Greetings and welcome to the Hudson Pacific Properties Inc. fourth quarter 2020 earnings conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Laura Campbell, Senior Vice President, Investor Relations and Marketing. Thank you. You may begin. Thank you, operator. Good morning, everyone. Welcome to Hudson Pacific Properties fourth quarter 2020 earnings call. Yesterday, our press release and supplemental were filed on an 8-K with the SEC. Both are available on the investors section of our website, hudsonpacificproperties.com. An audio webcast of this call will also be available for replay by phone over the next week and on the investors section of our website. During this call, we will discuss non-GAAP financial measures which are reconciled to our GAAP financial results in our press release and supplemental. We will also be making forward looking statements based on our current expectations. These statements are subject to risks and uncertainties discussed in our SEC filings, including various ongoing developments regarding the COVID-19 pandemic. Actual events could cause our results to differ materially from these forward looking statements, which we undertake no duty to update. Moreover, today we've added certain disclosures specifically in response to the SEC's direction on special disclosure of changes in our business prompted by COVID-19. We do not expect to maintain this level of disclosure when normal business operations resume. With that, I'd like to welcome Victor Coleman, our Chairman and CEO, Mark Lammas, our President, Arthur Suazo, our EVP of Leasing, and Harout Diramerian, our CFO. Victor? Thank you, Laura. Hello, everyone, welcome to Hudson Pacific Properties' fourth quarter 2020 earnings call. 2020 certainly presented everyone with unprecedented challenges, I remain extremely proud of the Hudson Pacific Properties team and how we've navigated the pandemic to get to this point. To roll out the vaccine in the new year gives us a line of sight on getting our tenants and employees safely back to their offices. As you know, we believe the vast majority of the companies, it's not a matter of if, but when. We specialize in leasing workplace to the world's most creative and innovative businesses. Their success did not happen in a remote context. It happened because of the connections, culture, and facilities that gave them a competitive edge. Those environments, designed to inspire and be infinitely better than your home office, attracted the best talent and fostered optimum creativity. I expect everyone still working from home can probably attest that hours of Zoom calls from your couch just doesn't do the same thing. Hudson Pacific didn't slow down in 2020, and our accomplishments for the year were numerous. Even with many tenants on the sideline, we leased over 800,000 sq ft with strong rent spreads, 21.5% GAAP and 14.3% cash. We collected 98% of our rents during the three quarters of 2020 impacted by COVID-19, including 99% of office and 100% of studio rents, showcasing the exceptional quality of our tenants. Our portfolio remained open and fully operational as we swiftly implemented industry leading health and safety protocols. We completed Harlow and kept One Westside on time and on budget. In August, we monetized a portion of our Hollywood studio and office properties, generating $1.3 billion of proceeds, which further fortified our balance sheet and liquidity position. We significantly expanded our Seattle and Denny Triangle footprint and our relationship with Amazon with the acquisition of 1918 Eighth. Capitalizing on the disconnect between public and private valuations, we repurchased over 3.5 million shares of our stock at an average price of $23. We continue to set ourselves apart as an ESG leader in the real estate circles and beyond, launching our proprietary Better Blueprint platform, achieving 100% carbon neutral operations, and earning ENERGY STAR Partner of the Year awards and the Green Star awards, among other things. As we look to 2021, we're ideally positioned to capitalize on opportunities before us. Our markets are the center of gravity for media and technology industries, both of which have accelerated as a result of the pandemic. Our balance sheet remains strong with no material near term maturities and ample liquidity, and we also have excellent JV partners, and we're actively evaluating a variety of opportunities, both office and studio. We're tackling our 2021 expirations with good momentum and coverage to date, and our nearly 600,000 sq ft, fully One Westside leased project will deliver in Q1 next year. Our development pipeline contains some of the best sites and most exciting projects in our markets, a large portion of which are fully entitled and will be ready to break ground as conditions warrant. In 2021, we'll take further action to ensure our cities and communities remain vibrant places to work, live, and play, be it through policy and advocacy, impact investing, philanthropy, or other civic engagement. This will especially be important as we recover from this pandemic. Just last week, we pledged $20 million over five years to support innovative approaches to addressing the homelessness and housing affordability crisis in our markets. In Southern California especially, there's been a lack of leadership from the business community on this issue, and certainly not on par with what we've seen in the Bay Area. It's imperative that more L.A. Based CEOs and companies become part of the solution. With that, I'm going to turn it over to Mark. Thanks, Victor. Our rent collections remain strong. In the fourth quarter, we collected 97% of total rents, including 98% for office, 100% for studios, and 51% for retail. To date in January, we've collected 97% of total rents, including 98% for office, 99% for studio, and 48% for retail. Again, our high-quality office and studio tenants are continuing to perform. It's the storefront retail tenants that are struggling as they await building repopulation. After nearly a full year of monitoring collections, we're seeing a clear trend that indicates our tenants have weathered the worst of the pandemic's challenges. In the second quarter of last year, we deferred rents for 60 tenants comprising 550,000 sq ft. The following quarter, only 19 tenants occupying 120,000 sq ft needed a deferral. By the fourth quarter, the number had dropped to a mere nine tenants in 82,000 sq ft. As for the collection of deferred rents, while we're still early in the payback period for most tenants, we've already collected 54% of the $5.6 million of deferred rents, nearly three-quarters of which we received in the fourth quarter. This highlights the improving strength of even our most challenged tenants. On the development front, at One Westside, we've begun space planning with Google. The project