Earnings release
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Hudson Pacific Properties , Inc. Press Release Hudson Pacific Properties Reports Second Quarter 2026 Financial Results - - Executed 1.3 Million Square Feet of Office Leases – - In - Service Office Occupancy Up 470 bps - - $ 876 Million of Total Liquidity - - Full - Year Guidance Raised - UDSON PACIFIC PROPERTIES LOS ANGELES ( August 5 , 2026 ) —Hudson Pacific Properties , Inc. ( NYSE : HPP ) ( the " Company , " " Hudson Pacific , " or " HPP " ) today announced financial and operating results for the second quarter 2026 . Victor Coleman , Hudson Pacific's CEO and Chairman , commented , " Our second quarter results reflect the continued execution of our strategy to drive occupancy and unlock the earnings power of our portfolio . We delivered our fourth consecutive quarter of in - service office occupancy gains , up 470 basis points to 82.5 % , and executed 1.3 million square feet of office leases , headlined by 891,000 square feet of new and renewal leases with the City and County of San Francisco . This landmark transaction underscores the enduring appeal of our portfolio and provides nearly a quarter century of cash flow visibility . We increased Core FFO on a per share basis by 30 % to $ 0.35 , while growing same - store cash NOI by 7.5 % , further evidence that our occupancy gains are translating directly into earnings growth . " Our studio business also continued to make progress , highlighted by our Hollywood stages , which remained effectively fully leased at 95.5 % . We stayed disciplined on capital allocation , ending the quarter with $ 876 million of total liquidity while continuing to prune non - core assets . With a reloaded 2.4 million - square - foot leasing pipeline , and broad demand from Al , other technology and professional services tenants alike building across our West Coast markets , we are confident in our path toward sustained FFO per share growth . " Financial Results Compared to Second Quarter 2025 • • • • Total revenue of $ 188.3 million compared to $ 190.0 million , primarily due to asset dispositions , partially offset by improved office occupancy General and administrative expenses of $ 12.0 million , improved from $ 13.5 million ( excluding $ 14.3 million of one - time expenses in the prior year associated with cancellation of non - cash compensation agreements ) , driven by ongoing cost savings initiatives Core FFO grew to $ 23.1 million , or $ 0.35 per diluted share , compared to $ 8.0 million , or $ 0.27 per diluted share , up approximately 30 % on a per share basis о Adjustments to FFO totaled $ 7.5 million , or $ 0.11 per diluted share , compared to $ 19.2 million , or $ 0.64 per diluted share FFO increased to $ 15.6 million , or $ 0.24 per diluted share , up from $ ( 11.2 ) million , or $ ( 0.38 ) per diluted share AFFO improved to $ ( 3.2 ) million , or $ ( 0.05 ) per diluted share , up from $ ( 6.1 ) million , or $ ( 0.20 ) per diluted share , driven by stronger Core FFO , partially offset by the timing of capital expenditures associated with lease - up activity Same - store cash NOI of $ 90.2 million grew 7.5 % from $ 83.9 million , driven by higher office and studio occupancy
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Hudson Pacific Properties, Inc. Press Release Office Leasing • Executed 56 leases totaling 1.3 million square feet (61% new / 39% renewal), headlined by 891,000 square feet of new and renewal leases signed with the City and County of San Francisco at 1455 Market with a weighted average 24-year term ◦ Executed 402,000 square feet (71% new / 29% renewal) across the broader portfolio excluding the City and County leases, including additional notable leases: ▪ 39,000-square-foot, 9-year new lease at 83 King in Pioneer Square; ▪ 28,000-square-foot, 5-year new lease at Hill7 in Denny Triangle; ▪ 26,000-square-foot, 9-year new lease at Page Mill Hill in Palo Alto; and ▪ 20,000-square-foot, 3-year new lease at Shorebreeze in Redwood Shores • GAAP rents on new leases signed increased 17.2% compared to prior levels while cash rents were down 11.4%, largely due to the City and County leases at 1455 Market ◦ Excluding the City and County leases, GAAP and cash rents were down 3.3% and 9.9%, respectively, due to re-leasing activity on space previously signed at pre-pandemic peak rents in Palo Alto • In-service office portfolio occupancy improved for the fourth consecutive quarter to 82.5% (up sequentially from 77.8%) and leased rate rose to 82.8% (up sequentially from 78.4%) Studio Leasing • In-service studio stages were 74.6% leased on a trailing three-month basis (up sequentially from 72.8%) and 74.6% on a trailing 12-month basis (up sequentially from 72.5%) ◦ Reflects Hollywood studios' continued