Greetings and welcome to Hudson Pacific Properties, Incorporated Third Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the conference over to your host, Kay Tidwell, Executive Vice President and General Counsel. Thank you. You may begin.

Good morning, everyone, and welcome to Hudson Pacific Properties third quarter 2017 earnings conference call. With us today are the Company's Chairman and Chief Executive Officer, Victor Coleman; and Chief Operating Officer and Chief Financial Officer, Mark Lammas. Before I hand the call over to them, please note that on this call, certain information presented contains forward-looking statements. These statements are based on management's current expectations and are subject to risks, uncertainties and assumptions. Potential risks and uncertainties that could cause the company's business and financial results to differ materially from these forward-looking statements are described in the company's periodic reports filed with the SEC from time-to-time. All information discussed on this call is as of today, November 2, 2017, and Hudson Pacific does not intend and undertakes no duty to update future events or circumstances. In addition, certain of the financial information presented in this call represents non-GAAP financial measures. The Company's earnings release, which was released this morning and is available on the Company's website, presents reconciliations to the appropriate GAAP measure and an explanation of why the Company believes such non-GAAP financial measures are useful to investors. And now I would like to turn the call over to Victor Coleman, Chairman and Chief Executive Officer of Hudson Pacific. Victor?

Thanks, Kay. Good morning, everyone, and welcome to our third quarter call. We had a very strong third quarter. On the leasing front, we signed over 460,000 square feet of new and renewal deals at 32% cash and 46% GAAP rent spreads. That brings our year-to-date leasing activity to approximately 1.5 million square feet at 41% cash and 60% GAAP rent spreads. Fundamentals across our markets remain strong, if not exceptional. While I'll touch on each market in a minute, it's worth noting upfront that our demand pipeline stands at 1.6 million square feet. That's elevated, in fact, from our last call and driven by increased demand for availabilities in our Silicon Valley assets. In addition to successfully executing our inaugural public bond offering, which Mark will speak on in a moment, in the third quarter, we've moved forward on several dispositions of non-strategic assets. In September, we put our 65% joint venture interest in Pinnacle I and II under contract to sell for a combined sales price of $350 million. Several factors led us to conclude our capital could be put to better use, including a joint venture partnership that had run its course, continued softness within the Burbank marketplace and significant near-term roll of two of the building's largest tenants. We expect the Pinnacle transaction to close in mid-November. Regarding dispositions, we're also exploring the sale of two of our Palo Alto assets, Embarcadero Center and 2180 Sand Hill Road, which are outside the sought-after Stanford Research Park, where the remainder of our Palo Alto holdings are concentrated. And should pricing prove attractive, these dispositions will also further our efforts to rebalance our portfolio in terms of ADR generated across our core markets. Now our markets. Let's start again in this quarter in Silicon Valley. Bottom line, demand…

Thanks, Victor. Funds from operations or FFO excluding specified items for the three months ended September 30, 2017, totaled $78.9 million or $0.50 per diluted share compared to FFO excluding specified items of $67.4 million or $0.46 per share a year ago. Specified items for the third quarter of 2017 consisted of transaction-related expenses of $600,000 or $0.00 per diluted share. Specified items for the third quarter of 2016 consisted of transaction-related expense of $300,000 or $0.00 per diluted share. As of September 30, 2017, our stabilized and in-service office portfolio was 95.9% and 91.5% leased, respectively, versus 95.6% and 90.8% in the second quarter of this year. The primary drivers of these increases were our 54,000 square foot deal with WeWork at Hill7, our 33,000 square foot deal with Snap at 875 Howard and multiple deals at Metro Center totaling roughly 29,000 square feet. Net operating income with respect to our 32 same-store office properties for the third quarter increased 12.3% on a cash basis and 6.2% on a GAAP basis. The trailing 12-month lease percentage for our same-store media and entertainment properties ended the second quarter at 90.6%, up 70 basis points in the quarter and 320 basis points year-over-year. This upward trend in studio lease percentage continues to reflect the heightened demand for stages and production offices. Same-store media and entertainment net operating income during the third quarter increased by 15.7% on a cash basis and 2.5% on a GAAP basis. This was, again, due to higher occupancy and production at both Sunset Gower and Sunset Bronson. Before turning to guidance, I'll touch on a few other items. First, I will comment on the 90% and 85% year-end lease targets for the 22 former EOP Northern California assets and the eight remaining lease-up assets. As of the…

