8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________

FORM 8-K

_________________________________

CURRENT REPORT

Pursuant to Section 13 OR 15 (d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 3, 2017

_________________________________

Hudson Pacific Properties, Inc.

(Exact name of registrant as specified in its charter)

Maryland	001-34789	27-1430478
(State or other jurisdiction	(Commission File Number)	(IRS Employer
of incorporation)		Identification No.)

11601 Wilshire Blvd., Ninth Floor Los Angeles, California	90025
(Address of Principal Executive Offices)	(Zip Code)

(310) 445-5700

Registrant’s Telephone Number, Including Area Code

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

_________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02    Results of Operations and Financial Condition.

On August 3, 2017, Hudson Pacific Properties, Inc. (also referred to herein as the “Company,” “we,” “us,” or “our”) issued a press release regarding our financial results for our quarter ended June 30, 2017. A copy of the press release is furnished herewith as Exhibit 99.1, which is incorporated herein by reference.

Also on August 3, 2017, we made available on our Website (www.hudsonpacificproperties.com) certain supplemental information concerning our financial results and operations for the second quarter. A copy of the supplemental information is furnished herewith as Exhibit 99.2, which is incorporated herein by reference.

Exhibits 99.1 and 99.2 are being furnished pursuant to Item 2.02 and shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act regardless of any general incorporation language in such filing.

Item 7.01    Regulation FD Disclosure.

As discussed in Item 2.02 above, we issued a press release regarding our financial results for our quarter ended June 30, 2017 and made available on our Website certain supplemental information relating to our financial results for the quarter ended June 30, 2017.

The information being furnished pursuant to Item 7.01 shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act regardless of any general incorporation language in such filing.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1**	Press release dated August 3, 2017 regarding the Company’s financial results for the quarter ended June 30, 2017.
99.2**	Supplemental Operating and Financial Data for the quarter ended June 30, 2017.

_____________

**     Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

		HUDSON PACIFIC PROPERTIES, INC.
Date:	August 3, 2017	By:	/s/ Mark T. Lammas
			Mark T. Lammas Chief Operating Officer, Chief Financial Officer and Treasurer

EXHIBIT INDEX

Exhibit No.	Description
99.1**	Press release dated August 3, 2017 regarding the Company’s financial results for the quarter ended June 30, 2017.
99.2**	Supplemental Operating and Financial Data for the quarter ended June 30, 2017.

_____________

**     Furnished herewith.

EX-99.1

Hudson Pacific Properties Reports Strong Second Quarter2017 Financial Results

73 Leases Totaling 583,000 Square Feet Executed at 67% GAAP and 48% Cash Rent Spreads

Los Angeles, CA, August 3, 2017—Hudson Pacific Properties, Inc. (the “Company,” or “Hudson Pacific”) (NYSE: HPP) today announced financial results for the second quarter ended June 30, 2017.

Second Quarter Highlights

• Net income attributable to common stockholders of $3.6 million, or $0.02 per diluted share, compared to net income of $0.8 million, or $0.01 per diluted share, a year ago;

• Funds From Operations (FFO), excluding specified items, of $75.3 million, or $0.48 per diluted share, compared to $62.9 million, or $0.43 per diluted share, a year ago;

• Executed new and renewal leases totaling 582,589 square feet, consisting of 356,581 square feet of new leases and 226,008 square feet of renewal leases with GAAP and cash rent growth of 67.4% and 48.4%, respectively, including a lease renewal with Bank of America for 95,002 square feet at 1455 Market;

• Completed the acquisition of Sunset Las Palmas Studios (formerly Hollywood Center Studios) in Hollywood, which closed on May 1, 2017; and

• Declared and paid a quarterly dividend of $0.25 per share on common stock.

“Strong leasing activity once again headlines our quarterly results,” said Victor Coleman, Hudson Pacific Properties’ Chairman and CEO. “We executed more than 580,000 square feet of leases at 48% cash rent spreads. In addition to larger leases, like our 95,000-square-foot renewal with Bank of America at 1455 Market in San Francisco, we signed nearly 270,000 square feet of deals at our Silicon Valley assets. An average lease size of less than 5,000 square feet for those transactions highlights the elevated velocity and volume for smaller deals across our Silicon Valley markets.”

Coleman continued, “In the second quarter, we also expanded our relationship with Netflix and closed our Sunset Las Palmas Studios acquisition. We believe we have positioned ourselves, both in terms of real estate and relationships, as the partner of choice for content creators driving growth within L.A.’s office market. Following the delivery of the ICON and CUE office projects, we have another 1.2 million square feet of value creation development opportunities with access to our Hollywood studios. This includes our 300,000-square-foot EPIC project, which we intend to break ground on this fall.”

Financial Results

The Company reported net income attributable to common stockholders of $3.6 million, or $0.02 per diluted share, for the three months ended June 30, 2017, compared to net income attributable to common stockholders of $0.8 million, or $0.01 per diluted share, for the three months ended June 30, 2016.

FFO, excluding specified items, for the three months ended June 30, 2017 totaled $75.3 million, or $0.48 per diluted share, compared to FFO, excluding specified items, of $62.9 million, or $0.43 per diluted share, a year ago. There were no specified items for the second quarter of 2017. Specified items for the second quarter of 2016 consisted of acquisition-related expense of $0.1 million, or $0.00 per diluted share.

FFO, including specified items, for the three months ended June 30, 2017 totaled $75.3 million, or $0.48 per diluted share, compared to $62.9 million, or $0.43 per diluted share, a year ago.

Consolidated Operating Results for the Three Months Ended June 30, 2017

Total revenue during the second quarter increased 17.0% to $180.5 million from $154.3 million for the same quarter a year ago. Total operating expenses increased 13.3% to $152.4 million from $134.5 million for the same quarter a year ago. As a result, income from operations increased 41.9% to $28.1 million from $19.8 million for the same quarter a year ago. The primary reasons for the changes in total revenue and operating expenses are discussed below in connection with the Company’s segment operating results.

Interest expense during the second quarter increased 23.2% to $21.7 million from $17.6 million for the same quarter a year ago. The Company had $2.6 billion and $2.3 billion of notes payable, excluding net deferred financing costs, at June 30, 2017 and June 30, 2016, respectively.

The Company had $0.1 million of unrealized loss on the ineffective portion of derivative instruments during the second quarter of 2017 compared to $0.4 million of unrealized loss on the ineffective portion of derivative instruments during the second quarter of 2016.

Other income during the second quarter increased 1,125.5% to $0.6 million from $0.0 million for the same quarter a year ago. The increase is primarily the result of interest income related to a joint venture we entered into in June 2016.

The Company had no gain on sale associated with dispositions during the second quarter of 2017 compared to $2.2 million of gain on sale associated with the dispositions of One Bay Plaza and Patrick Henry Drive during the second quarter of 2016.

Segment Operating Results for the Three Months Ended June 30, 2017

Office Properties

Total revenue at the Company’s office properties increased 15.5% to $166.9 million from $144.4 million for the same quarter a year ago. The increase was primarily the result of a $15.6 million increase in rental revenue to $133.6 million, a $3.7 million increase in tenant recoveries to $25.0 million, and a $3.2 million increase in parking and other revenue to $8.2 million. The increase in rental revenue largely resulted from higher rents and occupancy throughout the Company’s same-store portfolio, including Netflix’s lease commencement at ICON, and rental revenue associated with the acquisitions of 11601 Wilshire (purchased in July 2016), Hill7 (purchased in October 2016) and Page Mill Hill (purchased in December 2016). The increase was partially offset by the dispositions of One Bay Plaza (sold in June 2016) and 222 Kearny (sold in February 2017). The increase in tenant recoveries is largely due to the aforementioned acquisitions and the Netflix lease commencement. The increase in parking and other revenue also primarily resulted from the aforementioned acquisitions and the Netflix lease commencement, as well as Cisco and NerdWallet lease termination fees. These were offset by the repayment of the Broadway note, which matured in the second quarter of 2016.

Office property operating expenses increased 13.0% to $55.5 million from $49.1 million for the same quarter a year ago. The increase primarily resulted from the aforementioned acquisitions, partially offset by the sales of One Bay Plaza and 222 Kearny.

Net operating income with respect to the Company’s 34 same-store office properties for the second quarter increased 8.5% on a GAAP basis and 8.5% on a cash basis.

At June 30, 2017, the Company’s stabilized and in-service office portfolio was 95.6% and 90.8% leased, respectively. During the quarter, the Company executed 73 new and renewal leases totaling 582,589 square feet.

Media and Entertainment Properties

Total revenue at the Company’s media and entertainment properties increased 37.6% to $13.6 million from $9.9 million for the same quarter a year ago, largely due to a $2.2 million increase in rental revenue to $9.1 million and a $1.6 million increase in other property-related revenue to $4.4 million. The increase in rental revenue largely resulted from the acquisition of Sunset Las Palmas Studios (purchased in May 2017), as well as from higher occupancy at Sunset Bronson Studios. The increase in other property-related revenue largely resulted from the Sunset Las Palmas acquisition, as well as from higher production activity at Sunset Bronson. Total media and entertainment operating expenses increased 11.2% to $7.0 million from $6.3 million for the same quarter a year ago, largely due to the Sunset Las Palmas acquisition, partially offset by a reduction in utilities, bad debt reserve and security expenses at Sunset Bronson.

As of June 30, 2017, the trailing 12-month occupancy for the Company’s same-store media and entertainment portfolio increased to 89.9% from 85.3% for the period ended June 30, 2016.

Balance Sheet

At June 30, 2017, the Company had total assets of $6.9 billion, including unrestricted cash and cash equivalents of $73.2 million. At June 30, 2017, the Company had $190.0 million of undrawn total capacity under its unsecured revolving credit facility.

Major Leasing

Executed Significant Leases Throughout Portfolio

Bank of America renewed 95,002 square feet of its 180,529-square-foot lease at 1455 Market in San Francisco at nearly a 300% increase to the previous rents corresponding to that renewed space. Under this renewal, 26,001 square feet will expire in June 2018 and 68,991 square feet will expire in December 2024.

Glu Mobile, Inc., a 16-year-old, publicly traded developer/publisher of mobile games, signed a lease for 57,074 square feet (former Heald College space) through October 2027 at 875 Howard in San Francisco.

Restaurant delivery service DoorDash signed a lease for 50,821 square feet through August 2024 at 901 Market in San Francisco. The DoorDash lease backfills space that NerdWallet vacated in April 2017.

RealSelf, a 12-year-old private company providing an informational website on aesthetics medicine, signed a 49,799-square-foot lease (former Capital One space) through June 2022 at 83 King in Seattle.

Host Analytics, Inc., which provides a single, cloud-based Enterprise Performance Management platform, signed a lease for 35,006 square feet (former LiveOps space) through March 2023 at 555 Twin Dolphin in Redwood City.

Acquisitions

Purchased Sunset Las Palmas Studios (Formerly Hollywood Center Studios)

On May 1, 2017, the Company completed its acquisition of Sunset Las Palmas Studios (formerly Hollywood Center Studios) in Hollywood, a 373,150-square-foot media and entertainment campus with future development rights for $200.0 million before credits, prorations and closing costs. Located at 1040 N. Las Palmas Avenue, Sunset Las Palmas consists of 13 stages, production offices and support space on 15 acres near the Company’s Sunset Gower and Sunset Bronson Studios.

Dividend

Paid Common Dividend

The Company’s Board of Directors declared a dividend on its common stock of $0.25 per share for the second quarter of 2017, equivalent to an annual rate of $1.00 per share. The dividends were paid on June 30, 2017 to stockholders of record on June 20, 2017.

Activities Subsequent to June 30, 2017

Completed Additional Major Leasing

Netflix signed an agreement to lease another 47,864 square feet at Sunset Bronson Studios, including the historic mansion on Sunset Boulevard, which housed the Warner Brothers’ offices for decades. This new agreement brings

Netflix’s presence at Sunset Bronson, inclusive of ICON, CUE and various soundstages and production office and support space, to a total of 574,216 square feet through 2026.

2017 Outlook

Guidance Narrowed

The Company is narrowing its full-year 2017 FFO guidance to a range of $1.93 to $2.01 per diluted share, excluding specified items, maintaining the previous mid-point of $1.97 per diluted share. The guidance reflects the transactional activity referenced in this press release and in earlier announcements. As with the Company’s previous guidance, this estimate also includes Cisco’s early lease termination payment of $10.4 million, reduced for GAAP purposes by the write-off of approximately $5.9 million of non-cash items (i.e. straight-line rent receivable and above/below-market rent lease adjustment), amortized beginning with the second quarter of this year at approximately $1.5 million per quarter. The full-year 2017 FFO estimate reflects management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of events referenced in this press release, but otherwise excludes any impact from future unannounced or speculative acquisitions, dispositions, debt financings or repayments, recapitalizations, capital market activity or similar matters. There can be no assurance that the actual results will not differ materially from this estimate.

Below are some of the assumptions the Company used in providing this guidance (dollars in thousands):

Metric	Low	High
Growth in Same-Store Office Property Cash NOI(1)(2)(3)	8.5%	9.5%
Growth in Same-Store Media and Entertainment Property Cash NOI(1)(2)	7.5%	8.5%
GAAP Non-Cash Revenue (Straight-Line Rent and Above/Below-Market Rents)(4)	$47,000	$57,000
GAAP Non-Cash Expense (Above/Below-Market Ground Rent)	$(3,200)	$(3,200)
General and Administrative Expenses(5)	$(52,000)	$(57,000)
Interest Expense, net(6)	$(89,000)	$(92,000)
FFO Attributable to Non-controlling Interests	$(22,800)	$(26,600)
Weighted Average Common Stock/Units Outstanding—Diluted(7)	155,000,000	156,000,000

(1) Same-Store is defined as the 33 office properties or two media and entertainment properties, as applicable, owned and included in the Company’s stabilized portfolio as of January 1, 2016, and anticipated to still be owned and included in the stabilized portfolio through December 31, 2017.

(2) Please see non-GAAP information below for definition of Cash NOI.

(3) This estimate excludes the $10.4 million early lease termination fee paid by Cisco and the impact of the lease with Weil, Gotshal & Manges LLP at Towers at Shore Center in both periods. Effective September 1, 2016, the rent and square footage with Weil, Gotshal & Manges LLP was reduced under a lease amendment entered into on December 18, 2014, prior to the Company’s acquisition of that property from Blackstone. The Company estimates that Same-Store Office Property Cash NOI growth, including Cisco’s early lease termination payment and the impact of the Weil, Gotshal & Manges LLP lease in both periods, would range from 9.6% to 10.6%.

(4) Includes non-cash straight-line rent associated with the media and entertainment properties.

(5) Includes non-cash compensation expense, which the Company estimates at $16,000 in 2017.

(6) Includes amortization of deferred financing costs and loan premiums, which the Company estimates at $5,000 in 2017.

