HUDSON PACIFIC PROPERTIES, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-Q)

The following discussion relates to our consolidated financial statements and
should be read in conjunction with the consolidated financial statements and the
related notes, see Part I, Item 1 "Financial Statements of Hudson Pacific
Properties, Inc.," "Financial Statements of Hudson Pacific Properties, L.P." and
"Notes to Unaudited Consolidated Financial Statements." Statements in this Item
2 contain forward-looking statements. For a discussion of important risks
related to our business and related to investing in our securities, including
risks that could cause actual results and events to differ materially from
results and events referred to in the forward-looking statements, see Part II,
Item 1A "Risk Factors." In light of these risks, uncertainties and assumptions,
the forward-looking events discussed in this report might not occur.

Forward-looking statements

Certain written and oral statements made or incorporated by reference from time
to time by us or our representatives in this Quarterly Report on Form 10-Q,
other filings or reports filed with the SEC, press releases, conferences, or
otherwise, are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 (set forth in Section 27A of the
Securities Act of 1933, as amended, or the Securities Act, as amended, and
Section 21E of the Exchange Act). In particular, statements relating to our
liquidity and capital resources, portfolio performance and results of operations
contain forward-looking statements. Furthermore, all of the statements regarding
future financial performance (including anticipated funds from operations, or
FFO, market conditions and demographics) are forward-looking statements. We are
including this cautionary statement to make applicable and take advantage of the
safe harbor provisions of the Private Securities Litigation Reform Act of 1995
for any such forward-looking statements. We caution investors that any
forward-looking statements presented in this Quarterly Report on Form 10-Q, or
that management may make orally or in writing from time to time, are based on
management's beliefs and assumptions made by, and information currently
available to, management. When used, the words "anticipate," "believe,"
"expect," "intend," "may," "might," "plan," "estimate," "project," "should,"
"will," "result" and similar expressions that do not relate solely to historical
matters are intended to identify forward-looking statements. Such statements are
subject to risks, uncertainties and assumptions and may be affected by known and
unknown risks, trends, uncertainties and factors that are beyond our control.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary materially from
those anticipated, estimated or projected. We expressly disclaim any
responsibility to update forward-looking statements, whether as a result of new
information, future events or otherwise. Accordingly, investors should use
caution in relying on past forward-looking statements, which were based on
results and trends at the time they were made, to anticipate future results or
trends.

Some of the risks and uncertainties that may cause our actual results, performance, liquidity or achievements to differ materially from those expressed or implied by the forward-looking statements include, among others, the following:

•adverse economic or real estate developments in our target markets;
•general economic conditions;
•defaults on, early terminations of or non-renewal of leases by tenants;
•fluctuations in interest rates and increased operating costs;
•our failure to obtain necessary outside financing or maintain an investment
grade rating;
•our failure to generate sufficient cash flows to service our outstanding
indebtedness and maintain dividend payments;
•lack or insufficient amounts of insurance;
•decreased rental rates or increased vacancy rates;
•difficulties in identifying properties to acquire and completing acquisitions;
•our failure to successfully operate acquired properties and operations;
•our failure to maintain our status as a REIT;
•the loss of key personnel;
•environmental uncertainties and risks related to adverse weather conditions and
natural disasters;
•financial market and foreign currency fluctuations;
•risks related to acquisitions generally, including the diversion of
management's attention from ongoing business operations and the impact on
customers, tenants, lenders, operating results and business;
•the inability to successfully integrate acquired properties, realize the
anticipated benefits of acquisitions or capitalize on value creation
opportunities;
•changes in the tax laws and uncertainty as to how those changes may be applied;
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•changes in real estate and zoning laws and increases in real property tax
rates; and
•other factors affecting the real estate industry generally, including the
impact of the COVID-19 pandemic.

Set forth below are some (but not all) of the factors that could adversely
affect our business and financial performance. Moreover, we operate in a highly
competitive and rapidly changing environment. New risk factors emerge from time
to time, and it is not possible for management to predict all such risk factors,
nor can it assess the impact of all such risk factors on our business or the
extent to which any factor, or combination of factors, may cause actual results
to differ materially from those contained in any forward-looking statements.
Given these risks and uncertainties, investors should not place undue reliance
on forward-looking statements as a prediction of actual results.

Impact of COVID-19

The COVID-19 pandemic has not had a material impact on our operations, however,
we continue to face significant uncertainties as a result of it, including new
variants, although their impact on the economy appears to have diminished and
the general commercial real estate market appears to be recovering. Both the
investing and leasing environments are highly competitive. Even before the
COVID-19 pandemic, uncertainty regarding the economic and political environment
had made businesses reluctant to make long-term commitments or changes in their
business plans. The COVID-19 pandemic has resulted in significant disruptions in
utilization of office properties and uncertainty over how tenants will respond
when their leases are scheduled to expire.

Possible future declines in rental rates and expectations of future rental
concessions, including free rent to renew tenants early, to retain tenants who
are up for renewal or to attract new tenants, or rent abatements for tenants
severely impacted by the COVID-19 pandemic, may result in decreases in cash
flows from our properties. Our tenants could re-evaluate their use of such
properties in light of the impacts of the COVID-19 pandemic, including their
ability to have workers succeed in working at home, and determine not to renew
these leases or to seek rent or other concessions as a condition of renewing
their leases.

Potential future declines in economic conditions could negatively impact
commercial real estate fundamentals and result in lower occupancy, lower rental
rates and declining values in our real estate portfolio, which could have the
following negative effects on us: the values of our investments in commercial
properties could decrease below the amounts paid for such investments; and/or
revenues from our properties could decrease due to fewer tenants and/or lower
rental rates, making it more difficult for us to make distributions or meet our
debt service obligations.

The debt market remains sensitive to the macro environment, such as impacts of
the COVID-19 pandemic, Federal Reserve policy, market sentiment or regulatory
factors affecting the banking industry. Any future uncertainties in the capital
markets may cause difficulty in refinancing debt obligations prior to maturity
at terms as favorable as the terms of existing indebtedness. Market conditions
can change quickly, potentially negatively impacting the value of real estate
investments. We continuously review our investment and debt financing strategies
to optimize our portfolio and the cost of our debt exposure.

Summary

Through our interest in Hudson Pacific Properties, L.P. (our operating
partnership) and its subsidiaries, at September 30, 2022, our office portfolio
consisted of approximately 16.1 million square feet of in-service,
repositioning, redevelopment, development and held for sale properties.
Additionally, as of September 30, 2022, our studio portfolio consisted of 2.1
million square feet of in-service, repositioning and development properties and
our land portfolio consisted of 3.6 million developable square feet. Our
consolidated and unconsolidated portfolio consists of 65 properties (42
wholly-owned properties, 16 properties owned by joint ventures and seven land
properties) located throughout the United States, Western Canada and Greater
London, United Kingdom, totaling approximately 21.2 million square feet.

From September 30, 2022, our office portfolio in service was 89.3% leased (including leases not yet started). Our same-store studio apartments were 84.4% leased for the average percentage leased for the 12 months ended
September 30, 2022.