Thanks, Mark. Excellent job. As we head into 2018, we are well positioned to capitalize on the growth trends and positive fundamentals in each of our core markets. We have an unmatched pipeline of development opportunities in Hollywood. We have outsized mark-to-market on lease expirations in San Francisco. We're poised to expand our platform of value-add opportunities in Downtown Seattle, and we're generating additional significant NOI through leasing along the Peninsula and Silicon Valley. And I'm confident that we've got the right markets, portfolio and people to deliver additional value for our shareholders during the remainder of this year and next. As always, I want to thank the entire Hudson Pacific team and, particularly, our senior management for their hard work this quarter. And to everyone on the call, we appreciate your support of Hudson Pacific Properties, and we look forward to updating you next quarter. Operator, with that, I'm going to turn the call over to you for questions.

[Operator Instructions] Our first question is from Craig Mailman with KeyBanc Capital Markets.

Hey, guys. Mark, I just want to clarify. It sounds like you're walking back a bit from the 90% lease target for the Silicon Valley portfolio. Is that accurate?

First of all, you cut out. What was the number you said?

The 90% target you guys had said last quarter.

No, not at all.

We're not walking it back. What's your indication on that?

When Mark was going through the expirations and the impact on it, it sounded like you guys...

No, he was just giving facts. He is not walking back. He was just giving the facts.

Okay. Right. I just wanted to double-check. I mean, it looks like you guys need about 190,000 square feet to hit that. And can you just kind of give - you said of the 1.6 million, a good amount of that is Silicon Valley. Could you kind of give the breakout of maybe what percentage that could be?

What percentage of what?

The 1.6 million square foot demand pipeline.

Yes. I mean, right now, we're looking at - of the 1.6 million, I mean, since you're laser-focused, it seems like, in the Valley, between the Valley and the Peninsula, about 1 million square feet is in the pipeline of that. So, it's about 63%, 64%, something like that. There's about 465,000 feet in Los Angeles and 100,000 or so feet in Seattle.

Great. And then, Mark, what was driving the better same-store NOI guidance on the studios? Is that Las Palmas doing better than you guys thought it would?

Well, Las Palmas will be in the same-store rate. It's really just better performance at Gower and Bronson. I mean, they're trending incredibly well this year relative to last. I mean, I think we had - our early expectation, when we first guided early this year, was maybe we'd get 3% to 4%, and it's looking quite a bit higher than that as we're nearing year-end.

Great. Thank you, guys.

Our next question is from Alex Goldfarb with Sandler O'Neill. Please proceed with your question.

Good morning, out there. First, just sort of broader market - just got off the Essex call. And on there, they were talking about sort of a job slowdown in the fall of this year. They said it wasn't demand-driven. It was just sort of lack of people to hire. What do you guys see as far as demand from the tech companies and the employers out there? And do you notice a seasonality, whereby it may be very strong in the summer and then it cools off later in the year?

Well, Alex, we're not seeing an impact on the ground thus far. I mean, there's modest job losses to the Bay Area, I think, in September. But year-over-year, it's still, I think, 50,000-plus jobs. I do think that we are at or near full employment. And obviously, there is a housing crunch factor that sort of is built in there. I do think you're - before we sort of touch on the seasonality, which I don't think I'm qualified to talk about on a seasonality basis because I don't think we see any definitive seasonality shifts. But I can tell you that I do think that the availability of qualified tech job - people seems to be a factor. But then again, if you look up in Seattle, I think the number is 6,000 employees for tech jobs for the next two years. Amazon's looking alone for their additional 2 million square feet that they need to populate. And there's a similar sort of demand driver in Pacific Northwest with Facebook and Google and Apple for about 4,000 people. So, there's a lot of jobs that need to be filled, and I'm not so sure where those people are coming from.

Okay. And then my second question is CBS Studio is obviously on the market. It seems like a big price. Can you just talk about, one, how you guys think about that asset and doing it on your own, which would seem to be a little much just given where your equity is, so perhaps, bringing in a joint venture partner? And then, two, just given the Amazon news for their Culver City lease there and others, it seems like the cat's out of the bag on studio space. So, if you can give your sort of expectations for how pricing may change on this versus when you guys bid on Las Palmas last year.

