Good afternoon, everyone. Thanks for joining us. Me on the call today are Victor Coleman, CEO and Chairman Mark Lammas, President Harut Dheerairean, CFO and Art Swazo, EVP of Leasing. This afternoon, we filed our earnings release and supplemental on an eight ks with the SEC both are now available on our website. An audio webcast of this call will also be available for replay on our website. Of the information we'll share on the call today is forward looking in nature, Please reference our earnings release and supplemental for statements regarding forward looking information as well as the reconciliation of non GAAP financial measures used on this call. Today, Victor will discuss industry and market trends, Mark will provide an update on our office and studio operations and development, and Haroot will review our financial results and 2025 outlook. Thereafter, we'll be happy to take your questions. Victor?

Thank you, Laura. Good afternoon, everyone, and welcome to our first quarter call.

Our team continues to execute across the business staying cognizant of the state of our markets, working to maximize flexibility lease space and grow occupancy. We are also closely monitoring the potential effects of tariffs on our core industries and we continue to see signs of improving or stabilization of our fundamentals. We remain optimistic that the tariff negotiations will start to settle in the coming months and that pro growth policies will phase in. Additionally, we're encouraged that the federal government is actively facilitating billions of additional investment into AI and implementing policies to redirect content production back to The United States. Which could be a positive for Hudson Pacific. One of the other catalysts we continue to monitor is venture investing. Which in the first quarter set a new high watermark with deal value more than doubling year over year to $92,000,000,000 which is also 92% above the ten year average. The Bay Area squarely remains the epicenter of U. S. Innovation, receiving nearly 70% of the funding or $59,000,000,000 the most in a decade and more than fourfold year over year increase. AI alone received 70% of the funding, including the five largest investments with all but one of those companies headquartered in the Bay Area.

The Stargate Project, a US based multinational artificial intelligence joint venture created by Oracle, SoftBank, and OpenAI will invest $500,000,000,000 in AI infrastructure and jobs over the next five years with a hundred billion deployed immediately. AI should remain a bright spot for tech and by extension for AI office leasing, which totaled over 5,000,000 square feet in San Francisco alone in the first quarter, up significantly year over year. Clearly, San Francisco is leading the West Coast recovery both in terms of tech leasing and the benefits of a more moderate pro business tough on crime leadership. First quarter marked the second straight quarter of positive net absorption and gross leasing was just under 3,000,000 square feet. Beyond continued AI investment, the election of mayor Lurie, has been a game changer for the city. With his focus on public safety, in camping cleanup, drug enforcement, and array of other initiatives to promote economic activity. Case in point, we welcome 2,500,000 visitors to our Ferry Building in the first quarter alone, our best first quarter on record and 23% year over year increase. Another positive with the city's new financial and zoning incentives for residential conversions, we're reevaluating and underwriting adaptive reuse of some of our office assets and expect to have one or more good candidates in the future.

Downtown Seattle too is benefiting from political tailwinds, while direct vacancy increased 90 basis points in the quarter gross leasing increased 15% to the highest level in a year. The election of Merrill a more moderate city council significantly reducing crime and drug use and accelerated return to office for both public and private sector employees alike. Nowhere has this been more evident than in Pioneer Square, where year over year, our leasing activity pipeline and tours have notably increased. Have successfully grown occupancy to 93% at 41178% in the first quarter last last year. And we have another 225,000 square feet in late stage deals in our pipeline for the other assets in that market. We're also working closely with city officials to expedite the lease up of Washington 1000, including a potential code amendment to allow building top signage and a partnership with the adjacent convention center to activate our retail spaces. The devastating fires and increasing budget woes made it more of a challenging quarter for Los Angeles. Fortunately, our Los Angeles portfolio is currently 97% leased largely under long term leases. On the studio side, average shows and production remained in the mid-80s. This year, California has seen new production starts accelerate more so than other North American and UK markets, but the recovery has favored feature films as opposed to episodic TV shows, which is critical to Los Angeles production.

