Company: HPP
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001482512-25-000126
Chunk: 82

Company: Hudson Pacific Properties, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 82
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103,733 Capitalized interest(10,272)(10,912)(20,352)(19,394)Non-cash interest expense(2)5,272 1,994 9,730 3,909 INTEREST EXPENSE$48,137 $44,159 $91,642 $88,248 _________________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.

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Table of ContentsHudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P.Notes to Unaudited Consolidated Financial Statements(Unaudited, tabular amounts in thousands, except square footage, share and unit data)

10. Derivatives

The Company enters into derivatives in order to hedge interest rate risk. Derivative assets are recorded in prepaid expenses and other assets and derivative liabilities are recorded in accounts payable, accrued liabilities and other on the Consolidated Balance Sheets.The Company has agreements with its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness. The Company’s derivatives are classified as Level 2 and their fair values are derived from estimated values obtained from observable market data for similar instruments.The fair market value of derivatives is presented on a gross basis on the Consolidated Balance Sheets. The following table summarizes the Company’s derivative instruments as of June 30, 2025 and December 31, 2024:Fair Value Assets (Liabilities)Underlying Debt InstrumentType of InstrumentAccounting PolicyNotional AmountEffective DateMaturity DateInterest RateJune 30, 2025December 31, 20241918 EighthSwapCash flow hedge$172,865 February 2023October 20253.75%$261 $524 1918 EighthCapPartial cash flow hedge(1)$314,300 June 2023December 20255.00%1 62 1918 EighthSold cap(2)Mark-to-market$172,865 June 2023December 20255.00%(1)(34)Hollywood Media Portfolio CMBSSwapCash flow hedge$351,186 August 2023June 20263.31%1,709 3,663 Hollywood Media Portfolio CMBSSwapCash flow hedge$180,000 February