Company: HPP
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001482512-25-000126
Chunk: 18

Company: Hudson Pacific Properties, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 2
Chunk 18
---
 of $2.5 million for the three months 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 $1.5 million for the three months ended June 30, 2025 compared to $1.4 million for the three 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:

Three Months Ended June 30,20252024Dollar ChangePercent ChangeGross interest expense(1)$53,137 $53,077 $60 0.1 %Capitalized interest(10,272)(10,912)640 (5.9)Non-cash interest expense(2)5,272 1,994 3,278 164.4 TOTAL$48,137 $44,159 $3,978 9.0 %

_________________

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 remained relatively flat, at $53.1 million for the three months ended June 30, 2025 compared to $53.1 million for the three months ended June 30, 2024. The slight increase during the three months ended June 30, 2025 was primarily related to the interest expense related to the Office Portfolio CMBS loan, which was secured during the first quarter of 2025. The increase was offset by repayment of the Series B, C and D notes during the three months ended June 30, 2025, as well as lower reference rates on our floating rate debt. 

Capitalized interest decreased by $0.6 million or 5.9%, to $10.3 million for the three months ended June 30, 2025 compared to $10.9 million for the three months ended June 30, 2024 primarily due to the completion of the Sunset Glenoaks Studios development during the three months ended June 30, 2025. The decrease was partially offset by development activity at Washington 1000,