Hudson Pacific Properties: Market Perform Rating Amid Leasing Progress, Studio Uncertainty, and Persistent Vacancy Headwinds

In a report released today, John Kim from BMO Capital downgraded Hudson Pacific Properties to a Hold, with a price target of $11.00.

John Kim has given his Hold rating due to a combination of factors related to both company-specific and market headwinds. He notes that while Hudson Pacific Properties has demonstrated some progress in leasing, the company continues to grapple with elevated vacancy levels versus pre‑pandemic benchmarks and compressed office NOI margins. In addition, the studio segment faces meaningful uncertainty, with a key Netflix lease expiration and a looming CMBS maturity creating risk around cash flows and value realization.

Kim also highlights that Hudson Pacific Properties has been offering notably higher tenant concessions than most peers, which pressures economic returns even as headline leasing volumes improve. He expects the stock to trade at a discount to its underlying asset value until the company can deliver more durable earnings growth and greater clarity around its studio operations. Combined with ongoing macro weakness in core markets such as Los Angeles and San Francisco, these factors support a more neutral stance, reflected in his Market Perform (Hold) rating and revised $11 price target.

In another report released on January 5, Piper Sandler also maintained a Hold rating on the stock with a $11.00 price target.