remains on track to deliver in Q1 of next year, which once fully online, will generate nearly $43 million of annual consolidated cash NOI. Our future development pipeline comprises nearly 3.2 million square feet, of which over 1 million square feet is fully entitled. This includes our state-of-the-art 538,000 sq ft Washington 1000 project in Seattle's Denny Triangle, which we've designed to be at the forefront of health and wellness and any COVID safety-related considerations. It also includes approximately 480,000 sq ft of net new development at Sunset Gower Studios, obviously ideally positioned to cater to growing demand from content producers. We're perfecting designs and our entitlements for other unique sites and projects in Hollywood, West L.A., the Vancouver CBD, and North San José too, as Victor's mentioned, ensure we're ready to move forward with tenant interest. Now I'll turn it over to Art. Thanks, Mark. In the fourth quarter, our stabilized and in-service portfolio held steady at 94.5% and 93.5% leased respectively. We signed nearly 280,000 sq ft of new and renewal leases, our best quarter for 2020 in terms of volume, at GAAP and cash rent spreads of 4.9% and 4.7%, respectively. GAAP and cash rent spreads would have been 9.9% and 9.2% respectively, but mostly for a 44,000 sq ft renewal we completed with 24 Hour Fitness at Met Park North in Seattle. As Victor noted, our GAAP and cash rent spreads for all of 2020 were 21.5% and 14.3% respectively, which would have been even higher at 22.3% and 15.4% respectively, but for short-term deals. Tenant interest, tours, and activity continue to accelerate in the new year across all our markets. For example, we're seeing increased interest from larger tenants, particularly in Los Angeles. We are now in discussions with multiple multi-floor users at Harlow. We also had a notable uptick in tours and proposals from smaller tenants in Redwood Shores and North San Jose. Our deal pipeline, that is deals in leases, LOIs or proposals, increased quarter-over-quarter more than 30% to 1.1 million sq ft and aligns with our availabilities across our markets. As of the end of Q4, we had 10.7% of our ABR expiring this year with a 13% mark-to-market. We have about 45% coverage on those expirations. That is deals in leases, LOIs or proposals. For expirations over 20,000 sq ft, we have 65% coverage. Our two largest expirations by far are Google at 3400 Hillview in Palo Alto and Dell EMC at 505 First Street in Pioneer Square. Renewal discussions are underway. Addressing these two leases alone will reduce our ABR exposure for 2021 to 7.6%. We also have nothing expiring of significance in either Los Angeles or San Francisco this year. I'd like to reiterate that our lease economics have remained intact during the pandemic. Our average net effective rent for 2020 actually increased slightly year-over-year, just over a percent to $46 per sq ft. Comparing Q4 2020 to Q4 2019, our net effective rent was up 14% to $42 per sq ft. One of the immediate impacts of COVID was shorter-term leases, particularly for renewal deals. However, since Q2, we've seen a sequential uptick in lease term across the board. Our Q4 2020 new deals were on par with Q1, with an average of six-year term. For our Q4 2020 renewals, the average term was 3.8 years or up over 100% from Q2. Now I'll turn the call over to Harout. Thanks, Art. In the fourth quarter, we generated FFO excluding specified items of $0.44 per diluted share compared to $0.55 per diluted share a year ago. Fourth quarter specified items in 2020 consisted of one-time tax reassessment management costs of $5.5 million or $0.04 per diluted share, and one-time prior period net property tax savings of $700,000 or $0.00 per diluted share, compared to transaction related expenses of $200,000 Or $0.00 per diluted share and one-time debt extinguishment cost of $600,000 or $0.00 per diluted share. The year-over-year decrease in our FFO resulted from the partial sale of our Hollywood Media Portfolio, lower parking revenue due to COVID-19 impacted occupancy, reserves against uncollected rents, and lower service and other revenue at our studios, partly offset by gains from lease commencements at Epic, Fourth and Traction, Foothill Research Park, and 1455 Market. Fourth quarter 2020 FFO, excluding specified items, includes approximately $0.02 per diluted share of write-offs against uncollected cash rents, and approximately $0.01 per diluted share of charges to revenue related to reserves against straight-line rent receivables. This resulted in a total negative impact to fourth quarter 2020 FFO of approximately $0.03 per diluted share, some or all of which may be ultimately collected. Fourth quarter 2020 FFO also reflects $0.02 per diluted share decrease in parking revenue, some or all of which will resume with tenant reintegration. Despite the pandemic, we continue to post relatively strong same-store cash NOI growth within our office portfolio. We have same-store office NOI growth of 4.2% in Q4 and 0.6% for the year. However, adjusting for prior period property tax expense, our same-store office cash NOI would have been 5.7% for Q4 and 0.9% for the year. Following our 1918 Eighth acquisition as well as repurchasing another 900,000 shares of common stock in Q4, we have $1 billion in liquidity. We have no material maturities until 2023, save for the loan secured by our Hollywood Media Portfolio, which matures on Q3 2022 and has 3 one-year extension options. Our average loan term is 5.8 years. In short, as Victor said, we have ample capital to manage our properties, complete our development projects, and pursue new opportunities. Once again this quarter, we've had a steady and meaningful AFFO growth. Specifically, AFFO increased by $11 million or 27% in Q4 2020 compared to Q4 2019. This occurred even while FFO declined by $22.6 million for the same period due to temporary impacts of both our Hollywood Media Portfolio and COVID-19. Our year-over-year 2020 AFFO increased $55.9 million or 40%, despite a $32 million decrease in FFO for the same period, largely due to our JV and COVID-19. In both cases, this positive AFFO trend reflects the significant impact of normalizing leasing costs and cash rent commencements on major leases following the burn-off of free rent. We're providing guidance for Q1 2021 FFO of $0.45- $0.47 per diluted share, excluding specified items. At the midpoint, this is $0.02 per diluted share higher than our Q4 2020 per diluted share, excluding specified items. The increase is primarily driven by the following Q1 2021 compared to Q4 2020 items. We expect our office GAAP NOI to increase approximately 5.5%, excluding the $1.6 million one-time prior period property tax expense that occurred in Q4 2020. The 5.5% increase is primarily due to our acquisition of 1918 Eighth. We expect