Company: HPP
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001482512-25-000150
Chunk: 81

Company: Hudson Pacific Properties, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 81
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 except square footage, share and unit data)

Interest ExpenseThe following table represents a reconciliation from gross interest expense to interest expense on the Consolidated Statements of Operations:Three Months Ended September 30,Nine Months Ended September 30,2025202420252024Gross interest expense(1)$48,743 $53,539 $151,007 $157,272 Capitalized interest(9,589)(10,521)(29,941)(29,915)Non-cash interest expense(2)2,572 1,987 12,302 5,896 INTEREST EXPENSE$41,726 $45,005 $133,368 $133,253 _________________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.

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.

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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)

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 September 30, 2025 and December 31, 2024:Fair Value Assets (Liabilities)Underlying Debt InstrumentType of InstrumentAccounting Policy(1)Notional AmountEffective DateMaturity DateInterest RateSeptember 30, 2025December 31, 20241918 EighthSwapMark-to-market(2)$172,865 February 2023October 20253.75%$31 $524 1918 EighthCapPartial cash flow hedge$314,300 June 2023December 2025(3)5.00%— 62 191