That said, starting last quarter, we noted a higher percentage of increase coming from quality productions looking for multi stage and multi month or year leases with second and third quarter start dates. Importantly, this trend continues. Our leasing pipeline is as strong as it's been in the last two years. And thus far, as Mark will discuss, our sales team has been very successful at capturing an outsized share of those leads. The reality is that the gravity of Los Angeles challenges finally seems to have created some urgency for local officials to figure out what needs to happen for the city to thrive again. A new district attorney has been the bright spot for public safety, And despite significant budget cuts elsewhere, both the police and fire departments received funding increases. The city is taking another look at Measure ULA, has significantly impaired multifamily development and last week passed a motion to reduce onerous regulations and permitting unnecessary fees and inconsistent safety requirements to make it easier and cheaper to film. In Los Angeles. At the state level, the Governor's budget proposal is on track to nearly double California's film and tax credit to $750,000,000 to be voted on and adapted prior to July 1.

Two companion bills have been introduced to enhance tax credits appeal by raising the qualified expense cap making credits transferable and expanding eligible productions to include among other things, episodic TV shows, which as I mentioned, are so beneficial to the Los Angeles production marketplace. And while it's truly to know precisely what federal incentives will look like, it's extremely positive to see Washington DC now fully engaged with Hollywood and well positioned to receive the net benefit going forward. Finally, we continue to make good progress on non strategic asset sales generate liquidity and reduce leverage. In the first quarter, we closed on the previously announced Foothill Research Center and Maxwell Dispositions for a combined total of $69,000,000 with the net proceeds used to pay down our revolver. Subsequent to the quarter, six twenty five Second in San Francisco went under contract to sell for $28,000,000 with closing expected in the second quarter of this year. And collectively, these three transactions have generated an additional $97,000,000 of liquidity and we continue to work on another approximately $125 to $150,000,000 of dispositions, of which we'll provide additional updates in the coming quarters. And now I'm going to turn the call over to Mark.

Thanks, Victor.

We've signed 630,000 square feet of new and renewal lease leases in the first quarter, our highest quarterly leasing activity since second quarter twenty twenty two. New leasing accounted for 66% of activity and included execution of our second lease with the City and County of San Francisco at fourteen fifty five Market for two hundred and thirty two thousand square feet in twenty years. Our GAAP rents increased 4.8% and cash rents decreased 13.6%. Excluding our large lease with the City And County At 1455 Market, a portion of which backfilled space previously leased at peak market rents, cash rents would have decreased 8.8% roughly in line sequentially. Our first quarter trailing twelve month blended net effective rents were 4% higher year over year only 7% lower than pre pandemic. Net effective rents on new deals alone were up 22% year over year and only 4% below pre pandemic on a trailing twelve month basis. Our trailing twelve month blended lease term was up 96% year over year and 54% versus pre pandemic. Even after removing our two roughly twenty year leases with the City and County of San Francisco, our trailing twelve month lease term was still up 16% year over year.

Regarding TIs, have seen no impact from tariffs to date. Our exposure to TI related price increases should be minimal as most of our materials are U. S. Or could be changed to a U. S. Supplier. Furthermore, we have been extremely active with our vacant suite prep program in recent years with most of the front and back of the house improvements behind us. Our in service office properties were 76.5% leased as of the end of the first quarter compared to 78.9% at the end of the fourth quarter last year. 170 basis points of that change after accounting for square footage backfilled with a portion of the city and county lease is attributable to a significant known vacate at 1455 Market that we have discussed for some time. During the first quarter, unique tour activity at our assets meaningfully accelerated up 18% to 1,700,000 square feet. The average requirement size also increased by 18% to 13,000 square feet. A new post pandemic high. Even after signing over 600,000 square feet our leasing pipeline increased 5% to 2,100,000 square feet with an average requirement size of 19,000 square feet. This included 716,000 square feet of late stage deals in leases or LOIs a significant portion of which has subsequently been signed.

We have 50% coverage that is deals and leases LOIs for proposals on our remaining 1,000,000 square feet of twenty twenty five expirations 48% of which are in the second quarter alone. We have 76% coverage on our four remaining twenty twenty five expirations over 50,000 square feet which collectively totaled 397,000 square feet. While our elevated expirations in the first half of the year have impacted occupancy, Starting in the third quarter, we expect occupancy will begin to stabilize and grow thereafter. This is because from the third quarter twenty twenty five through year end 2026, we have only 225,000 square feet expiring on average each quarter, which favorably compares to our average trailing four quarter leasing activity of 530,000 square feet 62% of which is comprised of new deals. Turning to our studios. As Victor noted, our pipeline remains robust and our team continues to capture an outsized share of productions in the market. At present, 46 of our 53 film and TV stages or 88% of the related square footage are either leased or in contract compared to 35 stages or 69% of the related square footage last quarter. Note for comparison purposes, we have adjusted our fourth quarter film and TV stage portfolio and associated square footage and leasing activity to exclude leases we terminated as part of broader Coyote cost cutting initiatives.

