Hollywood Writers’ Strike Impacts Hudson Pacific Earnings
Hudson Pacific Properties, a commercial real estate firm that has pivoted to owning film production studios, said it’s not immune from the effects of the Hollywood writers strike.
In a conference call in connection with its first-quarter filings, the L.A.-based company said its financials have already been impacted by the Writers Guild of America strike — an ongoing labor dispute between the guild, which represents 11,500 writers, and the Alliance of Motion Picture and Television Producers, which represents major production companies such as Universal Pictures and Netflix.
Hudson Pacific’s studios and other related production services “experienced a significant slowdown in production activity as new scripted content was pre-emptively halted,” according to the earnings release on Monday.
From January through March, Hudson Pacific reported a $20.4 million net loss, up 3 percent from the same period last year. Its total revenues were $252 million in the first quarter, compared to $244.5 million in the first quarter of 2022.
The company’s stock price fell to $4.71 per share as of noon Eastern time on Monday morning — a 9 percent drop compared to when the market opened.
Hudson Pacific also reported $49.7 million in funds from operations — a decline from $75.2 million in the first quarter of last year.
Most of the shortfall was attributed to “lower production activity” impacting Quixote Studios, a production and studio company Hudson Pacific bought for $360 million last year. However, the firm acknowledged higher interest expenses and a dip in office occupancy also impacted its financials.
“We’re focused on what we can control,” CEO Victor Coleman said on the earnings call Tuesday morning.
Hudson Pacific is also looking to sell six assets, including a land parcel, and reducing its dividend by up to 50 percent, Coleman said on the earnings call, in an effort to boost its liquidity.
The firm has struggled with small and mid-size tenants leaving its office space, ending the quarter with an occupancy rate of 87 percent across its buildings. In the first quarter of 2022, its office portfolio was about 91 percent leased.
Revenues from the firm’s office portfolio dropped from $211 million in the first quarter of last year to $207 million in the first three months of this year, according to financial filings.
Hudson Pacific’s studio revenues, however, jumped slightly from $244 million in the first quarter of 2022 to $252 million in the same period this year.
