In order to leverage its portfolio repositioning and leasing capability, Hudson Pacific Properties, Inc. (HPP), a real estate investment trust (:REIT), recently announced the completion of the acquisition of a property -- Olympic-Bundy Media Campus -- situated in West Los Angeles. The company has acquired the property for $89.0 million from Stonebridge Holdings Inc.
Positioned at the corner of 1901, 1925 and 1933 South Bundy Drive and 12333 West Olympic Boulevard, Olympic-Bundy Media Campus comprises 11.55 acres along with four existing buildings which span a total of approximately 233,600 square feet. Of the total building space, around 84,200 square feet is available for office tenancy. The remaining space is scheduled to be refurbished to construct high-class office space.
The available office space is currently 64% leased to The Rubicon Project, all the way through to May 2013. The renovation activity on the remaining 149,400 square feet of space is intended to make the most of rising demand of technology, entertainment and media tenants in the West Los Angeles Market. The activity is expected to end by early 2014.
The West Los Angeles office market comprises around 56 million square feet, with major concentration in the area focused in the Los Angeles Basin. The market already boasts a cluster of high-end firms related to the sectors which cater to entertainment, digital media, software and finance in the midst of some of the most prosperous neighborhoods.
Some of the major corporations – such as Activision Blizzard, Inc. (ATVI), Electronic Arts Inc. (EA) and Sony Corporation (SNE) – have a strong presence in the market. The demand for office space in this market has been generally strong since 1985 with an average of 710,000 square feet annually which represents 2.4% annual growth in occupied space.
Hudson Pacific is focused on ownership, operation and acquisition of high-quality office properties and state-of-the-art media and entertainment properties primarily in North and South California. In keeping with this, the company mostly targets high barrier-to-entry, in-fill locations with favorable, long-term supply-demand characteristics in markets such as Los Angeles, Orange County, San Diego and San Francisco.
As of June 30, 2012, Hudson Pacific's portfolio consists of property spanning approximately 5.0 million square feet of space, which comprises total office space of around 3.8 million square feet.
Hudson Pacific currently carries a Zacks #3 Rank, which translates into a short-term Hold rating. We also have a long-term Neutral recommendation on the stock.
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