(7) Diluted shares represent ownership in the Company through shares of common stock, OP Units and other convertible or exchangeable instruments. The weighted average fully diluted common stocks/units outstanding for 2017 includes an estimate for dilution impact of stock grants to the Company’s executives under our 2015, 2016 and 2017 outperformance programs and performance-based awards under the Company’s special one-time award grants based on the projected award potential of such programs as of the end of such periods, as calculated in accordance with the Accounting Standards Codification 260 Earnings Per Share.

The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, including the information under “2017 Outlook” above, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the

inherent difficulty of forecasting the timing and/or amount of various items that would impact net income attributable to common stockholders per diluted share, the most directly comparable forward-looking GAAP financial measure, including, for example, acquisition costs and other non-core items that have not yet occurred, are out of the Company’s control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures.

Supplemental Information

Supplemental financial information regarding the Company’s second quarter 2017 results may be found in the Investor Relations section of the Company’s Website at investors.hudsonpacificproperties.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules.

Conference Call

The Company will hold a conference call to discuss second quarter 2017 financial results at 11:00 a.m. PT / 2:00 p.m. ET on August 3, 2017. To participate in the call by telephone, please dial (877) 407-0784 five to 10 minutes prior to the start time to allow time for registration. International callers should dial (201) 689-8560. The call will also be broadcast live over the Internet and can be accessed via the Investor Relations section of the Company’s Website at investors.hudsonpacificproperties.com, where a replay of the call will be available for 90 days. A replay will also be available beginning August 3, 2017 at 2:00 p.m. PT / 5:00 p.m. ET, through August 10, 2017 at 8:59 p.m. PT / 11:59 p.m. ET, by dialing (844) 512-2921 and entering the passcode 13665810. International callers should dial (412) 317-6671 and enter the same passcode.

About Hudson Pacific Properties

Hudson Pacific Properties is a vertically integrated real estate company focused on acquiring, repositioning, developing and operating high-quality office and state-of-the-art media and entertainment properties in select West Coast markets. Hudson Pacificinvests across the risk-return spectrum, favoring opportunities where it can employ leasing, capital investment and management expertise to create additional value. Founded in 2006 as Hudson Capital, the Company went public in 2010, electing to be taxed as a real estate investment trust. Through the years, Hudson Pacific has strategically assembled a portfolio totaling over 17 million square feet, including land for development, in high-growth, high-barrier-to-entry submarkets throughout Northern and Southern California and the Pacific Northwest. The Company is a leading provider of design-forward, next-generation workspaces for a variety of tenants, with a focus on Fortune 500 and industry-leading growth companies, many in the technology, media and entertainment sectors. As a long-term owner, Hudson Pacific prioritizes tenant satisfaction and retention, providing highly customized build-outs and working proactively to accommodate tenants’ growth. Hudson Pacific trades as a component of the Russell 2000® and the Russell 3000® indices. For more information visit hudsonpacificproperties.com.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of the federal securities laws. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward-looking statements by the use of forward-looking terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” or “potential” or the negative of these words and phrases or similar words or phrases that are predictions of or indicate future events, or trends and that do not relate solely to historical matters. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and contingencies, many of which are beyond the Company’s control that may cause actual results to differ significantly from those expressed in any forward-looking statement. All forward-looking statements reflect the Company’s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company disclaims

any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes. For a further discussion of these and other factors that could cause the Company’s future results to differ materially from any forward-looking statements, see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission, or SEC, on February 21, 2017, and other risks described in documents subsequently filed by the Company from time to time with the SEC.

Investor/Media Contacts:

Hudson Pacific Properties, Inc.

Laura Campbell

Vice President, Head of Investor Relations

(310) 445-5700

lcampbell@hudsonppi.com

or

Greg Berardi

Blue Marlin Partners

(415) 239-7826

greg@bluemarlinpartners.com

(FINANCIAL TABLES FOLLOW)

Hudson Pacific Properties, Inc. Consolidated Balance Sheets (Unaudited, in thousands, except share data)
	June 30, 2017			December 31, 2016
ASSETS
Real estate assets
Land	$	1,413,269		$	1,265,399
Building and improvements	4,765,915			4,502,235
Tenant improvements	403,359			373,778
Furniture and fixtures	7,230			4,276
Property under development	247,634			295,239
Total real estate held for investment	6,837,407			6,440,927
Accumulated depreciation and amortization	(506,118		)	(419,368		)
Investment in real estate, net	6,331,289			6,021,559
Cash and cash equivalents	73,242			83,015
Restricted cash	17,284			25,177
Accounts receivable, net	4,088			6,852
Straight-line rent receivables, net	93,093			87,281
Deferred leasing costs and lease intangible assets, net	282,272			309,962
Derivative assets	5,858			5,935
Goodwill	8,754			8,754
Prepaid expenses and other assets, net	32,777			27,153
Investment in unconsolidated entities	15,377			37,228
Assets associated with real estate held for sale	—			66,082
TOTAL ASSETS	$	6,864,034		$	6,678,998
LIABILITIES AND EQUITY
Notes payable, net	$	2,598,780		$	2,688,010
Accounts payable and accrued liabilities	134,237			120,444
Lease intangible liabilities, net	66,438			80,130
Security deposits	35,655			31,495
Prepaid rent	33,344			40,755
Derivative liabilities	987			1,303
Liabilities associated with real estate held for sale	—			3,934
TOTAL LIABILITIES	2,869,441			2,966,071
6.25% Series A cumulative redeemable preferred units of the operating partnership	10,177			10,177
EQUITY
Hudson Pacific Properties, Inc. stockholders’ equity:
Common stock, $0.01 par value, 490,000,000 authorized, 155,301,850 shares and 136,492,235 shares outstanding at June 30, 2017 and December 31, 2016, respectively	1,553			1,364
Additional paid-in capital	3,656,009			3,109,394
Accumulated other comprehensive income	5,960			9,496
Accumulated income (deficit)	7,592			(16,971		)
Total Hudson Pacific Properties, Inc. stockholders’ equity	3,671,114			3,103,283
Non-controlling interest—members in consolidated entities	299,898			304,608
Non-controlling interest—units in the operating partnership	13,404			294,859
TOTAL EQUITY	3,984,416			3,702,750
TOTAL LIABILITIES AND EQUITY	$	6,864,034		$	6,678,998

Hudson Pacific Properties, Inc.

Consolidated Statements of Operations

(Unaudited, in thousands, except share data)

	Three Months Ended   June 30,						Six Months Ended   June 30,
	2017			2016			2017			2016
REVENUES
Office
Rental	$	133,602		$	118,047		$	267,118		$	234,274
Tenant recoveries	25,038			21,303			42,439			41,836
Parking and other	8,212			5,050			14,111			10,582
Total Office revenues	166,852			144,400			323,668			286,692
Media & Entertainment
Rental	9,105			6,857			15,790			12,885
Tenant recoveries	129			213			794			412
Other property-related revenue	4,361			2,810			8,403			7,779
Other	53			41			130			90
Total Media & Entertainment revenues	13,648			9,921			25,117			21,166
TOTAL REVENUES	180,500			154,321			348,785			307,858
OPERATING EXPENSES
Office operating expenses	55,468			49,091			103,422			96,794
Media & Entertainment operating expenses	7,003			6,295			14,254			12,247
General and administrative	14,506			13,016			28,316			25,519
Depreciation and amortization	75,415			66,108			146,182			134,476
TOTAL OPERATING EXPENSES	152,392			134,510			292,174			269,036
INCOME FROM OPERATIONS	28,108			19,811			56,611			38,822
OTHER EXPENSE (INCOME)
Interest expense	21,695			17,614			43,625			34,865
Interest income	(16		)	(73		)	(46		)	(86		)
Unrealized loss on ineffective portion of derivative instruments	51			384			45			2,509
Acquisition-related expenses	—			61			—			61
Other income	(576		)	(47		)	(1,254		)	(23		)
TOTAL OTHER EXPENSES	21,154			17,939			42,370			37,326
INCOME BEFORE GAINS ON SALE OF REAL ESTATE	6,954			1,872			14,241			1,496
Gains on sale of real estate	—			2,163			16,866			8,515
NET INCOME	6,954			4,035			31,107			10,011
Net income attributable to preferred units	(159		)	(159		)	(318		)	(318		)
Net income attributable to participating securities	(255		)	(196		)	(495		)	(393		)
Net income attributable to non-controlling interest in consolidated entities	(2,974		)	(2,396		)	(6,011		)	(4,341		)
Net income attributable to units in the operating partnership	(13		)	(445		)	(215		)	(1,867		)
Net income attributable to Hudson Pacific Properties, Inc. common stockholders	$	3,553		$	839		$	24,068		$	3,092
Basic and diluted per share amounts:
Net income attributable to common stockholders—basic	$	0.02		$	0.01		$	0.16		$	0.03
Net income attributable to common stockholders—diluted	$	0.02		$	0.01		$	0.16		$	0.03
Weighted average shares of common stock outstanding—basic	155,290,559			95,145,496			151,640,853			92,168,432
Weighted average shares of common stock outstanding—diluted	156,095,603			95,995,496			152,431,897			93,000,432
Dividends declared per share	$	0.250		$	0.200		$	0.500		$	0.400

Hudson Pacific Properties, Inc.

Funds From Operations

(Unaudited, in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended   June 30,
	2017			2016			2017			2016
Reconciliation of net income to Funds From Operations (“FFO”)(1):
Net income	$	6,954		$	4,035		$	31,107		$	10,011
Adjustments:
Depreciation and amortization of real estate assets	74,939			65,655			145,233			133,560
Gains on sale of real estate	—			(2,163		)	(16,866		)	(8,515		)
FFO attributable to non-controlling interests	(6,445		)	(4,510		)	(11,952		)	(8,672		)
Net income attributable to preferred units	(159		)	(159		)	(318		)	(318		)
FFO to common stockholders and unitholders	75,289			62,858			147,204			126,066
Specified items impacting FFO:
Acquisition-related expenses	—			61			—			61
FFO (excluding specified items) to common stockholders and unitholders	$	75,289		$	62,919		$	147,204		$	126,127
Weighted average common stock/units outstanding—diluted	156,665			146,399			153,443			146,350
FFO per common stock/unit—diluted	$	0.48		$	0.43		$	0.96		$	0.86
FFO (excluding specified items) per common stock/unit—diluted	$	0.48		$	0.43		$	0.96		$	0.86

_________________

(1) We calculate FFO in accordance with the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts. The White Paper defines FFO as net income or loss calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), excluding extraordinary items, as defined by GAAP, gains and losses from sales of depreciable real estate and impairment write-downs associated with depreciable real estate, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets) and after adjustment for unconsolidated partnerships and joint ventures. The calculation of FFO includes the amortization of deferred revenue related to tenant-funded tenant improvements and excludes the depreciation of the related tenant improvement assets. We believe that FFO is a useful supplemental measure of our operating performance. The exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the assets that form the core of our activity and assists in comparing those operating results between periods. Also, because FFO is generally recognized as the industry standard for reporting the operations of REITs, it facilitates comparisons of operating performance to other REITs. However, other REITs may use different methodologies to calculate FFO, and accordingly, our FFO may not be comparable to all other REITs.

Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, we believe that FFO along with the required GAAP presentations provides a more complete measurement of our performance relative to our competitors and a more appropriate basis on which to make decisions involving operating, financing and investing activities than the required GAAP presentations alone would provide. We use FFO per share to calculate annual cost bonuses for certain employees.

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.

Hudson Pacific Properties, Inc.

Net Operating Income

(Unaudited, in thousands)

	Three Months Ended June 30,						Six Months Ended   June 30,
	2017			2016			2017			2016
Reconciliation of net income to Net Operating Income (“NOI”)(1):
Net income	$	6,954		$	4,035		$	31,107		$	10,011
Adjustments:
Interest expense	21,695			17,614			43,625			34,865
Interest income	(16		)	(73		)	(46		)	(86		)
Unrealized loss on ineffective portion of derivative instruments	51			384			45			2,509
Acquisition-related expenses	—			61			—			61
Other income	(576		)	(47		)	(1,254		)	(23		)
Gains on sale of real estate	—			(2,163		)	(16,866		)	(8,515		)
Income from operations	28,108			19,811			56,611			38,822
Adjustments:
General and administrative	14,506			13,016			28,316			25,519
Depreciation and amortization	75,415			66,108			146,182			134,476
NOI	$	118,029		$	98,935		$	231,109		$	198,817

_________________

(1) We evaluate performance based upon property NOI from continuing operations. NOI is not a measure of operating results or cash flows from operating activities as measured by GAAP and should not be considered an alternative to income from continuing operations, as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make distributions. All companies may not calculate NOI in the same manner. We consider NOI to be a useful performance measure to investors and management, because when compared across periods, NOI reflects the revenues and expenses directly associated with owning and operating our properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing a perspective not immediately apparent from income from continuing operations. We calculate net operating income as net income (loss) excluding corporate general and administrative expenses, depreciation and amortization, impairments, gains/losses on sales of real estate, interest expense, acquisition-related expenses and other non-operating items. We define NOI as operating revenues (including rental revenues, other property-related revenue, tenant recoveries and other operating revenues), less property-level operating expenses (which includes external management fees, if any, and property-level general and administrative expenses). NOI on a cash basis is NOI on a GAAP basis, adjusted to exclude the effect of straight-line rent and other non-cash adjustments required by GAAP. We believe that NOI on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent and other non-cash adjustments to revenue and expenses.

EX-99.2

HUDSON PACIFIC PROPERTIES, INC.

SECOND QUARTER2017

Supplemental Operating and Financial Information

This Supplemental Operating and Financial Data contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements. You should not rely on forward-looking statements as predictions of future events. Forward-looking statements involve numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statement made by us. These risks and uncertainties include, but are not limited to: adverse economic and real estate developments in Northern and Southern California and the Pacific Northwest; decreased rental rates or increased tenant incentives and vacancy rates; defaults on, early terminations of, or non-renewal of leases by tenants; increased interest rates and operating costs; failure to generate sufficient cash flows to service our outstanding indebtedness; difficulties in identifying properties to acquire and completing acquisitions; failure to successfully integrate pending and recent acquisitions; failure to successfully operate acquired properties and operations; failure to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended; possible adverse changes in laws and regulations; environmental uncertainties; risks related to natural disasters; lack or insufficient amount of insurance; inability to successfully expand into new markets or submarkets; risks associated with property development; conflicts of interest with our officers; changes in real estate and zoning laws and increases in real property tax rates; and the consequences of any possible future terrorist attacks. These factors are not exhaustive. For a discussion of important risks related to Hudson Pacific Properties, Inc.’s business, and an investment in its securities, including risks that could cause actual results and events to differ materially from results and events referred to in the forward-looking information, see the discussion under the caption “Risk Factors” in Hudson Pacific Properties, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission on February 21, 2017 and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. You are cautioned that the information contained herein speaks only as of the date hereof and Hudson Pacific Properties, Inc. assumes no obligation to update any forward-looking information, whether as a result of new information, future events or otherwise.