strong performance with stages 95.5% leased; Sunset Pier 94 Studios reached 78.5% leased (up sequentially from 38.8%) Dispositions • Subsequent to quarter-end, sold 2001 Gateway, a 161,000-square-foot, 55% leased office building, part of the Gateway office complex in North San Jose, for $25 million with net proceeds used for general corporate purposes Balance Sheet as of June 30, 2026 • Total liquidity of $876.1 million consisting of $80.8 million in unrestricted cash and cash equivalents and full availability of $795.3 million under the unsecured revolving credit facility • Net debt to undepreciated book value of 32.4% (HPP's share), with 100.0% of debt fixed or capped at a weighted average interest rate of 4.9% and one remaining 2026 maturity Dividend • The Board of Directors declared and paid a dividend of $0.296875 per share on the 4.750% Series C cumulative preferred stock 2026 Outlook Hudson Pacific is increasing its full-year 2026 Core FFO outlook to $1.12 to $1.20 per diluted share, from the prior range of $1.10 to $1.18. This updated range excludes the previously announced closures of Quixote's stage and Atlanta operations and the associated stage ancillary and pro-supplies segments from Core FFO. This outlook reflects management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels and the earnings impact of events referenced in this press release and in earlier announcements. It otherwise excludes any impact from new acquisitions, dispositions, debt financings, amendments or repayments, recapitalizations, capital markets activity or
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Hudson Pacific Properties, Inc. Press Release similar matters. There can be no assurance that actual results will not differ materially from these estimates. The table below reflects key assumptions for this outlook: Unaudited, in thousands Full-Year 2026 Assumptions Metric Low High Average in-service office occupancy 80.0% 82.0% Growth in same-store cash NOI (1.75)% (0.75)% GAAP non-cash revenue $11,500 $16,500 GAAP non-cash expense $(6,000) $(8,000) General and administrative expenses $(48,500) $(54,500) Interest expense $(150,000) $(160,000) Non-real estate depreciation and amortization $(12,000) $(14,000) FFO from unconsolidated joint ventures $500 $2,500 FFO attributable to non-controlling interests $(22,000) $(26,000) FFO attributable to preferred units/shares $(20,000) $(20,000) Weighted average common stock/units outstanding—diluted 65,000 66,000 (1) Same-store defined as consolidated 37 office properties and three studio properties owned and stabilized as of January 1, 2025, and anticipated to be owned and stabilized through December 31, 2026. (2) See non-GAAP information below for cash NOI definition. (3) Includes non-cash straight-line rent, above/below-market rents and lease incentives associated with studio and office properties. (4) Includes non-cash straight-line rent expense and above/below-market ground rent associated with studio and office properties. (5) Includes estimated $6.9 million of non-cash compensation expense. (6) Includes estimated $6.0 million of non-cash interest expense. (7) Diluted shares represent Company ownership through shares of common stock, OP Units and other convertible or exchangeable instruments. Weighted average fully diluted common stock/units outstanding for 2026 includes estimated dilution of stock grants to executives under long-term incentive programs. This estimate is based on award potential as of the end of the most recently completed quarter, calculated in accordance with ASC 260, Earnings Per Share. The Company does not provide a reconciliation for non-GAAP estimates on a forward-looking basis, where it is unable to provide a meaningful or accurate calculation or estimation of reconciling items and the information is not available without unreasonable effort. This is due to the inherent difficulty of forecasting the timing and/or amount of various items that would impact net income attributable to common stockholders per diluted share, which is the most directly comparable forward-looking GAAP financial measure. This includes, for example, acquisition costs and other non-core items that have not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. For the same reasons, the Company is unable to address the probable significance of the unavailable information. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. Supplemental Information Supplemental financial information regarding Hudson Pacific's second quarter 2026 results may be found on the Investors section of the Company's website at HudsonPacificProperties.com. This supplemental information provides additional detail on items such as property occupancy, financial performance by property and debt maturity schedules. Conference Call The Company will hold a conference call to discuss second quarter 2026 financial results at 9:00 a.m. PT / 12:00 p.m. ET on August 5, 2026. The conference call will be available via live audio webcast on the Investors section of the Company's website at HudsonPacificProperties.com. A replay of the audio webcast will also be available following the call. (1)(2) (3) (4) (5) (6) (7)
