Hudson Pacific Properties, Inc. (HPP): A Bull Case Theory

We came across a bullish thesis on Hudson Pacific Properties, Inc. on Cundill Deep Value’s Substack by FRAGMENTS. In this article, we will summarize the bulls’ thesis on HPP. Hudson Pacific Properties, Inc.’s share was trading at $9.49 as of January 14th. HPP’s trailing and forward P/E were 159.93 and 6.32 respectively according to Yahoo Finance.

Hudson Pacific Properties (HPP) represents a rare intersection of high-quality West Coast creative office and Hollywood studio real estate with a capital structure under significant stress, creating a stark disconnect between intrinsic asset value and current market pricing. The company owns approximately $6.3 billion in net real estate and $1.2 billion in land at cost, yet the market is valuing its equity at roughly $0.8 billion, implying a 0.25× price-to-book ratio pre-reverse split. Q3 2025 results highlight the pressures: total revenue declined to $186.6 million from $200.4 million a year ago, same-store cash NOI fell to $89.3 million versus $100 million, and net loss attributable to common shareholders was $136.5 million, or $0.30 per share.

HPP maintains total assets of $7.8 billion, equity of $3.4 billion, and debt of roughly $3.9–4.0 billion, with net debt of $3.7–3.8 billion, while working capital sits at $200 million and liquidity at $1.0 billion. Notably, 100% of debt is fixed or capped, with no maturities until H2 2026, and the company recently completed a $600 million equity raise and a 1-for-7 reverse stock split. The disconnect between book value and market valuation suggests a deep-value opportunity if the capital structure survives the next year. Key hidden assets include Blackstone’s $1.65 billion studio JV, land held at historical cost with potential upside, and development rights offering optionality.

The West Coast office cycle remains challenged, but studios and development platforms provide long-term optionality, while the reverse split and recapitalization stabilize near-term financials. With multiple catalysts, including SOTP recognition and potential upside in hidden or undervalued assets, HPP presents a compelling investment case for long-term investors focused on deeply discounted, high-quality real estate with meaningful optionality.

Previously, we covered a bearish thesis on Hudson Pacific Properties, Inc. (HPP) by Waterboy Investing in September 2024, which highlighted the company’s over-leveraged office portfolio, falling occupancy in Bay Area Class A offices, looming debt maturities, and management missteps. HPP’s stock price has appreciated by approximately 80.76% since our coverage due to recapitalization efforts and recognition of hidden value. FRAGMENTS shares a contrarian view but emphasizes optionality in creative offices, Hollywood studios, and land assets as key upside drivers.

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Disclosure: None.