Crash! Hudson Pacific Properties Suspends Its Common Stock Dividend

On September 10, Hudson Pacific Properties announced its Board of Directors suspended its third-quarter common stock dividend, saying it was "to preserve capital in an ongoing challenging environment." It did, however, declare a $0.296875 dividend on its Series C Cumulative Preferred stock, which will be paid to shareholders of record on September 20.

On September 11, Wells Fargo lowered the price target on Hudson Pacific from $5.00 to $4.50.

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Hudson Pacific Properties Inc HPP is a Los Angeles, CA-based Office REIT with 41 office properties and 3 motion picture studio properties, emphasizing innovation for media and tech companies in California, Washington state and Vancouver, British Columbia.

The Board of Directors states it will continue to monitor Hudson Pacific's financial performance and operations to determine when it will be appropriate to reinstate the quarterly common stock dividend.

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Hudson Pacific has had serious problems since December 2023 and even before the dividend announcement, its share price had dropped nearly 45%. The strike by the actors and writers guilds in 2023 was crippling. It recently announced Q3 FFO guidance of $0.08-$0.12 per share which was below expectations. Q2 FFO of $0.16 per share declined from Q2 2023 FFO of $0.29. Average office occupancy has fallen from 85.2% to 78.7% year-over-year, with little to suggest that the California or Seattle office markets will improve soon.

Ironically, Hudson Pacific Properties was one of the top-performing REITs in July, with a 27% gain. However, the August stock chart looks more like a roller coaster, with Hudson losing 14.02% for the month. By noon on Tuesday morning, the stock was down 7.35% and at its low for the day. Dividend cuts are short-term painful but are designed to be long-term curative to a company. Investors considering a purchase should have ample time to wait, as Hudson Pacific is apt to be in the doldrums for a long time.

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