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

TABLE OF CONTENTS

	Page
COMPANY BACKGROUND, RESEARCH COVERAGE AND CORPORATE DATA	3
CONSOLIDATED FINANCIAL RESULTS	6
Consolidated Balance Sheets	7
Consolidated Statements of Operations	8
Funds from Operations	9
Adjusted Funds from Operations	10
Debt Summary	11
PORTFOLIO DATA	14
In-Service Office Portfolio by Property	15
In-Service Office Portfolio Summary	17
Redevelopment, Development and Held-For-Sale Office Summary	18
Land Properties Summary	19
Media & Entertainment Portfolio Summary	20
Current Value Creation Development Projects	21
Same-Store Analysis	23
Reconciliation of GAAP Net Income to Net Operating Income	25
Net Operating Income Detail	26
Office Portfolio Leasing Activity	27
Office Portfolio Commenced Leases with Non-Recurring, Up-Front Abatements	28
Quarterly Uncommenced / Backfill—Next Eight Quarters	29
Quarterly Office Lease Expirations—Next Eight Quarters	31
Office Lease Expirations—Annual	33
Fifteen Largest Office Tenants	34
Office Portfolio Diversification	35
DEFINITIONS	36

2

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

COMPANY BACKGROUND

CORPORATE 11601 Wilshire Boulevard, Ninth Floor, Los Angeles, California 90025 (310) 445-5700 www.hudsonpacificproperties.com
BOARD OF DIRECTORS
Victor J. Coleman		Theodore R. Antenucci	Frank Cohen
Chairman of the Board, Chief Executive Officer and President, Hudson Pacific Properties, Inc.		President and Chief Executive Officer, Catellus Development Corporation	Senior Managing Director, Blackstone Group, L.P.
Richard B. Fried		Jonathan M. Glaser	Robert L. Harris II
Managing Member, Farallon Capital Management, L.L.C.		Managing Member, JMG Capital Management LLC	Executive Chairman (retired), Acacia Research Corporation
Mark D. Linehan		Robert M. Moran, Jr.	Michael Nash
President and Chief Executive Officer, Wynmark Company		Co-founder and Co-owner, FJM Investments LLC	Senior Managing Director, Blackstone Group, L.P., Chief Investment Officer, Blackstone Real Estate Debt Strategies
		Barry A. Porter
		Managing General Partner, Clarity Partners L.P.
EXECUTIVE AND SENIOR MANAGEMENT
Victor J. Coleman		Mark T. Lammas	Christopher Barton
Chief Executive Officer and President		Chief Operating Officer, Chief Financial Officer and Treasurer	EVP, Development and Capital Investments
Alexander Vouvalides		Dale Shimoda	Kay L. Tidwell
Chief Investment Officer		EVP, Finance	EVP, General Counsel and Secretary
Arthur X. Suazo		Harout Diramerian	Steve Jaffe
EVP, Leasing		Chief Accounting Officer	Chief Risk Officer
Josh Hatfield		Drew Gordon	Gary Hansel
EVP, Operations		SVP, Northern California	SVP, Southern California
David Tye		Derric Dubourdieu	Elva Hernandez
SVP, Pacific Northwest		SVP, Leasing	VP, Controller
		Bill Humphrey
		SVP, Sunset Studios
INVESTOR RELATIONS
	Laura Campbell VP, Head of Investor Relations lcampbell@hudsonppi.com

3

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

RESEARCH COVERAGE
EQUITY RESEARCH COVERAGE
James Feldman	Barry Oxford	Alexander Goldfarb
Bank of America Merrill Lynch	D.A. Davidson	Sandler O’Neill + Partners
(646) 855-5808	(212) 240-9871	(212) 466-7937
Ross Smotrich	Craig Mailman	Nick Yulico
Barclay Capital	KeyBanc Capital Markets	UBS Investment Bank
(212) 526-2306	(917) 368-2316	(212) 713-3402
Tom Catherwood	Richard Anderson	Blaine Heck
BTIG	Mizuho Securities	Wells Fargo Securities
(212) 738-6140	(212) 205-8445	(443) 263-6516
David Rodgers		Vikram Malhotra
Robert W. Baird & Company		Morgan Stanley
(216) 737-7341		(212) 761-7567
RATING AGENCIES
Stephen Boyd	Alice Chung	Fernanda Hernandez
Fitch Ratings	Moody’s Investor Service	Standard & Poor’s
(212) 908-9153	(212) 553-2949	(212) 438-1347

4

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

CORPORATE DATA

(Unaudited, in thousands, except number of properties, square feet and per share data)

Hudson Pacific Properties, Inc. (NYSE: HPP) (also referred to herein as the “Company,” “we,” “us,” or “our”) is a vertically integrated real estate company focused on acquiring, repositioning, developing and operating high-quality office and state-of-the-art media and entertainment properties in high-growth, high-barrier-to-entry submarkets throughout Northern and Southern California and the Pacific Northwest. The Company invests across the risk-return spectrum, favoring opportunities where it can employ leasing, capital investment and management expertise to create additional value. This Supplemental Operating and Financial Data supplements the information provided in our reports filed with the Securities and Exchange Commission. We maintain a Website at www.hudsonpacificproperties.com.

	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Number of office properties owned	52			52			54			52			51
Office properties square feet(1)	13,903,408			13,887,405			14,084,405			13,714,851			13,214,376
Stabilized office properties leased rate as of end of period(2)	95.6		%	96.4		%	96.4		%	96.5		%	96.5		%
In-Service office properties leased rate as of end of period(3)	90.8		%	91.2		%	91.2		%	90.7		%	91.1		%
Number of Media & Entertainment properties owned	3			2			2			2			2
Same-Store Media & Entertainment square feet(1)	879,652			879,652			879,652			879,652			879,652
Same-Store Media & Entertainment leased rate as of end of period(4)	89.9		%	90.3		%	89.1		%	87.1		%	85.3		%
Non-Same-Store Media & Entertainment square feet(1)	376,925			—			—			—			—
Non-Same-Store Media & Entertainment leased rate as of end of period(5)	76.3		%	—			—			—			—
Number of land assets owned	8			6			7			8			8
Land assets estimated square feet(6)	3,045,687			2,539,562			2,539,562			2,638,875			2,638,875
Market capitalization:
Total debt(7)	$	2,616,568		$	2,407,196		$	2,707,839		$	2,427,440		$	2,358,029
Series A preferred units	$	10,177		$	10,177		$	10,177		$	10,177		$	10,177
Common equity capitalization(8)	$	5,391,595		$	5,466,098		$	5,149,111		$	4,861,070		$	4,300,917
Total market capitalization	$	8,018,340		$	7,883,471		$	7,867,127		$	7,298,687		$	6,669,123
Debt/total market capitalization	32.6		%	30.5		%	34.4		%	33.3		%	35.4		%
Series A preferred units & debt/total market capitalization	32.8		%	30.7		%	34.5		%	33.4		%	35.5		%
Common stock data (NYSE:HPP):
Range of closing prices(9)	$ 32.68 - 35.79			$ 33.75 - 36.65			$ 31.99 - 35.27			$ 29.03 - 34.33			$ 27.16 - 30.05
Closing price at quarter end	$	34.19		$	34.64		$	34.78		$	32.87		$	29.18
Weighted average fully diluted common stock/units outstanding(10)	156,665			150,335			146,955			146,793			146,399
Shares of common stock/units outstanding at end of period(11)	157,695			157,797			148,048			147,888			147,393

__________________________

(1) Square footage for properties has been determined by management based upon estimated leasable square feet, which may be less or more than the Building Owners and Managers Association, or BOMA, rentable area. Square footage may change over time due to re-measurement or re-leasing.

(2) Stabilized office properties leased rate excludes the lease-up properties, redevelopment, development, properties held-for-sale, and land properties described on pages 16, 18 and 19.

(3) In-service office properties leased rate includes the stabilized office properties and lease-up properties described on pages 15 and 16.

(4) Percent occupied for Media and Entertainment properties is the average percent leased for the 12 months ended as of the quarter indicated.

(5) Percent occupied for Non-Same-Store Media and Entertainment properties is the average percent leased for the 2 months ended June 30, 2017.

(6) Square footage for land assets represents management’s estimate of developable square feet, the majority of which remains subject to receipt of entitlement approvals that have not yet been obtained.

(7) Total debt excludes deferred financing costs. The full amount of debt related to the Pinnacle I & II joint venture and Hill7 joint venture is included.

(8) Common equity capitalization represents the shares of common stock (including unvested restricted shares), OP units outstanding and dilutive shares multiplied by the closing price of our stock at the end of the period.

(9) For the quarter indicated.

(10) For the quarter indicated, diluted shares represent ownership in our Company through shares of common stock, OP units and other convertible or exchangeable instruments. The weighted average fully diluted common stock/units outstanding for the three-month periods ending June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016 and June 30, 2016 includes an estimate for dilution impact of stock grants to our executives under our 2014, 2015, 2016 and 2017 outperformance programs and performance-based awards under our special one-time award grants based on the projected award potential of such programs as of end of such periods, as calculated in accordance with the Accounting Standards Codification 260 Earnings Per Share (the “Dilutive 2014/2015/2016/2017 OPP stock grants and one-time retention award grants”).

(11) This amount represents fully diluted common stock and OP units (including unvested restricted stocks) as of the end of the quarter indicated. The shares of common stock\units outstanding include the estimated Dilutive 2014/2015/2016/2017 OPP stock grants and one-time retention award grants.

5

CONSOLIDATED FINANCIAL RESULTS

6

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

Consolidated Balance Sheets (Unaudited, in thousands, except share data)
	June 30, 2017		December 31, 2016
ASSETS
Investment in real estate, net	$	6,331,289	$	6,021,559
Cash and cash equivalents	73,242		83,015
Restricted cash	17,284		25,177
Accounts receivable, net	4,088		6,852
Straight-line rent receivables, net	93,093		87,281
Deferred leasing costs and lease intangible assets, net	282,272		309,962
Derivative assets	5,858		5,935
Goodwill	8,754		8,754
Prepaid expenses and other assets, net	32,777		27,153
Investment in unconsolidated entities	15,377		37,228
Assets associated with real estate held for sale	—		66,082
TOTAL ASSETS	$	6,864,034	$	6,678,998
LIABILITIES AND EQUITY
Notes payable, net	$	2,598,780	$	2,688,010
Accounts payable and accrued liabilities	134,237		120,444
Lease intangible liabilities, net	66,438		80,130
Security deposits	35,655		31,495
Prepaid rent	33,344		40,755
Derivative liabilities	987		1,303
Liabilities associated with real estate held for sale	—		3,934
TOTAL LIABILITIES	2,869,441		2,966,071
6.25% Series A cumulative redeemable preferred units of the operating partnership	10,177		10,177
EQUITY
Hudson Pacific Properties, Inc. stockholders’ equity:
Common stock, $0.01 par value, 490,000,000 authorized, 155,301,850 shares and 136,492,235 shares outstanding at June 30, 2017 and December 31, 2016, respectively	1,553		1,364
Additional paid-in capital	3,656,009		3,109,394
Accumulated other comprehensive income	5,960		9,496
Accumulated income (deficit)	7,592		(16,971		)
Total Hudson Pacific Properties, Inc. stockholders’ equity	3,671,114		3,103,283
Non-controlling interest—members in consolidated entities	299,898		304,608
Non-controlling interest—units in the operating partnership	13,404		294,859
TOTAL EQUITY	3,984,416		3,702,750
TOTAL LIABILITIES AND EQUITY	$	6,864,034	$	6,678,998

7

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

Consolidated Statements of Operations (Unaudited, in thousands, except share data)
	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
REVENUES
Office
Rental	$	133,602		$	118,047		$	267,118		$	234,274
Tenant recoveries	25,038			21,303			42,439			41,836
Parking and other	8,212			5,050			14,111			10,582
Total Office revenues	166,852			144,400			323,668			286,692
Media & Entertainment
Rental	9,105			6,857			15,790			12,885
Tenant recoveries	129			213			794			412
Other property-related revenue	4,361			2,810			8,403			7,779
Other	53			41			130			90
Total Media & Entertainment revenues	13,648			9,921			25,117			21,166
TOTAL REVENUES	180,500			154,321			348,785			307,858
OPERATING EXPENSES
Office operating expenses	$	55,468		$	49,091		$	103,422		$	96,794
Media & Entertainment operating expenses	7,003			6,295			14,254			12,247
General and administrative	14,506			13,016			28,316			25,519
Depreciation and amortization	75,415			66,108			146,182			134,476
TOTAL OPERATING EXPENSES	152,392			134,510			292,174			269,036
INCOME FROM OPERATIONS	28,108			19,811			56,611			38,822
OTHER EXPENSE (INCOME)
Interest expense	21,695			17,614			43,625			34,865
Interest income	(16		)	(73		)	(46		)	(86		)
Unrealized loss on ineffective portion of derivative instruments	51			384			45			2,509
Acquisition-related expenses	—			61			—			61
Other income	(576		)	(47		)	(1,254		)	(23		)
TOTAL OTHER EXPENSES	21,154			17,939			42,370			37,326
INCOME BEFORE GAINS ON SALE OF REAL ESTATE	6,954			1,872			14,241			1,496
Gains on sale of real estate	—			2,163			16,866			8,515
NET INCOME	6,954			4,035			31,107			10,011
Net income attributable to preferred units	(159		)	(159		)	(318		)	(318		)
Net income attributable to participating securities	(255		)	(196		)	(495		)	(393		)
Net income attributable to non-controlling interest in consolidated entities	(2,974		)	(2,396		)	(6,011		)	(4,341		)
Net income attributable to units in the operating partnership	(13		)	(445		)	(215		)	(1,867		)
Net income attributable to Hudson Pacific Properties, Inc. common stockholders	$	3,553		$	839		$	24,068		$	3,092
Basic and diluted per share amounts:
Net income attributable to common stockholders—basic	$	0.02		$	0.01		$	0.16		$	0.03
Net income attributable to common stockholders—diluted	$	0.02		$	0.01		$	0.16		$	0.03
Weighted average shares of common stock outstanding—basic	155,290,559			95,145,496			151,640,853			92,168,432
Weighted average shares of common stock outstanding—diluted	156,095,603			95,995,496			152,431,897			93,000,432
Dividends declared per share	$	0.250		$	0.200		$	0.500		$	0.400