studio GAAP NOI to increase approximately 7.5%, excluding the $2.2 million one-time prior period property tax savings that occurred in Q4 2020. This 7.5% increase is primarily due to heightened production activity. We expect our G&A to decrease approximately 1%, excluding the $5.5 million one-time tax reassessment management cost that occurred in Q4 2020. We expect interest expense to increase 2.8% as a result of our loan secured by 1918 Eighth, which commenced mid-December 2020. Finally, we expect our FFO attributable to non-controlling interest to increase approximately 23%, again, as a result of our acquisition of 1918 Eighth. Our $0.46 per share Q1 2021 guidance midpoint and the underlying components just outlined provide a helpful reference for forecasting our current full-year expectations. More specifically, we're expecting both Q1 2021 office and studio GAAP NOI to remain consistent throughout the balance of the year. We are, however, anticipating some improvement in a few key components of full-year 2020 FFO compared to Q1 2020 guidance annualized as follows. G&A is expected to be $2.5 million lower, and interest expense is expected to be $3.6 million lower. Now I'll turn it back to Victor. Thanks, Harout, Art, Mark, and Laura. To close, at Hudson Pacific, we've always operated a premier portfolio, and through the years, we've strategically invested in unique and highly accretive growth opportunities, be it through development, redevelopment, or repositioning. In doing so, we've ensured we own the best assets and attract the best tenants in prime West Coast tech and media hubs. There is no doubt that we have political hurdles to overcome in both California and in Washington. The West Coast professional networks and talent clusters were built over many decades, and thus are difficult, if not impossible, to replicate. We, like our peers, will be fully engaged and committed to ensuring our markets continue to thrive. That they are favorable for both businesses and residents alike. Once again, I want to express my sincere appreciation to the fantastic Hudson Pacific team for all their work and dedication this year. Thanks to everyone for listening today, and we appreciate your continued support. Stay healthy and safe, and we look forward to updating you next quarter. Operator, with that, let's open the line for questions. Thank you. Ladies and gentlemen, at this time, we'll be conducting a question and answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Nicholas Yulico with Scotiabank. Please proceed with your question. Thanks. Hello, everyone. I guess just first off, in terms of the full year, you talked about first, it sounds like first quarter is a good kind of run rate to think about for the year. Maybe just give us a feeling for how you guys are thinking about occupancy and in terms of releasing on the lease expirations for the year, how we should think about kind of occupancy trending for the year. Hi, Nick. It's Art. Yeah. As I said in my prepared remarks, we start the year with $1.5 million worth of expirations. It's encouraging early in the quarter already we've got 45% coverage on those expiring tenants. The two largest, obviously Google, 207,000 sq ft in Palo Alto, and Dell EMC, 185,000 sq ft in Seattle. We're well in front of them. We're down the road with those tenants. I think if you look at our uptick in pipeline activity just from the beginning of the year, probably pushing that 45% number closer to 50% of coverage early, and we're still having conversations. I think we're early. Tenants are starting to experience a kind of a renewed confidence as they look beyond the vaccine and schools opening. I think that's exactly why the numbers are increasing quarter-over-quarter. Nick, just on your initial question, as we completed budgets right towards the end of the year and kind of looked ahead to where they pointed on a lease percentage by year end, it looks to us like we should be able to maintain our lease percentage. As we ended the year, we should be able to maintain that throughout the year. We don't expect to see any deterioration in that number. Okay, great. Thanks. It sounds like you guys feel pretty optimistic about getting the lease expirations renewed with Google in Palo Alto and Dell in Pioneer Square. Is that fair? I'd say this, Nick. It's Victor. How are you? I'd say that we feel very good about our lease expiration timeline that's coming due in 2021. Of the big two, we are in leases on one right now, and the other one, we're negotiating back and forth on paper. We feel pretty good about it. Okay. Appreciate that. Thanks, Victor. I guess just one other follow-up is, as we think about the expirations this year, you do have some more weighting in Silicon Valley, which some of this is smaller tenant market. Thinking about that portfolio where you've had, I think, a little bit more tenant churn over the past couple of years. Some of that's planned because you're repositioning assets. We kind of think about some of the smaller tenant leasing trends right now that you're seeing in the portfolio? Sure, Nick. Absolutely. I think you hit it on the nose in Silicon Valley and on the Peninsula. It's a smaller tenant market. The churn that you're referring to was larger tenants that had either rolled out or downsized, and it obviously takes time to kind of re-lease it with smaller tenants. We're going to continue to successfully deploy our VSP program, which has been super successful for us, not only in those markets, but across our portfolio. With the uptick in small tenant activity, we feel we're going to be poised to capture that activity. All right. Thanks, Art. Thanks, everyone. Thanks, Nick. Our next question comes from the line of Jamie Feldman with Bank of America. Please proceed with your question. Great. Thank you. I guess, can you guys talk about what you're seeing in terms of space usage? Any changes, I guess as you're working on the Google and Dell leases or anything else large? Are they kind of rethinking how they want to use their space? Hey, Jamie. Listen, right now because the preponderance of our tenants are not back, but now they're preparing to go back, and we see the light, not just because of the vaccinations, but the activity and the schools coming back and all the positive news. We're not out of the woods, but we're seeing it. People are looking at the existing utilization. To date, when we've been saying this all the way through, the reason we're collecting at 97%, people are not giving back space. They're looking for the next-gen office space going forward. There's a number of factors that run around between safety and protocol, obviously, the opportunity to reimagine the future space, connectivity with personnel, climate change. All the protocols that they've been working through the last multiple