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Hudson Pacific Properties, Inc. Press Release About Hudson Pacific Properties Hudson Pacific Properties (NYSE: HPP) is a real estate investment trust serving dynamic tech and media tenants in global epicenters for these synergistic, converging and secular growth industries. Hudson Pacific’s unique and high-barrier tech and media focus leverages a full-service, end-to-end value creation platform forged through deep strategic relationships and niche expertise across identifying, acquiring, transforming and developing properties into world-class amenitized, collaborative and sustainable office and studio space. For more information visit HudsonPacificProperties.com. Forward-Looking Statements 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 the Company's control, which may cause actual results to differ significantly from those expressed in any forward-looking statement. All forward- looking statements reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance. Furthermore, the Company 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 the Company's future results to differ materially from any forward-looking statements, see the section entitled "Risk Factors" in the Company'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 the Company from time to time with the SEC. Investor Contact Laura Campbell Executive Vice President, Investor Relations & Marketing (310) 622-1702 lcampbell@hudsonppi.com Media Contact Laura Murray Vice President, Communications (310) 622-1781 lmurray@hudsonppi.com (FINANCIAL TABLES FOLLOW)
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Hudson Pacific Properties, Inc. Press Release Consolidated Balance Sheets In thousands, except share data 6/30/26 12/31/25 (Unaudited) ASSETS Investment in real estate, at cost $ 7,786,264 $ 7,793,299 Accumulated depreciation and amortization (2,063,909) (1,953,048) Investment in real estate, net 5,722,355 5,840,251 Non-real estate property, plant and equipment, net 67,564 72,397 Cash and cash equivalents 80,760 138,358 Restricted cash 24,659 23,770 Accounts receivable, net 21,531 14,923 Straight-line rent receivables, net 205,153 195,425 Deferred leasing costs and intangible assets, net 388,879 307,390 Operating lease right-of-use assets 291,420 333,258 Prepaid expenses and other assets, net 85,833 86,607 Investment in unconsolidated real estate entities 250,595 246,835 Goodwill 8,754 8,754 Assets associated with real estate held for sale 22,903 — TOTAL ASSETS $ 7,170,406 $ 7,267,968 LIABILITIES AND EQUITY Liabilities Unsecured and secured debt, net $ 3,348,793 $ 3,351,458 Joint venture partner debt 66,136 66,136 Accounts payable, accrued liabilities and other 298,168 209,382 Operating lease liabilities 323,486 343,886 Intangible liabilities, net 15,776 17,772 Security deposits, prepaid rent and other 78,069 74,369 Liabilities associated with real estate held for sale 1,442 — Total liabilities 4,131,870 4,063,003 Redeemable preferred units of the operating partnership 2,795 2,795 Redeemable non-controlling interest in consolidated real estate entities 48,844 50,581 Equity HPP stockholders' equity: 4.750% Series C cumulative redeemable preferred stock, $0.01 par value, $25.00 per shareliquidation preference, 18,400,000 authorized; 17,000,000 shares issued and outstanding at 6/30/26and 12/31/25 425,000 425,000 Common stock, $0.01 par value, 103,200,000 authorized, 54,267,530 and 54,227,096 shares issuedand outstanding at 6/30/26 and 12/31/25, respectively. 529 529 Additional paid-in capital 2,390,943 2,548,488 Accumulated other comprehensive loss (2,126) (1,860) Total HPP stockholders' equity 2,814,346 2,972,157 Non-controlling interest—members in consolidated real estate entities 61,437 67,869 Non-controlling interest—units in the operating partnership 111,114 111,563 Total equity 2,986,897 3,151,589 TOTAL LIABILITIES AND EQUITY $ 7,170,406 $ 7,267,968