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The following table summarizes our portfolio as of September 30, 2022:
                                                                                                                                                                Annualized Base Rent
In-Service Portfolio                          Number of Properties          Rentable Square Feet(1)          Percent Occupied(2)        Percent Leased(2)        per Square Foot(3)
OFFICE
Same-store(4)                                                     43                       12,821,754                     87.4  %                 88.9  %       $           53.42
Stabilized non-same store(5)                                       4                        1,100,588                     98.6                    99.2                      57.21
Total stabilized                                                  47                       13,922,342                     88.2                    89.7                      53.76
Lease-up(5)(6)                                                     1                          724,939                     78.3                    80.6                      60.77
Total in-service office                                           48                       14,647,281                     87.8                    89.3                      54.07
STUDIO
Same-store(7)                                                      3                        1,230,454                     84.4                    84.4                      44.72
Non-same store(5)                                                  1                           35,562                        -                       -                          -
Total                                                              4                        1,266,016
Repositioning(5)(8)                                                2                          433,259                        -                     2.4                          -
Development(5)(9)                                                  2                          787,000                        -                       -                          -
Held-for-sale(5)(10)                                               2                          452,186                     54.6                    54.6                      53.99

Total repositioning, redevelopment,                                6                        1,672,445
development and held-for-sale
Total office and studio properties                                58                       17,585,742
Land                                                               7                        3,583,589
TOTAL                                                             65                       21,169,331


____________
1.Determined by management based upon estimated leasable square feet, which may
be less or more than the Building Owners and Managers Association ("BOMA")
rentable area. Square footage may change over time due to re-measurement or
re-leasing.
2.Percent occupied for office properties is calculated as (i) square footage
under commenced leases as of September 30, 2022, divided by (ii) total square
feet, expressed as a percentage. Percent leased for office properties includes
uncommenced leases. Percent leased for studio properties is calculated as (i)
average square footage under commenced leases for the 12 months ended
September 30, 2022, divided by (ii) total square feet, expressed as a
percentage.
3.Annualized base rent per square foot for office properties is calculated as
(i) annualized base rent divided by (ii) square footage under commenced leases
as of September 30, 2022. Annualized base rent does not reflect tenant
reimbursements. Annualized base rent per square foot for studio properties is
calculated as (i) annual base rent divided by (ii) square footage under leased
as of September 30, 2022.
4.Includes office properties owned and included in our stabilized portfolio as
of July 1, 2022 and still owned and included in the stabilized portfolio as of
September 30, 2022.
5.Included in our non-same-store property group.
6.Includes office properties that have not yet reached 92.0% occupancy since the
date they were acquired as of September 30, 2022.
7.Includes studio properties owned and included in our portfolio as of July 1,
2022 and still owned and included in our portfolio as of September 30, 2022.
8.Includes 96,322 square feet at 10850 Pico, 96,240 square feet at 875 Howard,
79,056 square feet at Page Mill Center, 50,847 square feet at Metro Plaza,
36,905 square feet at Rincon Center, 35,905 square feet at 95 Jackson, 18,594
square feet at Sunset Las Palmas, 12,740 square feet at Palo Alto Square, and
6,650 square feet at Sunset Gower as of third quarter 2022.
9.Includes 546,000 square feet related to the office development Washington
1000, adjacent to the Washington State Convention Center, to which we purchased
rights in the first quarter of 2019, and 241,000 square feet related to Sunset
Glenoaks.
10.Includes Skyway Landing and 6922 Hollywood.

Insight

Business acquisitions

On August 31, 2022, the Company acquired 100% of the equity interests in Quixote
Studios ("Quixote"), which provides sound stages, cast trailers and trucks, and
other equipment essential for media content production and it will expand the
Company's service offerings for its studio platform. See Part I, Item 1 "Note 3
to the Consolidated Financial Statements-Business Combinations" for details.

Real estate acquisitions

On April 27, 2022, the Company completed its previously announced acquisition of
Washington 1000, a fully entitled office development site in Seattle, Washington
for a total purchase price of $85.6 million, before certain credits, prorations
and closing costs.
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Contents

On May 19, 2022, the Company purchased a parcel of land at Sunset Gower Studios
that was previously encumbered by a ground lease for a total purchase price of
$22.0 million, before certain credits, prorations and closing costs.

On July 15, 2022, the Company purchased 5801 Bobby Foster Road, approximately 29
acres of land with an office/warehouse located in Albuquerque, New Mexico, for
the storage of trailers and other rental assets used to serve the surrounding
studio production industry. The property was acquired for a total purchase price
of $8.0 million, before certain credits, prorations and closing costs.

See Part I, Heading 4 “Note 4 to the consolidated financial statements – Investment in real estate” for further details.

Ownership provisions

In the nine months ended September 30, 2022the Company sold its Del Amo and Northview Center properties for $2.8 million and $46.0 million, respectively. See Part I, Item 1 “Note 4 to the consolidated financial statements – Real estate investments” for further details.

Held for sale

As of September 30, 2022, the Company had two properties classified as held for
sale-6922 Hollywood and Skyway Landing-as these properties were considered
non-strategic to the Company's portfolio. During the nine months ended
September 30, 2022, the Company recognized an impairment loss of $3.1 million
related to its 6922 Hollywood office property due to a reduction in the
estimated fair value of the property. 6922 Hollywood was subsequently sold on
October 20, 2022.

Projects under construction and future development projects

The following table summarizes the properties currently under construction and future development projects at September 30, 2022: Location

                                                 Submarket                Estimated Square Feet(1)          Estimated Completion Date          
Estimated Stabilization Date
Under Construction:
Sunset Glenoaks Studios(2)                              Los Angeles                       241,000                            Q3-2023                              Q2-2024
Washington 1000                                        Denny Triangle                     546,000                            Q1-2024                              Q1-2026
Total Under Construction                                                                  787,000

Future Development Pipeline:
Burrard Exchange at Bentall Centre(3)                Downtown Vancouver                   450,000                              TBD                                  TBD
Sunset Waltham Cross Studios(4)                          Broxbourne                     1,167,347                              TBD                                  TBD
Sunset Gower Studios-Development(5)                      Hollywood                        478,845                              TBD                                  TBD
Sunset Las Palmas Studios-Development(5)                 Hollywood                        617,581                              TBD                                  TBD
Cloud10                                                North San Jose                     350,000                              TBD                                  TBD
Element LA-Development                                West Los Angeles                    500,000                              TBD                                  TBD
Sunset Bronson Studios Lot D-Development(5)              Hollywood                         19,816                              TBD                                  TBD
Total Future Development Pipeline                                                       3,583,589
TOTAL UNDER CONSTRUCTION AND FUTURE                                                     4,370,589
DEVELOPMENT


_____________
1.Determined by management based upon estimated leasable square feet, which may
be less or more than the BOMA rentable area. Square footage may change over time
due to re-measurement or re-leasing.
2.We own 50% of the ownership interests in the unconsolidated joint venture that
owns Sunset Glenoaks Studios.
3.We own 20% of the ownership interests in the unconsolidated joint venture that
owns Burrard Exchange.
4.We own 35% of the ownership interests in the unconsolidated joint venture that
owns Sunset Waltham Cross Studios.
5.We own 51% of the ownership interests in the consolidated joint venture that
owns Sunset Bronson Studios, Sunset Gower Studios and Sunset Las Palmas Studios.
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Expiration of leases

The following table summarizes the lease expirations for leases in place as of
September 30, 2022, plus available space, beginning January 1, 2022 at the
properties in our office portfolio. Unless otherwise stated in the footnotes,
the information set forth in the table assumes that tenants did not exercise any
renewal options.
                                                                                                                                            Company's Share(1)
                                                                                                                                                                                                             Annualized Base
                                                                                                       Percent of Office                      Percentage of Office  Annualized Base Rent                     Rent Per Lease
                                     Number of           Square Footage of       Square Footage of      Portfolio Square    Annualized Base   Portfolio Annualized   Per Leased Square    Annualized Base    Square Foot at
Year of Lease Expiration        Leases Expiring(2)      Expiring Leases(3)      Expiring Leases(4)            Feet              Rent(5)            Base Rent              Foot(6)        Rent at Expiration   Expiration(7)
Vacant                                                         2,722,442               2,614,565                   19.9  %
2022                                       67                    567,011                 519,708                    3.9    $   26,001,505                    4.4  % $           50.03    $    26,267,292    $        50.54
2023                                      172                  1,717,729               1,369,011                   10.4        73,949,187                   12.4                54.02         74,930,084             54.73
2024                                      169                  1,791,887               1,514,926                   11.5        85,582,785                   14.4                56.49         90,593,643             59.80
2025                                      138                  1,854,803               1,522,868                   11.6        93,087,659                   15.8                61.13         99,879,752             65.59
2026                                       63                    711,825                 621,106                    4.7        38,306,154                    6.4                61.67         42,593,801             68.58
2027                                       84                    939,702                 795,547                    6.0        46,920,342                    7.9                58.98         53,241,773             66.92
2028                                       42                  1,037,801                 896,956                    6.8        60,923,983                   10.2                67.92         71,862,566             80.12
2029                                       20                    361,097                 254,942                    1.9        19,073,279                    3.2                74.81         22,606,021             88.67
2030                                       16                  1,532,267               1,170,613                    8.9        56,599,859                    9.5                48.35         72,303,833             61.77
2031                                       14                  1,086,447                 670,931                    5.1        37,964,531                    6.4                56.58         50,272,084             74.93
Thereafter                                 25                  1,264,299                 814,359                    6.2        45,456,342                    7.6                55.82         65,679,797             80.65
Building management use(8)                 46                    209,140                 183,138                    1.4                 -                      -                    -                  -                 -
Signed leases not                          44                    230,553                 219,863                    1.7        10,901,410                    1.8                49.58         12,981,094             59.04
commenced(9)
Portfolio Total/Weighted                  900                 16,027,003              13,168,533                  100.0  % $  594,767,036                  100.0  % $           56.35    $   683,211,740    $        64.74
Average