months are being enacted. I think the back-ended answer to what your question is that we're not seeing, in our instances with the tenants that we're talking to right now, tenants coming back and saying, "We're giving up space." With the exception of one large tenant in our portfolio has said, "We may end up restructuring and giving back space." The numbers are well in our favor of tenants that are keeping the existing footprints. Art, yeah, to put a finer point on it, Victor. What we're reading, what we're all reading, we're all reading the same things, and what we're hearing, and granted it's kind of a smaller subset of that, is Some of the tenants are still building for maximum density. For sure, they need to solve in the short term, but their plans on, I would say, larger blocks of space are for kind of pre-COVID densities, if that's an indication for you. Okay. Even if they're keeping that same footprint, are you seeing a different type of usage, like less desks, more meeting space, or you can't really even see that yet? It's hard for us to sort of see through that right now. As I said, we're still running at, I think, we're maybe physical occupancy in the assets are now in the low 20s, so it's too hard to see. The bigger guys are not back yet. They're getting ready to come back over several months all the way through till fall. We don't have a clear line on that yet. Okay. Art, you talked about a pickup in L.A., smaller tenants in Redwood Shores in North San Jose. Can you talk about what's driving that? We've seen a lot of capital raised in the Bay Area. Is that a big part of it? How do you think about CBD San Francisco, since it seems like the sublease space seems to still be on the rise there? In L.A., it's chiefly in Hollywood, I'll say. It's a really kind of larger tenant deals, and we're obviously bolstering our efforts at Harlow. In Silicon Valley on the peninsula, it is small tenant activity. I think it's renewed confidence. I think some of these tenants kind of got to the end of the year. They're starting to see the light at the end of the tunnel, and they were on the sidelines. We've talked about kind of the decrease in tenants in the market. Well, a lot of those tenants were on the sidelines, and I think those tenants, you're starting to see the front end of those tenants come back and start to kick the tires again and reengage. In San Francisco, believe it or not, there's been about a 20% uptick in activity in San Francisco. As you know, we don't have any exposure. We're 98% leased. We've got maybe 50,000 sq ft expiring this year. We're in really good shape. It's refreshing to see that some of those tenants have come back in the sidelines in San Francisco. The sublease space, as you know, we've seen a deceleration, right? In the sublease space that's being put on the market. Obviously, we feel confident about the direction it's going. Would you say CBD San Francisco is seeing a similar pickup to these other sub-markets, or not necessarily? In activity? Yeah. Yeah. No. Like I said, we've specifically seen there are tenants in the market. It dropped to about 2.8 million square feet off of 6 million feet. We're back over three and a half million feet. Yeah, we're starting to see some of those tenants reengage. Okay. All right. Thank you. Thanks, Jamie. Our next question comes from the line of Blaine Heck with Wells Fargo. Please proceed with your question. Thanks. Good morning out there. In terms of future development projects, you guys have been able to build to some pretty solid yields over the last few years and added to your land bank. I guess, can you talk about that shadow pipeline? I'm guessing you'd be more willing to build something with a studio component rather than traditional office at this point. What do you think could be the next development start? When could that happen, and what level of pre-lease, if any, would you need to start something in this environment? Well, Blaine, listen, I think you know, given our pipeline right now, I think it would be the both ends of our market. In Vancouver, at Bentall Centre, we're evaluating 500,000 ft, and the demand in that marketplace seems to still be as consistent as it was pre-COVID. We're looking through on design right now and deciding if the opportune time in pre-leasing. We've got some activity with some larger tenants that are currently in the marketplace and expanding in the marketplace. We have Washington 1000. That is a planned, fully entitled build for 2023 for us to start. We could start earlier if we wanted to, maybe as early as end of 2022. I do think that that's going to be based upon a pre-leasing component. We have not seen the two or three tenants that came to us initially have been on the sidelines during this timeframe. I think our team is fairly confident that for us to break ground there, we will have a level of pre-leasing. As to the percentage amount, not really sure. You come down to Los Angeles, we are in the final stages of our Sunset Gower development, which will be two development opportunities, about a half a million sq ft. We are a year away from being fully ready to break ground there. That would also depend on some pre-lease component, and that's going to be a combination of office and studios. The activity there has been fairly stable with our existing tenants and new tenants in the marketplace that want to expand. Okay. Thanks, Victor. That's helpful. Just to circle back on your Washington 1000 asset, if my recollection is correct, I think that project is somewhat tied to what goes on with the convention center expansion there, which seems to be delayed and kind of over budget. Can you just comment on what effect, if any, that has on your plans there? Yeah. Listen, it's slightly delayed. The budgetary aspects are not our issue. Once delivered, we'll be compelled to do at least initially complete the podium through the retail component there, which is part and parcel of our commitment. After that, we will have a timeline that can extend a little longer than our anticipated timeline to build the tower. We're not concerned about the State of Washington completing it. Candidly, it actually works in our benefit if the timeline works that we have some pre-leasing component done, we can hold off on us breaking ground until they're completed. Great. That's helpful. Last for me, in terms of studio acquisitions, obviously interest in the property type has increased recently, and there have been a couple of studios that have been on the market or traded recently. I'm sure you guys looked at those assets. Was it just pricing that held you back, or was there any other reason? I guess, what are the main features that you guys are looking for in studio assets and acquisition opportunities? Other than the Raleigh Studios that just, a portion of that sold, there