Hollywood Media Portfolio

Company overview

The Hollywood Media Portfolio is HPP's core studio-and-office cluster in Hollywood, Los Angeles. In July 2020 funds affiliated with Blackstone Property Partners bought a 49% interest at a gross portfolio valuation of $1.65bn; HPP kept 51% and remains responsible for day-to-day operations, leasing and development, for which it earns property management and other fees [S9].

The collateral has two halves.

Studio lots. Sunset Gower (559,422 sq ft, 12 stages), Sunset Bronson (310,563 sq ft, 9 stages) and Sunset Las Palmas (334,954 sq ft, 11 stages). The lots earn rent for sound stages, production offices and support space, usually on short production-length or series-length licences, plus service revenue from lighting, grip and equipment. Income therefore moves with Los Angeles production volume. Studio NOI fell from $29.2M in FY23A to $22.9M in FY25A, then recovered to $26.6M for the twelve months to June 2026 as the average % leased rose to 83.5% (Exhibits 1, 2 and 8).

Office buildings. ICON (326,792 sq ft), EPIC (301,127 sq ft), CUE (94,386 sq ft), Harlow (129,931 sq ft) and 6040 Sunset (114,958 sq ft). Netflix leases all of ICON, EPIC and CUE, 722,305 sq ft in total, on leases expiring 30 September 2031. The four in-service buildings were 100% occupied at 30 June 2026 with annualized base rent (ABR) of $63.0M, or $73.98 per sq ft. 6040 Sunset had an early lease termination in 2025 and went into repositioning in the first quarter of 2026 [S1].

The loan. The joint venture's original $1,100.0M floating-rate CMBS loan (BXHPP Trust 2021-FILM) was interest-only at SOFR + 1.10%. It reached its fully extended maturity on 9 August 2026, received a 30-day extension to 9 September, and on that date was modified to mature on 9 November 2027. The modification kept the rate and required no paydown. The joint venture reallocated partnership funds to a $20.0M leasing and capital reserve, and all future excess cash flow is swept into it. HPP separately entered into a derivative swapping SOFR at 3.50% through maturity (notional not disclosed) [S7]. HPP holds $30.2M of the certificates itself.

Los Angeles production has not recovered to its pre-strike level. FilmLA counted 4,711 on-location shoot days in the second quarter of 2026, down 12.7% from 5,394 a year earlier [S21]. The 2023 writers' and actors' strikes (May to November 2023) are visible in the studio lots' 2023 quarters (Exhibit 2). Studio demand is also being reshaped by the streamers: in June 2026 Netflix bought the roughly 1.1M sq ft Radford Studio Center for $400.0M, about $364 per sq ft, against a 2021 appraisal of $1.8bn [S13].

Office credit remains under stress. Trepp's CMBS delinquency rate for September 2026 was 8.0% across property types and 12.2% for office [S14]. Lenders are still active, mostly at lower leverage. CBRE's Q2-2026 averages for stabilised, mostly fixed-rate permanent loans were LTV 59.6%, DSCR 1.43x and debt yield 10.2% [S15]. Piccard's summer-2026 quote survey put the median office floating bridge loan at SOFR + 470bp (middle half 436–496bp), 70.0% as-is LTV and a 12.5% stabilised debt yield, on a small sample of eight quotes [S16]. CRED iQ reports 2026 new-issue securitised office loans at a 7.4% cap rate and a 13.8% NCF debt yield [S17].

Your memo should answer

1. 01Underwritten NCF and base metrics. Build your underwritten net cash flow (NCF) for the portfolio on a 100% basis from Exhibits 1–4, stating each adjustment and its source. Reconcile it to the servicer-reported NCF and the rating agencies' sustainable NCF. On the requested $1,100.0M loan, compute the NCF debt yield; the interest-only debt service coverage ratio (DSCR) at 1M CME Term SOFR of 3.925% (9 October 2026) plus the requested margin, and at the cap strike; and loan-to-value (LTV) across a cap-rate range you justify from Exhibits 4 and 6.
2. 02Pricing and terms against the market. Compare the requested margin, fee, leverage and debt-yield tests with the dated bands in Exhibit 6 (Piccard office bridge, CBRE averages, CRED iQ new-issue office) and with the yields on HPP's own unsecured notes at the October tender prices (Exhibit 7). Say which comparator fits this collateral and why, and state the margin, fees, rate cap, reserves and cash-management terms you would require.
3. 03Sizing a counter-proposal. Size the largest loan you would offer on (a) a minimum NCF debt yield and (b) a maximum LTV on a cap rate you justify. State which constraint binds, the paydown the joint venture would need at closing, and whether each partner can fund its share, using HPP's liquidity, maturities and covenants in Exhibit 7.
4. 04Downside. Stress your underwriting for: (i) studio NOI at the lots' own weakest filed period (Exhibits 2 and 8; say which period and how you annualise it); (ii) the tenant expiries in Exhibit 3 to January 2027, with your re-leasing assumption; (iii) an exit cap rate 100bp and 200bp above your base at initial maturity; and (iv) the forward curve 100bp higher, with and without the cap. Report NCF debt yield, DSCR and LTV in each case, and the refinancing gap at the initial and fully extended maturities.
5. 05Recommendation. Recommend approve, decline or counter. Give hold size, pricing, structure, the conditions precedent and the diligence you need before closing, and what would change your view.