_____________
1.Calculated based on the Company's consolidated portfolio, plus the Company's
share of the amount from the Company's unconsolidated joint ventures (calculated
based on the Company's percentage ownership interests), minus the Company's
partners' share of the amount from the Company's consolidated joint ventures
(calculated based on the partners' percentage ownership interests).
2.Does not include 39 month-to-month leases.
3.Total expiring square footage does not include 26,479 square feet of
month-to-month leases.
4.Total expiring square footage does not include 16,397 square feet of
month-to-month leases.
5.Annualized base rent for office properties is calculated by multiplying (i)
base rental payments (defined as cash base rents (before abatements or
deferments)) as of September 30, 2022, by (ii) 12. Annualized base rent does not
reflect tenant reimbursements. Rent data for our office properties is presented
on an annualized basis without regard to cancellation options.
6.Annualized base rent per square foot for all lease expiration years is
calculated as (i) base rental payments (defined as cash base rents (before
abatements or deferments)) under commenced leases, divided by (ii) square
footage under commenced leases as of September 30, 2022.
7.Annualized base rent per square foot at expiration for all lease expiration
years is calculated as (i) base rental payments (defined as cash base rents
(before abatements or deferments)) under commenced leases, divided by (ii)
square footage under commenced leases as of September 30, 2022.
8.Reflects management offices occupied by the Company with various expiration
dates.
9.Annualized base rent per leased square foot and annualized base rent per
square foot at expiration for signed leases not commenced reflects uncommenced
leases for spaces not occupied as of September 30, 2022 and is calculated as (i)
base rental payments (defined as cash base rents at expiration (before
abatements or deferments)) under uncommenced leases for vacant space as of
September 30, 2022, divided by (ii) square footage under uncommenced leases as
of September 30, 2022.

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Historical Tenant Improvements and Leasing Commissions

The following table summarizes historical information regarding tenant
improvement and leasing commission costs for tenants at our office properties:
                                           Three Months Ended September 30,                 Nine Months Ended September 30,
                                              2022                     2021                    2022                    2021
Renewals(1)
Number of leases                                      34                   27                        120                    92
Square feet                                      216,505              187,913                    948,663               909,757
Tenant improvement costs per square   $             5.32          $     16.25          $           13.75          $       8.23

foot(2)(3)

Leasing commission costs per square                 5.71                 5.24                      10.80                  7.56

foot(2)

Total tenant improvement and leasing  $            11.03          $     21.49          $           24.55          $      15.79
commission costs(2)

New leases(4)
Number of leases                                      31                   26                        106                    76
Square feet                                      164,859              130,515                    649,982               443,221
Tenant improvement costs per square   $            95.70          $     77.82          $           70.22          $      67.50

foot(2)(3)

Leasing commission costs per square                16.48                14.06                      16.51                 15.85

foot(2)

Total tenant improvement and leasing  $           112.18          $     91.88          $           86.73          $      83.35
commission costs(2)

TOTAL
Number of leases                                      65                   53                        226                   168
Square feet                                      381,364              318,428                  1,598,645             1,352,978
Tenant improvement costs per square   $            43.20          $     40.61          $           36.73          $      26.45

foot(2)(3)

Leasing commission costs per square                10.23                 8.73                      13.12                 10.11

foot(2)

TOTAL TENANT IMPROVEMENT AND LEASING  $            53.43          $     49.34          $           49.85          $      36.56
COMMISSION COSTS(2)


_____________
1.Excludes retained tenants that have relocated or expanded into new space
within our portfolio.
2.Assumes all tenant improvement and leasing commissions are paid in the
calendar year in which the lease is executed, which may be different than the
year in which they were actually paid.
3.Tenant improvement costs are based on negotiated tenant improvement allowances
set forth in leases, or, for any lease in which a tenant improvement allowance
was not specified, the aggregate cost originally budgeted at the time the lease
commenced.
4.Includes retained tenants that have relocated or expanded into new space
within our portfolio.

Funding

During the nine months ended September 30, 2022, there were $170.0 million in
borrowings on the unsecured revolving credit facility, net of repayments. The
Company generally uses the unsecured revolving credit facility to finance the
acquisition of properties and businesses, to provide funds for tenant
improvements and capital expenditures and to provide for working capital and
other corporate purposes.

In July 2022the Company repaid its substantially canceled debt for an amount of
$126.4 million entirely by using the proceeds of the maturity of its United States Government titles in June 2022.

In August 2022the Company amended the existing loan agreement secured by its 1918 Eighth property, whereby the variable interest rate based on LIBOR was replaced by a variable interest rate based on forward SOFR.

In August 2022, the Company acquired Quixote. In conjunction with the
acquisition, the Company obtained a $160.0 million note payable from the sellers
secured by the assets of Quixote. The loan has an interest rate of 5.00% per
annum and is interest-only through the maturity date of December 31, 2023.
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In September 2022, the operating partnership completed an underwritten public
offering of $350.0 million of 5.95% Senior Notes due in 2028, which were issued
at a discount of 99.614% of par and are fully and unconditionally guaranteed by
the Company. The net proceeds from the offering, after deducting the
underwriting discount and commissions, were approximately $346.5 million and
were used to repay the outstanding borrowings under its unsecured revolving
credit facility. An amount equal to the net proceeds has been allocated to new
or existing eligible green projects.

In September 2022, the operating partnership entered into the First Modification
Agreement to the Fourth Amended and Restated Credit Agreement, which replaced
the LIBOR-based floating interest rate option with a term SOFR-based floating
interest rate option as a benchmark rate for borrowings denominated in U.S.
dollars for all purposes under the existing credit agreement.

Historical operating results

This Quarterly Report on Form 10-Q of Hudson Pacific Properties, Inc. and Hudson
Pacific Properties, L.P. represents an update to the more detailed and
comprehensive disclosures included in the 2021 Annual Report on Form 10-K of
Hudson Pacific Properties, Inc. and Hudson Pacific Properties, L.P. Accordingly,
you should read the following discussion in conjunction with the information
included in our 2021 Annual Report on Form 10-K, as well as the unaudited
financial statements included in Part I, Item 1 of this Quarterly Report on Form
10-Q.

In addition, some of the statements and assumptions in this Quarterly Report on
Form 10-Q are forward-looking statements within the meaning of Section 27A of
the Securities Act or Section 21E of the Exchange Act, including, in particular,
statements about our plans, strategies and prospects as well as estimates of
industry growth for the quarter and beyond. See "Forward-looking Statements."

All amounts and percentages used in this discussion of our results of operations
are calculated using the numbers presented in the financial statements contained
in Part I, Item 1 of this Quarterly Report rather than the rounded numbers
appearing in this discussion. The dollar amounts included in the tables in this
discussion of our results of operations are presented in thousands.