8

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

FUNDS FROM OPERATIONS (Unaudited, in thousands, except per share data)
	Three Months Ended
Quarter To Date	June 30, 2017			March 31,  2017			December 31, 2016			September 30, 2016			June 30, 2016
Funds From Operations (“FFO”)(1)
Net income	$	6,954		$	24,153		$	28,530		$	5,217		$	4,035
Adjustments:
Depreciation and amortization of real estate assets	74,939			70,294			66,720			66,965			65,655
Gains on sale of real estate	—			(16,866		)	(21,874		)	—			(2,163		)
FFO attributable to non-controlling interests	(6,445		)	(5,507		)	(5,243		)	(4,902		)	(4,510		)
Net income attributable to preferred units	(159		)	(159		)	(159		)	(159		)	(159		)
FFO to common stockholders and unitholders	75,289			71,915			67,974			67,121			62,858
Specified items impacting FFO:
Acquisition-related expenses	—			—			—			315			61
FFO (excluding specified items) to common stockholders and unitholders	$	75,289		$	71,915		$	67,974		$	67,436		$	62,919
Weighted average common stock/units outstanding—diluted	156,665			150,335			146,955			146,793			146,399
FFO per common stock/unit—diluted	$	0.48		$	0.48		$	0.46		$	0.46		$	0.43
FFO (excluding specified items) per common stock/unit—diluted	$	0.48		$	0.48		$	0.46		$	0.46		$	0.43
	Six Months Ended			Three Months Ended			Twelve Months Ended			Nine Months Ended			Six Months Ended
Year To Date	June 30, 2017			March 31,  2017			December 31, 2016			September 30, 2016			June 30, 2016
Funds From Operations (“FFO”)(1)
Net income	$	31,107		$	24,153		$	43,758		$	15,228		$	10,011
Adjustments:
Depreciation and amortization of real estate assets	145,233			70,294			267,245			200,525			133,560
Gains on sale of real estate	(16,866		)	(16,866		)	(30,389		)	(8,515		)	(8,515		)
FFO attributable to non-controlling interests	(11,952		)	(5,507		)	(18,817		)	(13,574		)	(8,672		)
Net income attributable to preferred units	(318		)	(159		)	(636		)	(477		)	(318		)
FFO to common stockholders and unitholders	147,204			71,915			261,161			193,187			126,066
Specified items impacting FFO:
Acquisition-related expenses	—			—			376			376			61
FFO (excluding specified items) to common stockholders and unitholders	$	147,204		$	71,915		$	261,537		$	193,563		$	126,127
Weighted average common stock/units outstanding—diluted	153,443			150,335			146,739			146,668			146,350
FFO per common stock/unit—diluted	$	0.96		$	0.48		$	1.78		$	1.32		$	0.86
FFO (excluding specified items) per common stock/unit—diluted	$	0.96		$	0.48		$	1.78		$	1.32		$	0.86

_________________

(1) See page 36 for Management’s Statements on FFO.

9

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

ADJUSTED FUNDS FROM OPERATIONS (Unaudited, in thousands)
	Three Months Ended
Quarter To Date	June 30, 2017			March 31,  2017			December 31, 2016			September 30, 2016			June 30, 2016
Adjusted Funds From Operations (“AFFO”)(1)
FFO	$	75,289		$	71,915		$	67,974		$	67,121		$	62,858
Adjustments:
Straight-line rent, net	(7,652		)	3,084			(9,069		)	(7,510		)	(4,979		)
Amortization of above-market and below-market leases, net	(4,493		)	(5,564		)	(5,776		)	(4,347		)	(4,298		)
Amortization of above-market and below-market ground leases, net	833			637			556			534			535
Amortization of lease incentive costs	320			320			311			303			268
Amortization of deferred financing costs and loan premium, net	1,154			1,157			1,155			1,128			1,558
Unrealized loss (gain) on ineffective portion of derivative instrument	51			(6		)	(194		)	(879		)	384
Recurring capital expenditures, tenant improvements and lease commissions	(29,551		)	(31,712		)	(28,075		)	(22,903		)	(24,099		)
Non-cash compensation expense	3,887			3,901			4,213			3,288			3,301
AFFO	$	39,838		$	43,732		$	31,095		$	36,735		$	35,528
Dividends paid to common stock and unitholders	$	39,919		$	39,919		$	29,350		$	29,350		$	29,317
AFFO payout ratio	100.2		%	91.3		%	94.4		%	79.9		%	82.5		%
	Six Months Ended			Three Months Ended			Twelve Months Ended			Nine Months Ended			Six Months Ended
Year To Date	June 30, 2017			March 31,  2017			December 31, 2016			September 30, 2016			June 30, 2016
Adjusted Funds From Operations (“AFFO”)(1)
FFO	$	147,204		$	71,915		$	261,161		$	193,187		$	126,066
Adjustments:
Straight-line rent, net	(4,568		)	3,084			(26,348		)	(17,279		)	(9,769		)
Amortization of above-market and below-market leases, net	(10,057		)	(5,564		)	(19,118		)	(13,342		)	(8,995		)
Amortization of above-market and below-market ground leases, net	1,470			637			2,160			1,604			1,070
Amortization of lease incentive costs	640			320			1,151			840			537
Amortization of deferred financing costs and loan premium, net	2,311			1,157			4,856			3,701			2,573
Unrealized loss (gain) on ineffective portion of derivative instrument	45			(6		)	1,436			1,630			2,509
Recurring capital expenditures, tenant improvements and lease commissions	(61,263		)	(31,712		)	(95,294		)	(67,219		)	(44,316		)
Non-cash compensation expense	7,788			3,901			14,144			9,931			6,643
AFFO	$	83,570		$	43,732		$	144,148		$	113,053		$	76,318
Dividends paid to common stock and unitholders	$	79,163		$	39,919		$	117,819		$	88,469		$	59,119
AFFO payout ratio	94.7		%	91.3		%	81.7		%	78.3		%	77.5		%

_________________

(1) See page 36 for Management’s Statements on AFFO.

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Second Quarter 2017 Supplemental Operating and Financial Information

DEBT SUMMARY

(Unaudited, in thousands)

The following table summarizes the balance of our indebtedness as of June 30, 2017 and December 31, 2016.

	June 30, 2017			December 31, 2016
Notes payable	$	2,616,568		$	2,707,839
Less: deferred financing costs, net(1)	(17,788		)	(19,829		)
Notes payable, net	$	2,598,780		$	2,688,010

________________

(1) Excludes deferred financing costs related to establishing our unsecured revolving credit facility of $1.2 million and $1.5 million as of June 30, 2017 and December 31, 2016, respectively, which are included in prepaid expenses and other assets, net in the Consolidated Balance Sheets. 

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Second Quarter 2017 Supplemental Operating and Financial Information

DEBT SUMMARY—(Continued)

(Unaudited, in thousands)

The following table sets forth information with respect to the amounts included in notes payable, net as of:

	June 30, 2017					December 31, 2016
	Principal Amount		Deferred Financing Costs, net			Principal Amount		Deferred Financing Costs, net			Interest Rate(1)	Contractual Maturity Date		Annual Debt Service(2)		Balance at Maturity
UNSECURED LOANS
Unsecured Revolving Credit Facility(3)	$	210,000	$	—		$	300,000	$	—		LIBOR+ 1.15% to 1.85%	4/1/2019	(4)	$	—	$	210,000
5-Year Term Loan due April 2020(3)(5)	450,000		(2,972		)	450,000		(3,513		)	LIBOR+ 1.30% to 2.20%	4/1/2020		—		450,000
5-Year Term Loan due November 2020(3)	175,000		(650		)	175,000		(745		)	LIBOR +1.30% to 2.20%	11/17/2020		—		175,000
7-Year Term Loan due April 2022(3)(6)	350,000		(2,049		)	350,000		(2,265		)	LIBOR+ 1.60% to 2.55%	4/1/2022		11,760		350,000
7-Year Term Loan due November 2022(3)(7)	125,000		(852		)	125,000		(931		)	LIBOR +1.60% to 2.55%	11/17/2022		3,788		125,000
Series A Notes	110,000		(852		)	110,000		(930		)	4.34%	1/2/2023		4,774		110,000
Series E Notes	50,000		(277		)	50,000		(300		)	3.66%	9/15/2023		1,830		50,000
Series B Notes	259,000		(2,144		)	259,000		(2,271		)	4.69%	12/16/2025		12,147		259,000
Series D Notes	150,000		(851		)	150,000		(898		)	3.98%	7/6/2026		5,970		150,000
Series C Notes	56,000		(515		)	56,000		(539		)	4.79%	12/16/2027		2,682		56,000
TOTAL UNSECURED LOANS	1,935,000		(11,162		)	2,025,000		(12,392		)				42,951		1,935,000
MORTGAGE LOANS
Mortgage Loan secured by Rincon Center(8)	99,392		(119		)	100,409		(198		)	5.13%	5/1/2018		7,195		97,854
Mortgage Loan secured by Sunset Gower Studios/Sunset Bronson Studios	5,001		(1,180		)	5,001		(1,534		)	LIBOR+2.25%	3/4/2019	(4)	—		5,001
Mortgage Loan secured by Met Park North(9)	64,500		(342		)	64,500		(398		)	LIBOR+1.55%	8/1/2020		2,393		64,500
Mortgage Loan secured by 10950 Washington(8)	27,675		(320		)	27,929		(354		)	5.32%	3/11/2022		2,003		24,981
Mortgage Loan secured by Pinnacle I(10)(11)	129,000		(542		)	129,000		(593		)	3.95%	11/7/2022		5,359		117,190
Mortgage Loan secured by Element L.A.	168,000		(2,190		)	168,000		(2,321		)	4.59%	11/6/2025		7,716		168,000
Mortgage Loan secured by Pinnacle II(11)	87,000		(682		)	87,000		(720		)	4.30%	6/11/2026		3,741		87,000
Mortgage Loan secured by Hill7(12)	101,000		(1,251		)	101,000		(1,319		)	3.38%	11/6/2026		3,414		101,000
TOTAL MORTGAGE LOANS	681,568		(6,626		)	682,839		(7,437		)				31,821		665,526
TOTAL	$	2,616,568	$	(17,788	)	$	2,707,839	$	(19,829	)				$	74,772	$	2,600,526

_________________

(1) Interest rate with respect to indebtedness is calculated on the basis of a 360-day year for the actual days elapsed. Interest rates are as of June 30, 2017, which may be different than the interest rates as of December 31, 2016 for corresponding indebtedness.

(2) Annual debt service includes principal payments based on amortization schedule and annual interest payments of fixed rate loans and variable rate loans with effective fixed rate as a result of derivative instruments on the full principal balance. In instances where interest is paid based on a LIBOR margin, we used the current margin based on the leverage ratio as of June 30, 2017. Amount doesn’t include interest payment of variable rate loans that are partially effectively fixed through derivative instruments.

(3) We have the option to make an irrevocable election to change the interest rate depending on our credit rating. As of June 30, 2017, no such election had been made.

(4) The maturity date may be extended once for an additional one-year term.

(5) Effective July 2016, $300.0 million of the term loan has been effectively fixed at 2.75% to 3.65% per annum through the use of two interest rate swaps.

(6) Effective July 2016, the outstanding balance of the term loan has been effectively fixed at 3.36% to 4.31% per annum through the use of two interest rate swaps.

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Second Quarter 2017 Supplemental Operating and Financial Information

(7) Effective June 1, 2016, the outstanding balance of the term loan has been effectively fixed at 3.03% to 3.98% per annum through the use of an interest rate swap.

(8) Monthly debt service includes annual debt amortization payments based on a 30-year amortization schedule with a balloon payment at maturity.

(9) This loan bears interest only. Interest on the full loan amount has been effectively fixed at 3.71% per annum through the use of an interest rate swap.

(10) This loan bears interest only for the first five years. Beginning with the payment due December 6, 2017, monthly debt service will include annual debt amortization payments based on a 30-year amortization schedule with a balloon payment at maturity.

(11) We own 65% of the ownership interests in the consolidated joint venture that owns the Pinnacle I and II properties. The full amount of the loan is shown.

(12) We own 55% of the ownership interest in the consolidated joint venture that owns the Hill7 property. The full amount of the loan is shown. The maturity date of this loan can be extended for an additional two years at a higher interest rate and with principal amortization.

13

PORTFOLIO DATA

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Second Quarter 2017 Supplemental Operating and Financial Information

IN-SERVICE OFFICE PORTFOLIO BY PROPERTY(1)
Location	Submarket	Square Feet(2)	Percent Occupied(3)		Percent Leased(3)		Annualized Base Rent(4)		Annualized Base Rent Per Square Foot(4)
SAME-STORE(5)
Greater Seattle, Washington
Northview Center	Lynnwood	182,009	84.4	%	90.3	%	$	3,337,985	$	21.72
Met Park North	South Lake Union	190,748	95.8		95.8		5,192,434		28.42
Merrill Place	Pioneer Square	163,768	94.4		95.8		4,662,668		30.17
505 First Avenue	Pioneer Square	288,140	97.4		97.4		6,305,341		22.47
83 King Street	Pioneer Square	184,083	90.0		90.0		4,717,913		28.49
Subtotal		1,008,748	92.9	%	94.2	%	$	24,216,341	$	25.84
San Francisco Bay Area, California
1455 Market Street(6)	San Francisco	1,025,833	99.7	%	99.7	%	$	38,041,152	$	37.19
275 Brannan Street	San Francisco	54,673	100.0		100.0		3,261,352		59.65
625 Second Street	San Francisco	138,080	100.0		100.0		8,506,768		61.63
875 Howard Street	San Francisco	229,196	85.4		85.4		5,482,984		28.01
901 Market Street	San Francisco	206,218	100.0		100.0		11,091,636		53.79
Rincon Center	San Francisco	580,850	88.0		92.5		23,618,621		46.22
Towers at Shore Center	Redwood Shores	334,483	83.6		83.6		15,928,518		56.96
Skyway Landing	Redwood Shores	247,173	88.9		88.9		9,792,053		44.54
Lockheed	Palo Alto	42,899	100.0		100.0		3,011,716		70.20
2180 Sand Hill Road	Palo Alto	45,613	97.2		97.2		4,293,340		96.87
3400 Hillview	Palo Alto	207,857	100.0		100.0		13,334,941		64.15
Clocktower Square	Palo Alto	100,344	71.0		71.0		5,278,065		74.09
Embarcadero Place	Palo Alto	197,402	84.0		84.0		7,470,178		45.05
Foothill Research Center	Palo Alto	195,376	100.0		100.0		12,870,949		65.88
Page Mill Center(7)	Palo Alto	176,245	99.9		99.9		12,054,825		68.44
Campus Center	Milpitas	471,580	100.0		100.0		15,845,088		33.60
1740 Technology	North San Jose	206,876	98.0		98.0		7,443,852		36.70
Concourse	North San Jose	944,386	94.5		95.2		28,381,185		31.79
Skyport Plaza	North San Jose	418,086	96.5		96.5		13,537,080		33.56
Subtotal		5,823,170	94.5	%	95.0	%	$	239,244,303	$	43.48
Los Angeles, California
Pinnacle I(8)	Burbank	393,777	97.0	%	97.0	%	$	15,953,498	$	41.75
Pinnacle II(8)	Burbank	230,000	100.0		100.0		9,281,389		40.35
6922 Hollywood	Hollywood	205,523	85.4		85.4		8,017,912		45.69
Technicolor Building	Hollywood	114,958	100.0		100.0		5,220,427		45.41
3401 Exposition	West Los Angeles	63,376	100.0		100.0		2,702,871		42.65
10900 Washington	West Los Angeles	9,919	100.0		100.0		403,505		40.68
10950 Washington	West Los Angeles	159,025	100.0		100.0		6,414,707		40.34
9300 Wilshire	West Los Angeles	61,422	92.5		98.0		2,678,286		47.16
Element LA	West Los Angeles	284,037	100.0		100.0		15,871,935		55.88
Del Amo Office	Torrance	113,000	100.0		100.0		3,327,208		29.44
Subtotal		1,635,037	97.2	%	97.4	%	$	69,871,738	$	43.98
Total Same-Store		8,466,955	94.8	%	95.4	%	$	333,332,382	$	41.52

