Hudson Pacific Properties Could Take Years to Improve Leverage Ratio, BofA Securities Says
Hudson Pacific Properties' (HPP) leverage ratio is among the highest in its peer group, potentially taking years to improve amid refinancing headwinds, BofA Securities said in a Tuesday note.BofA Securities estimated the company's leverage ratio at 13.7x as of fiscal Q1, versus the peer average of 8.0x. Elevated leverage puts the company at a disadvantage given the current higher interest rate environment, the brokerage noted.Investors are also eyeing the approaching maturity of Hudson Pacific Properties' $1.1 billion Hollywood Media Portfolio CMBS loan in August, BofA Securities said.And while the company benefited from better office fundamentals, especially in San Francisco, structural headwinds related to the Los Angeles entertainment sector are expected to persist through the near-medium term, the investment firm added.BofA Securities downgraded Hudson Pacific Properties to underperform from neutral, and maintained its $14 price target.Price: $14.60, Change: $-0.55, Percent Change: -3.63%