Comparison of the three months ended September 30, 2022 at the end of three months September 30, 2021

Net operating income

We evaluate performance based upon property net operating income ("NOI"). NOI is
not a measure of operating results or cash flows from operating activities or
cash flows as measured by generally accepted accounting principles in the United
States ("GAAP") and should not be considered an alternative to net income, as an
indication of our performance, or as an alternative to cash flows as a measure
of liquidity, or our ability to make distributions. All companies may not
calculate NOI in the same manner. We consider NOI to be a useful performance
measure to investors and management because when compared across periods, NOI
reflects the revenues and expenses directly associated with owning and operating
our properties and the impact to operations from trends in occupancy rates,
rental rates and operating costs, providing a perspective not immediately
apparent from net income. We calculate NOI as net income excluding corporate
general and administrative expenses, depreciation and amortization, impairments,
gains/losses on sales of real estate, interest expense, interest income,
transaction-related expenses and other non-operating items. We define NOI as
operating revenues (including rental revenues, other property-related revenue,
tenant recoveries and other operating revenues), less property-level operating
expenses (which includes external management fees, if any, and property-level
general and administrative expenses). NOI on a cash basis is NOI adjusted to
exclude the effect of straight-line rent and other non-cash adjustments required
by GAAP. We believe that NOI on a cash basis is helpful to investors as an
additional measure of operating performance because it eliminates straight-line
rent and other non-cash adjustments to revenue and expenses.

Management further analyzes the NOI by evaluating the performance of the following groups:

•Same store, which includes all properties owned and included in our stabilized portfolio from July 1, 2022 and still held and included in the stabilized portfolio at September 30, 2022; and

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•Non-same-store, which includes:
•Stabilized non-same-store properties
•Lease-up properties
•Repositioning properties
•Development properties
•Redevelopment properties
•Held for sale properties
•Operating results from studio service-related businesses

The following table reconciles the net loss with the NOI:

                                                 Three Months Ended September 30,
                                                     2022                2021             Dollar Change             Percent Change
Net loss                                         $   (6,792)         $  (6,182)         $         (610)                         9.9  %
Adjustments:
Loss (income) from unconsolidated real estate           352               (566)                    918                       (162.2)
entities
Fee income                                             (911)              (678)                   (233)                        34.4
Interest expense                                     37,261             30,825                   6,436                         20.9
Interest income                                        (196)              (934)                    738                        (79.0)
Management services reimbursement                       983                253                     730                        288.5
income-unconsolidated real estate entities
Management services expense-unconsolidated real        (983)              (253)                   (730)                       288.5
estate entities
Transaction-related expenses                          9,331              6,300                   3,031                         48.1
Unrealized loss (gain) on non-real estate               894               (827)                  1,721                       (208.1)

investments

Loss on sale of real estate                             180                  -                     180                            -
Impairment loss                                       4,795              2,762                   2,033                         73.6
Loss on extinguishment of debt                            -              6,249                  (6,249)                      (100.0)
Other income                                         (2,453)               (82)                 (2,371)                     2,891.5
General and administrative                           19,795             18,288                   1,507                          8.2
Depreciation and amortization                        93,070             88,568                   4,502                          5.1
NOI                                              $  155,326          $ 143,723          $       11,603                          8.1  %

Same-store NOI                                   $  120,153          $ 129,221          $       (9,068)                        (7.0) %
Non-same-store NOI                                   35,173             14,502                  20,671                        142.5
NOI                                              $  155,326          $ 143,723          $       11,603                          8.1  %



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The following table summarizes certain statistics of our consolidated same-store
office and studio properties:
                                                                    Three 

Months ended September 30,

                                                                        2022                   2021
Same-store office
Number of properties                                                             42                   42
Rentable square feet                                                     11,311,811           11,311,811
Ending % leased                                                            88.2   %              92.3  %
Ending % occupied                                                          86.5   %              91.7  %
Average % occupied for the period                                          90.1   %              92.1  %
Average annual rental rate per square foot                       $        57.10           $     54.10

Same-store studio
Number of properties                                                              3                    3
Rentable square feet                                                      1,230,454            1,230,454
Average % occupied for the period(1)                                       84.4   %              87.3  %


_____________

1. Percentage occupancy of a studio in the same store is the average percentage occupancy over the 12 months ended.

The following table gives more details about our NOI:

Three months completed September 30,

                                                          2022                                                            2021
                                 Same-Store           Non-Same-Store            Total            Same-Store           Non-Same-Store            Total
Revenues
Office
Rental                          $  173,813          $        34,966        

$208,779 $179,000 $18,941 $197,941
Services and other income

           4,063                      649              4,712               3,115                      810              3,925
Total office revenues              177,876                   35,615            213,491             182,115                   19,751            201,866

Studio
Rental                              12,998                    2,307             15,305              12,620                      148             12,768
Service and other revenues           9,267                   22,291             31,558               6,131                    6,867             12,998
Total studio revenues               22,265                   24,598             46,863              18,751                    7,015             25,766

Total revenues                     200,141                   60,213            260,354             200,866                   26,766            227,632

Operating expenses
Office operating expenses           66,838                   11,502             78,340              62,687                    9,178             71,865
Studio operating expenses           13,150                   13,538             26,688               8,958                    3,086             12,044
Total operating expenses            79,988                   25,040            105,028              71,645                   12,264             83,909

Office NOI                         111,038                   24,113            135,151             119,428                   10,573            130,001
Studio NOI                           9,115                   11,060             20,175               9,793                    3,929             13,722
NOI                             $  120,153          $        35,173          $ 155,326          $  129,221          $        14,502          $ 143,723







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The following table gives further detail on our change in NOI:
                                                                        

Three months completed September 30, 2022 compared to

                                                                               Three Months Ended September 30, 2021
                                            Same-Store                                  Non-Same-Store                                        Total
                                   Dollar
                                   Change          Percent Change         Dollar Change             Percent Change             Dollar Change         Percent Change
Revenues
Office
Rental                          $  (5,187)                 (2.9) %       $      16,025                         84.6  %       $       10,838                   5.5  %
Service and other revenues            948                  30.4                   (161)                       (19.9)                    787                  20.1
Total office revenues              (4,239)                 (2.3)                15,864                         80.3                  11,625                   5.8

Studio
Rental                                378                   3.0                  2,159                      1,458.8                   2,537                  19.9
Service and other revenues          3,136                  51.1                 15,424                        224.6                  18,560                 142.8
Total studio revenues               3,514                  18.7                 17,583                        250.6                  21,097                  81.9

Total revenues                       (725)                 (0.4)                33,447                        125.0                  32,722                  14.4

Operating expenses
Office operating expenses           4,151                   6.6                  2,324                         25.3                   6,475                   9.0
Studio operating expenses           4,192                  46.8                 10,452                        338.7                  14,644                 121.6
Total operating expenses            8,343                  11.6                 12,776                        104.2                  21,119                  25.2

Office NOI                         (8,390)                 (7.0)                13,540                        128.1                   5,150                   4.0
Studio NOI                           (678)                 (6.9)                 7,131                        181.5                   6,453                  47.0
NOI                             $  (9,068)                 (7.0) %       $      20,671                        142.5  %       $       11,603                   8.1  %


NOI increased $11.6 millionor 8.1%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021mainly resulting from:

•a $20.7 million increase in non-same-store NOI driven by:
•an increase in office NOI of $13.5 million primarily due to:
•a $16.0 million increase in rental revenues primarily resulting from the
delivery of the entire premises of our One Westside development property to
Google in November 2021 and the acquisition of our 5th & Bell property in
December 2021;
•partially offset by a $2.3 million increase in operating expenses corresponding
to the increase in rental revenues.
•an increase in studio NOI of $7.1 million primarily due to the acquisition of
Zio and Star Waggons in August 2021 and Quixote in August 2022.
•a $9.1 million decrease in same-store NOI driven by:
•a decrease in office NOI of $8.4 million primarily due to:
•a $5.2 million decrease in rental revenues resulting from a decrease in
occupancy across our same-store portfolio; and
•a $4.2 million increase in operating expenses, predominantly utilities and
cleaning, resulting from higher utilization of office space due to an increase
in the number of tenant employees returning to in-person work;
•partially offset by a $0.9 million increase in service and other revenues
primarily resulting from a lease cancellation fee at our Concourse property and
increases in visitor parking at several properties across our same-store
portfolio.
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•a decrease in studio NOI of $0.7 million primarily due to:
•a $4.2 million increase in studio operating expenses due to a favorable
supplemental property tax assessment for our Sunset Las Palmas studio property
recorded in the prior period and an increase in lighting and grip, utilities and
cleaning expenses at our Sunset Gower studio property;
•partially offset by a $3.1 million increase in service and other revenues
predominantly due to increased activity at our Sunset Gower studio property.