As examples of this strong activity, we are in contract on two longer term multi stage leases, one, a long running soap opera and another a returning writer producer with multiple successful shows. It is also worth highlighting that Stages leased or in contract at Sunset Las Palmas since our last call are expected to bring occupancy at that asset to the highest level since early twenty twenty three. This strong activity is also reflected in the sequential improvement of our trailing twelve month studio lease percentages. In the first quarter, our in service stages were 78.7% leased or 190 basis points higher on additional occupancy again at Sunset Las Palmas. 43.4% leased or two twenty basis points higher after adjusting for the previously mentioned lease terminations due to increased occupancy at Coyote North Valley as well as on our commercial stages at Coyote Griffith Park and West Hollywood. First quarter studio revenues were $33,200,000 or $2,200,000 lower, primarily due to lower Coyote studio ancillary and transportation revenues related to production pauses during the fires. Studio expenses were up $3,000,000 due to a $59,000,000 termination fee and associated with certain cost reduction measures at Coyote. But for that one time fee, our operating expenses would have decreased by $2,900,000 reflecting the benefit of completed cost reduction initiatives.

To that point, since our February call, we have proactively terminated certain lease and negotiated rent reductions that bring our total run rate savings to $14,200,000 on an annualized basis or $13,600,000 at share. Remain committed to achieving cost efficiencies to accelerate Coyote's return to profitability and look forward to providing updates on these ongoing efforts. Regarding development, Sunset Pier ninety four Studios is on track for year end delivery exterior components nearing completion and interior construction well underway. We expect no material impact from tariffs on cost for this project given that the vast majority of materials are already on-site or paid for and in off-site U. S. Locations. We are in discussions with potential long term tenants interested in one or more stages and are preparing to launch show by show leasing efforts this summer. Studio leasing has largely moved to a show by show model and typically occurs two to three months prior lease commencement. Given we are targeting first quarter twenty twenty six for certificate of occupancy and productions must have certainty around space availability prior to committing primarily due to talent schedules. We would expect show by show leasing to begin in earnest in the first fourth quarter of this year.

Finally, regarding lease up of Washington 1000, we remain in discussions with multiple large tenants during the first quarter, we saw an increase in tour activity from multi floor tenants looking to upgrade their locations. The competitive landscape continues to improve with Class A direct and large block sublease space being cleared from the inventory. Bellevue has only a few remaining Class A options over 100,000 square feet. Seattle's Class A sublease supply has been reduced from 2,000,000 square feet to less than 300,000 square feet, none of which offer contiguous space of 100,000 square feet or greater. Washington 1000 is the only new construction alternative in Seattle and with no further supply coming online in the near to mid term, the project remains well positioned to capture large trophy class users. And with that, I'll turn the call over to Haru.

Thanks, Mark.

Our first quarter twenty twenty five revenue was hundred and $98,500,000 compared to $214,000,000 in the first quarter of last year. The change is due to both asset sales and lower occupancy within our office portfolio. Our first quarter FFO excluding specified items was $12,900,000 or $09 per diluted share. Compared to $24,200,000 or $0.17 per diluted share a year ago. Specified items for the first quarter totaled $07 per diluted share, consisting of onetime Coyote cost cutting expenses of $05 per diluted share. A loss on early extinguishment of our Element LA debt of $01 per diluted share [indiscernible] non cash derivative fair value adjustment of $00 per diluted share.

By comparison, specified items for the first quarter of twenty twenty four consists of transaction related expenses, of $01 per diluted share. Excluding these specified items, the year over year change in FFO was mostly attributable to factors affecting revenue. Our first quarter same store cash NOI was $93,200,000 compared to hundred and $3,400,000 in the first quarter last year. Mostly due to lower office occupancy. Turning to our balance sheet. In the first quarter, we completed a CMBS financing for a portfolio of six office properties for $475,000,000 and used the net proceeds to fully repay our hundred and $68,000,000 loan secured by Element LA.

