Hudson uses funds from preferreds, revolver draw to buy Amazon lease

By Devika Patel

Knoxville, Tenn., Dec. 23 – Hudson Pacific Properties, Inc. used some funds from $425 million of recently sold preferreds and drew $75 million under its revolving credit facility to fund the acquisition of a leasehold interest in a 197,000-square-foot office building in Seattle for $119 million.

The property’s office component, which comprises approximately 192,000 square feet, is fully leased to Amazon.

Hudson Pacific priced $400 million, or 16 million shares, of $25-par series C cumulative redeemable preferred stock on Nov. 4, as previously reported.

On Dec. 2, underwriters partially exercised the 30-day $60 million greenshoe for an additional $25 million, or 1 million additional shares.

BofA Securities, Inc., Morgan Stanley & Co. LLC, Wells Fargo Securities, LLC and RBC Capital Markets, LLC were the joint bookrunners.

The dividend is 4.75%.

Dividends will be payable on the last day of March, June, September and December of each year, beginning on March 31, 2022.

The preferreds will be non-callable prior to November 2026, except in limited circumstances to preserve the company’s status as a real estate investment trust or within 120 days of a change of control.

If a change of control occurs, holders will have the right to convert the preferreds into common stock.

Operating partnership Hudson Pacific Properties, LP intends to use the proceeds to repay amounts outstanding under its revolving credit facility or other debt, to fund development or redevelopment activities, to fund potential acquisition opportunities, to provide funds for tenant improvements and capital expenditures, for working capital or for other general corporate purposes.

The series C preferreds were expected to be listed on the New York Stock Exchange under symbol “HPPPrC.”

Hudson Pacific is a Los Angeles-based REIT.

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