Other Income (Expense)

Interest expense

The following table provides a reconciliation between gross interest expense and the interest expense line item in the consolidated statements of income:

Three months completed September 30,

                                                        2022                2021             Dollar Change          Percent Change
Gross interest expense                             $     38,595          $ 33,912          $        4,683                   13.8  %
Capitalized interest                                     (4,797)           (5,760)                    963                  (16.7)
Amortization of deferred financing costs and loan         3,463             2,673                     790                   29.6
discounts/premiums
TOTAL                                              $     37,261          $ 30,825          $        6,436                   20.9  %



Gross interest expense increased $4.7 million, or 13.8%, to $38.6 million for
the three months ended September 30, 2022 compared to $33.9 million for the
three months ended September 30, 2021. The increase was primarily driven by an
increase in the average reference rates for the Company's variable rate debt,
increases in the outstanding borrowings on the Company's unsecured revolving
credit facility and One Westside construction loan and interest incurred on the
Quixote secured note and the 5.95% Registered senior notes, which were issued in
August 2022 and September 2022, respectively. The overall increase was partially
offset by decreases in interest expense due to the repayment of the mortgage
loan secured by the 10950 Washington property and the in-substance defeased debt
in December 2021 and July 2022, respectively.

Capitalized interest decreased $1.0 million, or 16.7%, to $4.8 million for the
three months ended September 30, 2022 compared to $5.8 million for the three
months ended September 30, 2021. The decrease was primarily driven by the
completion of the One Westside development property, partially offset by
interest capitalized on the newly-acquired Washington 1000 development.

Amortization of deferred financing costs and loan discounts/premiums increased
$0.8 million, or 29.6%, to $3.5 million for the three months ended September 30,
2022 compared to $2.7 million for the three months ended September 30, 2021. The
increase was primarily driven by the amortization of new issuance costs
associated with the refinancing of the $1.1 billion loan secured by the
Hollywood Media Portfolio and the amendment of the unsecured revolving credit
facility in August 2021 and December 2021, respectively.

General and administrative expenses

General and administrative expenses increased $1.5 million, or 8.2%, to $19.8
million for the three months ended September 30, 2022 compared to $18.3 million
for the three months ended September 30, 2021. The increase was primarily driven
by an increase in professional fees, travel and entertainment and office
expenses during the three months ended September 30, 2022.

Depreciation and amortization

Depreciation and amortization expense increased $4.5 million, or 5.1%, to $93.1
million for the three months ended September 30, 2022 compared to $88.6 million
for the three months ended September 30, 2021. The increase was primarily
related to the completion of the One Westside development in November 2021, the
depreciation and amortization of non-real estate property, plant and equipment
and finite-lived intangible assets acquired as part of the Zio and Star Waggons
transactions in August 2021 and the Quixote transaction in August 2022 and the
acquisition of the 5th & Bell property in December 2021. These
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increases were partially offset by the cessation of depreciation related to four
properties classified as held for sale during the three months ended
September 30, 2022, two of which were also sold during the period.

Transaction-related expenses

We incurred transaction-related expenses of $9.3 million for the three months
ended September 30, 2022 primarily related to the Quixote acquisition, compared
to $6.3 million for the three months ended September 30, 2021 primarily related
to the Zio and Star Waggons acquisitions.

interest income

Interest income decreased $0.7 million, or 79.0%, to $0.2 million for the three
months ended September 30, 2022 compared to $0.9 million for the three months
ended September 30, 2021. The decrease was primarily driven by the maturity of
the U.S. Government securities in June 2022.

Fee receipts

We recognized fee income of $0.9 million for the three months ended
September 30, 2022 compared to $0.7 million for the three months ended
September 30, 2021. Fee income primarily represents management fee, construction
management fee and leasing commission income earned from our unconsolidated real
estate entities.

Unrealized gain (loss) on non-real estate investments

We recognized an unrealized loss on non-real estate investments of $0.9 million
for the three months ended September 30, 2022 compared to an unrealized gain on
non-real estate investments of $0.8 million for the three months ended
September 30, 2021. The activity in both periods is due to the observable
changes in the fair value of the investments.

Loss on extinguishment of debt

During the three months ended September 30, 2021 we completed a refinancing of
the loan secured by the Hollywood Media Portfolio and recognized a loss on
extinguishment of debt of $6.2 million primarily representing the write-off of
unamortized deferred financing costs associated with the extinguished portion of
the loan. During the three months ended September 30, 2022, no such loss was
recognized.

Impairment loss

We recognized an impairment loss of $4.8 million during the three months ended
September 30, 2022 due to reductions in the estimated fair values of our Del
Amo, 6922 Hollywood and Northview Center properties, as compared to an
impairment loss of $2.8 million recognized during the three months ended
September 30, 2021 due to a reduction in the estimated hold period of our Del
Amo property.

Comparison of the nine months ended September 30, 2022 at the nine months ended
September 30, 2021

Net Operating Income

Management further analyzes the NOI by evaluating the performance of the following groups:

•Same-store, which includes all of the properties owned and included in our
stabilized portfolio as of January 1, 2022 and still owned and included in the
stabilized portfolio as of September 30, 2022; and

•Non-same-store, which includes:
•Stabilized non-same-store properties
•Lease-up properties
•Repositioning properties
•Development properties
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•Redevelopment properties
•Held for sale properties
•Operating results from studio service-related businesses

The following table reconciles the net income (loss) to the NOI:

                                                   Nine Months Ended 

September 30,

                                                       2022                2021             Dollar Change          Percent Change
Net (loss) income                                  $  (10,861)         $  12,259          $      (23,120)                (188.6) %

Adjustments:

Income from unconsolidated real estate entities        (1,731)            (1,671)                    (60)                   3.6
Fee income                                             (3,122)            (2,323)                   (799)                  34.4
Interest expense                                      101,816             91,800                  10,016                   10.9
Interest income                                        (2,026)            (2,868)                    842                  (29.4)
Management services reimbursement                       3,159                879                   2,280                  259.4
income-unconsolidated real estate entities
Management services expense-unconsolidated real        (3,159)              (879)                 (2,280)                 259.4
estate entities
Transaction-related expenses                           10,713              7,364                   3,349                   45.5
Unrealized loss (gain) on non-real estate               1,062            (11,620)                 12,682                 (109.1)

investments

Loss on sale of real estate                               180                  -                     180                      -
Impairment loss                                        28,548              2,762                  25,786                  933.6
Loss on extinguishment of debt                              -              6,249                  (6,249)                (100.0)
Other (income) expense                                 (4,047)             1,547                  (5,594)                (361.6)
General and administrative                             62,178             53,846                   8,332                   15.5
Depreciation and amortization                         276,701            255,507                  21,194                    8.3
NOI                                                $  459,411          $ 412,852          $       46,559                   11.3  %

Same-store NOI                                        371,475            377,426                  (5,951)                  (1.6) %
Non-same-store NOI                                     87,936             35,426                  52,510                  148.2
NOI                                                $  459,411          $ 412,852          $       46,559                   11.3  %



The following table summarizes certain statistics of our same-store office and
studio properties:
                                                                     Nine Months Ended September 30,
                                                                        2022                   2021
Same-store office
Number of properties                                                         42                     42
Rentable square feet                                                 11,311,811             11,311,811
Ending % leased                                                            88.2   %               92.3  %
Ending % occupied                                                          86.5   %               91.7  %
Average % occupied for the period                                          89.6   %               92.3  %
Average annual rental rate per square foot                       $        57.10           $      54.10

Same-store studio
Number of properties                                                          3                      3
Rentable square feet                                                  1,230,454              1,230,454
Average % occupied for the period(1)                                       84.4   %               87.3  %


_____________

1. Percentage occupancy of a studio in the same store is the average percentage occupancy over the 12 months ended.


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The following table gives further detail on our NOI:
                                                                            

