Hudson Pacific Properties (HPP) risk factors, FY2025 10-K

Risks Related to Our Properties and Our Business

1. 01Our properties are located in Northern and Southern California, the Pacific Northwest, New York, Western Canada and Greater London, United Kingdom, and we are susceptible to adverse economic conditions, local regulations and natural disasters affecting those markets28% rewritten
2. 02We derive a significant portion of our rental revenue from tenants in the technology and media and entertainment industries, which makes us particularly susceptible to demand for rental space in those industries
3. 03We may be unable to identify and complete acquisitions of properties that meet our criteria, which may impede our growth
4. 04Our future acquisitions may not yield the returns we expect
5. 05We may acquire properties or portfolios of properties through tax deferred contribution transactions, which could result in stockholder dilution and limit our ability to sell such assets
6. 06Our growth depends on external sources of capital that are outside of our control and may not be available to us on commercially reasonable terms or at all
7. 07As of February 18, 2026, our consolidated debt was approximately $3.4 billion (excluding unconsolidated joint venture debt)New
8. 081.Excludes joint venture partner debt and unamortized deferred financing costs and loan discounts/premiumsNew
9. 09Failure to hedge effectively against interest rate changes may adversely affect our financial condition, results of operations, cash flow, cash available for distribution, including cash available for payment of dividends on and the per share trading price of our securities
10. 10Mortgage debt obligations expose us to the possibility of foreclosure, which could result in the loss of our investment in a property or group of properties subject to mortgage debt
11. 11Our unsecured revolving credit facility, registered senior notes, term loan facility and note purchase agreements restrict our ability to engage in some business activities28% rewritten
12. 12Further downgrades in our credit ratings could materially adversely affect our business and financial condition
13. 13We face significant competition, which may decrease or prevent increases in the occupancy and rental rates of our properties
14. 14We depend on significant tenants
15. 15We may be unable to renew leases, lease vacant space or re-let space as leases expire26% rewritten
16. 16We may be required to make rent or other concessions and/or significant capital expenditures to improve our properties in order to retain and attract tenants, causing our financial condition, results of operations, cash flow and per share trading price of our securities to be adversely affected
17. 17The actual rents we receive for the properties in our portfolio may be less than our asking rents, and we may experience lease roll-down from time to time
18. 18Some of our properties are subject to ground leases, the termination or expiration of which could cause us to lose our interest in, and the right to receive rental income from, such properties
19. 19Our success depends on key personnel whose continued service is not guaranteed
20. 20Some of our workforce is covered by collective bargaining agreements and our business may be adversely affected by any disruptions caused by union activities
21. 21Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on co-venturers’ financial condition and disputes between us and our co-venturers
22. 22If we fail to maintain an effective system of integrated internal controls, we may not be able to accurately report our financial results
23. 23Volatility in market and economic conditions may impact the accuracy of the various estimates used in the preparation of our financial statements and footnotes to the financial statementsNew
24. 24We have suspended paying dividends on our common stock and we cannot assure you of our ability to pay dividends in the future or the amount of any dividends
25. 25We cannot provide any assurance that our Quixote business will be able to fully respond to the challenging market conditions prevailing within the entertainment industryNew

Risks Related to the Real Estate Industry

1. 26Our performance and value are subject to risks associated with real estate assets and the real estate industry
2. 27Illiquidity of real estate investments could significantly impede our ability to respond to adverse changes in the performance of our properties and harm our financial condition
3. 28We could incur significant costs related to government regulation and litigation over environmental matters
4. 29Our properties may contain or develop harmful mold or suffer from other air quality issues, which could lead to liability for adverse health effects and costs of remediation
5. 30We may incur significant costs complying with various federal, state and local laws, regulations and covenants that are applicable to our properties
6. 31We are exposed to risks associated with property development and redevelopment

Risks Related to Our Organizational Structure

1. 32Our common stock is ranked junior to our series C preferred stock
2. 33Conflicts of interest exist or could arise in the future between the interests of our stockholders and the interests of holders of units in our operating partnership, which may impede business decisions that could benefit our stockholders
3. 34Our charter and bylaws, the partnership agreement of our operating partnership and Maryland law contain provisions that may delay, defer or prevent a change of control transaction, even if such a change in control may be in our interest, and as a result may depress the market price of our securities
4. 35Certain provisions in the partnership agreement of our operating partnership may delay or prevent unsolicited acquisitions of us
5. 36Our board of directors may change our investment and financing policies without stockholder approval and we may become more highly leveraged, which may increase our risk of default under our debt obligations
6. 37Our rights and the rights of our stockholders to take action against our directors and officers are limited
7. 38We are a holding company with no direct operations and, as such, we rely on funds received from our operating partnership to pay liabilities, and the interests of our stockholders are structurally subordinated to all liabilities and obligations of our operating partnership and its subsidiaries

Risks Related to Our Status as a REIT

1. 39Failure to qualify as a REIT would have significant adverse consequences to us and the value of our stock
2. 40In addition, legislation, new regulations, administrative interpretations or court decisions may materially adversely affect our investors, our ability to qualify as a REIT for federal income tax purposes or the desirability of an investment in a REIT relative to other investments
3. 41If our operating partnership were to fail to qualify as a partnership for federal income tax purposes, we would cease to qualify as a REIT and suffer other adverse consequences
4. 42The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions that would be treated as sales for federal income tax purposes
5. 43Our ownership of taxable REIT subsidiaries is subject to certain restrictions, and we will be required to pay a 100% penalty tax on certain income or deductions if our transactions with our taxable REIT subsidiaries are not conducted on arm’s length terms
6. 44To maintain our REIT status, we may be forced to borrow funds during unfavorable market conditions
7. 45Complying with REIT requirements may affect our profitability and may force us to liquidate or forgo otherwise attractive investments
8. 46Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends
9. 47The power of our board of directors to revoke our REIT election without stockholder approval may cause adverse consequences to our stockholders and unitholders
10. 48Legislative or other actions affecting REITs could have a negative effect on our investors and us

Risks Related to General and Global Factors

1. 49Adverse economic and geopolitical conditions and dislocations in the credit markets could have a material adverse effect on our financial condition, results of operations, cash flow and per share trading price of our securities
2. 50Epidemics, pandemics or other outbreaks, and restrictions intended to prevent their spread, could adversely impact our business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our debt service obligations and to pay dividends and distributions to security holders
3. 51Social, political, and economic instability, unrest, and other circumstances beyond our control could adversely affect our business operations
4. 52Potential losses, including from adverse weather conditions, natural disasters and title claims, may not be covered by insurance
5. 53We may become subject to litigation, which could have an adverse effect on our financial condition, results of operations, cash flow and the per share trading price of our securities
6. 54We face risks associated with security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (“IT”) networks and related systems25% rewritten
7. 55Our business and operations would suffer in the event of IT networks and related systems failures
8. 56Future terrorist activity or engagement in war by the United States may have an adverse effect on our financial condition and operating results