The remainder paying down amounts outstanding on our credit facility and for general corporate purposes.

After successfully hedging the entire financing shortly following the transaction. The loan now bears an all in rate of 7.14%, or 50 basis points below corresponding rates at the time of closing. As one of the largest office backed CMBS transactions completed this year, this was a significant win for our team. As of the end of the first quarter, we had $838,500,000 of liquidity, comprised of $86,500,000 of unrestricted cash and cash equivalents and $752,000,000 of undrawn capacity under the unsecured revolving credit facility. We also had another $31,400,000 at HPP share of undrawn capacity under Sunset Pier ninety four Studios construction loan. We have routinely discussed various paths to enhance our balance sheet and maturity schedules, including the repayment of our unsecured notes.

Subsequent to the quarter, we tendered to repay all $465,000,000 outstanding under our Series B, C and D private placement notes. To date, have repaid $254,000,000 of the Series B notes and $50,000,000 of the Series C notes with the balance to be repaid on or before May 9.

We're also now in the process of refinancing our only other 2025 maturity loan secured by 1918.

Which is fully leased to a leading investment grade tech tenant through 02/1930.

Those conversations have been constructive as expected and we look forward to providing additional updates. Turning to outlook. For the second quarter, we expect FFO per diluted share to range from $03 to $07 per diluted share. Compared to the first quarter FFO of $0.9 per diluted share based on the midpoint of our second quarter guidance, we anticipate office NOI approximately of $05 lower due to the full impact of first quarter leasing expirations and to a lesser extent recent and pending asset sales. We expect full quarter impact of higher interest expense from the six asset CMBS transaction of approximately $0.4 the lower office NOI and the higher interest expense will be partially offset by $0.3 of higher combined studio NOI and $0.2 of lower G and A expense. Regarding our full year guidance metrics, most amounts remain unchanged from those provided last quarter, with the only exceptions being an increase to our full year interest expense of $12,000,000 stemming from the recent CMBS financing.

And decreased to our full year G and A expense of $3,000,000 Our full year weighted average shares outstanding is also expected to be approximately 500,000 higher.

Lastly, compared to our initial 2024 gs and A guidance, we previously announced 2025 gs and A guidance reflected a projected savings of approximately $10,000,000 We continue to implement further cost cutting measures, which resulting in the $3,000,000 additional G and A reduction noted earlier. Apart from June, and the early repayment of the private placement notes, our outlook excludes the impact of any potential dispositions acquisitions, financings and or capital markets activity. Now we will happy to take your questions.

Operator? Thank you.

Our first question for today comes from Seth Berge of Citi. Your line is now open. Please go ahead.

Hi, thanks for taking my question. I just wondered if you could comment a little bit on the cash rent spreads that you kind of achieved in the quarter. Were those kind of in line with expectations? And then of any color you can provide on concessions and kind of how those are trending? Thanks.

Yes. No, this is Mark. In line for sure. You heard on our prepared remarks the impact of Citi deal in at $14.55. You know, adjusted for that, we would have been negative 8.8 as opposed to the thirteen six you see in the supplemental. So it had a fairly sizable impact. That's really the mark against 90,000 plus square feet of expiring Uber and, some square footage with B of A, which were Uber space especially was peak market rents from last cycle. So, yeah, in line with our expectations. I I would say maybe the easiest way to appreciate how overall lease economics are holding up Our net effectives are holding up quite well. We mentioned in the prepared remarks that year over year a trailing twelve month basis, net effectives are higher year over year 4% and only 7% lower than trailing twelve month pre pandemic net effectives.

And I would you know, you could we could dissect that, you know, a number of different ways I would just say the overall picture as it relates to rents and and lease economics is that they have continued to hold up. Extremely well especially by comparison to pre pandemic amounts.

Yeah. And if I could put a finer point on that, Seth. On a per square foot per year basis, we're down. Yeah. The commissions are down about almost a dollar, call it 97¢.

Per foot per annum? Yeah.