Nine month period ended September 30,

                                                          2022                                                            2021
                                 Same-Store           Non-Same-Store            Total            Same-Store           Non-Same-Store            Total
Revenues
Office
Rental                          $  526,957          $        99,850        

$626,807 $524,865 $55,489 $580,354
Services and other income 10,396

                    3,932             14,328               7,272                    2,086              9,358
Total office revenues              537,353                  103,782            641,135             532,137                   57,575            589,712

Studio
Rental                              38,981                    3,156             42,137              36,324                      148             36,472
Service and other revenues          24,334                   48,691             73,025              23,302                    6,867             30,169
Total studio revenues               63,315                   51,847            115,162              59,626                    7,015             66,641

Total revenues                     600,668                  155,629            756,297             591,763                   64,590            656,353

Operating expenses
Office operating expenses          192,222                   38,307            230,529             181,459                   26,079            207,538
Studio operating expenses           36,971                   29,386             66,357              32,878                    3,085             35,963
Total operating expenses           229,193                   67,693            296,886             214,337                   29,164            243,501

Office NOI                         345,131                   65,475            410,606             350,678                   31,496            382,174
Studio NOI                          26,344                   22,461             48,805              26,748                    3,930             30,678
NOI                             $  371,475          $        87,936          $ 459,411          $  377,426          $        35,426          $ 412,852







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The following table gives further detail on our change in NOI:
                                                                        

Nine month period ended September 30, 2022 compared to

                                                                                Nine Months Ended September 30, 2021
                                            Same-Store                                  Non-Same-Store                                        Total
                                   Dollar
                                   Change          Percent Change         Dollar Change             Percent Change             Dollar Change         Percent Change
Revenues
Office
Rental                          $   2,092                   0.4  %       $      44,361                         79.9  %       $       46,453                   8.0  %
Service and other revenues          3,124                  43.0                  1,846                         88.5                   4,970                  53.1
Total office revenues               5,216                   1.0                 46,207                         80.3                  51,423                   8.7

Studio
Rental                              2,657                   7.3                  3,008                      2,032.4                   5,665                  15.5
Service and other revenues          1,032                   4.4                 41,824                        609.1                  42,856                 142.1
Total studio revenues               3,689                   6.2                 44,832                        639.1                  48,521                  72.8

Total revenues                      8,905                   1.5                 91,039                        140.9                  99,944                  15.2

Operating expenses
Office operating expenses          10,763                   5.9                 12,228                         46.9                  22,991                  11.1
Studio operating expenses           4,093                  12.4                 26,301                        852.5                  30,394                  84.5
Total operating expenses           14,856                   6.9                 38,529                        132.1                  53,385                  21.9

Office NOI                         (5,547)                 (1.6)                33,979                        107.9                  28,432                   7.4
Studio NOI                           (404)                 (1.5)                18,531                        471.5                  18,127                  59.1
NOI                             $  (5,951)                 (1.6) %       $      52,510                        148.2  %       $       46,559                  11.3  %


NOI increased $46.6 millionor 11.3%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021mainly resulting from:

•a $52.5 million increase in non-same-store NOI from driven by:
•an increase in office NOI of $34.0 million primarily due to:
•a $44.4 million increase in rental revenues primarily resulting from the
delivery of the entire premises of our One Westside development property to
Google in November 2021 and the acquisition of our 5th & Bell property in
December 2021; and
•a $1.8 million increase in service and other revenues primarily due to lease
cancellation fees received at our Skyway Landing property and an increase in
visitor parking revenue at our 6922 Hollywood property, partially offset by a
decrease arising from lease cancellation fees received at our 10850 Pico
property in the prior period that did not recur in the current period;
•partially offset by a $12.2 million increase in operating expenses
corresponding to the increase in rental revenues.
•an increase in studio NOI of $18.5 million primarily due to the acquisition of
Zio and Star Waggons in August 2021 and Quixote in August 2022.
•a $6.0 million decrease in same-store NOI driven by:
•an decrease in office NOI of $5.5 million primarily due to:
•a $10.8 million increase in operating expenses, predominantly utilities and
cleaning, resulting from higher utilization of office space due to an increase
in the number of tenant employees returning to in-person work;
•partially offset by a $2.1 million increase in rental revenues primarily
resulting from lease commencements at our Maxwell property (Califia Farms and
Twitch Interactive), the conversion of a lease from percentage rent to base rent
at our Maxwell property, the reversal of reserves for
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uncollectible rents recognized at our 11601 Wilshire and 1455 Market properties,
a restoration fee received at our Concourse property and higher recoveries at
certain properties as compared to the prior year comparative period. The
increase was partially offset by the impact of a decrease in occupancy across
our same-store portfolio; and
•a $3.1 million increase in service and other revenues primarily resulting from
lease cancellation fees received at our 11601 Wilshire, Concourse and
Shorebreeze properties and increases in visitor parking at several properties
across our same-store portfolio.
•an decrease in studio NOI of $0.4 million primarily due to:
•a $4.1 million increase in studio operating expenses primarily due to a
supplemental property tax assessment for our Sunset Gower studio property
recorded in the current period, a favorable supplemental property tax assessment
for our Sunset Las Palmas studio property recorded in the prior period and an
increase in payroll and payroll-related costs at our Sunset Gower studio
property;
•partially offset by a $2.7 million increase in rental revenues primarily from
increased activity at our Sunset Gower and Sunset Las Palmas studio properties;
and
•a $1.0 million increase in service and other revenues primarily resulting from
increased services activity at our Sunset Bronson and Sunset Las Palmas studio
properties.

Other Income (Expense)

Interest expense

The following table provides a reconciliation between gross interest expense and the interest expense line item in the consolidated statements of income:

Nine month period ended September 30,

                                                          2022                  2021             Dollar Change          Percent Change
Gross interest expense                             $    103,242             $ 101,341          $        1,901                    1.9  %
Capitalized interest                                    (11,674)              (17,049)                  5,375                  (31.5)
Amortization of deferred financing costs and loan        10,248                 7,508
discounts/premiums                                                                                      2,740                   36.5
TOTAL                                              $    101,816             $  91,800          $       10,016                   10.9  %



Gross interest expense increased $1.9 million, or 1.9%, to $103.2 million for
the nine months ended September 30, 2022 compared to $101.3 million for the nine
months ended September 30, 2021. The increase was primarily driven by an
increase in the average reference rates for the Company's variable rate debt,
increases in the outstanding borrowings on the Company's unsecured revolving
credit facility and One Westside construction loan and interest incurred on the
Quixote secured note and the 5.95% Registered senior notes, which were issued in
August 2022 and September 2022, respectively. The overall increase was partially
offset by decreases in interest expense due to the repayment of the mortgage
loan secured by the 10950 Washington property and the in-substance defeased debt
in December 2021 and July 2022, respectively.

Capitalized interest decreased $5.4 millioni.e. 31.5%, at $11.7 million for the nine months ended September 30, 2022 compared to $17.0 million for the nine months ended September 30, 2021. The increase is mainly due to the completion of the One Westside and Harlow development properties, partially offset by capitalized interest on newly acquired properties Washington 1000 development.

Amortization of deferred financing costs and loan discounts/premiums increased
$2.7 million, or 36.5%, to $10.2 million for the nine months ended September 30,
2022 compared to $7.5 million for the nine months ended September 30, 2021. The
increase was primarily driven by the amortization of new issuance costs
associated with the refinancing of the $1.1 billion loan secured by the
Hollywood Media Portfolio and the amendment of the unsecured revolving credit
facility in August 2021 and December 2021, respectively.

General and administrative expenses

General and administrative expenses increased $8.3 million, or 15.5%, to $62.2
million for the nine months ended September 30, 2022 compared to $53.8 million
for the nine months ended September 30, 2021. The increase is primarily driven
by
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lower non-cash compensation expense during the nine months ended September 30,
2021 due to the forfeiture of non-cash compensation awards granted to certain
departing members of management, which did not recur during the current period,
as well as an increase in professional fees, travel and entertainment and office
expenses during the nine months ended September 30, 2022.