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Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

IN-SERVICE OFFICE PORTFOLIO BY PROPERTY(1)
NON-SAME-STORE
San Francisco Bay Area, California
555 Twin Dolphin Plaza	Redwood Shores	198,936	94.8	%	94.8	%	$	9,547,877	$	50.62
Page Mill Hill	Palo Alto	182,676	98.4		98.4		11,492,886		63.93
Subtotal		381,612	96.5	%	96.5	%	$	21,040,763	$	57.11
Los Angeles, California
Icon	Hollywood	325,757	100.0		100.0		17,800,735		54.64
Subtotal		325,757	100.0	%	100.0	%	$	17,800,735	$	54.64
Total Non-Same-Store		707,369	98.1	%	98.1	%	$	38,841,498	$	55.95
Total Stabilized		9,174,324	95.1	%	95.6	%	$	372,173,880	$	42.67
LEASE-UP
Greater Seattle, Washington
Hill7(9)	South Lake Union	285,680	70.5	%	80.4	%	$	7,406,538	$	36.76
Subtotal		285,680	70.5	%	80.4	%	$	7,406,538	$	36.76
San Francisco Bay Area, California
Peninsula Office Park	San Mateo	510,789	76.9	%	76.9	%	$	18,336,069	$	46.69
Metro Center	Foster City	730,215	76.7		76.7		26,251,310		46.90
333 Twin Dolphin Plaza	Redwood Shores	182,789	74.6		74.6		7,473,346		54.81
Shorebreeze	Redwood Shores	230,932	65.0		73.8		8,095,980		53.91
Palo Alto Square	Palo Alto	328,251	66.9		79.1		16,711,737		76.07
Techmart Commerce Center	Santa Clara	284,440	80.2		84.8		9,482,615		41.56
Gateway	North San Jose	609,093	75.1		83.3		14,952,004		32.71
Metro Plaza	North San Jose	456,921	79.1		80.0		12,457,872		34.48
Subtotal		3,333,430	75.2	%	79.0	%	$	113,760,933	$	45.41
Los Angeles, California
11601 Wilshire	West Los Angeles	500,475	85.2	%	88.3	%	$	17,352,754	$	40.69
Subtotal		500,475	85.2	%	88.3	%	$	17,352,754	$	40.69
Total Lease-Up		4,119,585	76.1	%	80.2	%	$	138,520,225	$	44.21
TOTAL IN-SERVICE		13,293,909	89.2	%	90.8	%	$	510,694,105	$	43.08

___________________________

(1) Our in-service portfolio excludes the redevelopment, development, properties held-for-sale and land properties described on pages 18 and 19. As of June 30, 2017, we had two office development properties under construction, five office redevelopment properties under construction and eight land properties (see pages 18 and 19). We define lease-up properties as properties that have not yet reached 92.0% occupancy since the date they were acquired or placed under redevelopment or development.

(2) Square footage for office properties has been determined by management based upon estimated leasable square feet, which may be less or more than the Building Owners and Managers Association, or BOMA, rentable area. Square footage may change over time due to re-measurement or re-leasing.

(3) Percent occupied for office properties is calculated as (i) square footage under commenced leases as of June 30, 2017, divided by (ii) total square feet, expressed as a percentage. Percent leased for office properties includes uncommenced leases.

(4) Rent data for our office properties is presented on an annualized basis. Annualized base rent for office properties is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) under commenced leases as of June 30, 2017, by (ii) 12. Annualized base rent per square foot for the office properties is calculated as (i) annualized base rent divided by (ii) square footage under commenced leases as of June 30, 2017. Annualized base rent does not reflect tenant reimbursements.

(5) Defined as all of the properties owned and included in our stabilized portfolio as of April 1, 2016 and still owned and included in the stabilized portfolio as of June 30, 2017.

(6) We own 55% of the ownership interests in the consolidated joint venture that owns the 1455 Market Street property.

(7) Page Mill Center is not part of the Same-Store population for the six months ended June 30, 2017. Same-Store for the six months ended June 30, 2017 is defined as all of the properties owned and included in our stabilized portfolio as of January 1, 2016 and still owned and included in the stabilized portfolio as of June 30, 2017.

(8) We own 65% of the ownership interests in the consolidated joint venture that owns the Pinnacle I and II properties.

(9) We own 55% of the ownership interests in the consolidated joint venture that owns the Hill7 property.

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Second Quarter 2017 Supplemental Operating and Financial Information

IN-SERVICE OFFICE PORTFOLIO SUMMARY(1)
			Occupied Square Feet	Percent Occupied(3)		Leased Square Feet	Percent Leased(3)		Annualized Base Rent(4)		Annualized Base Rent Per Square Foot(4)
Location	Properties	Square Feet(2)
STABILIZED
Greater Seattle, Washington
Lynnwood	1	182,009	153,692	84.4	%	164,326	90.3	%	$	3,337,985	$	21.72
South Lake Union	1	190,748	182,692	95.8		182,692	95.8		5,192,434		28.42
Pioneer Square	3	635,991	600,802	94.5		603,068	94.8		15,685,922		26.11
Subtotal	5	1,008,748	937,186	92.9	%	950,086	94.2	%	$	24,216,341	$	25.84
San Francisco Bay Area, California
San Francisco	6	2,234,850	2,128,647	95.2	%	2,154,805	96.4	%	$	90,002,513	$	42.28
Redwood Shores	3	780,592	688,112	88.2		688,112	88.2		35,268,448		51.25
Palo Alto	8	1,148,412	1,083,409	94.3		1,083,409	94.3		69,806,900		64.43
Milpitas	1	471,580	471,580	100.0		471,580	100.0		15,845,088		33.60
North San Jose	3	1,569,348	1,499,016	95.5		1,505,241	95.9		49,362,117		32.93
Subtotal	21	6,204,782	5,870,764	94.6	%	5,903,147	95.1	%	$	260,285,066	$	44.34
Los Angeles, California
Burbank	2	623,777	612,160	98.1	%	612,160	98.1	%	$	25,234,887	$	41.22
Hollywood	3	646,238	616,186	95.3		616,186	95.3		31,039,074		50.37
West Los Angeles	5	577,779	573,149	99.2		576,563	99.8		28,071,304		48.98
Torrance	1	113,000	113,000	100.0		113,000	100.0		3,327,208		29.44
Subtotal	11	1,960,794	1,914,495	97.6	%	1,917,909	97.8	%	$	87,672,473	$	45.79
Total Stabilized	37	9,174,324	8,722,445	95.1	%	8,771,142	95.6	%	$	372,173,880	$	42.67
LEASE-UP
Greater Seattle, Washington
South Lake Union	1	285,680	201,493	70.5	%	229,780	80.4	%	$	7,406,538	$	36.76
Subtotal	1	285,680	201,493	70.5	%	229,780	80.4	%	$	7,406,538	$	36.76
San Francisco Bay Area, California
San Mateo	1	510,789	392,745	76.9	%	392,745	76.9	%	$	18,336,069	$	46.69
Foster City	1	730,215	559,723	76.7		559,723	76.7		26,251,310		46.90
Redwood Shores	2	413,721	286,545	69.3		306,764	74.1		15,569,326		54.33
Palo Alto	1	328,251	219,677	66.9		259,550	79.1		16,711,737		76.07
Santa Clara	1	284,440	228,194	80.2		241,126	84.8		9,482,615		41.56
North San Jose	2	1,066,014	818,461	76.8		873,155	81.9		27,409,876		33.49
Subtotal	8	3,333,430	2,505,345	75.2	%	2,633,063	79.0	%	$	113,760,933	$	45.41
Los Angeles, California
West Los Angeles	1	500,475	426,473	85.2	%	441,757	88.3	%	$	17,352,754	$	40.69
Subtotal	1	500,475	426,473	85.2	%	441,757	88.3	%	$	17,352,754	$	40.69
Total Lease-up	10	4,119,585	3,133,311	76.1	%	3,304,600	80.2	%	$	138,520,225	$	44.21
TOTAL IN-SERVICE	47	13,293,909	11,855,756	89.2	%	12,075,742	90.8	%	510,694,105		$	43.08

___________________________

Refer to footnotes on page 16.

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Second Quarter 2017 Supplemental Operating and Financial Information

REDEVELOPMENT, DEVELOPMENT AND HELD-FOR-SALE OFFICE SUMMARY⁽¹⁾ 

		Estimated Square Feet(2)	Occupied Square Feet	Percent Occupied(3)		Leased Square Feet	Percent Leased(3)		Annualized Base Rent(4)		Annualized Base Rent Per Square Foot(4)
Location	Submarket
REDEVELOPMENT
Los Angeles, CA
MaxWell (formerly 405 Mateo)	Downtown Los Angeles	99,090	—	—	%	—	—	%	$	—	$	—
4th & Traction	Downtown Los Angeles	120,937	—	—		—	—		—		—
604 Arizona	West Los Angeles	44,260	—	—		—	—		—		—
Subtotal		264,287	—	—	%	—	—	%	$	—	$	—
San Francisco Bay Area, CA
875 Howard Street (1st Floor)	San Francisco	57,074	—	—	%	57,074	100.0	%	$	—	$	—
Subtotal		57,074	—	—	%	57,074	100.0	%	$	—	$	—
Greater Seattle, WA
95 Jackson (formerly Merrill Place Theater Building)	Pioneer Square	29,385	—	—	%	—	—	%	$	—	$	—
Subtotal		29,385	—	—	%	—	—	%	$	—	$	—
Total Redevelopment		350,746	—	—	%	57,074	16.3	%	$	—	$	—
DEVELOPMENT
Los Angeles, CA
CUE	Hollywood	91,953	—	—		91,953	100.0	%	$	—	$	—
Subtotal		91,953	—	—	%	91,953	100.0	%	$	—	$	—
Greater Seattle, WA
450 Alaskan Way	Pioneer Square	166,800	—	—	%	91,357	54.8	%	$	—	$	—
Subtotal		166,800	—	—	%	91,357	54.8	%	$	—	$	—
Total Development		258,753	—	—	%	183,310	70.8	%	$	—	$	—
TOTAL		609,499	—	—	%	240,384	39.4	%	$	—	$	—

______________________________

(1) Excludes in-service properties and land assets (see pages 15, 16 and 19).

(2) Square footages have been determined by management based upon estimated leasable square feet, which may be less or more than the Building Owners and Managers Association, or BOMA, rentable area. Square footage may change over time due to re-measurement or re-leasing.

(3) Percent occupied for office properties is calculated as (i) square footage under commenced leases as of June 30, 2017, divided by (ii) total square feet, expressed as a percentage. Percent leased for office properties includes uncommenced leases.

(4) Rent data for our office properties is presented on an annualized basis. Annualized base rent for office properties is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) under commenced leases as of June 30, 2017, by (ii) 12. Annualized base rent per square foot for the office properties is calculated as (i) annualized base rent divided by (ii) square footage under commenced lease as of June 30, 2017. Annualized base rent does not reflect tenant reimbursements.

18

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

LAND PROPERTIES SUMMARY

Location	Submarket	Square Feet(1)	Percent of Total
San Francisco Bay Area, California
Cloud10 (formerly Skyport Plaza)	North San Jose	350,000	11.5	%
Campus Center	Milpitas	946,350	31.1
Subtotal		1,296,350	42.6	%
Los Angeles, California
EPIC	Hollywood	300,000	9.8	%
Sunset Bronson—Lot D(2)	Hollywood	19,816	0.7
Sunset Gower—Redevelopment	Hollywood	423,396	13.9
Sunset Las Palmas—1021 Seward Street(3)	Hollywood	106,125	3.5
Sunset Las Palmas—Redevelopment	Hollywood	400,000	13.1
Element LA	West Los Angeles	500,000	16.4
Subtotal		1,749,337	57.4	%
TOTAL		3,045,687	100.0	%

______________________________

(1) Square footage for land assets represents management’s estimate of developable square feet, the majority of which remains subject to entitlement approvals that have not yet been obtained.

(2) Square footage for Sunset Bronson Lot D represents management’s estimate of developable square feet for 33 residential units.

(3) Square footage for Sunset Las Palmas-1021 Seward Street would require the demolition of approximately 45,000 square feet of existing improvements.

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Second Quarter 2017 Supplemental Operating and Financial Information

MEDIA & ENTERTAINMENT PORTFOLIO SUMMARY

Property	Square Feet	Percent of Total		Percent Leased			Annual Base Rent			Annual Base Rent Per Leased Square Foot
Sunset Gower	571,626	45.5	%	88.4	%		$	16,493,504		$	32.65
Sunset Bronson	308,026	24.5		92.9			10,528,985			36.81
Total Same-Store Media & Entertainment	879,652	70.0	%	89.9	%	(1)	$	27,022,489	(2)	$	34.15	(3)
Sunset Las Palmas(4)	376,925	30.0	%	76.3	%
Total Non-Same-Store Media & Entertainment	376,925	30.0	%	76.3	%	(5)
Total Media & Entertainment	1,256,577	100.0	%

______________________________

(1) Percent leased for Same-Store Media and Entertainment properties is the average percent leased for the 12 months ended June 30, 2017.

(2) Annual base rent for Same-Store Media and Entertainment properties reflects actual base rent for the 12 months ended June 30, 2017, excluding tenant reimbursements.

(3) Annual base rent per leased square foot for the Same-Store Media and Entertainment properties is calculated as (i) annual base rent divided by (ii) square footage under lease as of June 30, 2017.

(4) The base rent for Sunset Las Palmas for the two months ended June 30, 2017 is $1,995,745 ($42.09 per leased square foot), excluding tenant reimbursements.

(5) Percent leased for Non-Same-Store Media and Entertainment properties is the average percent leased for the two months ended June 30, 2017.

