Hudson Pacific to Offer Shares - Analyst Blog

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Hudson Pacific Properties, Inc ( HPP ), a real estate investment trust (REIT), recently announced its decision to offer 10 million shares of its common stock. The company also decided to grant the underwriters a 30-day option to purchase up to an additional 1.5 million shares to cover the over-allotment options.

This public offering will enable the company to attain financial flexibility. Hudson Pacific intends to use the proceeds from the offering  to repay debt under its secured revolving credit facility, to fund  the recently announced acquisitions of '901 Market Street' and the 'Olympic Bundy' properties, and for general corporate purpose.

Hudson Pacific reported first quarter 2012 funds from operations (FFO) of $9.4 million or 26 cents per share. Funds from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

At March 31, 2012, Hudson Pacific had unrestricted cash and cash equivalents of $21.9 million. The company had an available borrowing capacity of approximately $161.8 million on its $200.0 million secured credit facility by the end of first quarter 2012.

Hudson Pacific is focused on owning, operating and acquiring high-quality office properties and state-of-the-art media and entertainment properties primarily in Northern and Southern California. The company primarily targets high barrier-to-entry, in-fill locations with favorable, long-term supply-demand characteristics in  markets such as Los Angeles, Orange County, San Diego and San Francisco.

Hudson Pacific currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We have a long-term Underperform recommendation on the stock. One of its competitors, MPG Office Trust ( MPG ) holds a Zacks #2 Rank, which implies a short-term Buy rating.

HUDSON PAC PPTY (HPP): Free Stock Analysis Report
MPG OFFICE TRST (MPG): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: HPP , MPG

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