Office Recovery Signals New Opportunity For Hudson Pacific

Hudson Pacific sees a turning point in the West Coast office market, with occupancy and leasing rates climbing to levels not seen in over a decade.
Executives are preparing for rapid-fire sales, as valuations begin to rise amid a rebound in demand, especially from AI and VC-backed companies.
The REIT is targeting strategic dispositions to recycle capital into high-conviction assets, following a strong Q3 leasing performance and increased tenant demand.

Key Takeaways

Inflection Point For Office

Hudson Pacific Properties, a major West Coast office landlord, says the market is finally bouncing back, as reported by CoStar. In its latest earnings call, CEO Victor Coleman highlighted improving leasing momentum. He also noted strong demand from AI firms and venture capital-backed tenants as signs the office sector is stabilizing.

Hudson reported a Q3 leasing volume of nearly 550,500 SF, with occupancy reaching almost 76%. That’s close to its leased rate of 76.5%, leading the company to believe the market has reached an inflection point.

Fast And Furious Sales Ahead

As valuations tick up, the company is preparing a slate of office properties for potential sale. While details on specific assets weren’t disclosed, Coleman described a “list of a few assets” that are primed for disposition. He emphasized the pace of deal opportunities, noting they could come “fast and furious” as investors reenter the office market.

Shifting Strategy

Tenant space requirements are growing, with Hudson seeing a notable increase in average lease size. That shift is prompting the REIT to recalibrate its approach — balancing acquisitions and dispositions to match the evolving market dynamics.

One recent move: Hudson acquired the remaining 45% stake in Hill7, a Seattle office building at 1099 Stewart Street. Now with full ownership, the firm is positioning the property to benefit from increased touring and tenant interest in the recovering downtown Seattle market.

Why It Matters

Hudson’s renewed confidence in the office sector reflects broader optimism around the West Coast’s recovery, particularly in tech and AI-driven submarkets. For landlords, improved leasing and rising valuations could mark the beginning of a new cycle — one that favors selective sales and reinvestment in core assets.

With no pressure to sell, Hudson plans to maintain a disciplined and strategic approach to asset sales. The company aims to enhance shareholder value and reinvest proceeds into markets and properties with the strongest upside.

What’s Next

Hudson Pacific’s focus will remain on capital recycling and capturing momentum in its key markets, including San Francisco, Los Angeles, Seattle, and Silicon Valley. As the office market continues to stabilize, expect the REIT to remain active — both as a seller and a buyer — as it bets on a recovery led by innovation-sector demand.