Well, I don't know what kind of cat you have, but I don't think there's any cat out of the bag concept on the studio business. They've been running the movie business since the early 1900s, so I don't know what cat out of the bag concept that is. But I'll sort of leave that at that. In terms of Amazon moving into Culver, that's a fantastic thing for the industry. It's another feather in the Los Angeles cap for content providers. We've been talking about that - we've known that deal has been coming down the pike, as others are. And so, I don't think that's a negative at all, and quite frankly, it's a positive. It's taking stages off the marketplace that are not allocated to specific owned studios of the big core guys. And in terms of CBS, I don't know what expensive number you're referring to. There is no posted number. If you want to read the rags, go ahead and read the rags and get your information off of that. But it's inaccurate, and it's not, at all, even remotely what I think expectations are. We won't comment on deals that we're working on unless we've tied them up. Clearly, that's a deal - that is a fantastic piece of property in a marketplace that we think we're well suited to be the leaders and current leaders and future leaders in that industry. So, I'm not going to say anything else about that.

Victor, I appreciate. Thank you.

Thanks.

Our next question is from Jamie Feldman with Bank of America Merrill Lynch. Please proceed with your question.

Victor, all your responses so far seem pretty frustrated. Is there something else - any other message you want to get out here? Or is the question you're getting...

Jamie, wow, I guess I'd be frustrated if you had some accurate comments in your write-ups today that would be nice. I think you were the one who said we met. Is that right? But if you looked at the consensus, I think we'd be. You shouldn't write so quickly before you read all your information. No, it's raining in Los Angeles. I think that's probably where my frustration is coming from. What's your question? You can talk about feelings later.

Yes, okay. So, I guess, I heard the same thing as Craig. So, you're saying on the EOP assets, you guys are still comfortable with the 90% target. Is that the answer to his question?

Yes, yes.

But the eight lease-up assets, you sound like you're not - there, you're not quite as comfortable.

Well, we'll see. I mean, all we were trying to do is relay that, relatively speaking, there's a higher percentage of deals have to get done in that eight assets than they do on the 22 assets. I think one thing I would add to that is, look, I guess there's a tendency to look at those eight assets and get a little myopic about it. Our goal here is to stabilize our portfolio in Silicon Valley that we bought that was underperforming. And that, in our opinion, should be looked at holistically against 22 assets. If we're moving in the right direction against that wider portfolio, we think, one, not only does it reflect the strength of our performance, but also, it's a better reflection of the overall market rather than isolating some subset of assets. By the way, I mean, we also provided commentary on just San Jose, and you can see how well those are doing and got a bigger portfolio than those eight assets. I mean, one could choose to dissect whatever a subset of assets they want as our indicator of performance. Our only point is we think the 22 assets is a better reflection of that, and we're not walking back those leasing targets on that at all.

Okay. That makes sense. And then on the construction pipeline, so did I hear you say 450 Alaskan Way and 95 Jackson are both farther along now than is listed in the supplemental?

That's right. We did a deal, you'll see in the supplemental, in the footnotes, that was signed post-quarter. So naturally, it doesn't show up in the tables, but we've given the information around that, so you can see what the impact of that is.

Okay. And then what about the Downtown L.A. developments, Fourth & Traction, any - can you talk about leasing progress there?

Yes. I mean, listen. I think the Fourth & Traction process in terms of - it's completed. We're really, right now, about 250,000 square feet of demand for that project. We've got one tenant for a very large piece that we're going back and forth on. And it's sort of the chicken and the egg, Jamie, whether we decide to wait on that or do a couple of smaller deals. I think we're very astutely aware of the spotlight on that asset not being leased. I'd say we have a lot of activity of smaller scale, and we could announce a couple of leases that would be signed maybe as early as the end of the year. But candidly, I think we're a little frustrated that we haven't signed leases at Fourth & Traction to date. Maxwell is a different story because we're still on the construction process, and that's going to be one tenant or two tenants. And quite frankly, the activity on that seems to be even more surrounded about that comfort level of one or two tenants.

Okay. Did you have any appetite to sell those assets before they're leased and just move on?

We never really considered it. Nobody's ever come to us and - there are no users that have come to us, and I don't think that we would not be interested in selling to a user if they came. But obviously, we're not marking those assets.

Okay. And then any update on Campus Center? I think you said in your press release that that's part of the good demand you're seeing.