Yeah. Thanks. That's helpful. And I guess just, you know, on the recent news, with tariffs, you know, kind of are you seeing that impact this studio business or any change in kind of behaviors from tenants? If there are tariffs implemented on foreign [indiscernible] Well, first of think on a global basis, it's still early to tell what's the impact on tariffs. As they keep moving around, as a company, we're acutely aware of the downside, which you know, obviously could be a recession, or or even maybe worse in stagflation. And as a result, we're preparing ourselves for the negative or the positive flip side on that. And watching to see what tenants are signing versus not. And on a global basis, we really have seen no impact of loss of tenants or interest level, in any of our assets up and down the West Coast. In terms of the tariff news, on the federal level, from the studio side, for good or for bad, it's an awareness that I think we're very happy that it's got to the federal level. As you well know, the state is proposed that there's $750,000,000 tax credit that is implemented hopefully by July 1 and it's on track to being approved.

So that now enhanced with either a tariff, or some form of federal support for the studio industry, only makes it, I think, more heightened aware, as of the need for additional support. And we feel that it will be a positive at the end of the day. And it may come in the form of federal relief fund, on tax overall to benefit production in The United States, which we would welcome greatly.

Great. Thanks.

Thank you.

Our next question comes from John Kim of BMO. Your line is now open. Please go ahead.

Thank you.

Can you just discuss the pay down of the private placement notes Only the Series B is due this year. And presumably, you're using the Verlava prepay this and the remaining $211,000,000 that's outstanding. If that's the case, how do you plan to adjust the revolver going forward?

Hey, John. It's Haroot. Thank you for asking the question. So you're right. You know, we are using the revolver. I think we stated earlier know, when we did the CMBS, it was to address maturities in 2025. This was just a two step process. And once you pay down the series b notes, you only have a little bit of, private placements left, which have more restricted covenants. It kind of clears the path of our unsecured through essentially 2027 without the revolver. And we are in constant discussions. I think we've stated in the past that we have very good relationship with our, you know, lead line bend lead line bankers. And, you know, we see that instrument as a green instrument. We're gonna continue to have it. Beyond 2026. And, you know, once we get closer to that maturity, we will extend that one in due course.

Okay.

And then your your guidance of 125,000,000 to $150,000,000 of asset sales for the remainder of the year seems a little light. I realize you're not selling your best assets. In seven six twenty five seconds.

Sold for a pretty big discount to book value, as a result of that. But is this realistically what you're going to sell? And how assets does that contemplate?

John, as you know, we don't we don't identify the assets until they're, under contract. So I can just say we're going to be consistent in that process. The range that was quoted on the prepared remarks is three assets. They are assets that are non core to the portfolio. And similar to what we've sold in the past. I would say that's a conservative number We've been approached on and looking at evaluating potentially other assets. But those are the three that we're working on right now.

Okay. But something like Sunset, Walton Cross, I know that's that's already being repositioned. Is that part of this guidance? Or is that something that may be sold this year or a subsequent year?

As I said, we're not going to talk about assets until they're under contract. Okay.

Understood. Thank you. Thanks, John.

Thank you.

Our next question comes from Connor Mitchell of Piper Sandler. Your line is now open. Please go ahead.

Hey, thanks for taking my question.

I guess just following along that line of thinking, just curious how your your thought process and how the team has discussed maybe you know, adding some additional asset sales or thinking of different properties that that might kinda fall fall into that bucket or a different path, maybe, you've removed some potential sales and just kinda wondering how the team has thought about the whole process. Since you kinda put this plan into motion and and how the environment has changed throughout.

Well, I think we're being very consistent as to the number. I mean, last quarter, I think it was a hundred and said it was 150,000,000 to $200,000,000 of dispositions. We're just saying it's roughly around 100,000,000 to 150,000,000 now because we've already sold $95,000,000 of dispositions. So it's consistent with what our plan has been. As I said in prior comments, we're not looking to sell core assets in the portfolio. We're looking to sell assets that are non core and we think that they're executionable and they don't have any type of material impact on FFO. And so that's the direction we're going in. In terms of the market change, the assets that we're looking at selling right now is pretty much consistent with what we sold in the past. I mean, it's users it's high net worth, it's small investment funds. And the demand for these type of assets for those type of buyers has been pretty constant. There's not a tremendous amount of product in the marketplace in our markets of any quality assets. And so these fit into the marketplace. The demand ratios of where people are looking right now.