Depreciation and amortization

Depreciation and amortization expense increased $21.2 million, or 8.3%, to
$276.7 million for the nine months ended September 30, 2022 compared to $255.5
million for the nine months ended September 30, 2021. The increase was primarily
related to the completion of the One Westside development in November 2021, the
depreciation and amortization of non-real estate property, plant and equipment
and finite-lived intangible assets acquired as part of the Zio and Star Waggons
transactions in August 2021 and the Quixote transaction in August 2022 and the
acquisition of the 5th & Bell property in December 2021. These increases were
partially offset by the cessation of depreciation related to the cessation of
depreciation related to four properties classified as held for sale during the
nine months ended September 30, 2022, two of which were also sold during the
period.

Transaction-related expenses

We incurred transaction-related expenses of $10.7 million for the nine months
ended September 30, 2022 primarily related to the Quixote acquisition, compared
to $7.4 million for the three months ended September 30, 2021 primarily related
to the Zio and Star Waggons acquisitions.

interest income

Interest income decreased $0.8 million, or 29.4%, to $2.0 million for the nine
months ended September 30, 2022 compared to $2.9 million for the nine months
ended September 30, 2021. The decrease was primarily driven by the maturity of
the U.S. Government securities in June 2022.

Fee receipts

We recognized fee income of $3.1 million for the nine months ended September 30,
2022 compared to $2.3 million for the nine months ended September 30, 2021. Fee
income primarily represents management fee, construction management fee and
leasing commission income earned from our unconsolidated real estate entities.

Unrealized gain (loss) on non-real estate investments

We recognized an unrealized loss on our non-real estate investments of $1.1
million for the nine months ended September 30, 2022 compared to an unrealized
gain on non-real estate investments of $11.6 million for the nine months ended
September 30, 2021. The activity in both periods is due to the observable
changes in the fair value of the investments.

Loss on extinguishment of debt

During the nine months ended September 30, 2021 we completed a refinancing of
the loan secured by the Hollywood Media Portfolio and recognized a loss on
extinguishment of debt of $6.2 million primarily representing the write-off of
unamortized deferred financing costs associated with the extinguished portion of
the loan. During the nine months ended September 30, 2022, no such loss was
recognized.

Loss of value

We recognized an impairment loss of $28.5 million during the nine months
ended September 30, 2022, of which $20.0 million was due to reductions in the
estimated fair values of our Del Amo, 6922 Hollywood and Northview Center
properties and $8.5 million was due to the full impairment of the Zio trade name
in connection with a rebranding of the business under the Company's Sunset
Studios platform. We recognized an impairment loss of $2.8 million during the
nine months ended September 30, 2021 due to a reduction in the estimated hold
period of our Del Amo property.

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Liquidity and Capital Resources

We have remained capitalized since our initial public offering through public
offerings, private placements, joint ventures and continuous offerings under our
at-the-market ("ATM") program. We currently expect that our principal sources of
funds to meet our short-term and long-term liquidity requirements for working
capital, strategic acquisitions, capital expenditures, tenant improvements,
leasing costs, dividends and distributions, share repurchases and repayments of
outstanding debt financing will include:

•cash on hand, cash reserves and net cash provided by operations;
•proceeds from additional equity securities;
•our ATM program;
•borrowings under the operating partnership's unsecured revolving credit
facility and One Westside construction loan;
•proceeds from joint venture partners;
•proceeds from the Sunset Glenoaks construction loan (unconsolidated joint
venture); and
•proceeds from additional secured, unsecured debt financings or offerings.

Sources of liquidity

We had approximately $161.7 million of cash and cash equivalents at
September 30, 2022. Our principal source of operating cash flow is related to
leasing and operating the properties in our portfolio. Our properties provide a
relatively consistent stream of cash flow that provides us with resources to pay
operating expenses, debt service fees and fund quarterly dividend and
distribution requirements.

Our ability to access the equity capital markets will be dependent on a number
of factors as well, including general market conditions for REITs and market
perceptions about us.

We have an ATM program that allows us to sell up to $125.0 million of common
stock, $65.8 million of which has been sold through September 30, 2022. Any
future sales will depend on several factors, including, but not limited to,
market conditions, the trading price of our common stock and our capital needs.
We have no obligation to sell the remaining shares available for sale under this
program.

As of September 30, 2022, we had total borrowing capacity of $1.0 billion under
our unsecured revolving credit facility, $295.0 million of which had been drawn.
As of September 30, 2022, we had total borrowing capacity of $414.6 million
under our construction loan, secured by our One Westside and 10850 Pico
properties, $273.1 million of which had been drawn. As of September 30, 2022, we
had total borrowing capacity of $100.6 million under the Sunset Glenoaks
construction loan (unconsolidated joint venture), of which $30.8 million had
been drawn.

Our ability to incur additional debt will be dependent on a number of factors,
including our degree of leverage, the value of our unencumbered assets and
borrowing restrictions that may be imposed by lenders. If we incur additional
debt, the risks associated with our leverage, including our ability to service
our debt, would increase.

The following table shows our ratio of debt to total market capitalization (counting Series A Preferred Units as debt) at September 30, 2022 (in thousands, except percentage):

                                                                                   September 30, 2022
Unsecured and secured debt(1)                                                     $       4,476,575
Series A redeemable preferred units                                                           9,815
Total consolidated debt                                                                   4,486,390

Equity capitalization(2)                                                                  2,015,135
TOTAL CONSOLIDATED MARKET CAPITALIZATION                                          $       6,501,525
Total consolidated debt/total consolidated market capitalization                               69.0  %


_____________

1. Excludes joint venture partner debt and unamortized deferred financing costs and loan discounts/premiums.

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2.Equity capitalization represents the shares of common stock outstanding
(including unvested restricted shares), OP units outstanding, restricted
performance units and dilutive shares multiplied by the closing price of $10.95,
as reported by the NYSE, on September 30, 2022 as well as the aggregate value of
the Series C preferred stock liquidation preference as of September 30, 2022.

Outstanding debt

The following table sets forth information as of September 30, 2022 and
December 31, 2021 with respect to our outstanding indebtedness, excluding
unamortized deferred financing costs and loan discounts/premiums (in thousands):
                               September 30, 2022       December 31, 2021
Unsecured debt                $         2,570,000      $        2,050,000
Secured debt                  $         1,906,575      $        1,714,874
In-substance defeased debt    $                 -      $          128,212
Joint venture partner debt    $            66,136      $           66,136


The operational partnership complied with its financial covenants at
September 30, 2022.

Liquidity Uses

Contractual Obligations

The terms of the securities purchase agreement for the acquisition of Zio require the Company to pay up to $20.0 million additional compensation to the company’s former shareholders in 2024, subject to compliance with certain performance thresholds.

During the nine months ended September 30, 2022, there were no material changes
outside the ordinary course of business in the information regarding specified
contractual obligations contained in our 2021 Annual Report on Form 10-K. See
Part I, Item 1 "Note 10 to the Consolidated Financial Statements-Debt" for
information regarding our future minimum principal payments due on our
outstanding debt. See Part I, Item 1 "Note 14 to the Consolidated Financial
Statements-Future Minimum Rents and Lease Payments" for information regarding
our future minimum operating lease payments. See Part I, Item 1 "Note 22 to the
Consolidated Financial Statements-Commitments and Contingencies" for more
detail.

Cash flow

A comparison of our treasury activity is as follows:

                                            Nine Months Ended September 30,
                                               2022                   2021              Dollar Change           Percent Change
Net cash provided by operating
activities                              $        328,549          $  285,512          $       43,037                     15.1  %

Net cash used in investing activities ($335,427) $(560,602) $225,175

                    (40.2) %
Net cash provided by financing
activities                              $         14,070          $  345,787          $     (331,717)                   (95.9) %


Cash and cash equivalents and restricted cash have been $204.1 million and
$196.9 million at September 30, 2022 and December 31, 2021respectively.

Operational activities

Net cash provided by operating activities increased by $43.0 million, or 15.1%,
to $328.5 million for the nine months ended September 30, 2022 compared to
$285.5 million for the nine months ended September 30, 2021. The change
primarily resulted from operating cash flow contributions from the acquisitions
of Quixote in 2022 and Star Waggons, Zio and 5th & Bell in 2021, partially
offset by increases in corporate expenditures.

