Hudson Pacific eyes permanent financing for $1.75 billion cash component of EOP acquisition

By Lisa Kerner

Charlotte, N.C., Dec. 8 – Hudson Pacific Properties, Inc. has a $1.75 billion bridge facility in place from Wells Fargo, Bank of America Merrill Lynch and Goldman Sachs to fund the cash component of its $3.5 billion acquisition of Equity Office Properties’ San Francisco Peninsula and Silicon Valley portfolio.

“However, we are already exploring several alternatives to fund the transaction’s cash component, including existing asset sales and/or joint ventures, new secured and unsecured financing, and the potential pursuit of an investment-grade rating,” said Hudson chairman and chief executive officer Victor J. Coleman during a conference call with analysts on Monday.

The cash and stock transaction also includes the issuance of about 63.5 million of Hudson common shares and operating partnership units directly to Blackstone.

Hudson is acquiring the portfolio from Blackstone Real Estate Partners V and VI. The transaction is expected to close in the first half of 2015.

Chief financial officer Mark Lammas said Hudson’s pro forma net debt to enterprise leverage will increase to 39.7%, from 26.9% at Sept. 30.

Pro forma net debt will increase to $2.6 billion, from $772 million at Sept. 30, according to the company’s presentation materials.

Hudson Pacific is a Los Angeles-based real estate investment trust focused on office and media and entertainment properties in California.

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