REAL ESTATE NEWS

Cohen & Steers, Inc. is making a $300 million investment in Hudson Pacific Properties, Inc., which targets the REIT's West Coast office portfolio.

It comes days after HPP kicked off its $690 million public stock offering. The investment represents 43 percent of the shares issued, with HPP planning to use the funds to recapitalize its balance sheet.

HPP's office properties are located in West Coast metros, including Los Angeles, Seattle, the San Francisco Bay Area and overseas in Vancouver.

It was a struggle, notably for the office sectors in Los Angeles and Seattle, in the first quarter. During the period, Los Angeles' vacancy hit a historic high of 24.2%, according to a report from CBRE. And in Seattle, the rate has surged to 31.2, up 10 basis points from the fourth quarter and significantly above the 28.1 percent recorded at the start of 2024, as reported by Colliers. Cohen will hope that its investment is coming at a time when both markets are bottoming out and that a strong recovery happens, as more companies implement more return-to-office requirements. But Cohen sees the upside in doing so.

"We believe the West Coast office market recovery is underway and poised to gain momentum over the coming years. Hudson Pacific Properties stands to benefit from this trend, supported by a strong management team and high-quality portfolio," Jason Yablon, executive vice president and head of Listed Real Estate for Cohen, said in a statement.

"Recapitalizing the balance sheet positions HPP to reduce debt, extend existing debt maturities and fund the immense occupancy upside this high-quality portfolio has to offer."

Currently, Cohen holds equity in two real estate mutual funds. Year-to-date, they have returned 3.60 percent and 7.10 percent, respectively.

Source: GlobeSt/ALM