Well, I think it's excellent demand. It's a short list of about 1.5 million square feet of interest, so let's just sort of run through it. I think we're ahead of schedule. I know we're ahead of schedule on our construction and the access to the space right now. Repositioning is well underway. I think the first building I was up there two weeks ago. The first building is looking great. The entire reposition is targeted for February of 2018. We got early access to the property, even though they're still paying rent, so we're doing the work now. So, we're ahead of schedule on that. But more importantly, of sort of the 1.5 million feet of top prospects, I'm looking at - in proposals on one tenant for 180,000 feet to 200,000 and then four tenants running between 300,000 and 400,000 feet each. And then there's an additional 12 prospects for another 3.2 million square feet, with the smallest 60,000 feet, all the way up to 450,000 feet. The interesting thing is whether it's us that lands these or not, these are tenants that are in the marketplace, and almost half of them are new and half of them are relocated. So that's a great sign for the area that there will be some absorption, whether it's us or somebody else. And we're not going off - we're not moving off of our underwriting of one-third in 19 of January, two-thirds in six months and 12 months thereafter.

Okay, all right. Thank you.

Our next question is from Nick Yulico with UBS. Please proceed with your question.

Thanks, a couple of questions, first, on the lease-up portfolio. Are any of those assets going to be entering your same-store next year?

They won't. They have to have been - for the quarterly same-store, they have to have been stabilized in the prior year. And so, as your - since they're not currently stabilized, there would be no ability to put them in the same-store, even if they stabilize next year. That is to say they could reach stabilization, but they won't qualify to the same-store pool.

Okay. That's helpful. And then I guess just going back to some of the leasing you did in Seattle this quarter at the development and then also at the Hill building. It looks like you did some leasing with Regus and also with WeWork. So, what was kind of driving some of that, I guess, shared workspace demand in that market? And how do you think about your thoughts on that space?

Well, I'll start with - and Regus was done this quarter, and that is the new use concept, and that's over at 450 Alaskan Way. That's a deal that we - our team had been working on that deal for a considerable amount of time. There's a huge demand for small tenant use in Pioneer Square, and that's basically sought after for that tenant. We focused on Regus for some time because we love their concept, and they took some space that was not what we would consider the best space in the building. So, it worked out well for us. In terms of Hill7, we look at - WeWork took that space. That's the lowest two floors of the building that made the building fully leased from that point on. I think at the end of the day that deal was a very high rent. It was at over $36 triple net rent. It had a substantial amount of TIs included to it. And again, that serviced - I mean, just that building alone, both vacant buildings beside us, 100% vacant buildings beside us just took leases to Amazon, so the attractiveness to have that kind of co-working space. So, having larger users have some sort of flex space to be next to Amazon or the other tenants in that marketplace made a lot of sense from our standpoint.

I kind of get where you're sort of going at, Nick, and I'm not - it does not go unnoticed. That's the only WeWork lease we have in the whole portfolio.

Okay. And do you have - have you had done leases with Regus before?

Yes. We inherited Regus in Northern California on two properties, is that right? And then also one asset here in Southern California.

Got it, okay. Thanks Victor.

Next question is from Dave Rodgers with Robert W. Baird. Please proceed with your question.

Victor, I just wanted to ask you a couple of questions following up on the Campus Center discussion and backfilling Cisco. How much of the discussions that you're having there and the demand that you're tracking would be interested in kind of that excess land that you have for something other than office? I mean, is that kind of a key component to any of your discussions today?

So, there's sort of two parts to that question, Dave. Some of the existing tenants absolutely want the ability to expand, and these are - I mean, they're not all tech tenants, but they're - some of them are Fortune - one of the tenants is a Fortune...

Fortune 10.

10 company that is not tech, and they definitely want this for expansion. And it would be office and office-related for a campus facility. I think you probably heard Microsoft took the space right next to us almost. That space they bought is literally within one mile away that they're going to build their new campus on. And so, you're seeing that desire in that area because of the access to transportation and the labor force and the likes of that. The second part of your question is the interest level that we've also received on that excess land is for flex space, and so it's not necessarily pure office. It's flex. We've not underwritten it yet because we've not gotten close to those conversations. But literally, if you stood on our campus and you looked across the field or the acreage or whatever you want to call it or the [indiscernible] most - the first thing you see in a development project that is building a two-story flex, and it was a building by a developer here in Southern California, and they broke ground and put it up, and it's fully leased already. And that seems to be where the desire is on this sort of flex space. So, we're contemplating that. But we're early on in the process, and we're going to evaluate the existing tenants that are sort of at the table now. The bigger decision is going to be, from our standpoint, is not who's going to take that, what the space is going to look like. It's how we're going to split the project up or, again, sort of leave it for one tenant to take 300 to grow into 475.

