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Hudson Pacific Properties Announces Acquisition Of The Pinnacle Office Property In Burbank, California, In Joint-Venture With M. David Paul & Associates/Worthe Real Estate Group

Hudson Pacific Properties, Inc. (the “Company”) (NYSE: HPP) today announced it has entered into a joint venture with M. David Paul & Associates/Worthe Real Estate Group (“MDP/Worthe”) to acquire The Pinnacle, a two-building (Pinnacle I and Pinnacle II), 625,640 square foot, Class-A property located in the heart of the Burbank Media District. The MDP/Worthe entities will be contributing their existing ownership in The Pinnacle to the newly formed joint venture.

“The Pinnacle will be extremely complimentary to our portfolio and will provide Hudson with an immediate foothold in one of the top media and entertainment submarkets in Los Angeles,” said Victor J. Coleman, Chairman and Chief Executive Officer of Hudson Pacific Properties, Inc. “The quality of the asset, its location and tenancy exemplifies the Company’s acquisition strategy to own and operate best-in-class office properties, with a strong media and entertainment tenancy. The joint venture enables us to preserve capital while establishing a strategic alliance with MDP/Worthe, the successful developer of The Pinnacle.”

The acquisition of the 393,776 square foot Pinnacle I building by the joint venture closed on November 8, 2012 for a purchase price of $212.5 million, $129.0 million of which was financed with a new ten-year project loan. In connection with the acquisition of Pinnacle I, the Company contributed $83.9 million in exchange for approximately 98 percent of the joint venture (reflecting certain credits and adjustments among the partners). The Company funded its contribution to the joint venture with a combination of available cash on hand and a $38.0 million draw on its unsecured credit facility, leaving approximately $164.2 million of undrawn availability under its unsecured credit facility.

MDP/Worthe currently owns 100 percent of the 231,864 square foot Pinnacle II building which it has agreed to contribute to the joint venture for a purchase price of $130.0 million by the end of the first quarter of 2013, subject to certain closing conditions, including the assumption of an existing approximately $89.6 million loan. Other than for purposes of funding closing costs or prorations, the Company will not be required to make a capital contribution in connection with the Pinnacle II contribution, but its ownership interest in Pinnacle I will be adjusted to reflect the contribution by MDP/Worthe of Pinnacle II to the joint venture.

Stock quotes in this article: HPP 

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