Okay. Appreciate the color. And then Mark, you you gave a lot of pretty good information on you know, some of the expirations, coming due with '25 and then the coverage associated with that. I think it was 50% coverage for the remaining, expirations during the year. I'm just wondering if you could give us any more color on maybe how we should think about occupancy and the cadence throughout the the remainder of the year along with some of information on the coverage, expirations, and then the the leasing pipeline and the late stages. Of, some of those deals you discussed?

Yeah. I'll I'll I'll give a little bit of response to that. And then Art can unpack some of the further details on it. But our occupancy expectations remain, in on track for what our expectations were in the last phone call. You know, heading in into at, you know, the end of the fourth quarter heading into the new year, we knew we had a considerable amount of square footage expiring in the first quarter. Still a significant amount in the second less than the first, but still relatively high amount. And then it was going to significantly taper off in terms of the expirations in the back half and beyond. And on account of that, even though the pipeline was quite significant, and, Art and team managed to, you know, get $6.30 over the line, which is obviously a monster quarter. Still had a lot of expirations. More than even that $6.30. And so the occupancy you're seeing are the least percentage seeing at the end of the first quarter is right on in track, actually slightly better than what our own model expectations were. We believe that could be the bottom There's a very good chance it could be the bottom in terms of at least an occupied percentage.

And that starting as early as the end of the second quarter, certainly by the time we get to the end of the third quarter, we expect to see sequential improvements on leased and occupied percentage. And we expect that trend given how low expirations are all the way into '26 and beyond. We we expect that general trend should continue for some time. Hey, Conor, it's Art. As Mark talked about it in his prepared remarks, our pipeline obviously grew 5% to almost 2,200,000 square feet. This is after the 630,000 square feet that we transacted. What gives us confidence going forward just that this number appears out of nowhere, it's the leading indicator, which is tours. And the tours grew by 18% to 1,700,000 square feet. Not only did the number increase, but the average, tour size increase, which tells us that, you know, kind of single floor, multi floor deals are out in the market in a in a bigger way, a larger way than they have been in the past. So that gives us the confidence with the pipeline. Of the 2,200,000 square feet that we have currently, We also mentioned that 700 just over 700,000 square feet are late stage LOI or in leases that we feel very we feel extremely confident about closing certainly in the next couple of quarters.

In addition to just the deals and proposals that have really come out since the quarter ended. So all those things said, we continue to refill the pipeline and continue to transact at a high level. Going forward.

Thank you.

Our next question comes from Tom Catherwood of BTIG. Your line is now open. Please go ahead.

Thank you. And Art, I want to go back to the comment you just made on large block leasing and obviously you got the big deal done with the City of San Francisco at 1455 Market. But can you walk us through activity on other large blocks vacancies, maybe specifically Hill 7, Metpark North, 11601 Wilshire and kind of any other kind of real material ones?

Yes. I mean, I'll start with your lead off hitter, was which was still seven. Know, HBO vacating, they're actually downsizing into Discovery Space. In Bellevue, but we have that's a 12,000 square feet, and we have 58,000 square feet in in negotiations right now. We have great coverage on on that. At 05:05, as you know, our floor plates are about 40,000, 45,000 square feet non divisible. We have we are in negotiations for about a 45 square feet on that and we're very close. And in 11/2001 we have we currently have about six sixty thousand square feet in negotiations, 40,000 square feet of which are in leases about ready to sign. So and are not you know, And and close to 95% leased in in 11/06/2001.

Sorry. My math got, I got tongue tied with my math. I was so excited.

No. I'm sorry. What was what was that number on? [indiscernible] 11601, we're very close to getting to about 95% leased very shortly. Okay.

Got it.

It. Got it. Thank you for that, Art.

And then maybe for the debt on the Hollywood Media portfolio, I get that it come due till next August. But given uncertainty, the market is likely assuming the worst. What, in your view, is the actual downside risk for the studio refinancing? And with higher California tax credits and Victor, which you mentioned potential federal relief, is selling your stake one of the options under active consideration?