Okay, yes. On EPIC, I think you said 1 million square feet of demand. Is that just what you're tracking in the market? Are those current conversations that you're kind of having with 3, 4, 5 different tenants? What's the interest level for a near-term signing there?

So, I said 1.5 million feet, not 1 million, its 1.5 million feet and there are five tenants over 1.5 million feet that are specific for tracking in that area. And those are tenants that have toured and/or asked for RFPs or we are in proposals on. The additional 12 tenants, it's another 3.2 million feet and they are in that area and the marketplace, which is basically, I would say, Palo Alto South. And so, it totals about 4.7 million feet, so we hope to get our fair share of that.

And then over at Las Palmas, I think your remarks was that you'd start the next building fairly soon there, and then you're re-entitling the [west]. Obviously, you have Netflix on campus, and Amazon made a previous commitment. Do you think that either one of those precludes those same tenants from expanding in those areas? And I guess maybe the alternate to that question is, do those commitments help you track tenants much more quickly? Are you seeing any of that?

So, hang on, Dave, I'm sorry. You were asking about EPIC. These guys were pointed out, right? I thought we were still talking about campus. On EPIC, we have had one tenant that has requested proposal for the entire building. That's an expanding tenant in the marketplace that's going to come from - I don't know. They're at multiple locations, right? They're moving from multiple locations and expanding from the West side. They're not currently in Hollywood. And we've had three tenant increase up to 500,000 feet, and one of those are Netflix. Going to your Las Palmas question, the 100,000, right?

100,000.

On the 100,000 feet, I mean, currently, right now, we are building that, as we've said in the past, spec. It's a small building. It will be - we're anticipating it to be a production-type building, so multi-tenanted, to enhance the studio space that we currently have since there is really no, what we would consider, production post and pre Class A space in - at that facility. And so, as we are converting that facility over to similar - to what we did to Gower and Bronson, it looks like that would be the high-level demand there. We're not seeing that we wouldn't have a single tenant, but we haven't even shown our rent rates on that asset yet. But hopefully, our design review will go through in the next couple of months, and we'll break ground by April 1, hopefully.

All right, great. Thanks for the clarity on EPIC that make a lot more sense. Appreciate it.

Our next question is from Blaine Heck with Wells Fargo. Please proceed with your question.

Hey guys. Can you talk a little bit more about your decision to market Embarcadero Place and 2180 Sand Hill? Just want to make sure there's really nothing concerning about that market for you guys, and it's just more of a non-core to your portfolio. And second part of that question, specifically on Embarcadero, it's a little under 80% leased. Would it be beneficial to try to get that back to stabilization before selling it or do you guys think the demand is good enough that it doesn't really matter?

Well, let me tackle your first question. I mean clearly, Palo Alto is nothing concerning from our standpoint or I think anybody else who owns or has real estate there. It's clearly the hottest market in the Valley and it continues to show the highest rents. And we have now repositioned our building there. The activity that we're seeing and the rents that we're seeing are all consistent with what we perceptibly have said the market conditions are. So, there's no hidden secret at Palo Alto, and there's no hidden secret as to why we're marketing those assets. The assets are not core to our portfolio. Embarcadero is, fortunately, a Palo Alto asset, but it is sort of on the outskirts of Palo Alto. It always was one of those assets we had a conversation on about its ability for us to maintain it or sell it, and we've always thought that that would be a great candidate for us to sell. I think in terms of your vacancy question, I mean I think we've got 100 packages - requests for packages out. And the response so far on our pricing guidelines is, from what [indiscernible] is telling us, is well in our comfort zone of what we would be able to transact on. So, we have no concerns on selling that with some vacancy. Quite frankly, I think it's attractive that we're showing what the vacancy aspect there. Sand Hill Road is Sand Hill Road. This is a boutique building. It's small. I think we're going to hit some historic numbers in terms of where we're going to sell this at. And if we don't, we won't sell it. I mean, that's plain and simple. But it's such a small asset, and we do have a little bit of a roll coming there. So, it's attracting some high net worth owner/users, with Zoox coming out in the first quarter of this coming year. And again, I think that asset has got another 100 or so packages out, and I think we're calling for offers on that in the next 30 days.