really has not been anything else in the market. There are several deals coming to market, at market, and several deals that we are negotiating exclusively off-market. I think it would be fair to say that our plate is going to be relatively full in that area in the near future, and announcements should be anticipated shortly. You know what? We've been very disciplined into our markets. We're interested in the core markets that we've always talked about. Our venture with Blackstone is completely active right now, and I would venture to say that you'll see a number of deals come our way, both of existing deals and ground up. Great. Thanks, Victor. Thank you. Take care. Our next question comes from the line of Alexander Goldfarb with Piper Sandler. Please attribute your question. Hey, good morning. Morning, Victor, and everyone out there. Just a few questions here. I guess the first question is just sort of going back to Jamie's question. We hear a lot about what's going on in San Francisco versus the peninsula. It sounds like the peninsula is sort of like the sunbelt of sort of California, where everyone's sort of either moving out of San Francisco to either live in the peninsula or business, whatever. Totally different dynamics between the business situation there versus the political situation in San Francisco, these lockdowns, et cetera. Victor, I hear you that you guys are committed to California, the West Coast. Are you seeing more tenants sort of rethink their San Francisco plans and instead focus on peninsula? Are you seeing that translate to any actual discussions as far as leasing or development potential? Right now, people are just making decisions based on their existing holdings or existing sq ftage, and so far it is not really translating into anything that is longer term visible. Alex, this is Art. No, we're not seeing that exodus out of San Francisco at all. In fact, our leasing teams are connected up and down from the city down to San Jose. All of these deals that are coming back are really deals that were on pause and are seeing kind of a renewed interest. They're made independently of any of those things that you mentioned. I think, Alex, you're spot on in the peninsula. I think you'll be surprised to hear when we announce some of the renewals that we're working on as the terms and conditions they're at. The activity in the peninsula has picked up dramatically in the last 90 days. Our team up there is entertaining a number of deals that were pretty much stagnant all through spring and summer. As Art said, they're coming back. In terms of the city, listen, I think you're spot on in the political environment there. It's not a good situation. Does that mean you throw it out? The answer is no. The city will recover. It just depends on when. We're just poised very fortuitously that we don't have a lot of expirations in the city. Those that are coming up, we actually have reverse inquiries by our tenants that are asking to renew for longer term, some of the larger tenants now in years 2023 and beyond. We've had some activity around that at the same time. I'm not saying that the picture is absolutely spectacular by any means, but there is activity and people are planning for the future. The future is going to come on us pretty quickly, and I think these tenants understand that when they're back, they're going to be back on some form that's greater than it is clearly today, and maybe not as great as it was a year ago today, but they're pretty excited about the opportunities to get people back in the office. That's the central theme. Okay. Harout, to put you on the spot because I can't ask Mark this anymore because he gave you the CFO reins. It sounds like for the first quarter, it sounds like it's a pretty good number, call it $0.46 at the midpoint, which sort of annualizes $1.85. Things are getting better. I think you said lower interest expense, is there any reason that sort of a $1.85 is not a good 2021 number that we should think about? Are there some things I'm sure there's some things that are variables, but it seems like they're all positives, right? There's uncollected rents, parking, there's studios, retail coming back on. These are all sort of positives. Is there any reason that we shouldn't think about sort of $1.85 as sort of being the sort of implied low end of a guidance range for the year? Alex, yeah, I think that implies basically the right thing. I think we did provide in our prepared remarks, there are some items that we feel would be even better through the remainder of the year, which was G&A and interest. Theoretically, if those do also come on by, the $1.85 is low. I think if you want to start off with $1.85 as the low end of the range, I think that works well. Okay. All these other things sounds like they could come on sometime over the course of the year that would sort of bring that up. Meaning that from what you see right now, there are no negatives that would bring this that would be a detriment, or unforeseen, that would be a detriment to this number. Right. The only negative is anything COVID related, right? Right. Yeah. things like that, we can't control that. So far, we like the trend. Just to be clear, it's not going to be straight throughout the year. There'll be ebbs and flows, right? The media business being an item, right? Q2 is usually our slowest quarter, just you got to factor that in. Ultimately, what you said is accurate. Okay. Just final question. Victor, the announcement about a week or two ago, the departure of Alex and Josh. Obviously, we all got to know Alex quite well, great guy. It does seem to be a trend that we're seeing, not just you, but some other REITs where people are going to the private side, just seeing the disconnect in opportunity, comp and all that. Do you foresee this being a bigger issue? Is this going to lead to G&A pressure for you? Is this sort of your more view is this is the natural ebb and flow and their departure allows opportunity for people to grow, and therefore you don't see like a G&A issue or any of those sorts of things? Well, first of all, Josh is a really good guy, too. I don't want you to just think Alex is the nicest guy of the two that left. I think Josh is a pretty good guy. Maybe I'm in the minority, but I'm going to support him. Alex has a full bar cart in his office, and you never put Josh on the sacrificial lamb in front of us public analysts. Listen, they're both great assets, and they've been with us for a long time, and I would say, first and foremost, we wish them the greatest success in their new venture that they're launching, hopefully imminently. Any help that we can do as a company and friends, we're going to support them. The issue around Hudson specifically and then generally, I'll comment it this way. This is the first time we've ever had