Hudson Pacific IPO raises $210.5 million
The stock of Hudson Pacific Properties Inc., a real estate investment trust founded by Los Angeles investor Victor Coleman, closed up 2.4% from its initial offering price in its first day of trading on the New York Stock Exchange.
The company, based in West Los Angeles, said it priced its shares at $17 apiece and raised $210.5 million after fees in its initial public offering. Shares closed Thursday at $17.40.
Hudson Pacific, which trades under the ticker symbol HPP, said it intends to use the proceeds to repay mortgage debt, to fund acquisitions and for general corporate and working capital purposes.
The company owns several Southern California office buildings and specializes in buying properties catering to the entertainment industry. Among its largest holdings are Sunset Gower and Sunset Bronson studios, two of Hollywood’s oldest movie and television studios.
Coleman, Hudson Pacific’s chairman and chief executive, is the former president of Arden Realty Inc., a Los Angeles office landlord that was purchased by General Electric Co. in 2006 for $3.2 billion.
Coleman is expected to follow Arden’s strategy of acquiring non-trophy properties in Southern California markets that are slightly off the radar of large national and international investors. It already has office buildings in Encino, Torrance and Orange, for example.
“There is more risk in this sort of strategy, but it can work, and most of Hudson’s management team hails from Arden,” said Michael Knott, an analyst with Green Street Advisors. “The spotlight is now clearly on Victor Coleman, who was the No. 2 at Arden but will now have the opportunity to be ‘the guy’ at a public company.”
A key challenge will be to operate the two studios well, Knott said, because their incomes are less predictable than those of office buildings full of long-term tenants.
Sunset Gower Studios is the former headquarters of Columbia Pictures. Sunset Bronson Studios was the first home of Warner Bros.