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Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

CURRENT VALUE CREATION DEVELOPMENT PROJECTS

(Unaudited, in thousands, except square feet)

Estimated Construction Period

Project Costs(1)

City

Start Date

Estimated Completion Date

Estimated Stabilization Date(2)

Estimated Square Feet(3)

Total %Leased

Project Costs as of 6/30/17

Total Estimated Project Costs

Estimated Initial Stabilized Yield on Project Costs(4)

UNDER CONSTRUCTION

Greater Seattle, Washington

450 Alaskan Way

Seattle

Q1-2016

Q4-2017

Q2-2018

166,800

54.8

%

$

62,353

(5)

$

92,870

(5)

6.7%

Los Angeles, California

CUE(6)

Hollywood

Q1-2016

Q3-2017

Q2-2019

91,953

100.0

%

(7

)

38,347

52,546

8.3%

4th & Traction

Los Angeles

Q4-2015

Q2-2017

Q3-2018

120,937

—

%

79,099

(8)

96,425

(8)

6.2%

MaxWell (formerly 405 Mateo)

Los Angeles

Q2-2017

Q4-2018

Q2-2019

99,090

—

%

43,511

(9)

85,652

(9)

6.1%

Total Under Construction

478,780

$

223,310

$

327,493

FUTURE DEVELOPMENT PIPELINE

Greater Seattle, Washington

95 Jackson (formerly Merrill Place Theater Building)

Seattle

Q3-2017

Q2-2018

Q3-2018

29,385

N/A

$

1,090

TBD

TBD

San Francisco Bay Area, California

Cloud10 (formerly Skyport Plaza)

North San Jose

TBD

TBD

TBD

350,000

N/A

$

11,230

(10)

TBD

TBD

Campus Center

Milpitas

TBD

TBD

TBD

946,350

N/A

$

7,355

(11)

TBD

TBD

Los Angeles, California

EPIC

Hollywood

TBD

TBD

TBD

300,000

N/A

$

9,845

(12)

TBD

TBD

Sunset Bronson—Lot D

Hollywood

TBD

TBD

TBD

19,816

N/A

N/A

TBD

TBD

Sunset Gower—Redevelopment

Hollywood

TBD

TBD

TBD

423,396

N/A

N/A

TBD

TBD

Sunset Las Palmas —

1021 Seward Street

Hollywood

TBD

TBD

TBD

106,125

(13)

N/A

N/A

TBD

TBD

Redevelopment

Hollywood

TBD

TBD

TBD

400,000

N/A

N/A

TBD

TBD

Total

506,125

$

25,000

(14)

TBD

Element LA

Los Angeles

TBD

TBD

TBD

500,000

N/A

N/A

TBD

TBD

Total Future Development Pipeline

3,075,072

__________________________

(1) Project costs exclude interest costs capitalized in accordance with Accounting Standards Codification (“ASC”) 835-20-50-1, personnel costs capitalized in accordance with ASC 970-360-25 and operating expenses capitalized in accordance with ASC 970-340.

(2) Based on management’s estimate of stabilized occupancy (92.0%).

(3) Square footage for office properties has been determined by management based upon estimated leasable square feet, which may be less or more than the Building Owners and Managers Association (BOMA) rentable area. Square footage may change over time due to re-measurement or re-leasing. Square footage for land assets represents management’s estimate of developable square feet, the majority of which remains subject to entitlement approvals that have not yet been obtained.

(4) Estimated initial stabilized yield on project costs is calculated as the quotient of the estimated amounts of NOI and our investment in the property once the project has reached stabilization and initial rental concessions, if any, have elapsed. Our estimated initial stabilized yield excludes the impact of leverage. Our cash rents related to our value-creation projects are expected to increase over time and our average cash yields are expected, in general, to be greater than our estimated initial stabilized yields on a cash basis. Our estimates for initial cash yields, and total costs at completion, represent our initial estimates at the commencement of the project. We expect to update this information upon completion of the project, or sooner if there are significant changes to the expected project yields or costs. We caution you not to place undue reliance on the estimated initial

21

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

stabilized yields because they are based solely on our estimates, using data available to us throughout the development process. The amount of total investment required to reach stabilized occupancy may differ substantially from our estimates due to various factors. We can provide no assurance that the actual initial stabilized yields will be consistent with the estimated initial stabilized yields set forth herein.

(5) Project Costs as of June 30, 2017 and Total Estimated Project Costs for 450 Alaskan Way include $7.0 million for management’s estimate of allocated land and acquisition costs.

(6) The costs of the 1,635-stall parking structure and certain other development costs attributable to CUE have been allocated based on management’s estimate of the building’s share of such costs. Project Costs and Total Estimated Project Costs exclude land.

(7) Netflix, Inc. is anticipated to commence 52,626 square feet in August 2018 and 39,327 square feet in April 2019.

(8) Project Costs as of June 30, 2017 and Total Estimated Project Costs for 4th & Traction include approximately $49.4 million of initial acquisition cost for existing 120,937-square-foot building.

(9) Project Costs as of June 30, 2017 and Total Estimated Project Costs for MaxWell (formerly 405 Mateo) include approximately $40.0 million of initial acquisition costs for the existing 99,090-square-foot building.

(10) Project Costs as of June 30, 2017 for Cloud10 (formerly Skyport Plaza) include approximately $10.5 million for management’s estimate of allocated land and acquisition costs.

(11) Project Costs as of June 30, 2017 for Campus Center include approximately $7.0 million for management’s estimate of allocated land and acquisition costs.

(12) Project Costs as of June 30, 2017 for EPIC exclude land.

(13) Square footage for Sunset Las Palmas-1021 Seward Street would require the demolition of approximately 45,000 square feet of existing improvements.

(14) Project Costs as of June 30, 2017 for Sunset Las Palmas—1021 Seward Street and Redevelopment include $25.0 million for management’s estimate of allocated land and acquisition costs.

22

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

SAME-STORE ANALYSIS⁽¹⁾

(Unaudited, tabular amounts in thousands, except number of properties and square feet)

	Three Months Ended June 30,								Six Months Ended June 30,
	2017			2016			% change		2017			2016			% change
Same-Store office statistics(2)
Number of properties	34			34					33			33
Rentable square feet	8,466,955			8,466,955					8,290,710			8,290,710
Ending % leased	95.4		%	96.5		%	(1.1	)%	95.3		%	96.4		%	(1.1	)%
Ending % occupied	94.8		%	95.1		%	(0.3	)%	94.7		%	95.0		%	(0.3	)%
Average % occupied for the period	94.7		%	94.3		%	0.4	%	95.1		%	93.9		%	1.2	%
Same-Store Media & Entertainment statistics(3)
Number of properties	2			2					2			2
Rentable square feet	879,652			879,652					879,652			879,652
Average % occupied for the period	89.9		%	85.3		%	4.6	%	89.9		%	85.3		%	4.6	%
SAME-STORE ANALYSIS—GAAP BASIS
	Three Months Ended June 30,								Six Months Ended June 30,
	2017			2016			% change		2017			2016			% change
Same-Store net operating income—GAAP basis
Total office revenues	$	111,442		$	104,484		6.7	%	$	207,880		$	199,220		4.4	%
Total Media & Entertainment revenues	10,274			9,921			3.6		21,743			21,166			2.7
Total revenues	$	121,716		$	114,405		6.4	%	$	229,623		$	220,386		4.2	%
Total office expense	$	34,080		$	33,186		2.7	%	$	59,884		$	63,168		(5.2	)%
Total Media & Entertainment expense	4,935			6,295			(21.6	)	12,187			12,247			(0.5	)
Total property expense	$	39,015		$	39,481		(1.2	)%	$	72,071		$	75,415		(4.4	)%
Same-Store office net operating income—GAAP basis	$	77,362		$	71,298		8.5	%	$	147,996		$	136,052		8.8	%
NOI Margin	69.4		%	68.2		%	1.2	%	71.2		%	68.3		%	2.9	%
Same-Store Media & Entertainment net operating income—GAAP basis	$	5,339		$	3,626		47.2	%	$	9,556		$	8,919		7.1	%
NOI Margin	52.0		%	36.5		%	15.5	%	43.9		%	42.1		%	1.8	%
Same-Store total property net operating income—GAAP basis	$	82,701		$	74,924		10.4	%	$	157,552		$	144,971		8.7	%
NOI Margin	67.9		%	65.5		%	2.4	%	68.6		%	65.8		%	2.8	%

23

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Second Quarter 2017 Supplemental Operating and Financial Information

SAME-STORE ANALYSIS⁽¹⁾—CONTINUED

(Unaudited, tabular amounts in thousands)

SAME-STORE ANALYSIS—CASH BASIS
	Three Months Ended June 30,								Six Months Ended June 30,
	2017			2016			% change		2017				2016			% change
Same-Store net operating income—Cash basis
Total office revenues	$	106,902		$	100,247		6.6	%	$	207,141		(4)	$	191,233		8.3	%
Total Media & Entertainment revenues	10,140			9,788			3.6		21,624				20,845			3.7
Total revenues	$	117,042		$	110,035		6.4	%	$	228,765			$	212,078		7.9	%
Total office expense	$	33,565		$	32,671		2.7	%	$	58,933			$	62,217		(5.3	)%
Total Media & Entertainment expense	4,935			6,295			(21.6	)	12,187				12,247			(0.5	)
Total property expense	$	38,500		$	38,966		(1.2	)%	$	71,120			$	74,464		(4.5	)%
Same-Store office net operating income—Cash basis	$	73,337		$	67,576		8.5	%	$	148,208			$	129,016		14.9	%
NOI Margin	68.6		%	67.4		%	1.2	%	71.5		%		67.5		%	4.0	%
Same-Store Media & Entertainment net operating income—Cash basis	$	5,205		$	3,493		49.0	%	$	9,437			$	8,598		9.8	%
NOI Margin	51.3		%	35.7		%	15.6	%	43.6		%		41.2		%	2.4	%
Same-Store total property net operating income—Cash basis	$	78,542		$	71,069		10.5	%	$	157,645			$	137,614		14.6	%
NOI Margin	67.1		%	64.6		%	2.5	%	68.9		%		64.9		%	4.0	%

______________________________

(1) Same-Store for the three months ended June 30, 2017 is defined as all of the properties owned and included in our stabilized portfolio as of April 1, 2016 and still owned and included in the stabilized portfolio as of June 30, 2017. Same-Store for the six months ended June 30, 2017 is defined as all of the properties owned and included in our stabilized portfolio as of January 1, 2016 and still owned and included in the stabilized portfolio as of June 30, 2017.

(2) See page 15 for Same-Store office properties.

(3) See page 20 for Same-Store Media & Entertainment properties.

(4) Includes a one-time early lease termination fee of $10,390,400 at Campus Center.

24

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

RECONCILIATION OF GAAP NET INCOME TO NET OPERATING INCOME

(Unaudited, in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Reconciliation to Net Operating Income
Net Income	$	6,954		$	4,035		$	31,107		$	10,011
Adjustments:
Interest expense	21,695			17,614			43,625			34,865
Interest income	(16		)	(73		)	(46		)	(86		)
Unrealized loss on ineffective portion of derivative instruments	51			384			45			2,509
Acquisition-related expenses	—			61			—			61
Other income	(576		)	(47		)	(1,254		)	(23		)
Gains on sale of real estate	—			(2,163		)	(16,866		)	(8,515		)
Income from operations	$	28,108		$	19,811		$	56,611		$	38,822
Adjustments:
General and administrative	14,506			13,016			28,316			25,519
Depreciation and amortization	75,415			66,108			146,182			134,476
Net Operating Income	$	118,029		$	98,935		$	231,109		$	198,817
Net Operating Income Breakdown
Same-Store office revenues—Cash basis	$	106,902		$	100,247		$	207,141		$	191,233
GAAP adjustments to office revenues—Cash basis	4,540			4,237			739			7,987
Same-Store office revenues—GAAP basis	$	111,442		$	104,484		$	207,880		$	199,220
Same-Store Media & Entertainment revenues—Cash basis	$	10,140		$	9,788		$	21,624		$	20,845
GAAP adjustments to media revenues—Cash basis	134			133			119			321
Same-Store Media & Entertainment revenues—GAAP basis	$	10,274		$	9,921		$	21,743		$	21,166
Same-Store property revenues—GAAP basis	$	121,716		$	114,405		$	229,623		$	220,386
Same-Store office expenses—Cash basis	$	33,565		$	32,671		$	58,933		$	62,217
GAAP adjustments to office expenses—Cash basis	515			515			951			951
Same-Store office expenses—GAAP basis	$	34,080		$	33,186		$	59,884		$	63,168
Same-Store Media & Entertainment expenses—Cash basis	$	4,935		$	6,295		$	12,187		$	12,247
Same-Store Media & Entertainment expenses—GAAP basis	$	4,935		$	6,295		$	12,187		$	12,247
Same-Store property expenses—GAAP basis	$	39,015		$	39,481		$	72,071		$	75,415
Same-Store net operating income—GAAP basis	$	82,701		$	74,924		$	157,552		$	144,971
Non-Same-Store GAAP net operating income	35,328			24,011			73,557			53,846
Net Operating Income	$	118,029		$	98,935		$	231,109		$	198,817

25

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

NET OPERATING INCOME DETAIL Three Months Ended June 30, 2017 (Unaudited, in thousands)
	Same-Store Office Properties(1)			Same-Store Media Properties(2)			Non-Same-Store Office Properties(3)			Non-Same-Store Media Properties(2)			Development/Redevelopment(4)			Lease-Up Properties(5)			Total Properties
Revenue
Rents
Cash	$	81,283		$	6,975		$	9,214		$	1,996		$	308		$	30,491		$	130,267
GAAP Revenue	4,540			134			1,193			—			—			6,573			12,440
Total Rents	$	85,823		$	7,109		$	10,407		$	1,996		$	308		$	37,064		$	142,707
Tenant Reimbursements	$	19,582		$	64		$	1,392		$	65		$	82		$	3,872		$	25,057
Parking and Other	6,037			3,101			562			1,313			37			1,497			12,547
Total Revenue	$	111,442		$	10,274		$	12,361		$	3,374		$	427		$	42,433		$	180,311
Property operating expenses	34,080			4,935			3,285			2,068			407			17,597			62,372
Property GAAP Net Operating Income	$	77,362		$	5,339		$	9,076		$	1,306		$	20		$	24,836		$	117,939
Square Feet	8,466,955			879,652			707,369			376,925			593,694			4,119,585			15,144,180
Ending % Leased	95.4		%	89.9		%	98.1		%	76.3		%	40.5		%	80.2		%	88.5		%
Ending % Occupied	94.8		%	89.9		%	98.1		%	76.3		%	—		%	76.1		%	85.4		%
NOI Margin	69.4		%	52.0		%	73.4		%	38.7		%	4.7		%	58.5		%	65.4		%
Property GAAP Net Operating Income	$	77,362		$	5,339		$	9,076		$	1,306		$	20		$	24,836		$	117,939
Less : GAAP Revenue	(4,540		)	(134		)	(1,193		)	—			—			(6,573		)	(12,440		)
Add : GAAP Expense	515			—			92			—			—			226			833
Property Cash Net Operating Income	$	73,337		$	5,205		$	7,975		$	1,306		$	20		$	18,489		$	106,332
Net Operating Income Reconciliation	Q2 - 2017
Net Income	$	6,954
Adjustments:
Interest expense	21,695
Interest income	(16		)
Unrealized loss on ineffective portion of derivative instruments	51
Other income	(576		)
Income from operations	$	28,108					(1) See page 15 for Same-Store office properties for the three months ended June 30, 2017.
Adjustments:							(2) See page 20 for Media & Entertainment properties.
General and administrative	14,506						(3) See page 16 for Non-Same-Store office properties.
Depreciation and amortization	75,415						(4) See page 18 for redevelopment, development and held-for-sale properties.
Total GAAP Net Operating Income	$	118,029					(5) See page 16 for lease-up properties.
Property GAAP Net Operating Income	117,939
Disposed Asset	268
Other Inter-Company Eliminations	(178		)
Total GAAP Net Operating Income	$	118,029

