12/11/2018 | By Nareit Staff
Victor Coleman, chairman, president and CEO of Hudson Pacific Properties, Inc. (NYSE: HPP), participated in a video interview at Nareit’s REITworld: 2018 Annual Conference in San Francisco.
Hudson Pacific recently formed a joint venture to own and operate San Francisco’s historic Ferry Building, which Coleman described as one of the top three iconic buildings in the city. The property has more than 200,000 square feet of office space, and the value add proposition is that mark-to-market office rents are about 25 to 30 percent higher, he explained.
“We’ll probably see a 200-basis point shift in valuation from a cash flow standpoint between now and the end of 2020,” Coleman noted.
On the retail side, the plan for phase one of the Ferry Building is to focus more on locals rather than tourists, he added.
Turning to fundamentals in the core markets of Seattle, Los Angeles, and the Bay Area, Coleman noted that by the end of 2018, all three will have market rent growth of between 4 and 10 percent.
“The tech, media, [and] entertainment demand in our markets has never been stronger. The large tenant absorption has been consistent for the last 24 months and we see no end in sight…it’s going to bear very well for the cash flow performance of Hudson going forward for at least the next 24 months,” Coleman said.
Meanwhile, although Hudson Pacific is “pretty committed” to its core markets at this time, one potential market the company is watching is Vancouver, Coleman added.