Company: HPP
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001482512-25-000043
Chunk: 19

Company: Hudson Pacific Properties, Inc.
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 2
Chunk 19
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 represents the management fee income earned from our unconsolidated real estate entities. The increase in fee income is primarily driven by an increase in construction activity at the Sunset Pier 94 Studios development during the three months ended March 31, 2025. 

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 March 31,20252024Dollar ChangePercent ChangeGross interest expense(1)$49,127 $50,656 $(1,529)(3.0)%Capitalized interest(10,080)(8,482)(1,598)18.8 Non-cash interest expense(2)4,458 1,915 2,543 132.8 TOTAL$43,505 $44,089 $(584)(1.3)%

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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 3.0%, to $49.1 million for the three months ended March 31, 2025 compared to $50.7 million for the three months ended March 31, 2024. The decrease was driven by lower reference rates on our floating rate debt during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.

Capitalized interest increased by $1.6 million or 18.8%, to $10.1 million for the three months ended March 31, 2025 compared to $8.5 million for the three months ended March 31, 2024. The increase was primarily driven by capitalized interest at Sunset Glenoaks Studios, which was not a consolidated property during the three months ended March 31, 2024 but was a consolidated property during the three months ended March 31, 2025.

Non-cash interest expense increased by $2.5 million, or 132.8%, to $4.5 million for the three months ended March 31, 2025 compared to $1.9 million for the three months ended March 31, 2024. The increase in non-cash interest expense was primarily related to the amortization of an interest rate cap premium during the three months ended March