any senior people leave the company that's been by their choice, not our choice, I will say it that way. We've got a massive bench and great depth, and the team here is energized and excited to take over and grow. I think you point out an interesting dynamic in that the public markets versus the private markets are constrained. When you have talented, energetic individuals, this comes up, and it shouldn't be expected that this is a one-time thing. I think from our standpoint, the company doesn't anticipate any more exodus, but you never know what happens in time, and that's why you're not run by one person, you're run by a team of professionals, and the team is ready to move forward on this. As economic aspects change, I think you're going to see gravitation to or from the public to private markets. Okay. Thanks, Victor. Our next question comes from the line of John Kim with BMO Capital Markets. Please proceed with your question. Hi. Follow-up on the studio business, various opportunities you're looking at. Can you talk about how competitive and how the buyer pool has changed in markets such as Burbank, Culver City, and in the Valley? Longer term, do you foresee any potential disruptions this could have in your Hollywood market as supply increases? Well, I'll take the latter first. Listen, our stabilized assets in Hollywood are best in class, and they're historical purpose-built assets. There's not going to be any variability around that. The demand is absolutely off the charts from the competitive landscape that's out there right now because of the growth and the product that's in the marketplace. As a result, I think that the competition for sound stages is as high as it's ever been. I do think that in terms of the competition, it's so ironic that of everybody who covers us for years, they didn't talk about this business being competitive, and we were the only ones doing it. Now that there's a competitor out there, and it really is just a competitor, it's all of a sudden a concern. On our office side, which is 80+% of the portfolio, we've got countless competitors. Nobody seems to talk about that aspect. I welcome the competition. I think the opportunities that we have are extremely impressive. As I said, I'm not worried about it. I think it does validate our thesis that we've been publicly dealing with for 10 years, which has said from day one, there's massive values in these assets, and the pricing around them is not solely based on what we think the values are. Other people are out there now pricing them. I think it just proves that the markets have undervalued the value of this real estate, and we have now, I would say, yes, a competitor, but a benchmark, and others that have come into the marketplace that are validating our values, which is currently trading way below what NAV is by the private market valuation. Okay, great. There's been some discussions that San Francisco is looking to take more of a proactive approach in reducing property taxes given decline in property values from the pandemic. Just want to get your thoughts if you think other California markets you're in could follow suit, and if this plays out, if there could be any potential property tax savings within your portfolio? Well, we did announce that we had a great property tax savings just recently on this quarter. I think there could be additional property tax savings throughout the entire portfolio in California. I do see that there is a little bit of a sea change with Proposition 15 getting defeated, and there is a pushback, and there's political realization that it can't continue the way it has been that's gotten us to this point right now. Those are all positive aspects of where I think people realize that businesses in place do have some sort of control and aspects as to where values are put in place, and then you can't continually tax the same entities going forward. The coalitions for are starting to build to the coalitions against, and I think that's encouraging. We still have a lot of room to go. I think more companies and more CEOs are becoming more vocal, and as a result, I think you'll see a change, but it's going to take some time. Okay. Thank you. Thanks. Our next question comes from the line of Vikram Malhotra with Morgan Stanley. Please proceed with your question. Thanks for taking the questions. Maybe just going back to sort of the core market, San Francisco, versus sort of the broader Bay Area. I know you talked about overall demand sort of picking up, the pipeline looking good, sublease space is high. I'm just sort of wondering if you were to sit here across sort of the key markets and particularly the city, given where sublease rates are today, is there a bifurcation in what you're seeing in terms of the need for landlords to reduce rents on what maybe tenants are looking for? How wide could that be? What areas are you seeing sort of pricing hold or rental hold versus what types of properties are you seeing kind of rents needed to go down pretty dramatically to see incremental demand? Vikram, listen, it's a great question. I do think that you have to look at quality of the real estate first. Candidly, if you're a landlord in that marketplace like we are, our goal is to maintain occupancy. It depends how much pain you want to take, right? If you've got a loan on the asset, you've got expenses that you need to adhere to. You haven't got deep pockets to protect yourself in the asset quality in terms of what's happening, you're going to be a little bit more desperate to lower your rent versus not. I think all landlords in today's marketplace are going to be dictated towards the demand of a tenant. None of us want to lose tenants. How far down you're going to go, I don't think there's a benchmark that says that. I think the irony, and we've made this comment before, and it's important for me to highlight, is that the tenants that are coming to you today, whether it's 2021, 2022, whatever it is, typically have been tenants that signed in 2015, 2016, maybe even seven years back to 2014. At 2014 or 2015 or 2016, the mark-to-market is still well above where even your reduced rent is. We're all still making more money than our current in-place rents were as these tenants come into play. These aren't mark-to-market deals that were 2019, in late 2019, and obviously first quarter of 2020 that were the peak of the marketplaces. When we look at some of our space, and you've been following us for a long time, and supporting us for a long time, you've seen that we had mark-to-market in San Francisco at 50% or 100%. Those mark-to-markets are now 20% or 25%. It's still much greater than what the tenants were rolling at. We still have some, what I would say is a floor or cushion or whatever you want to classify it to be. We're not saying we're giving space away. Yes, it's