26

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

OFFICE PORTFOLIO LEASING ACTIVITY

	Three Months Ended   June 30, 2017			Six Months Ended   June 30, 2017
Total Gross Leasing Activity
Rentable square feet	582,589			1,107,673
Gross New Leasing Activity
Rentable square feet	356,581			709,177
New cash rate	$	52.34		$	58.96
Gross Renewal Leasing Activity
Rentable square feet	226,008			398,496
Renewal cash rate	$	52.43		$	52.94
Total Leases Expired and Terminated
Contractual (scheduled) expiration (square feet)	279,244			388,747
Early termination (square feet)	101,918			171,529
Total	381,162			560,276
Net Absorption
Leased rentable square feet	(24,581		)	148,901
Cash Rent Growth(1)
Expiring rate	$	34.72		$	39.82
New/renewal rate	$	51.54		$	57.70
Change	48.4		%	44.9		%
Straight-Line Rent Growth(2)
Expiring Rate	$	31.72		$	37.01
New/renewal rate	$	53.08		$	60.95
Change	67.4		%	64.7		%
Weighted Average Lease Terms
New (in months)	69.7			82.2
Renewal (in months)	47.6			48.1

Tenant Improvements and Leasing Commissions(3)	Lease Transaction Costs Per Square Foot
	Three Months Ended   June 30, 2017				Six Months Ended   June 30, 2017
	Total		Annual		Total		Annual
New leases	$	42.98	$	7.41	$	61.04	$	8.91
Renewal leases	$	10.07	$	2.54	$	15.41	$	3.85
Blended	$	30.22	$	5.93	$	44.63	$	7.66

______________________________

(1) Represents a comparison between initial stabilized cash rents on new and renewal leases as compared to the expiring cash rents in the same space. New leases are only included if the same space was leased within the previous 12 months.

(2) Represents a comparison between initial straight-line rents on new and renewal leases as compared to the straight-line rents on expiring leases in the same space. New leases are only included if the same space was leased within the previous 12 months.

(3) Represents per square foot weighted average lease transaction costs based on the leases executed in the current quarter.

27

Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

OFFICE PORTFOLIO COMMENCED LEASES WITH NON-RECURRING, UP-FRONT ABATEMENTS(1)
Location	Submarket	Square Feet	Lease Start Date	Rent Start Date	Starting Base Rents(2)		Lease Expiration Date
Greater Seattle, Washington
Hill7	South Lake Union	84,703	1/17/2017	7/17/2017	$	35.00	7/31/2027
San Francisco Bay Area, California
Metro Center(3)	Foster City	76,922	Various	5/1/2018	$	43.80	4/30/2028
Metro Center(4)	Foster City	10,625	3/19/2017	3/19/2017	$	69.00	3/31/2027
Los Angeles, California
11601 Wilshire(5)	West Los Angeles	30,273	1/1/2017	1/1/2017	$	51.60	2/29/2028
11601 Wilshire	West Los Angeles	12,389	1/1/2017	11/1/2017	$	55.80	12/31/2026
Pinnacle I(6)	Burbank	12,803	3/1/2017	3/1/2017	$	42.00	9/30/2024

______________________________

(1) Consists of leases for more than 10,000 square feet that commenced on or prior to June 30, 2017, with three or more months of up-front free rent resulting in a rent start date after the commencement of the three-month period ending June 30, 2017.

(2) Stated per leased square foot. Calculated by dividing the product of (i) monthly base rental payments (defined as cash base rents (before abatements)) as of the lease commencement date, and (ii) 12, by (iii) the leased square footage. For commenced leases, calculated by dividing the product of (i) monthly base rental payments (defined as cash base rents (before abatements)) for the month ended June 30, 2017, and (ii) 12, by (iii) leased square footage. Base rents do not include tenant reimbursements.

(3) Qualys, Inc. commenced 69,834 square feet on February 1, 2017 and 7,088 square feet on March 15, 2017.

(4) Tenant paid monthly base rent concurrently with the lease start date on March 19, 2017. Monthly base rent was abated for the subsequent four-month period from April 2017 through July 2017.

(5) Tenant paid monthly base rent concurrently with the lease start date on January 1, 2017. Monthly base rent is abated for the subsequent nine-month period from February 2017 through October 2017.

(6) Tenant paid monthly base rent concurrently with the lease start date on March 1, 2017. Monthly base rent is abated for the subsequent seven-month period from April 2017 through October 2017.

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QUARTERLY UNCOMMENCED—NEXT EIGHT QUARTERS(1)
	Q3 2017			Q4 2017				Q1 2018			Q2 2018			Q3 2018				Q4 2018			Q1 2019			Q2 2019
Location	SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)			SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)			SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)
Greater Seattle, Washington
Lynnwood	10,634	$	19.31	—	$	—		—	$	—	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—
South Lake Union	—	—		—	—			—	—		—	—		—	—			—	—		28,287	36.00		—	—
Pioneer Square	—	—		93,623	37.64		(3)	—	—		—	—		—	—			—	—		—	—		—	—
Subtotal	10,634	$	19.31	93,623	$	37.64		—	$	—	—	$	—	—	$	—		—	$	—	28,287	$	36.00	—	$	—
San Francisco Bay Area, California
San Francisco	57,900	$	71.54	25,332	$	75.00		—	$	—	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—
Redwood Shores	20,219	61.31		—	—			—	—		—	—		—	—			—	—		—	—		—	—
Palo Alto	—	—		—	—			39,873	87.00		—	—		—	—			—	—		—	—		—	—
Santa Clara	12,932	46.78		—	—			—	—		—	—		—	—			—	—		—	—		—	—
North San Jose	57,532	37.71		—	—			3,387	37.80		—	—		—	—			—	—		—	—		—	—
Subtotal	148,583	$	54.90	25,332	$	75.00		43,260	$	83.15	—	$	—	—	$	—		—	$	—	—	$	—	—	$	—
Los Angeles, California
Hollywood	—	$	—	—	$	—		—	$	—	—	$	—	52,626	$	57.60	(4)	—	$	—	—	$	—	39,327	$	57.60	(4)
West Los Angeles	11,102	56.09		7,596	50.39			—	—		—	—		—	—			—	—		—	—		—	—
Subtotal	11,102	$	56.09	7,596	$	50.39		—	$	—	—	$	—	52,626	$	57.60		—	$	—	—	$	—	39,327	$	57.60
Total Uncommenced	170,319	$	52.75	126,551	$	45.88		43,260	$	83.15	—	$	—	52,626	$	57.60		—	$	—	28,287	$	36.00	39,327	$	57.60

QUARTERLY BACKFILLS—NEXT EIGHT QUARTERS(5)
	Q3 2017			Q4 2017				Q1 2018			Q2 2018			Q3 2018			Q4 2018			Q1 2019			Q2 2019
Location	SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)			SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)		SF	Starting Rent/sf (2)
Greater Seattle, Washington
Pioneer Square	—	$	—	775	$	30.00		—	$	—	—	$	—	—	$	—	—	$	—	49,799	$	43.00	—	$	—
Subtotal	—	$	—	775	$	30.00		—	$	—	—	$	—	—	$	—	—	$	—	49,799	$	43.00	—	$	—
San Francisco Bay Area, California
San Francisco	4,144	$	48.00	141,128	$	75.00	(6)	—	$	—	15,209	$	36.00	—	$	—	—	$	—	—	$	—	—	$	—
Redwood Shores	—	—		—	—			—	—		35,006	60.60		—	—		—	—		—	—		—	—
North San Jose	6,414	35.34		—	—			28,930	31.20		19,027	39.36		—	—		8,652	39.36		—	—		—	—
Subtotal	10,558	$	40.31	141,128	$	75.00		28,930	$	31.20	69,242	$	49.36	—	$	—	8,652	$	39.36	—	$	—	—	$	—
Los Angeles, California
West Los Angeles	—	$	—	—	$	—		5,472	$	55.80	—	$	—	—	$	—	—	$	—	—	$	—	—	$	—
Subtotal	—	$	—	—	$	—		5,472	$	55.80	—	$	—	—	$	—	—	$	—	—	$	—	—	$	—
Total Backfills	10,558	$	40.31	141,903	$	74.75		34,402	$	35.11	69,242	$	49.36	—	$	—	8,652	$	39.36	49,799	$	43.00	—	$	—
Total Uncommenced & Backfills	180,877	$	52.03	268,454	$	61.14		77,662	$	61.87	69,242	$	49.36	52,626	$	57.60	8,652	$	39.36	78,086	$	40.46	39,327	$	57.60

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Second Quarter 2017 Supplemental Operating and Financial Information

_____________________

(1) Consists of uncommenced leases, defined as new leases with respect to vacant space, executed on or prior to June 30, 2017 but with commencement dates after June 30, 2017 and within the next eight quarters. This table omits submarkets without any uncommenced leases over the next eight quarters.

(2) Calculated by dividing (a) the product of (i) monthly base rental payments (defined as cash base rents (before abatements)) as of the lease commencement date, and (ii) 12, by (b) the leased square footage. Base rents do not include tenant reimbursements. Rent commencement dates do not reflect up-front free rents, if any.

(3) Saltchuk Resources, Inc. is anticipated to commence 91,357 square feet November 2017.

(4) Netflix, Inc. is anticipated to commence 52,626 square feet August 2018 and 39,327 square feet April 2019.

(5) Consists of backfill leases, defined as new leases with respect to occupied space, executed on or prior to June 30, 2017 but with commencement dates after June 30, 2017 and within the next eight quarters. This table omits submarkets without any backfill leases over the next eight quarters.

(6) This lease is anticipated to commence on October 2017.

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Second Quarter 2017 Supplemental Operating and Financial Information

QUARTERLY OFFICE LEASE EXPIRATIONS—NEXT EIGHT QUARTERS(1)
	Q3 2017(2)					Q4 2017					Q1 2018				Q2 2018				Q3 2018				Q4 2018						Q1 2019						Q2 2019
Location	Expiring SF(3)		Rent/sf(4)			Expiring SF(3)		Rent/sf(4)			Expiring SF(3)		Rent/sf(4)		Expiring SF(3)		Rent/sf(4)		Expiring SF(3)		Rent/sf(4)		Expiring SF(3)		Rent/sf(4)				Expiring SF(3)		Rent/sf(4)				Expiring SF(3)		Rent/sf(4)
Greater Seattle, Washington
Lynnwood	—		$	—		—		$	—		2,343		$	20.76	1,756		$	20.50	—		$	—	21,155		$	28.27			—		$	—			—		$	—
Pioneer Square	—		—			3,260		33.00			—		—		2,624		30.80		—		—		10,050		34.50				145,279		28.64		(11	)	—		—
Subtotal	—		$	—		3,260		$	33.00		2,343		$	20.76	4,380		$	26.67	—		$	—	31,205		$	30.28			145,279		$	28.64			—		$	—
San Francisco Bay Area, California
Foster City	5,577		$	56.96		10,393		$	21.35		11,507		$	44.67	12,806		$	55.89	2,366		$	39.85	63,998		$	40.20			10,939		$	59.82			8,009		$	63.24
Palo Alto	22,816		66.19			111,499		72.73		(6)	63,883		83.19		12,637		95.60		26,411		32.19		21,278		48.89				21,533		58.03				93,921		73.09
Redwood Shores	9,590		35.11			39,838		54.26			97,156		43.70		60,628		54.04		37,099		60.20		38,393		56.38				43,473		53.58				149,591		59.47		(12	)
San Francisco	136,744		46.70		(5)	102,473		24.52		(7)	10,693		57.29		27,855		73.78		10,953		48.61		160,526		27.23		(9	)	76,036		65.34				74,127		44.57
North San Jose	96,778		29.33			97,662		29.79			74,352		30.58		73,356		34.25		83,322		33.39		104,088		33.88		(10	)	93,550		33.03				61,072		37.30
San Mateo	7,576		43.92			9,161		37.80			37,642		42.12		14,846		54.33		9,164		43.51		3,806		55.00				5,631		56.65				27,340		51.94
Milpitas	—		—			471,580		36.00		(8)	—		—		—		—		—		—		—		—				—		—				—		—
Santa Clara	30,112		34.99			13,018		41.52			6,652		45.48		19,691		40.31		1,098		51.14		12,384		48.25				4,710		46.35				7,862		42.25
Subtotal	309,193		$	41.32		855,624		$	39.48		301,885		$	49.18	221,819		$	51.25	170,413		$	40.76	404,473		$	35.80			255,872		$	50.14			421,922		$	55.94
Los Angeles, California
Burbank	—		$	—		9,005		$	44.50		3,413		$	45.89	—		$	—	—		$	—	—		$	—			—		$	—			—		$	—
Hollywood	—		—			—		—			10,000		50.50		—		—		87,272		43.68		—		—				7,559		92.20				—		—
West Los Angeles	6,031		59.30			21,369		44.54			16,363		42.67		5,878		50.54		—		—		12,302		46.41				2,749		55.21				29,794		43.42
Subtotal	6,031		$	59.30		30,374		$	44.52		29,776		$	45.67	5,878		$	50.54	87,272		$	43.68	12,302		$	46.41			10,308		$	82.33			29,794		$	43.42
TOTAL	315,224		$	41.66		889,258		$	39.63		334,004		$	48.67	232,077		$	50.77	257,685		$	41.75	447,980		$	35.71			411,459		$	43.35			451,716		$	55.11
Expirations as % of In-Service Portfolio	2.4	%				6.7	%				2.5	%			1.7	%			1.9	%			3.4	%					3.1	%					3.4	%

______________________

(1) The following schedule does not reflect 22,441 square feet that expired on June 30, 2017. This table omits submarkets without any expirations over the next eight quarters.

(2) Q3 2017 expiring square footage does not include 90,051 square feet of month-to-month leases.