Financials ($M)

Term sheet

Facility

$1,100.0M senior secured floating-rate first mortgage loan, single draw at closing (HYPOTHETICAL)

Borrowers and guarantors

The joint venture's property-owning entities. Non-recourse, with customary carve-out guaranties and environmental indemnity from Hudson Pacific Properties, L.P. and a Blackstone Property Partners affiliate, as on the 2020 loan [S9]

Ranking and security

First-priority mortgages on all eight properties; assignment of leases and rents; pledge of reserve accounts; hard lockbox with springing cash management

Tenor and maturity

Three-year initial term from closing, plus two one-year extension options. No springing maturity: the borrowers have no other debt

Pricing

1M CME Term SOFR + 325bp; SOFR floor 2.00%; origination fee 1.00%; exit fee 0.25%; extension fee 0.25% per option; no ticking fee

Call protection

12 months of spread maintenance, then prepayable at par plus the exit fee

Amortisation

None (interest-only)

Financial covenants

No maintenance covenants. Cash trap if debt yield is below 7.0%, where debt yield = trailing-12-month net cash flow (NCF, after reserves) ÷ outstanding principal, tested quarterly. Cured by two consecutive quarters at or above 7.0% or a paydown that restores it

Key negative covenants

No other debt beyond trade payables and equipment leases up to $10.0M; no mezzanine or preferred equity without consent; no distributions during a cash trap; transfers allowed between HPP and Blackstone affiliates

Mandatory prepayments

Property releases at 110.0% of the allocated loan amount, provided the debt yield after release is not lower; casualty and condemnation proceeds; excess cash during a cash trap

Reporting

Monthly rent roll and stage occupancy; quarterly operating statements and compliance certificate; audited joint-venture financial statements within 120 days of year-end; annual budget

Rate cap

Cap on 1M Term SOFR at a 5.00% strike for the initial term, notional equal to the loan, from a counterparty rated A or better; replaced at each extension at a strike chosen by the borrowers

Reserves

$20.0M TI/LC reserve at closing; replacement reserve $0.25 per sq ft per year; tax and insurance reserves springing

Extension tests

NCF debt yield of at least 8.0% on trailing-12-month NCF; no event of default; new rate cap purchased

Exhibit 3: Collateral at 30 June 2026 (sq ft; ABR at 100% share; HPP Q2-2026 supplemental)

Sunset Gower Studios

559,422 sq ft · 12 stages · 100.0% stage leased (T12M) · ABR $24.7M

Sunset Bronson Studios

310,563 sq ft · 9 stages · 91.2% stage leased (T12M) · ABR $12.6M

Sunset Las Palmas Studios

334,954 sq ft · 11 stages · 88.1% stage leased (T12M) · ABR $8.6M

Office: ICON, EPIC, CUE, Harlow

852,236 sq ft · 100% occupied · ABR $63.0M ($$73.98/sq ft)

Netflix (ICON, EPIC, CUE)

722,305 sq ft · leases expire 30 Sep 2031

6040 Sunset

114,958 sq ft · in repositioning since Q1-2026

Largest tenant (Morningstar DBRS)

56.7% of NRA; 11.7% of its footprint expires 2026, 29.8% in 2028, 58.4% in 2031

Exhibit 4: Third-party net cash flow and value ($M; 100% basis; Morningstar DBRS (Feb 2026) unless stated)

NCF at issuance (2021)

$99.6M

Servicer NCF, YE2024

$68.5M

Servicer NCF, 9M Sep-25 annualised

$72.6M

DBRS sustainable NCF / cap rate / value

$75.0M / 8.0% / $938.3M

Implied appraised value at issuance

$1,903.1M (loan ÷ 57.8% LTV)

2020 joint-venture valuation

$1,650.0M

Exhibit 6: Base rates and dated market bands (as of the dates shown)

1M CME Term SOFR (9 Oct 2026)

3.925%

Fed funds target (from 17 Sep 2026)

3.75%–4.00%

Piccard office bridge (Aug 2026)

median S+470bp (436–496bp) · 70.0% as-is LTV · 12.5% stabilised debt yield

CBRE Q2-2026 averages

LTV 59.6% · DSCR 1.43x · debt yield 10.2% · cap rate 6.3%

CRED iQ 2026 new-issue office

cap rate 7.4% · coupon 6.5% · NCF debt yield 13.8% · LTV 55.4%

Trepp CMBS delinquency (Sep 2026)

all 8.0% · office 12.2%

Exhibit 7: Sponsor (HPP) at 30 June 2026 ($M; HPP consolidated)

Cash / undrawn revolver

$80.8M / $795.3M ($333.3M of commitments mature 21 Dec 2026)

Total debt

$3,362.8M

Book equity

$2,986.9M

Fixed-charge cover covenant

1.6x actual vs 1.5x minimum

Oct 2026 tender prices (2027 / 2028 notes)

98.00 / 99.125 per 100