Hudson Pacific Properties, a commercial real estate firm that has pivoted to owning movie production studios, said it was not immune to the Hollywood screenwriters’ strike.
In a conference call related to the first-quarter filing, the Los Angeles-based company said its finances have been impacted by the Writers Guild of America strike — an ongoing labor dispute between the association representing 11,500 writers and the Writers Guild of America Film and television producer representing major production companies such as Universal Pictures and Netflix.
Hudson Pacific’s studio and other related production services “slowed significantly production activity as new scripted content was stopped early,” according to an earnings release Monday.
From January to March, Hudson Pacific reported a net loss of $20.4 million, up 3% from a year earlier. Its total revenue in the first quarter was $252 million, compared to $244.5 million in the first quarter of 2022.
As of noon ET Monday morning, the company’s shares were down to $4.71 a share — down 9% from the market open.
Hudson Pacific also reported $49.7 million in funds from operations — down from $75.2 million in last year’s first quarter.
Much of the shortfall has been attributed to “lower production activity” affecting Quixote Studios, the production and studio company that Hudson Pacific acquired last year for $360 million. However, the company acknowledged that higher interest expenses and lower office occupancy rates also impacted its financials.
“We’re focused on the things we can control,” Chief Executive Victor Coleman said on an earnings call Tuesday morning.
Hudson Pacific also intends to sell six assets, including a land parcel, and reduce its dividend by up to 50% to boost its liquidity, Coleman said on the earnings call.
The company has struggled with small and medium-sized tenants leaving its office space, with its buildings ending the quarter at 87% occupancy. Its office portfolio is approximately 91% occupancy in the first quarter of 2022.
Revenue from the company’s office portfolio fell to $207 million in the first three months of this year from $211 million in the first quarter of last year, according to financial filings.
However, Hudson Pacific’s studio revenue jumped slightly from $244 million in the first quarter of 2022 to $252 million in the same period this year.