Hudson Pacific Properties and Canada Pension Plan (CPP) Investment Board have finalized their acquisition of 1918 8th Avenue, a 668K square-foot class A office building in Seattle’s Denny Triangle neighborhood for $625 million.
Hudson Pacific (HPP) is a real estate investment trust (REIT) with a portfolio of office and studio properties totaling over 19 million square feet. Its anchor tenants include Fortune 500 and leading growth companies such as Netflix, Google, Square, Uber, NFL Enterprises and more.
Meanwhile, CPP is a professional investment management organization that manages the Fund on behalf of more than 20 million contributors and beneficiaries of the Canada Pension Plan. The Fund was valued at C$456.7 billion as of September 30, 2020.
The joint venture will see Hudson own 55% of the property while CPP will own the remaining 45%. Hudson will act as general partner as well as property, leasing and construction manager.
A mortgage loan of $314.3M was attained and secured by the property at an initial interest rate of LIBOR + 1.70% per year and is interest-only through the first five-year term. (See HPP stock analysis on TipRanks)
BMO Capital analyst Frank Lee initiated a Hold rating on the stock today with a price target $27. This implies upside potential of around 12.5% from current levels.
Consensus among analysts is a Moderate Buy based on 2 Buys and 3 Holds. The average price target of $25 suggests upside potential of just over 4% over the next 12 months. Hudson Properties’ share price is down around 36% year-to-date.
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