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): July 16, 2014

 

 

Hudson Pacific Properties, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Maryland   001-34789   27-1430478

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

11601 Wilshire Blvd., Sixth Floor, Los Angeles, California   90025
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (310) 445-5700

N/A

(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 (see General Instructions A.2.):

 

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

 

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

 

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

 

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

 

 

 


This Current Report on Form 8-K is filed by Hudson Pacific Properties, Inc., a Maryland corporation (which we may refer to herein as the “Company,” “we,” “our” or “us”), in connection with the matters described herein.

 

ITEM 2.01 COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS

On July 16, 2014, Hudson Tierrasanta, LLC, a wholly own subsidiary of Hudson Pacific Properties, L.P., our operating partnership, completed the sale of our Tierrasanta property, a 112,300 square foot office property located in San Diego, California, to IPG-Monro Capital Fund I, LP, for a gross sale price of $19.5 million (before certain credits, closing costs and prorations).

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

 

(b) Pro Forma Financial Information.

Hudson Pacific Properties, Inc.

 

Unaudited Pro Forma Financial Information

     F-1   

Unaudited Pro Forma Consolidated Balance Sheet as of March 31, 2014

     F-2   

Unaudited Pro Forma Consolidated Statement of Operations for the Three Months Ended March 31, 2014

     F-3   

Unaudited Pro Forma Consolidated Statement of Operations for the Year Ended December 31, 2013

     F-4   


SIGNATURES

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

 

Hudson Pacific Properties, Inc.
By:  

/s/ Mark T. Lammas

  Mark T. Lammas
  Chief Financial Officer

Date: July 21, 2014


HUDSON PACIFIC PROPERTIES, INC.

UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following unaudited pro forma consolidated balance sheet of Hudson Pacific Properties, Inc. (the “Company” or “our”) as of March 31, 2014 and unaudited pro forma consolidated statements of operations of the Company for the year ended December 31, 2013 and the three months ended March 31, 2014 have been prepared as if the disposition of Tierrasanta had occurred on March 31, 2014 for the pro forma consolidated balance sheet, and as if the disposition of Tierrasanta had occurred on January 1, 2013 for both pro forma consolidated statements of operations.

Our pro forma consolidated financial statements are presented for informational purposes only and should be read in conjunction with our forms 10-K and 10-Q filed with the Securities and Exchange Commission. The adjustments to our pro forma consolidated financial statements are based on available information and assumptions that we consider reasonable. Our pro forma consolidated financial statements do not purport to (1) represent our financial position that would have actually occurred had the disposition of Tierrasanta occurred on March 31, 2014, (2) represent the results of our operations that would have actually occurred had the disposition of Tierrasanta occurred on January 1, 2013 or (3) project our financial position or results of operations as of any future date or for any future period, as applicable.

 

F-1


Hudson Pacific Properties, Inc.

Unaudited Pro Forma Consolidated Balance Sheet

As of March 31, 2014

 

     Hudson
Pacific
Properties,
Inc.
(A)
    Sale of
Tierrasanta
(B)
    Company
Pro Forma
 

ASSETS

      

Investment in real estate, net

   $ 1,993,945      $ —        $ 1,993,945   

Cash and cash equivalents

     29,063        18,451        47,514   

Restricted cash

     17,714        —          17,714   

Accounts receivable, net

     6,673        —          6,673   

Straight-line rent receivables

     24,026        —          24,026   

Deferred leasing costs and lease intangibles, net

     110,042        —          110,042   

Deferred finance costs, net

     8,028        —          8,028   

Interest rate contracts

     33        —          33   

Goodwill

     8,754        —          8,754   

Prepaid expenses and other assets

     5,143        —          5,143   

Assets associated with real estate held for sale

     12,768        (12,768     —     
  

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

   $ 2,216,189      $ 5,683      $ 2,221,872   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND EQUITY

      

Notes payable

   $ 827,438      $ —        $ 827,438   

Accounts payable and accrued liabilities

     22,545        —          22,545   

Below-market leases and above-market ground leases

     46,853        —          46,853   

Security deposits

     6,147        —          6,147   

Prepaid rent

     10,565        —          10,565   

Interest rate contracts

     475        —          475   

Obligations associated with real estate held for sale

     170        (170     —     
  

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES

   $ 914,193      $ (170   $ 914,023   

6.25% Series A Cumulative Redeemable Preferred units of the Operating Partnership

     10,177        —          10,177   

EQUITY

      

Hudson Pacific Properties, Inc. shareholders’ equity:

      

Series B cumulative preferred stock

     145,000        —          145,000   

Common stockholders

     668        —          668   

Additional paid-in capital

     1,093,774        —          1,093,774   

Accumulated other comprehensive loss

     (1,529     —          (1,529

Accumulated deficit

     (43,784     5,853        (37,931
  

 

 

   

 

 

   

 

 

 

Total Hudson Pacific Properties, Inc. shareholders’ equity

     1,194,129        5,853        1,199,982   

Non-controlling unitholders in Operating Partnership

     44,224        —          44,224   

Non-controlling interest in consolidated real estate entity

     53,466        —          53,466   
  

 

 

   

 

 

   

 

 

 

TOTAL EQUITY

     1,291,819        5,853        1,297,672   
  

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES & EQUITY

   $ 2,216,189      $ 5,683      $ 2,221,872   
  

 

 

   

 

 

   

 

 

 

 

F-2


Hudson Pacific Properties, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

For the Three Months Ended March 31, 2014

 

     Hudson
Pacific
Properties,
Inc.
(AA)
    Sale of
Tierrasanta
(BB)
    Pro Forma
Consolidated
 

