- Hudson Pacific signed 558K SF of new office leases in Q2, on pace for its best leasing year since 2019.
- Office occupancy remains at 75.1%, but San Francisco saw its biggest quarterly occupancy gain in seven years.
- California’s film and TV tax credit cap jumped to $750M, expected to boost studio demand by late 2025.
- HPP reported an $83M net loss, citing cost cuts and asset write-downs tied to its Quixote studio operations.
Hudson Pacific Properties (HPP) is finding reasons for optimism after years of pandemic-era leasing headwinds, reports Bisnow. In Q2 2025, the Los Angeles-based REIT signed 558K SF of new office leases. Year-to-date leasing totals reached 1.2M SF. Executives say this momentum could make 2025 the company’s best leasing year since 2019.
Office Recovery Signs
Despite the strong leasing activity, occupancy in HPP’s office portfolio dipped year-over-year to 75.1% from 78.7%, while space leased fell from 80% to 76.2%. The bright spot came from Northern California. Tech and AI tenants pushed San Francisco to its biggest quarterly occupancy gain in seven years. This marked a third straight quarter of positive net absorption.. Silicon Valley properties also improved for a third consecutive quarter.
Get Smarter about what matters in CRE
Stay ahead of trends in commercial real estate with CRE Daily – the free newsletter delivering everything you need to start your day in just 5-minutes
Financial Pressures And Cost Cuts
The quarter closed with an $83M net loss attributable to common shareholders, up from a $74M loss in Q1. HPP cited revenue impacts and accelerated depreciation tied to Quixote lease terminations and the disposal of obsolete fleet equipment. The company has exited Quixote leases since January and laid off 82 employees at those facilities in July.
Studios Face Slow Rebound — But Help Is Coming
HPP’s studio segment is still recovering from the post-strike production slowdown, with soundstage occupancy at 63% in Q2, down from 76.1% a year ago. However, excluding the newly completed Sunset Glen Oaks campus, leasing would have reached 80%. Statewide, 134 productions were in development in Q2 — the highest since before the 2023 strikes — and pilot shoot days rose 11% year-to-date.
In July, California Gov. Gavin Newsom signed legislation boosting the state’s film and TV tax credit program from $330M to $750M. The move is aimed at luring productions back to the state. HPP expects to feel the impact as early as Q4 once productions secure credits.
Investor Confidence
In June, global asset manager Cohen & Steers invested $300M in HPP stock. The move signaled a bet on a gradual West Coast office market recovery.
Why It Matters
Leasing momentum in HPP’s office portfolio, combined with expanded film incentives, could mark a turning point. The company is balancing long-term recovery efforts in both its office and studio divisions.