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Hudson Pacific Properties, Inc. Press Release Consolidated Statements of Operations Unaudited, in thousands, except per share data Three Months Ended Six Months Ended 6/30/26 6/30/25 6/30/26 6/30/25 REVENUES Office Rental revenues $ 149,599 $ 150,533 $ 294,827 $ 308,926 Service and other revenues 3,522 5,300 6,968 12,118 Total office revenues 153,121 155,833 301,795 321,044 Studio Rental revenues 13,489 13,889 27,286 27,541 Service and other revenues 21,688 20,280 41,069 39,876 Total studio revenues 35,177 34,169 68,355 67,417 Total revenues 188,298 190,002 370,150 388,461 OPERATING EXPENSES Office operating expenses 69,535 71,501 139,357 143,778 Studio operating expenses 34,139 36,552 65,848 77,533 General and administrative 12,002 27,776 24,577 46,259 Depreciation and amortization 82,133 94,751 162,855 187,836 Total operating expenses 197,809 230,580 392,637 455,406 OTHER (EXPENSES) INCOME Loss from unconsolidated real estate entities (959) (205) (1,396) (1,459) Fee income 964 1,476 2,071 2,835 Interest expense (38,476) (48,137) (76,470) (91,642) Interest income 566 2,123 2,215 2,558 Management services reimbursement income—unconsolidated real estateentities 1,098 1,123 2,222 2,098 Management services expense—unconsolidated real estate entities (1,098) (1,123) (2,222) (2,098) Transaction-related expenses (682) (451) (783) (451) Unrealized (loss) gain on non-real estate investments (840) 212 (2,802) (237) (Loss) gain on sale of real estate, net — (16) — 10,007 Impairment loss (50,440) — (50,440) (18,476) Loss on extinguishment of debt — (1,637) — (3,495) Loss on lease terminations and other (4,916) (93) (4,758) (85) Total other expenses (94,783) (46,728) (132,363) (100,445) Loss before income tax provision (104,294) (87,306) (154,850) (167,390) Income tax provision (394) (454) (742) (648) Net loss (104,688) (87,760) (155,592) (168,038) Net income attributable to Series A preferred units (44) (121) (88) (267) Net income attributable to Series C preferred shares (5,047) (5,047) (10,094) (10,094) Net loss attributable to non-controlling interest in consolidated real estateentities 1,847 6,675 3,457 14,142 Net loss attributable to redeemable non-controlling interest in consolidated realestate entities 1,029 895 1,730 1,797 Net loss attributable to common units in the operating partnership 2,331 2,209 2,884 4,603 NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ (104,572) $ (83,149) $ (157,703) $ (157,857) BASIC AND DILUTED PER SHARE AMOUNTS Net loss attributable to common stockholders—basic $ (1.62) $ (2.87) $ (2.45) $ (6.42) Net loss attributable to common stockholders—diluted $ (1.62) $ (2.87) $ (2.45) $ (6.42) Weighted average shares of common stock outstanding—basic 64,475 28,952 64,469 24,599 Weighted average shares of common stock outstanding—diluted 64,475 28,952 64,469 24,599
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Hudson Pacific Properties, Inc. Press Release Funds from Operations Unaudited, in thousands, except per share data Three Months Ended Six Months Ended 6/30/26 6/30/25 6/30/26 6/30/25 RECONCILIATION OF NET LOSS TO FUNDS FROM OPERATIONS (“FFO”) : Net loss $ (104,688) $ (87,760) $ (155,592) $ (168,038) Adjustments: Depreciation and amortization—consolidated 82,133 94,751 162,855 187,836 Depreciation and amortization—non-real estate assets (3,598) (8,785) (7,039) (18,434) Depreciation and amortization—HPP's share from unconsolidated real estateentities 1,727 1,113 3,203 2,158 Loss (gain) on sale of real estate, net — 16 — (10,007) Impairment loss—real estate assets 50,440 — 50,440 18,476 Unrealized loss (gain) on non-real estate investments 840 (212) 2,802 237 FFO attributable to non-controlling interests (6,162) (5,152) (12,875) (10,005) FFO attributable to preferred shares and units (5,091) (5,168) (10,182) (10,361) FFO to common stock/unit holders 15,601 (11,197) 33,612 (8,138) Adjustments: Transaction-related expenses 682 451 783 451 Refundable payroll tax credit interest income — — (543) — Prior-period property tax refund (1,709) — (2,247) — Non-cash compensation agreements forfeiture — 14,280 — 14,280 Loan swap non-cash reevaluation — — (488) 682 Early debt repayment expenses — 3,213 — 5,071 Quixote fleet assets write-off (cost-savings initiatives) — 626 — 626 Quixote non-competition agreement termination (cost-savings initiatives) — — — 1,402 Non-core Quixote lease terminations 5,011 622 5,011 6,487 Non-core Quixote Studios & Services 3,552 — 3,552 — Core FFO to common stock/unit holders $ 23,137 $ 7,995 $ 39,680 $ 20,861 Weighted average common stock/units outstanding—diluted 65,684 29,773 65,722 48,691 FFO per common stock/unit—diluted $ 0.24 $ (0.38) $ 0.51 $ (0.17) Core FFO per common stock/unit—diluted $ 0.35 $ 0.27 $ 0.60 $ 0.43 (1) We calculate Funds from Operations ("FFO") in accordance with the White Paper on FFO approved by the Board of Governors of the National Association of Real Estate Investment Trusts. The White Paper defines FFO as net income or loss calculated in accordance with generally accepted accounting principles in the United States (“GAAP”), excluding gains and losses from sales of depreciable real estate and impairment write-downs associated