Company: HPP
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001482512-25-000126
Chunk: 25

Company: Hudson Pacific Properties, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 25
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 ended June 30, 2024. The change was primarily driven by mark-to-market adjustments for an interest rate swap that does not qualify for hedge accounting.

Fee income

There was no significant change in fee income. We recognized fee income of $2.8 million for the six months ended June 30, 2025 compared to $2.5 million for the six months ended June 30, 2024. Fee income represents the management fee income earned from our unconsolidated real estate entities. 

Interest expense

The following table presents a reconciliation from gross interest expense to the interest expense line item on the Consolidated Statements of Operations:Six Months Ended June 30,20252024Dollar ChangePercent ChangeGross interest expense(1)$102,264 $103,733 $(1,469)(1.4)%Capitalized interest(20,352)(19,394)(958)4.9 Non-cash interest expense(2)9,730 3,909 5,821 148.9 TOTAL$91,642 $88,248 $3,394 3.8 %

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1.Includes interest on the Company’s debt and hedging activities.

2.Includes the amortization of deferred financing costs and fair market value adjustments for our mark-to-market interest rate derivatives.

Gross interest expense decreased by $1.5 million, or 1.4%, to $102.3 million for the six months ended June 30, 2025 compared to $103.7 million for the six months ended June 30, 2024. The decrease was driven by the repayment of the Series B, C and D notes and lower reference rates on our floating rate debt during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024. The decrease was partially offset by interest expense related to the Office Portfolio CMBS loan, which was obtained during the first quarter of 2025, as well interest expense on the Sunset Glenoaks Studios loan, which became a consolidated entity during the second quarter of 2025.

Capitalized interest increased by $1.0 million, or 4.9%, to $20.4 million for the six months ended June 30, 2025 compared to $19.4 million for the six months ended June 30, 2024. The increase was primarily driven by development activity at Washington 1000 and Sunset