a mark-to-market to where the peak was pre-COVID, but not necessarily to where the rent started and where it even accreted to in-place rents over the last five or seven years. Okay, that's fair enough. That's helpful. Maybe one for Harout. If we think about sort of the same-store cash number for the year, and maybe even just looking beyond a little bit 18 months out, you obviously have the bumps, you have some lease review signs or some free rent converting. Offset to that, it sounds like, and correct me if I'm wrong, that on the expiration side and maybe just tenants deciding they may need less space, there is likely an occupancy headwind. With the bumps in the portfolio and potentially occupancy headwinds, how should we think about the trajectory of cash NOI over the next, call it, 12-18 months? Well, what you said is accurate. We do have those headwinds. However, to remind you, we also have below-market leases. We're going to renew a percentage of our tenants, and they're below market, so that's going to bring up our cash NOI. I think we're pretty confident on our prospects. I think we continue to see growth in cash NOI. It may not be as high as the +6% we got this quarter after removing the one-time items, but we still think we have a lot of upside as free rent continues to burn off and the bumps start coming in. Okay, just maybe just to clarify, I know we don't have specific numbers around it, but just kind of high level to put kind of guardrails around the occupancy. Kind of in your own budgeting, high end versus low end, how should we think about kind of where occupancy could shake out towards year-end? Well, I think I mentioned, Vikram, this is Mark. I mentioned that in completing year-end budgets and looking at where we ended up on a lease percentage basis at year-end and how it compares to where it will trend towards the end of the current year, we're materially in line with those two numbers. It's obviously a combination of our renewals and its success on renewals, plus expectations on absorption of existing vacancy. Through the combination of that, our in-service portfolio appears to trend so that we maintain our current lease percentage. Just a reminder in terms of renewals, the largest renewals that we have are happening at the end of the year. The impact on cash from NOI, at least for 2021, isn't going to be that large for those tenants. Those are going to be more 2022 and beyond in terms of occupancy headwinds. That makes sense. Okay, great. Thanks so much. Thanks, Vikram. Our next question comes from the line of Omotayo Okusanya with Mizuho. Please proceed with your question. Yes. Good afternoon. Most of my questions have been answered, a quick one on studio. The same store studio lease rate it kind of went down this quarter, also went down in Q3. I think in Q4, the general impression was maybe it would be a positive trend as production started coming back. Just kind of curious a little bit about the Q4 stat and the outlook going forward. When we talk about the studios, we so often focus on stage utilization because that's really the driver of success at the studios. It's easy to lose track a little bit that there's about a third of the footage is ancillary office footage that supports those studios. The office isn't entirely occupied by stage-using tenants. That is to say, some of the office utilization is writers and other production-related users, but some of it are people that simply just want to be on a studio lot, casting people and people like that. Due to the disruption from COVID-19, some of those users who, again, are not there because of the stage use, and who were under, say, shorter term leases or whose leases expired, we saw a bit of a pullback, if you will, on what would be a normal renewal rate for those users. As production has begun to resume again, our view is we’re going to see a lot of those non-stage office users return to the lot to be affiliated again with all the other studio users. Gotcha. That's helpful. Just another follow-up on the studio stuff again, in regards to just the Sunset Studios and potential development there. Did I hear you correctly that it's at least one year away before you break ground on any potential additional studio development? On Gower. Oh, you mean on Sunset Gower? Yeah, I think that would be an accurate statement. We probably would not break ground until first quarter of 2022. Of 2022. Great. Thank you. Thank you. Our next question comes from the line of Dave Rodgers with Robert W. Baird. Please proceed with your question. Yeah, good morning. Victor, you talked about acquisitions on the studio side, but could you revisit your thoughts around acquisitions and investment of the development on the traditional office side? Are you feeling any better there? Are you seeing more opportunities like you saw with APE? Is that something you're interested in today? Maybe juxtapose that against the buyback, which I know it's not one or the other, but maybe update us on your thoughts there and kind of the allocation of capital too. Yeah. Dave, no, thank you. Listen, the buyback position is still the same. At these levels, when opportunities avail themselves, we will consistently buy back. I think we've proven that track record out all through the last really 12 months plus. That's going to continue. We have not seen a massive inflow of deals on the commercial side as of now. I do think that the team has been evaluating a few value add deals, and so our appetite would be consistent with that, given the opportunity that some of those value add deals are significantly cheaper than they were a year ago. If we were interested in them at that time, why would we not be interested at this time if they're accretive to the portfolio? APE was a great acquisition opportunity, and we have a great partner in CPP that we've done several deals with, and their appetite, as I mentioned on the prepared remarks, as our other two JV partners' appetite is still very strong both for commercial assets. Just maybe one follow-up on the value add. Obviously, you saw deals last year. They're still in the market. Are you seeing more or having more off-market conversations just about more of those deals happening? Are we turning that corner yet or is that still a little bit way in front of us? I think you're seeing more value add deals now than when we maybe talked about it at our last call, or for sure at our summer call, where really nobody was prepared to put a value add deal because there was zero bids out there and the price differentiation was so extreme. There may be a little bit of what I would consider desperateness from some sellers that want to get out, and they are mostly, you're spot on. Those conversations are off market. They're not marketed deals. We're seeing more and there's a few attractive opportunities