with depreciable real estate, plus the HPP’s share real estate-related depreciation and amortization, excluding amortization of deferred financing costs and depreciation of non-real estate assets. The calculation of FFO includes the HPP’s share amortization of deferred revenue related to tenant-funded tenant improvements and excludes the depreciation of the related tenant improvement assets. FFO is a non-GAAP financial measure we believe is a useful supplemental measure of our operating performance. The exclusion from FFO of gains and losses from the sale of operating real estate assets allows investors and analysts to readily identify the operating results of the assets that form the core of our activity and assists in comparing those operating results between periods. Also, because FFO is generally recognized as the industry standard for reporting the operations of REITs, it facilitates comparisons of operating performance to other REITs. However, other REITs may use different methodologies to calculate FFO, and accordingly, our FFO may not be comparable to all other REITs. Implicit in historical cost accounting for real estate assets in accordance with GAAP is the assumption that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered presentations of operating results for real estate companies using historical cost accounting alone to be insufficient. Because FFO excludes depreciation and amortization of real estate assets, we believe that FFO along with the required GAAP presentations provides a more complete measurement of our performance relative to our competitors and a more appropriate basis on which to make decisions involving operating, financing and investing activities than the required GAAP presentations alone would provide. We use FFO per share to calculate annual cash bonuses for certain employees. However, FFO should not be viewed as an alternative measure of our operating performance because it does not reflect either depreciation and amortization costs or the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, which are significant economic costs and could materially impact our results from operations. (2) HPP's share is a Non-GAAP financial measure calculated as the measure on a consolidated basis, in accordance with GAAP, plus our Operating Partnership’s share of the measure from our unconsolidated joint ventures (calculated based upon the Operating Partnership’s percentage ownership interest), minus our partners’ share of the measure from our consolidated joint ventures (calculated based upon the partners’ (1) (1) (2)
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Hudson Pacific Properties, Inc. Press Release percentage ownership interests). We believe that presenting HPP’s share of these measures provides useful information to investors regarding the Company’s financial condition and/or results of operations because we have several significant joint ventures, and in some cases, we exercise significant influence over, but do not control, the joint venture. In such instances, GAAP requires us to account for the joint venture entity using the equity method of accounting, which we do not consolidate for financial reporting purposes. In other cases, GAAP requires us to consolidate the venture even though our partner(s) own(s) a significant percentage interest.
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Hudson Pacific Properties, Inc. Press Release Adjusted Funds from Operations Unaudited, in thousands, except per share data Three Months Ended Six Months Ended 6/30/26 6/30/25 6/30/26 6/30/25 Core FFO $ 23,137 $ 7,995 $ 39,680 $ 20,861 Adjustments: GAAP non-cash revenue (3,382) (3,704) (6,560) (4,375) GAAP non-cash expense 1,660 1,788 3,545 3,492 Non-real estate depreciation and amortization 3,598 8,159 7,039 16,406 Non-cash interest expense 1,716 5,065 3,627 9,174 Share/unit-based compensation expense 1,521 3,584 3,433 8,699 Recurring capital expenditures, tenant improvements and lease commissions (31,474) (28,957) (65,056) (58,615) AFFO $ (3,224) $ (6,070) $ (14,292) $ (4,358) Weighted average common stock/units outstanding—diluted 65,684 29,773 65,722 48,691 AFFO per common stock/unit—diluted $ (0.05) $ (0.20) $ (0.22) $ (0.09) (1) Adjusted Funds from Operations ("AFFO") is a non-GAAP financial measure we believe is a useful supplemental measure of our performance. We compute AFFO by adding to Core FFO HPP's share non-cash compensation expense and amortization of deferred financing costs, and subtractingrecurring capital expenditures related to HPP's share tenant improvements and leasing commissions (excluding pre-existing obligations on contributedor acquired properties funded with amounts received in settlement of prorations), and eliminating the net effect of HPP’s share straight-line rents, amortization of lease buy-out costs, amortization of above- and below-market lease intangible assets and liabilities, amortization of above- and below-market ground lease intangible assets and liabilities and amortization of loan discounts/premiums. AFFO is not intended to represent cash flow for the period. We believe that AFFO provides useful information to the investment community about our financial position as compared to other REITs sinceAFFO is a widely reported measure used by other REITs. However, other REITs may use different methodologies for calculating AFFO and, accordingly, our AFFO may not be comparable to other REITs.