Well, listen, I don't know what the potential risk is given the fact that it's fully leased in terms of the office side at 775,000 square feet. Till 31 or two. And and the occupancy and the sound stages, with the exception of two, are also master leased for a long period of time. The option of selling is not on the table at this time from our standpoint. It really come across for consideration. I do think that, we've mentioned this before We and our JV partner own the bottom tranche and a piece of the next tranche of the debt. That could be converted to equity and that takes care of any downside potential of if there was some form of additional capital needed to get financing done on that asset, it's already in place in the form of debt that we can convert to equity. So I think we're very comfortable that the market will adhere to us refinancing that. And make no mistake, I mean, are in the market having conversations as we speak. We're not waiting until the end for us to look at our options. We're evaluating them now. And to date, we've had some very good interest by our existing lenders and new lenders are coming to the table.

Yeah. I mean, that's right. I think the other thing just to add is that you know, maybe in the last year or so, we have some vacancy on Central Las Palmas as Victor and Mark indicated.

Know, we've kinda shorted that occupancy, which helps the NOI on that asset and therefore makes it even more, refinanceable, at least making the refinancing easier. Okay. But let me just clarify, Victor, it sounds like your comment is if there is a pay down required, you don't expect it to be more than the B piece that is held by you and your partner? Is that what you were saying?

What we're saying is that we have we're expecting no pay down. That's that's what we're going to the market with. Who knows what happens at the end of the day? But but we have that as a fallback already in place as opposed to bringing new equity into the deal.

Yeah. Just to put a final point on it, the debt that the Blackstone and Hudson owned collectively would, in and of itself, constitute a 15% re margin. So even if summary margins in store, are way you know, we're we're we've already addressed what would be the lion's share of that. Yeah. And and maybe to give an example, you know, we're in the market for 1918. And as of right now, that requires no re margin. So obviously, the, call immediate debt is further away. [indiscernible] obviously a different setup. But the point being is that we have a long time to go, and either it could be a large remarketing or no remarketing, it's kinda early too early to know right now.

Got it. Appreciate the answers.

Thanks, everyone.

Thank you.

Our next question comes from Yong Koo of Wells Fargo. Your line is now open. Please go ahead.

Great. Thank you. Just wanted touch upon your debt covenants a little bit. It looks like your NOI to interest expense fell [indiscernible] fell a little bit. Quarter over quarter. I was just wondering if you can provide some color on what we should be expecting for the rest of the year given that there are so many moving parts. Sorry. What's the last part?

The expectations for the rest of Okay. No. I I think we've like I'm on broken record at this point. Continue to be covenant compliance. We expect to be covenant compliant. We project out every quarter, and just like this quarter, our expectations were exceeded in terms of our coverage, meaning we came in better than our underlying expectations. So I think we expect to do the same in the future quarters.

And are you able to kind of, renegotiate some of the covenant covenant, minimums by any chance with lenders? We just did. I mean, we we recently completed a second amendment at the end of last year that improved both the ratios themselves, but also underlying definitions that you know, work through those ratios. So as of, you know To be fair, those are for the credit facility. The bonds we have not attempted to, and I think those have more room in them.

Got it. Okay. Thank you. Thank you for that. And then just turning to 2026, you guys talked about just a light lease expiration for the whole year about 800,000 square feet. Can you kind of provide some color on how whether you have there are some potential move outs that you're you know, potentially have to look at or, you know, how do you feel about the retention for '26? I know it's gotten early.

Yeah. I mean, you you hit the nail on the head with a low low expiration year, but there's really three large tenants that we're tracking.

In that market. Wild Godshall is a three floor tenant at Towers Above Shore, three story three floor tenant. We're renewing them in in two floors, so 50 call it 53,000 square feet. Of the 75. At Med Park North, we have twenty four hour fitness, which is 45,000 square feet. We're working on a renewal to keep them there as well. And then the last one is, at 875 Howard Pivotal Software. They're an eighty eighty thousand square feet. They're already out of the market. So we're currently marketing the space.

So those the large three, but the rest of those are smaller tenants that we will will be discussing over the next kind of six to nine months.

Got it. Great. Thank you. And then just one last. I think you guys talked about a couple production leads that you guys are looking at on the studio side. Can you comment on the size of those leads by any chance?