that we're underwriting. I'm anticipating that that could be a good opportunity for a company like Hudson. Great. Thanks. If you just follow up for Art, if I could. Art, you went through the lease economics for the fourth quarter. You talked about healthy economics overall. It looked like there was a bigger kind of maybe TI package this quarter that hit and maybe weighed on some portion of those numbers. Correct me if I'm wrong, or maybe explain the outlier. Sure. Yeah. If I could repeat, on a blended basis, we're actually, our TI and leasing commissions were down $21. If you're focused on the new deals, yes. That was the Rivian deal, which we were building the space from really raw space up to a warm shell where the tenant took it. Preponderance of our space is not in that condition. It's usually kind of ready move-in space. That was the outlier. That's helpful. Thanks all. Our next question comes from the line of Emmanuel Korchman with Citi. Please proceed with your question. Hey, it's Mike Gorman here with Manny. Victor, just two questions. The first on Alex and Josh. Did they not have non-competes, or are they just not competing in their new venture with you? When you say you're going to provide them all the support, are you capitalizing their venture in any way or providing them any capital? Can I just take this, Mark? Can I just take the initial question, Victor, the latter. On non-competes, California does not it's pretty employee friendly state as law goes. There is no such thing as enforceable non-competes. Typical arrangements, this would be the case not just with respect to Alex or Josh or candidly any executive, is we have standard non-solicitations. We have standard confidentiality clauses. Not that it would ever be necessary in this case because as Victor's outlined that all of our agreements also have things like non-disparagement clauses. These standard clauses. That's about what you can do in California, that's what our typical agreements have. Yeah. Then in terms of the latter part of the question, listen, they're not looking in our markets currently today. They're looking in the Sun Belt and other marketplaces. The answer to the capitalization is, if they came to us with opportunities, of course, since we trust them and like them, we would obviously entertain it. Not to say that we're going to do any assurances that we would do it, we would obviously help them out in any way. Then second question, just in terms of capital deployment, Victor, I know there's a lot of different buckets you can deploy capital. Obviously you've done the share buybacks given the significant discount to NAV. You're obviously doing development and activating as much of the pipeline for the future as possible. There's redevelopment. You talked in the last question about the value add opportunities that you're looking at. How does the buying of stabilized assets, even with a joint venture partner, how does that sort of marry up with really the value side of all those other activities? I guess why put money in? Is it a market share? Is it supporting your joint venture partner? Just help us understand that part of your capital deployment when all those other activities that you have in front of you seem better sort of return opportunities. Listen, I know where you're getting at on that, and specific to that, I think each opportunity will stand alone, and we're going to make the right decisions. You're right. I mean, we are heavily weighted on value add and development. That's not going to dissipate in terms of our game plan and what we're currently working on as we speak. In terms of Eighth, that was a conscious decision on threefold. One, in no particular order. It was a relationship with the tenant being Amazon and our exceptional relationship with them, and it's enhancing that going forward given what we have with them in that market and other markets. It's a Class A asset with them for 10+ years. The new CEO's office just happened to be in our project, and it was a great opportunity for us to capitalize on. Two, you mentioned it. It is a JV structure with an existing partner that we are 55/45, which is the standard deal that we do with them. Three, the economics around that transaction were effectively great. I mean, we did an L plus, I think, 170 loan for 50% of the transaction, where effectively gets us our going-in yield somewhere in the mid-sevens or so, going up. The capital deployment is minimal for us over the next 10 years. It wasn't, "Hey, this is a stabilized deal. Why are you buying a bond?" It was a combination of, I think, all three of those things. Okay. Thanks for the color, Victor. You got it. Our next question comes from the line of Richard Anderson with SMBC. Please proceed with your question. Thanks, thanks for hanging a little bit longer. I just had a quick question related to what you said, Victor, earlier. You're negotiating a bunch of potential opportunities in the studio space. You mentioned both development and acquisition opportunities. I'm wondering about kind of repurposed real estate or re-entitled real estate. Is that something that the studio business can kind of come to the rescue of some see-through assets that are out there, whether it's the anchor space of a department store in an old mall or even an industrial asset that's probably obsolete by now? Are these opportunities that you could see studios kind of expand that way, or am I just barking up the wrong tree? Listen, I think, Rich, you are commenting on something that people have been looking at. As have we, and we have not looked at it and said this is absolutely a non-starter. The cost return analysis for non-purpose-built studios is still very challenging, and the quality is challenging. Now, I do want to caution, and this is in no way of me hedging but saying, "Hey, does that mean Hudson's doing this or not?" The level of technology in the entertainment and media business that is evolving may avail themselves for this, given that smaller size stages for certain types of technological filming and the likes of that could be applicable for conversion space like that. In terms of a quote unquote savior to existing space that is not purpose-built and at the end of the day is void given the change of the economic structure, I don't see that as a mainstream for that business. Okay. That's all I have. Thanks very much. Thanks, Rich. There are no further questions in the queue. I'd like to hand the call back to management for closing remarks. Thank you so much, and I appreciate the interest in Hudson again this quarter, and the entire Hudson team appreciates all the support by everybody in the call. Have a great rest of your day, and everybody be safe. Thanks so much, operator. Bye-bye. Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time. Have a wonderful day.