Hudson Pacific Properties, Inc. (HPP - Free Report) has announced a major lease renewal in Hollywood with Trailer Park, a full-service agency that specializes in content creation and entertainment marketing. The move reflects the decent demand for the company’s premium properties from existing tenants.
Particularly, this 10-year lease that runs through December 2028 involves 102,977 square feet of office space at 6922 Hollywood Boulevard. Trailer Park has occupied space in this building since 2001 and with the 10-year lease, the company has plans to revamp its office space to suit growth needs.
Notably, Hudson Pacific focuses on office as well as media and entertainment properties in select West Coast markets. The company’s property at 6922 Hollywood Boulevard was built in 1967 and renovated in 2007. It is a 12-story, Class-A office building with the ground floor having retail space.
The property’s presence in the center of Hollywood drives its demand. It has TCL Chinese Theatre, the Hollywood Roosevelt Hotel, Hollywood & Highland Center and the Dolby Theater — home of the Oscars — in its surroundings. In addition, the expansion of digital entertainment production in Hollywood has further fueled demand for premium office space in Class-A properties.
Notably, improving economy and a healthy job market environment are anticipated to stoke growth in the office real estate market in 2018. However, the pace of growth will likely remain modest with increased supply of office space that has been curbing the pricing power of landlords and resulting in elevated concession levels. Also, rate hike adds to its woes.
Amid these, the Zacks Consensus Estimate for 2018 funds from operations (FFO) has been revised 4% southward in a month’s time. Currently, Hudson Pacific has a Zacks Rank #5 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock has dropped 13.1% over the past year, underperforming the 7.7% loss incurred by the industry it belongs to.
A few better-ranked stocks from the real estate space include CBRE Group, Inc. , FirstService Corporation (FSV - Free Report) and HFF, Inc. (HF - Free Report) . All three stocks carry a Zacks Rank of 2 (Buy).
CBRE Group’s Zacks Consensus Estimates for 2018 earnings per share have been revised 6.4% upward to $2.98 over the past month. Its share price has risen 9.1% in three months’ time.
FirstService Corporation’s earnings per share estimates for the current year have moved up 11.8% to $2.65 in a month’s time. Its shares have gained 4.2% over the past three months.
HFF’s earnings per share estimates for 2018 have been revised upward 10.8% to $2.35 over the past month. The stock has gained 4.7% during the past three months.
Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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