Well, the the the two we were talking about are are executed or, we'll make formal announcements, once they start filming. But both are two stages. With support space and mill space. And one is, as Mark mentioned, is a three plus year term with options and the other is an existing production company that we've done multiple deals with. So it just shows the stickiness that we're seeing some of the support coming back from yes. It's majority is show by show, but we've we've, I think, beaten the market in terms of these outsized longer term leases.

Okay. But you can't really comment on the size yet?

Well, I'd said they're both two stages with with support staff. We we don't we don't talk about square footage and Oh, got and the likes of that.

Yeah.

Each each show is two stages. Gotcha. Okay.

Great.

Okay. Perfect. Thank you. Thank you.

Our next question comes from Pete Abramovitz from Jefferies. Your line is now open. Please go ahead.

Yes. Thanks for taking the questions. It looks like in the FFO reconciliation here, you added back some some of the expenses related to cost cutting initiatives. At Quixote.

I guess could you just kind of dig into you know, what those expenses were, sort of the efforts that you're making to to cut expenses in Quilte and then what you incurred in the quarter as as the cost of doing that?

Yeah.

The costs are largely early lease termination costs In some instances, there are stages. So last year, we exited three stages in New Orleans for example, We've since exited some stages that were underutilized here in Los Angeles. So that's a fairly healthy amount of the overall cost cutting initiatives. I'll get to the aggregate number in a minute. We've also, we were able to eliminate some obsolete parts of our transportation fleet that enable us to exit out of parking areas for those that part of the transportation fleet. And then there's headcount and other things correlating to that downsizing that also contributes to the overall cost savings. So in aggregate, Bob, to date, we've, been able cut about 14,000,000 in costs. We think pro form a to last year's results that should improve NOI on the order of about $9 ish million. On a run rate basis. And so in terms of just looking ahead relative to those cost cutting initiatives, we think our current show count levels say 90 ish we were at 92 last year, think that negative $19,000,000 of NOI, cash NOI would pro form a have been more like a negative 10,000,000 But I think maybe the best takeaway is we our view was to get back to breakeven in Coyote.

We thought show counts needed to be somewhere close to 100. We still show positive NOI somewhere on the order of 8,000,000 to $9,000,000 of positive NOI at 100 But give based on those cuts, we think now can get to breakeven at closer to 95 shows. So we've sort of by doing the cuts, we've been able to lower the bar, if you will, to getting that business back to break Okay. That's helpful. Thank you for the clarification there. So guess then just one other question to on that. So you had it looks like, non same store studio expenses were about 29 and a half million in the quarter. Presumably that's almost entirely Quijote. I guess, what is sort of the the run rate going forward after either quarterly or annually after, expense reductions.

I think if you just take out the five points $9,000,000 that we highlight, and I think you can see that on page sorry. Real quick.

The studio page. Yeah. The studio page on sorry.

I'll get there quickly.

Page 20 of the supplemental. Yeah. Page 20.

Kinda have it laid out there. You know, you cut down the five, you're back to, like, 20 you know, 3 and a half million, I think, roughly.

Right? 29.1 less, 5.9 roughly.

So that gets you to a potential normalized. We still have some other work that we're working on. So from the perspective of what we've disclosed, that's the number to use.

Yeah. Well, well, maybe. I mean, I I would just once you adjust for those one time expenses, your NOI for the Coyote business goes to 7,500,000.0 Average show counts for the first quarter were in the low 80s. So again, getting back to the commentary about show counts, if we think we get to 90 that number should be annualized more like a negative $10 ish million. If we get to $95,000,000 we should be at breakeven. If we get to 100,000,000 we should be at somewhere approaching 10,000,000 maybe a touch drive $10,000,000 of positive NOI.

Got it. Thank you. And then I guess just more while we're on the topic of expenses. It looks like you lowered the G and A guide Just wondering if you could comment on what you're doing there and what drove that?

So in the theme of cost cutting and we're continuing to cost cut, I think we've commented last last quarter and last year, you know, we just cost initiatives and just lower payroll related costs. Is what we're doing.

Alright. That's all for me. Thanks.

Thank you.

There are no further questions at this time. I'd like to turn the call back to Victor Coleman CEO and Chairman, for closing remarks.

Thanks everybody for participating in this quarter's call. We look forward to speaking to you soon again. Goodbye.

Thank you all joining today's call.

Goodbye.

Disconnect your lines.