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Hudson Pacific Vends Bay Park Plaza Property for $90M

Los Angeles, CA-based real estate investment trust ("REIT") Hudson Pacific Properties, Inc.HPP recently sold its Bay Park Plaza office property in Burlingame to H&Q Asia Pacific, a private equity firm in Asia. The disposed asset, comprising two Class A office buildings at 555 Airport Boulevard and 577 Airport Boulevard, fetched $90 million in proceeds.

Notably, the 260,183-square foot property formed part of the larger San Francisco Peninsula and Silicon Valley portfolio. Hudson Pacific had acquired the entire portfolio from Blackstone Real Estate Partners V and VI, in a stock-and-cash deal worth $3.5 billion, in the first half of 2015.

The total portfolio comprises 26 high-quality office assets spread across 8.2 million square feet, along with 2 development parcels in prime Bay Area submarkets. Importantly, the property had strengthened Hudson Pacific's position as a leading office REIT in the West Coast.

However, at present, the Bay Park Plaza property was deemed as a non-strategic asset by the company, and hence the decision to divest it. Moreover, Hudson Pacific will likely use the proceeds from this sale to partially repay a $550-million two-year term facility that was drawn to finance the same acquisition. Also, the sale consideration reportedly reflects a premium to the cost of acquiring the same property.

Hudson Pacific is a vertically integrated REIT with a total portfolio area of 17.3 million square feet. It remains focused on owning, operating and acquiring office as well as media and entertainment properties in select growth markets, primarily in Northern and Southern California.

Hudson Pacific currently holds a Zacks Rank #2 (Buy).

Investors interested in the REIT space may also consider Iron Mountain Incorporated IRM , CoreSite Realty Corporation COR and Ashford Hospitality Prime, Inc. AHP . While Iron Mountain and CoreSite Realty sport a Zacks Rank #1 (Strong Buy), Ashford Hospitality carries the same Zacks Rank as Hudson Pacific.

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IRON MOUNTAIN (IRM): Free Stock Analysis Report

HUDSON PAC PPTY (HPP): Free Stock Analysis Report

CORESITE REALTY (COR): Free Stock Analysis Report

ASHFORD HOSP PR (AHP): 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.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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