Blackstone to purchase a 49% stake in Hudson
Pacific’s Hollywood Media Portfolio, a 2.2 million-square-foot
collection of studio facilities and Class A office buildings valued
at $1.65 billion
New venture includes rights to build another
1.1 million square feet of office and production space at Sunset
Gower and Sunset Las Palmas Studios
Hudson Pacific and Blackstone will look to
partner on future studio acquisitions in Los Angeles and other key
markets
Hudson Pacific Properties, Inc. (“Hudson Pacific”) (NYSE: HPP)
and Blackstone (NYSE: BX) today announced that funds affiliated
with Blackstone Property Partners will acquire a 49% interest in
Hudson Pacific’s three Hollywood studios and five on-lot or
adjacent Class A office properties, totaling 2.2 million square
feet, at a gross portfolio valuation of $1.65 billion. Hudson
Pacific will retain a 51% ownership stake and remain responsible
for day-to-day operations, leasing and development. The transaction
is expected to close in the third quarter of this year.
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“Hudson Pacific has been at the forefront of Hollywood’s
renaissance for more than a decade, owning, operating and building
world-class creative office and production campuses for leading
media and technology companies,” said Victor Coleman, Chairman and
CEO of Hudson Pacific. “Our latest joint venture with Blackstone
unlocks a portion of the value we’ve created for our shareholders
and provides us with significant capital to grow both our studio
and office portfolios, including the build-out of additional
development rights at our existing studios. We are pleased to once
again align with Blackstone, a trusted and proven strategic
partner, who shares our long-term vision for our studio portfolio
and the asset class more broadly.”
“Our business is driven by investing thematically in sectors
with powerful secular tailwinds, and there is no better example of
that than content creation in Los Angeles,” said Ken Caplan, Global
Co-Head of Blackstone Real Estate. “We could not be more excited to
partner with Hudson Pacific on this irreplaceable portfolio. They
have been an extraordinary partner to us and possess a
best-in-class management team. We look forward to significantly
growing this platform together for the long-term.”
The transaction includes Sunset Bronson, Sunset Gower and Sunset
Las Palmas Studios, which collectively comprise 35 stages or 1.2
million square feet of production and support space in Hollywood.
The studio lots are critical infrastructure for TV, film and
digital production and house content production tenants from both
traditional and streaming media companies. The portfolio also
features 966,000 square feet of highly sought-after Class A office
properties that Hudson Pacific has developed on or adjacent to the
lots, specifically 6040 Sunset, ICON, CUE, EPIC and the
soon-to-be-completed Harlow. Netflix is the portfolio’s largest
tenant, leasing over 700,000 square feet, in addition to signing
long-term deals for stages and production space.
Hudson Pacific’s predecessor company Hudson Capital, also
founded and led by Coleman, purchased Sunset Gower and Sunset
Bronson in 2007 and 2008, respectively, just as the ramp-up in
traditional and streaming content production began to put stages,
particularly those with adjacent premier quality workspace, in high
demand. In 2017, Hudson Pacific continued its successful strategy
when it purchased Sunset Las Palmas, strengthening the company’s
position as the largest independent owner and operator of sound
stages in Los Angeles. In addition to developing and leasing the
properties, Hudson Pacific also substantially improved studio cash
flow through property management and ongoing capital
improvements.
Opportunities to further expand the joint venture’s portfolio
include approximately 1.1 million square feet of untapped
development rights at Sunset Gower and Sunset Las Palmas, as well
as the pursuit of additional studio acquisitions in Los Angeles and
other markets. Blackstone’s and Hudson Pacific’s complementary
industry relationships and expertise provide the partnership with a
unique advantage in sourcing and executing on future studio deals.
Further, the two firms have a successful track record of working
together on transactions, including Hudson Pacific’s $3.5 billion
purchase of the former Equity Office Properties San Francisco
Peninsula and Silicon Valley office portfolio in 2015, and the
joint venture purchase of the 1.5 million-square-foot Bentall
Centre in Vancouver, Canada last year.
Eastdil Secured is acting as Hudson Pacific’s lead financial
advisor, with BofA Securities also acting as a financial advisor in
connection with the transaction. Gibson, Dunn & Crutcher LLP
and Latham & Watkins LLP are acting as Hudson Pacific’s legal
counsel. Simpson Thacher & Bartlett LLP is acting as
Blackstone’s legal counsel, and Goldman Sachs & Co. LLC and
Barclays are serving as Blackstone’s financial advisors.
About Hudson Pacific Properties
Hudson Pacific is a real estate investment trust with a
portfolio of office and studio properties totaling nearly 19
million square feet, including land for development. Focused on
premier West Coast epicenters of innovation, media and technology,
its anchor tenants include Fortune 500 and leading growth companies
such as Netflix, Google, Square, Uber, NFL Enterprises and more.
Hudson Pacific is publicly traded on the NYSE under the symbol HPP
and listed as a component of the S&P MidCap 400 Index. For more
information visit HudsonPacificProperties.com.
About Blackstone Real Estate
Blackstone is a global leader in real estate investing.
Blackstone’s real estate business was founded in 1991 and has $161
billion of investor capital under management. Blackstone is one of
the largest property owners in the world, owning and operating
assets across every major geography and sector, including
logistics, multifamily and single-family housing, office,
hospitality and retail. Our opportunistic funds seek to acquire
undermanaged, well-located assets across the world. Blackstone’s
Core+ strategy invests in substantially stabilized real estate
globally through regional open-ended funds focused on high-quality
assets, and Blackstone Real Estate Income Trust, Inc. (BREIT), a
non-listed REIT that invests in U.S. income-generating assets.
Blackstone Real Estate also operates one of the leading global real
estate debt businesses, providing comprehensive financing solutions
across the capital structure and risk spectrum, including
management of Blackstone Mortgage Trust (NYSE: BXMT).
Forward-Looking Statements Regarding Hudson Pacific
Properties
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 Hudson Pacific’s control,
which may cause actual results to differ significantly from those
expressed in any forward-looking statement. All forward-looking
statements reflect Hudson Pacific’s good faith beliefs, assumptions
and expectations, but they are not guarantees of future
performance. Furthermore, Hudson Pacific disclaims any obligation
to publicly update or revise any forward-looking statement to
reflect changes in underlying assumptions or factors, of new
information, data or methods, future events or other changes. For a
further discussion of these and other factors that could cause
Hudson Pacific’s future results to differ materially from any
forward-looking statements, see the section entitled “Risk Factors”
in Hudson Pacific’s Annual Report on Form 10-K filed with the
Securities and Exchange Commission, or SEC, and other risks
described in documents subsequently filed by Hudson Pacific from
time to time with the SEC.
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version on businesswire.com: https://www.businesswire.com/news/home/20200629005405/en/
Hudson Pacific Properties Laura
Campbell Senior Vice President, Investor Relations & Marketing
(310) 622-1702 lcampbell@hudsonppi.com
Blackstone Jennifer Friedman (212)
583-5122 Jennifer.Friedman@blackstone.com
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