Company: HPP
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001482512-25-000150
Chunk: 120

Company: Hudson Pacific Properties, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 8
Chunk 120
---
 from unconsolidated real estate entities for the three months ended September 30, 2025 compared to a loss of $3.2 million for the three months ended September 30, 2024. The change was primarily driven by mark-to-

52

market adjustments for an interest rate swap that does not qualify for hedge accounting.

Fee income

We recognized fee income of $1.1 million for the three months ended September 30, 2025 compared to $1.4 million for the three months ended September 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 September 30,20252024Dollar ChangePercent ChangeGross interest expense(1)$48,743 $53,539 $(4,796)(9.0)%Capitalized interest(9,589)(10,521)932 (8.9)Non-cash interest expense(2)2,572 1,987 585 29.4 TOTAL$41,726 $45,005 $(3,279)(7.3)%

_________________

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 $4.8 million or 9.0%, to $48.7 million for the three months ended September 30, 2025 compared to $53.5 million for the three months ended September 30, 2024. The decrease was primarily related to a lower outstanding balance on the unsecured line of credit, the 2025 repayments of the Element LA loan and Series B, C and D notes, a decrease in both the principal amount and the interest rate on the 1918 Eighth loan as a result of its refinancing and lower reference rates on our floating rate debt. The decrease was partially offset by the interest expense related to the Office Portfolio CMBS loan, which was obtained in March 2025. 

Capitalized interest decreased by $0.9 million or 8.9%, to $9.6 million for the three months ended September 30, 2025 compared to $10.5 million for the three months ended September