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Hudson Pacific Lands $475M CMBS Financing

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The note refinances more than 1.4 million square feet of office space. The post Hudson Pacific Lands $475M CMBS Financing appeared first on Commercial Property Executive.

Exterior shot of the office building at 1740 Technology Drive in San Jose, Calif. — The office building at 1740 Technology Drive in San Jose, Calif., is one of the six properties involved in the deal. *Image courtesy of CommercialEdge*

Hudson Pacific Properties has obtained a $475 million CMBS loan for six office properties. The portfolio includes West Coast assets encompassing more than 1.4 million square feet.

The note has a two-year initial term plus three one-year extension options and an interest rate of 376 basis points over one-month term SOFR. The company used net proceeds to pay off a $168 million loan secured by one of the assets, Element LA, and repay balances on its unsecured revolving credit facility.

Goldman Sachs served as lead manager and bookrunner for the CMBS financing, while Morgan Stanley and Wells Fargo Securities served as co-lead managers and joint bookrunners.

A six-property portfolio

The refinanced collection includes:

• the 499,398-square-foot 11601 Wilshire in Los Angeles
• the 284,037-square-foot Element LA in Los Angeles
• the 171,594-square-foot 450 Alaskan in Seattle
• the 197,136-square-foot 5th & Bell in Seattle
• the 57,120-square-foot 275 Brannan St. in San Francisco
• the 215,857-square-foot 1740 Technology in San Jose, Calif.

Hudson Pacific bought the San Jose asset from EQ Office in 2015 for $57.5 million, as part of a $3.5 billion transaction involving EQ’s Silicon Valley properties, according to CommercialEdge data. The company acquired 11601 Wilshire for $311 million in 2016 and 5th & Bell in 2021 for $118.6 million.

Following the closing of this CMBS loan and the previously announced sale of the 182,700-square-foot Foothill Research Center in Palo Alto, Calif., Pacific Hudson now has about $815 million of liquidity. Most of that, $752 million, is capacity on its unsecured revolving credit facility.

CMBS looks to stronger year

Following a strong issuance year in 2024, January continued to exhibit strength, with year-over-year private-label CMBS issuance increasing 38.1 percent, according to ratings agency KBRA.

More positive sentiment has encouraged borrowers who had previously held off on transactions to return to the CMBS market, pointing toward an increase in activity during 2025, Numerix forecasts. The demand for recapitalization is strong, for example, and less difficult than during the recent round of high interest rates. The quality of assets securing loans remains solid, partly due to tightened underwriting standards, which is characteristic of the recent issuance environment.

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