(3) Includes leases that expire on the last day of the quarter.

(4) Calculated by dividing (a) the product of (i) monthly base rental payments (defined as cash base rents (before abatements)) as of the lease commencement date, and (ii) 12, by (b) the leased square footage. Base rents do not include tenant reimbursements.

(5) The total expiring square footage consists of: (i) AIG, Inc. at Rincon Center for 132,600 square feet and Javlin Venture Partners at Rincon Center for 4,144 square feet. Effective October 2017, the lease for Google Inc. is anticipated to commence for 166,460 square feet at Rincon Center. This includes the entire space vacated by AIG, Inc.

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Second Quarter 2017 Supplemental Operating and Financial Information

(6) The top three expiring tenants based on annual base rent by property and square footage: (i) Robert Bosch, LLC at Foothill Research Center for 72,417 square feet; (ii) K&L Gates at Clocktower Square for 19,152 square feet; and (iii) Zoox, Inc. at 2180 Sand Hill Road for 18,773 square feet.

(7) The total expiring square footage consists of: (i) Bank of America at 1455 Market Street for 96,567 square feet and (ii) GSA at 901 Market for 5,906 square feet.

(8) The total expiring square footage consists of Cisco Systems, Inc. at Campus Center for 471,580 square feet.

(9) The top three expiring tenants based on annual base rent by property and square footage: (i) Burlington Coat Factory at 875 Howard Street for 94,505 square feet; (ii) Anaplan, Inc. at 625 Second Street for 38,775 square feet; and (iii) Hotel Tonight at 901 Market Street for 17,521 square feet.

(10) The top three expiring tenants based on annual base rent by property and square footage: (i) Quantum Corporation at Concourse for 19,294 square feet; (ii) Pixelworks, Inc. at Concourse for 19,294 square feet; and (iii) Calypto Design Systems, In. at Gateway for 10,942 square feet.

(11) The total expiring square footage consists of: (i) Capital One at 83 King Street for 133,148 square feet; (ii) Maveron LCC at Merrill Place for 6,136 square feet; and (iii) Cowgirls, Inc. at Merrill Place for 5,995 square feet.

(12) The top three expiring tenants based on annual base rent by property and square footage: (i) Mark Logic Corp at Skyway Landing for 40,268 square feet; (ii) Teachers Insurance & Annuity Association at Towers at Shore Center for 25,549 square feet; and (iii) Alarm.com, Inc. at 555 Twin Dolphin Plaza for 16,027 square feet.

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Second Quarter 2017 Supplemental Operating and Financial Information

OFFICE LEASE EXPIRATIONS—ANNUAL

Year of Lease Expiration	Expiring Leases	Square Footage of Expiring Leases	Percentage of Office Portfolio Square Feet		Annualized Base Rent(1)		Percentage of Office Portfolio Annualized Base Rent		Annualized Base Rent Per Square Foot(2)		Annualized Base Rent Per Square Foot at Expiration(3)
Vacant		1,571,477	11.4	%
2017	91	1,226,923	8.9		$	46,870,938	8.8	%	$	38.20	$	40.39
2018	168	1,271,746	9.2		52,087,654		9.7		40.96		43.09
2019	155	1,828,328	13.3		79,726,096		15.0		43.61		46.10
2020	119	1,145,760	8.3		53,217,784		10.0		46.45		50.60
2021	84	1,657,100	12.0		67,412,948		12.6		40.68		45.11
2022	73	1,112,627	8.1		48,703,536		9.1		43.77		52.52
2023	27	802,683	5.8		30,531,883		5.7		38.04		44.92
2024	30	549,476	4.0		25,883,084		4.9		47.11		62.69
2025	11	654,130	4.7		32,322,998		6.1		49.41		60.23
2026	14	561,905	4.1		30,789,026		5.8		54.79		71.52
Thereafter	17	800,676	5.8		40,968,868		7.7		51.17		68.48
Building management use	25	154,351	1.1		—		—		—		—
Signed leases not commenced(4)	33	460,370	3.3		24,703,337		4.6		53.66		68.92
Total/Weighted Average(5)	847	13,797,552	100.0	%	$	533,218,152	100.0	%	$	43.61	$	50.42

______________________________

(1) Rent data for our office properties is presented on an annualized basis without regard to cancellation options. Annualized base rent for office properties is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) as of June 30, 2017, by (ii) 12. Annualized base rent does not reflect tenant reimbursements.

(2) Annualized base rent per square foot for all lease expiration years is calculated as (i) base rental payments (defined as cash base rents (before abatements)) under commenced leases, divided by (ii) square footage under commenced leases as of June 30, 2017.

(3) Annualized base rent per square foot at expiration for all lease expiration years is calculated as (i) base rental payments (defined as cash base rents (before abatements)) under commenced leases, divided by (ii) square footage under commenced lease as of June 30, 2017.

(4) Annualized base rent per leased square foot and annualized base rent per square foot at expiration for signed leases not commenced reflects uncommenced leases for space not occupied as of June 30, 2017 and is calculated as (i) base rental payments (defined as cash base rents (before abatements)) under uncommenced leases for vacant space as of June 30, 2017, divided by (ii) square footage under uncommenced leases as of June 30, 2017.

(5) Total expiring square footage does not include 90,051 square feet of month-to-month leases.

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FIFTEEN LARGEST OFFICE TENANTS

Tenant	Property	Number of Leases	Number of Properties	Lease Expiration	Total Leased Square Feet	Percent of Rentable Square Feet	Annualized Base Rent(1)		Percent of Annualized Base Rent
Google, Inc.(2)	Various	2	2	Various	305,729	2.2%	$	19,751,784	3.9%
Netflix, Inc.(3)	Icon	1	1	12/31/2026	325,757	2.3	17,800,735		3.5
Riot Games, Inc.(4)	Various	2	2	Various	286,629	2.1	16,025,899		3.1
Cisco Systems, Inc.(5)	Various	2	2	Various	474,576	3.4	15,946,113		3.1
Uber Technologies, Inc.(6)	1455 Market Street	1	1	2/28/2025	309,811	2.2	14,996,608		2.9
Qualcomm	Skyport Plaza	2	1	7/31/2022	376,817	2.7	13,276,016		2.6
Salesforce.com(7)	Rincon Center	2	1	Various	261,250	1.9	12,831,577		2.5
Square, Inc.	1455 Market Street	1	1	9/27/2023	338,910	2.4	11,422,513		2.2
Stanford(8)	Various	4	3	Various	151,249	1.1	10,582,418		2.1
Warner Bros. Entertainment	Pinnacle II	1	1	12/31/2021	230,000	1.7	9,281,389		1.8
GSA(9)	Various	5	5	Various	202,097	1.5	9,218,349		1.8
Warner Music Group	Pinnacle I	1	1	12/31/2019	195,166	1.4	8,336,840		1.6
EMC Corporation(10)	Various	3	2	Various	294,756	2.1	7,905,112		1.5
NetSuite, Inc.(11)	Peninsula Office Park	2	1	Various	166,667	1.2	7,882,962		1.5
NFL Enterprises(12)	Various	2	2	6/30/2021	167,606	1.2	6,818,212		1.3
TOTAL		31	26		4,087,020	29.4%	$	182,076,527	35.4%

______________________________

(1) Annualized base rent is calculated by multiplying (i) base rental payments (defined as cash base rents (before abatements)) under commenced leases as of June 30, 2017, by (ii) 12. Annualized base rent does not reflect tenant reimbursements.

(2) Google, Inc. is expected to take possession of an additional 166,460 square feet at our Rincon Center property during the fourth quarter of 2017 with an annualized base rent of $12,484,500. Google, Inc. expirations by property and square footage: (i) 207,857 square feet at 3400 Hillview expiring on November 30, 2021 and (ii) 97,872 square feet at Foothill Research Center expiring on February 28, 2025.

(3) Netflix, Inc. is expected to take possession of an additional 52,626 square feet at CUE during the third quarter of 2018 and 39,327 square feet at CUE during the second quarter of 2019.

(4) Riot Games, Inc. expirations by property and square footage: (i) 2,592 square feet at Shorebreeze expiring on November 30, 2017 and (ii) 284,037 square feet at Element LA expiring on March 31, 2030. This tenant may elect to exercise their early termination right at Element LA with respect to 284,037 square feet effective March 31, 2025.

(5) Cisco Systems, Inc. expirations by property and square footage: (i) 471,580 square feet at Campus Center expiring on December 31, 2017 and (ii) 2,996 square feet at Concourse expiring March 31, 2018. This tenant elected to exercise their early termination right at Campus Center with respect to 471,850 square feet effective December 31, 2017.

(6) Uber is expected to take possession of an additional 15,209 square feet at our 1455 Market Street property during the second quarter of 2018.

(7) Salesforce.com is expected to take possession of an additional 4,144 square feet during the third quarter of 2017. Expirations by square footage: (i) 78,872 square feet expiring on July 31, 2025; (ii) 83,372 square feet expiring on April 30, 2027; (iii) 93,028 square feet expiring on October, 31, 2028; and (iv) 5,978 square feet of month-to-month storage space. This tenant may elect to exercise their early termination right with respect to 74,966 square feet between August 1, 2021 and September 30, 2021.

(8) Stanford Expirations by property and square footage: (i) Board of Trustees Stanford 18,753 square feet at Page Mill Hill expiring February 28, 2019; (ii) Stanford Healthcare 63,201 square feet at Page Mill Center expiring June 30, 2019; (iii) Stanford University 26,080 square feet at Palo Alto Square expiring on December 31, 2019; and (iv) Board of Trustees Stanford 43,215 square feet at Page Mill Center expiring December 31, 2022.

(9) GSA expirations by property and square footage: (i) 5,906 square feet at 901 Market expiring on October 21, 2017; (ii) 71,729 square feet at 1455 Market Street expiring on February 19, 2019; (iii) 28,993 square feet at Northview Center expiring on April 4, 2020; (iv) 33,582 square feet at Rincon Center expiring May 31, 2020; (v) 43,499 square feet at 901 Market Street expiring on July 31, 2021; and (vi) 18,388 square feet at Concourse expiring on May 7, 2024. This tenant may elect to exercise their early termination right at 901 Market with respect to 43,499 square feet any time after November 1, 2017 with 120 days prior written notice.

(10) EMC expirations by property and square footage: (i) 66,510 square feet at 875 Howard Street expiring on June 30, 2019; (ii) 185,292 square feet at 505 First Avenue expiring on October 18, 2021; and (iii) 42,954 square feet at 505 First Avenue expiring on December 31, 2023.

(11) NetSuite, Inc. expirations by square footage: (i) 37,597 square feet expiring on August 31, 2019; (ii) 129,070 square feet expiring on May 31, 2022.

(12) NFL Enterprises by property and square footage: (i) 157,687 square feet at 10950 Washington and (ii) 9,919 square feet at 10900 Washington. This tenant may elect to exercise their early termination right with respect to 167,606 square feet effective June 30, 2020.

34

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Second Quarter 2017 Supplemental Operating and Financial Information

OFFICE PORTFOLIO DIVERSIFICATION

Industry	Total Square Feet(1)	Annualized Rent as of Percent of Total
Technology	4,811,067	39.8	%
Media & Entertainment	1,866,521	17.3
Business Services	957,883	7.5
Financial Services	939,126	7.2
Legal	735,859	8.5
Other	624,447	4.7
Retail	579,246	3.5
Insurance	352,501	2.8
Government	301,905	2.4
Healthcare	197,649	2.1
Real Estate	197,461	1.6
Educational	168,489	1.8
Advertising	123,602	0.8
TOTAL	11,855,756	100.0	%

______________________________

(1) Does not include signed leases not commenced.

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Hudson Pacific Properties, Inc.

Second Quarter 2017 Supplemental Operating and Financial Information

DEFINITIONS

Funds From Operations (“FFO”): Funds From Operations before non-controlling interest (“FFO”) is a non-GAAP financial measure we believe is a useful supplemental measure of our performance. We calculate FFO in accordance with the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts. The White Paper defines FFO as net income or loss calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), excluding extraordinary items, as defined by GAAP, gains and losses from sales of depreciable real estate and impairment write-downs associated with depreciable real estate, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets) and after adjustment for unconsolidated partnerships and joint ventures. The calculation of FFO includes the amortization of deferred revenue related to tenant-funded tenant improvements and excludes the depreciation of the related tenant improvement assets. We believe that FFO is a useful supplemental measure of our operating performance. The exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the assets that form the core of our activity and assists in comparing those operating results between periods. Also, because FFO is generally recognized as the industry standard for reporting the operations of REITs, it facilitates comparisons of operating performance to other REITs. However, other REITs may use different methodologies to calculate FFO, and accordingly, our FFO may not be comparable to all other REITs.

Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, we believe that FFO along with the required GAAP presentations provides a more complete measurement of our performance relative to our competitors and a more appropriate basis on which to make decisions involving operating, financing and investing activities than the required GAAP presentations alone would provide. We use FFO per share to calculate annual cost bonuses for certain employees.

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.

Adjusted Funds From Operations (“AFFO”): Adjusted Funds From Operations (“AFFO”) is a non-GAAP financial measure we believe is a useful supplemental measure of our performance. We compute AFFO by adding to FFO the non-cash compensation expense and amortization of deferred financing costs, and subtracting recurring capital expenditures, tenant improvements and leasing commissions (excluding pre-existing obligations on contributed or acquired properties funded with amounts received in settlement of prorations), and eliminating the net effect of straight-line rents, amortization of lease buy-out costs, and amortization of above/below market lease intangible assets and liabilities and amortization of loan discounts/premium. AFFO is not intended to represent cash flow for the period. We believe that AFFO provides useful information to the investment community about our financial position as compared to other REITs since AFFO is a widely reported measure used by other REITs. However, other REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not be comparable to other REITs.

Net Operating Income (“NOI”): We evaluate performance based upon property net operating income (“NOI”) from continuing operations. NOI is not a measure of operating results or cash flows from operating activities as measured by GAAP and should not be considered an alternative to income from continuing operations, as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make distributions. All companies may not calculate NOI in the same manner. We consider NOI to be a useful performance measure to investors and management, because when compared across periods, NOI reflects the revenues and expenses directly associated with owning and operating our properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing a perspective not immediately apparent from income from continuing operations. We calculate net operating income as net income (loss) excluding corporate general and administrative expenses, depreciation and amortization, impairments, gains/losses on sales of real estate, interest expense, acquisition-related expenses and other non-operating items. We define NOI as operating revenues (including rental revenues, other property-related revenue, tenant recoveries and other operating revenues), less property-level operating expenses (which includes external management fees, if any, and property-level general and administrative expenses). NOI on a cash basis is NOI on a GAAP basis, adjusted to exclude the effect of straight-line rent and other non-cash adjustments required by GAAP. We believe that NOI on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent and other non-cash adjustments to revenue and expenses.

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