REVENUES

      

Office

      

Rental

   $ 36,010      $ (303   $ 35,707   

Tenant recoveries

     5,571        (127     5,444   

Other

     4,479        —          4,479   
  

 

 

   

 

 

   

 

 

 
     46,060        (430     45,630   

Media and entertainment properties

      

Rental

     5,449        —          5,449   

Tenant recoveries

     320        —          320   

Other property related revenue

     3,634        —          3,634   

Other

     133        —          133   
  

 

 

   

 

 

   

 

 

 
     9,536        —          9,536   

Total Revenues

     55,596        (430     55,166   

OPERATING EXPENSES

      

Office property related expenses

     15,927        (121     15,806   

Media and entertainment properties

     6,005        —          6,005   

General and administrative

     5,776        —          5,776   

Depreciation and amortization

     16,668        (58     16,610   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     44,376        (179     44,197   

Income from operations

     11,220        (251     10,969   

OTHER EXPENSE (INCOME)

      

Interest expense

     6,524        —          6,524   

Interest income

     (9     —          (9

Acquisition-related expenses

     105        —          105   

Other expense

     1        —          1   
  

 

 

   

 

 

   

 

 

 
     6,621        —          6,621   

Income (loss) from continuing operations

     4,599        (251     4,348   

Net income attributable to preferred stock and units

     (3,200     —          (3,200

Net income attributable to restricted shares

     (69     —          (69

Net loss attributable to non-controlling interest in Consolidated Entities

     43        —          43   

Net income attributable to common units in the Operating Partnership

     (46     —          (38 ) (CC) 
  

 

 

   

 

 

   

 

 

 

Net income attributable to Hudson Pacific Properties, Inc. common stockholders

     1,327        (251     1,084   
  

 

 

   

 

 

   

 

 

 

Pro Forma earnings per share—basic and diluted

   $ 0.02        $ 0.02   (DD) 

Pro Forma weighted average shares outstanding—basic and diluted

     63,625,751          63,625,751   (DD) 

 

F-3


Hudson Pacific Properties, Inc.

Unaudited Pro Forma Consolidated Statement of Operations

Year Ended December 31, 2013

 

     Hudson
Pacific
Properties,
Inc.
(AA)
    Sale of
Tierrasanta
(BB)
    Pro Forma
Consolidated
 

REVENUES

      

Office

      

Rental

   $ 124,839      $ (1,397   $ 123,442   

Tenant recoveries

     25,870        (511     25,359   

Other

     14,732        —          14,732   
  

 

 

   

 

 

   

 

 

 
     165,441        (1,908     163,533   

Media and entertainment properties

      

Rental

     23,003        —          23,003   

Tenant recoveries

     1,807        —          1,807   

Other property related revenue

     15,072        —          15,072   

Other

     235        —          235   
  

 

 

   

 

 

   

 

 

 
     40,117        —          40,117   

Total Revenues

     205,558        (1,908     203,650   

OPERATING EXPENSES

      

Office property related expenses

     63,434        (455     62,979   

Media and entertainment properties

     24,149        —          24,149   

General and administrative

     19,952        —          19,952   

Depreciation and amortization

     70,063        (629     69,434   
  

 

 

   

 

 

   

 

 

 

Total operating expenses

     177,598        (1,084     176,514   

Income from operations

     27,960        (824     27,136   

OTHER EXPENSE (INCOME)

      

Interest expense

     25,470        —          25,470   

Interest income

     (272     —          (272

Acquisition-related expenses

     1,446        —          1,446   

Other expense

     (99     —          (99
  

 

 

   

 

 

   

 

 

 
     26,545        —          26,545   

Income (loss) from continuing operations

     1,415        (824     591   

Net income attributable to preferred stock and units

     (12,893     —          (12,893

Net income attributable to restricted shares

     (300     —          (300

Net loss attributable to non-controlling interest in Consolidated Entities

     321        —          321   

Net loss attributable to common units in the Operating Partnership

     469        —          503   (CC) 
  

 

 

   

 

 

   

 

 

 

Net loss attributable to Hudson Pacific Properties, Inc. common stockholders

     (10,988     (824     (11,778
  

 

 

   

 

 

   

 

 

 

Pro Forma earnings per share—basic and diluted

   $ (0.20     $ (0.21 ) (DD) 

Pro Forma weighted average shares outstanding—basic and diluted

     55,182,647          55,182,647   (DD) 

 

F-4


HUDSON PACIFIC PROPERTIES, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

1. Balance sheet adjustments

 

(A) Represents the historical balance sheet of Hudson Pacific Properties, Inc. (the “Company,” “we,” “our” or “us”) as of March 31, 2014.

 

(B) Reflects the disposition of Tierrasanta, which was completed on July 16, 2014.

2. Income statement adjustments

 

(AA) Reflects our historical consolidated statement of operations for the three-month period ended March 31, 2014 and for the year ended December 31, 2013.

 

(BB) The pro forma adjustments reflect the disposition of Tierrasanta for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 as if Tierrasanta was disposed of on January 1, 2013.

 

(CC) Reflects the incremental impact on our pro forma results of operations for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 to reflect the income allocation to unitholders in our operating partnership as a result of the proforma adjustments described in (BB).

 

(DD) Pro forma loss per share from continuing operations attributable to common shareholders—basic and diluted is calculated by dividing pro forma consolidated net loss allocable to common stockholders by the number of weighted average shares of common stock outstanding for the three-month period ended March 31, 2014 and for the year ended December 31, 2013.

 

F-5