Investing activities

Net cash used in investing activities decreased by $225.2 million, or 40.2%, to
$335.4 million for the nine months ended September 30, 2022 compared to $560.6
million for the nine months ended September 30, 2021. The change primarily
resulted
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from a $124.3 million increase in proceeds from maturities of U.S. Government
securities, a $100.1 million decrease in additions to investment in real estate,
a $54.3 million decrease in contributions to unconsolidated real estate entities
and $44.5 million in proceeds from property sales during the nine months ended
September 30, 2022 as compared to the nine months ended September 30, 2021. This
change was partially offset by $96.4 million of cash outflows related to
property acquisitions during the nine months ended September 30, 2022 and a
$10.8 million increase in additions to non-real estate property, plant and
equipment during the nine months ended September 30, 2022 as compared to the
nine months ended September 30, 2021.

Fundraising activities

Net cash provided by financing activities decreased $331.7 million, or 95.9%, to
$14.1 million for the nine months ended September 30, 2022 compared to $345.8
million for the nine months ended September 30, 2021. The change primarily
resulted from a $326.1 million decrease in proceeds from notes payable, a $200.0
million cash outflow related to the accelerated share repurchase program, a
$125.6 million increase in payments of in-substance defeased debt, a $45.0
million decrease in proceeds from the sale of common stock, a $22.5 million
increase in other share repurchases and a $17.7 million increase in dividends
paid to Series C preferred stockholders during the nine months ended
September 30, 2022 as compared to the nine months ended September 30, 2021. The
decrease was partially offset by a $362.7 million decrease in payments of notes
payable, a $33.9 million decrease in distributions to non-controlling members in
consolidated real estate entities and a $13.7 million decrease in payments of
loan costs during the nine months ended September 30, 2022 as compared to the
nine months ended September 30, 2021.

Off-balance sheet arrangements

Joint venture debt

We have investments in unconsolidated real estate entities accounted for using
the equity method of accounting. The following table provides information about
joint venture indebtedness as of September 30, 2022 (in thousands):
                                         Principal Amount            Interest Rate               Contractual Maturity Date             Company's Share
Bentall Centre(1)                      $         482,506              CDOR + 1.75%                                    7/1/2024       $         96,501
Sunset Glenoaks Studios(2)             $          30,848              SOFR + 3.10%                                    1/9/2025       $         15,424


_____________
(1)We own 20% of the ownership interests in the unconsolidated real estate
investment that owns Bentall Centre. The loan was transacted in Canadian
dollars. The principal balance is shown in U.S. dollars using the foreign
currency exchange rate as of September 30, 2022. The interest on the full
principal amount has been effectively capped at 6.31% per annum (4.56% strike
rate + 1.75% spread) through the use of an interest rate cap.
(2)We own 50% of the ownership interests in the unconsolidated real estate
investment that owns the Sunset Glenoaks Studios development. This loan has an
initial interest rate of SOFR + 3.10% per annum until the construction at Sunset
Glenoaks Studios is complete and certain performance targets have been met, at
which time the effective interest rate will decrease to SOFR + 2.50%. This loan
is interest-only through its term. The total capacity of the loan is
$100.6 million. As of September 30, 2022, we have $69.8 million undrawn. The
interest on the full principal amount has been effectively capped at 7.60% per
annum (4.50% strike rate + 3.10% spread) through the use of an interest rate
cap.

Critical Accounting Policies

Our discussion and analysis of our historical financial condition and results of
operations are based upon our consolidated financial statements, which have been
prepared in accordance with GAAP. The preparation of our financial statements in
conformity with GAAP requires us to make estimates of certain items and
judgments as to certain future events, for example with respect to the
assignment of the purchase price of an acquired property among land, buildings,
improvements, equipment and any related intangible assets and liabilities, or
the effect of a property tax reassessment of our properties. These
determinations, even though inherently subjective and prone to change, affect
the reported amounts of our assets, liabilities, revenues and expenses. While we
believe that our estimates are based on reasonable assumptions and judgments at
the time they are made, some of our assumptions, estimates and judgments will
inevitably prove to be incorrect. As a result, actual outcomes will likely
differ from our accruals and those differences-positive or negative-could be
material. Some of our accruals are subject to adjustment, as we believe
appropriate, based on revised estimates and reconciliation to the actual results
when available.

Refer to Part I, Item 1 “Note 2 to the Consolidated Financial Statements – Summary of Significant Accounting Policies” for information on our significant accounting policies.

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Non-GAAP Supplemental Financial Measure: Funds From Operations

We calculate FFO in accordance with the White Paper issued in December 2018 on
FFO approved by the Board of Governors of the National Association of Real
Estate Investment Trusts ("NAREIT"). The White Paper defines FFO as net income
or loss calculated in accordance with GAAP, excluding gains and losses from
sales of depreciable real estate and impairment write-downs associated with
depreciable real estate, plus real estate-related depreciation and amortization
(excluding amortization of deferred financing costs and depreciation of non-real
estate assets) and after adjustment for unconsolidated partnerships and joint
ventures. The calculation of FFO includes the amortization of deferred revenue
related to tenant-funded tenant improvements and excludes the depreciation of
the related tenant improvement assets. In the December 2018 White Paper, NAREIT
provided an option to include value changes in mark-to-market equity securities
in the calculation of FFO. We elected this option retroactively during the
fourth quarter of 2018.

We believe that FFO is a useful supplemental measure of our operating
performance. The exclusion from FFO of gains and losses from the sale of
operating real estate assets allows investors and analysts to readily identify
the operating results of the assets that form the core of our activity and
assists in comparing those operating results between periods. Also, because FFO
is generally recognized as the industry standard for reporting the operations of
REITs, it facilitates comparisons of operating performance to other REITs.
However, other REITs may use different methodologies to calculate FFO, and
accordingly, our FFO may not be comparable to all other REITs.

Implicit in historical cost accounting for real estate assets in accordance with
GAAP is the assumption that the value of real estate assets diminishes
predictably over time. Since real estate values have historically risen or
fallen with market conditions, many industry investors and analysts have
considered presentations of operating results for real estate companies using
historical cost accounting alone to be insufficient. Because FFO excludes
depreciation and amortization of real estate assets, we believe that FFO along
with the required GAAP presentations provides a more complete measurement of our
performance relative to our competitors and a more appropriate basis on which to
make decisions involving operating, financing and investing activities than the
required GAAP presentations alone would provide. We use FFO per share to
calculate annual cash bonuses for certain employees.

However, FFO should not be viewed as an alternative measure of our operating
performance because it does not reflect either depreciation and amortization
costs or the level of capital expenditures and leasing costs necessary to
maintain the operating performance of our properties, which are significant
economic costs and could materially impact our results from operations.

The following table presents a reconciliation of net (loss) income to FFO (in
thousands):
                                                     Three Months Ended September 30,               Nine Months Ended September 30,
                                                         2022                   2021                   2022                   2021
Net (loss) income                                 $         (6,792)        

($6,182) ($10,861) $12,259
Adjustments: Depreciation and Amortization – Consolidated

                  93,070              88,568                   276,701             255,507
Depreciation and amortization-Non-real estate               (5,541)             (2,221)                  (14,458)             (3,388)

assets

Depreciation and amortization-Company's share                1,278               1,462                     3,967               4,523
from unconsolidated real estate entities
Loss on sale of real estate                                    180                   -                       180                   -
Impairment loss-Real estate assets                           4,795               2,762                    20,048               2,762
Unrealized loss (gain) on non-real estate                      894                (827)                    1,062             (11,620)

investments

Tax impact of unrealized gain on non-real estate                 -                   -                         -               1,876

investment

FFO attributable to non-controlling interests              (18,261)            (14,288)                  (56,934)            (46,731)
FFO attributable to preferred shares and units              (5,200)               (153)                  (15,843)               (459)

FFO TO COMMON SHAREHOLDERS AND UNITHOLDERS $64,423 $69,121 $203,862 $214,729



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