(2) Includes non-cash straight-line rent, above/below-market rents and lease incentives associated with studio and office properties.(3) Includes non-cash straight-line rent expense and above/below-market ground rent associated with studio and office properties. (1) (2) (3)
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Hudson Pacific Properties, Inc. Press Release Net Operating Income Unaudited, in thousands Three Months Ended 6/30/26 6/30/25 RECONCILIATION OF NET LOSS TO NET OPERATING INCOME (“NOI”) AND SAME-STORE CASHNET OPERATING INCOME ("NOI") Net loss $ (104,688) $ (87,760) Adjustments: Loss from unconsolidated real estate entities 959 205 Fee income (964) (1,476) Interest expense 38,476 48,137 Interest income (566) (2,123) Management services reimbursement income—unconsolidated real estate entities (1,098) (1,123) Management services expense—unconsolidated real estate entities 1,098 1,123 Transaction-related expenses 682 451 Unrealized loss (gain) on non-real estate investments 840 (212) Loss on sale of real estate, net — 16 Impairment loss 50,440 — Loss on extinguishment of debt — 1,637 Loss on lease terminations and other 4,916 93 Income tax provision 394 454 General and administrative 12,002 27,776 Depreciation and amortization 82,133 94,751 NOI $ 84,624 $ 81,949 NOI BREAKDOWN Same-store office cash revenues 149,229 145,647 Straight-line rent 5,459 1,751 Amortization of above/below-market leases, net 992 1,016 Amortization of lease incentive costs (3,657) (1,384) Same-store office revenues 152,023 147,030 Same-store studios cash revenues 19,733 15,525 Straight-line rent (209) 111 Amortization of above-market and below-market leases, net — — Amortization of lease incentive costs (9) (9) Same-store studio revenues 19,515 15,627 Same-store revenues 171,538 162,657 Same-store office cash expenses 66,608 66,821 Straight-line rent 317 367 Share/unit-based compensation expense 7 10 Amortization of above/below-market ground leases, net 641 641 Same-store office expenses 67,573 67,839 Same-store studio cash expenses 12,198 10,474 Share/unit-based compensation expense (35) 113 Same-store studio expenses 12,163 10,587 Same-store expenses 79,736 78,426 Same-store NOI 91,802 84,231 Non-same-store NOI (7,178) (2,282) NOI $ 84,624 $ 81,949 (1) We evaluate performance based upon property Net Operating Income ("NOI") from continuing operations. NOI is not a measure of operating results or cash flows from operating activities or cash flows as measured by GAAP and should not be considered an alternative to income from continuing operations, as an indication of our performance, or as an alternative to cash flows as a measure of liquidity, or our ability to make (1)
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Hudson Pacific Properties, Inc. Press Release distributions. All companies may not calculate NOI in the same manner. We consider NOI to be a useful performance measure to investors and management because when compared across periods, NOI reflects the revenues and expenses directly associated with owning and operating our properties and the impact to operations from trends in occupancy rates, rental rates and operating costs, providing a perspective not immediately apparent from income from continuing operations. We calculate NOI as net income (loss) excluding corporate general and administrative expenses, depreciation and amortization, impairments, gains/losses on sales of real estate, interest expense, transaction-related expenses and other non- operating items. We define NOI as operating revenues (rental revenues, other property-related revenue, tenant recoveries and other operating revenues), less property-level operating expenses (external management fees, if any, and property-level general and administrative expenses). NOI on a cash basis is NOI adjusted to exclude the effect of straight-line rent and other non-cash adjustments required by GAAP. We believe that NOI on a cash basis is helpful to investors as an additional measure of operating performance because it eliminates straight-line rent and other non-cash adjustments to revenue and expenses.