Number of Properties Rentable Square Feet (1) Percent Occupied (2) Percent Leased (2) Annualized Base Rent per Square Foot (3) OFFICE Same-store (4) 39 12,794,354 77.9 % 78.5 % $ 54.31 Stabilized non-same store (5) 1 31,613 45.8 45.8 33.00 Total stabilized 40 12,825,967 77.8 78.4 54.27 Lease-up (5)(6) 1 724,381 86.5 87.9 61.64 Total in-service office 41 13,550,348 78.3 78.9 54.71 STUDIO Same-store (7) 3 1,211,168 73.8 73.8 47.41 Non-same-store (5) 1 241,000 Total 4 1,452,168 Repositioning (5)(8) 1 260,567 — — — Development (5)(9) 2 778,000 0.3 0.4 — Held-for-sale (5) 2 298,084 85.2 85.2 72.64 Total repositioning and development 5 1,336,651 Total office and studio properties 50 16,339,167 Future development (10) 7 3,233,589 TOTAL 57 19,572,756 ____________ 1.
Generally, we have assessed our tax positions for all open years, which as of December 31, 2025 include 2022 to 2024 for federal purposes and 2021 to 2024 for state purposes, and concluded that there are no material uncertainties to be recognized. 48 Results of Operations The following table summarizes our portfolio as of December 31, 2025 : Number of Properties Rentable Square Feet (1) Percent Occupied (2) Percent Leased (2) Annualized Base Rent per Square Foot (3) OFFICE Same-store (4) 38 11,649,252 74.2 % 74.9 % $ 56.96 Non-same store 1 1,528,789 92.5 93.2 30.74 Total in-service office 39 13,178,041 76.3 % 77.0 % $ 53.27 STUDIO Same-store (5) 3 1,204,666 78.8 % 78.8 % $ 46.96 Non-same-store 1 243,300 9.3 9.3 37.62 Total in-service studio 4 1,447,966 67.1 % 67.1 % $ 46.76 Total 43 14,626,007 Repositioning (6) 1 240,569 — % — % $ — Development (7) 2 778,000 0.3 0.3 — Total repositioning and development 3 1,018,569 0.3 % 0.3 % $ — Total office and studio properties 46 15,644,576 Future development (8) 6 3,162,212 TOTAL 52 18,806,788 ____________ 1.
During the year ended December 31, 2023, we recognized a $103.2 million gain on sale of real estate attributable to the sales of our Skyway Landing, 604 Arizona, 3401 Exposition, Cloud10, One Westside and Westside Two properties.
No gain or loss on deconsolidation was recognized during the year ended December 31, 2024. Gain (loss) on sale of real estate, net During the year ended December 31, 2025, we recognized a $5.7 million net gain on sale of real estate attributable to the sales of our Foothill Research, Maxwell and Element LA properties.
The change was primarily driven by higher interest expense at the unconsolidated entities in 2024 due to an increase in the average reference rates for variable rate debt and a mark-to-market adjustment for an interest rate swap that does not qualify for hedge accounting.
The change was primarily driven by nonrecurring mark-to-market adjustments for an interest rate swap that did not qualify for hedge accounting during the year ended December 31, 2024 and a distribution received in excess of our investment in an unconsolidated real estate entity during the year ended December 31, 2025.
The increase was primarily driven by capitalized interest for the Sunset Glenoaks Studios and Washington 1000 development projects. Non-cash interest expense decreased by $14.1 million, or 64.6% to $7.7 million for the year ended December 31, 2024 compared to $21.9 million for the year ended December 31, 2023.
Non-cash interest expense increased by $6.5 million, or 84.0% to $14.2 million for the year ended December 31, 2025 compared to $7.7 million for the year ended December 31, 2024.