Okay, sounds good. Any sort of cap rate or range of cap rates that you guys are targeting for that? And then also, did you - I don't know if I missed, but was there a cap rate given on the Pinnacle sale?

So, the answer is if we give you a cap rate on this call, then we give kind of the pricing, right? Wouldn't that be kind of obvious? So, I'm not going to talk about cap rates on that asset. And in terms of Pinnacle, no, we didn't disclose a cap rate on that, I don't think. Did we, Mark?

Well, somewhat indirectly in so far as you've seen the impact of it in our guidance. I don't know that it would - I don't know. I'm looking at Alex in terms of whether or not you feel that it would affect the sale or anything. I mean, we haven't closed yet, and we historically don't comment on things until things have closed, so...

All right that's fair. I can probably back into it. And then I guess with all that capital coming in, Victor or Alex, can you guys just talk a little bit more about the acquisition environment? You talked a little bit about CBS. But are you finding any opportunistic investments on the office side out there in general?

So yes, I mean, absolutely, Blaine. I mean, we're looking at, right now, a nice off-market redevelopment value-add play. That's a fairly substantial-sized project that we've been working on for a while. We've got a smaller project that we should be announcing shortly under contract in Seattle. We've got a bigger project in San Francisco actually, that we're looking at. We obviously have that $1 billion number for CBS that everybody thinks is a value-add project. And we have another Los Angeles asset that's also off-market. So, we are finding our fair share. I think we'll get our fair share. I'm not going to give a time line as to when they come to fruition. I mean, we are sort of in an interesting time of the year, right? Even if we were to tie up a project, we're not closing it by year-end. So, it's a - everything that we're working on right now will be first quarter executed, with maybe the exception of the smaller project up in Seattle.

All right, great. Thank guys.

[Operator Instructions] Our next question is from Rich Anderson with Mizuho. Please proceed with your question.

Thank you. So, on the same-store, Mark I appreciate the explanation. You don't add assets until they're both owned and stabilized in the year-ago period, which is great. A lot of other REITs don't do it that way. They just need to own it in the previous period, so they get the benefit from occupancy upside, so that's more a conservative way to do it, and appreciate it. The question is - 9% to 10% guidance adjusted 10% to 11% for a while that shown in the Cisco lease term. How sustainable is this range? Is there anything about 9% to 10% or 10% to 11% or however you want to look it that isn't something we should expect five years from now or is it just that you're getting so much roll in certain markets that this type of high single-digit-type number is kind of foreseeable for a while?

Well, I certainly - I mean, look. If you look to 2018, 2019, which is kind of where we're more focused on expirations, which is going to be the key driver on the stabilized portfolio, the - there's still lot of the mark-to-market embedded in 2018, 2019. I mean, 2018 is right around the 24% mark-to-market on expirations. 2019 is in the high teens. And they blend to like 18%, 19% mark-to-market. And that is going to be the primary driver of the NOI growth. And so - and those are cash numbers I'm giving you, by the way. So, look, five years from now, I think it's beyond any reasonable sort of projection. But I think one year, two years from now, I expect us to outpace our peer group in terms of cash NOI growth. And I don't know. Could we get to 10% year-over-year? It seems possible.

I mean, that's good color. The idea is while you don't have a whole lot expiring next year, I think you mentioned 10%, would you maybe pursue early - a little bit more early lease - or attack leases a little bit earlier and kind of capture some of this sooner rather than later?

We are doing that. We consistently do that, Rich. I mean, I'd say there's a couple of larger tenants that we are in conversations with right now that expire in 2019. And they have an option to go from there, and we're doing that, of course.

Yes. I guess I was thinking more, I guess than you have been, but...

We'll take advantage of whatever opportunities we can to blend and extend. I mean, BofA, by the way, we did a large blend and extend with them just last quarter. And Oracle is an example. Not to - there's always - we're always looking for that opportunity.

Okay. Second question is - I attended the Boston Properties Investor Day and on Slide 351, they talked about Silicon Valley, and they identify a few things different than yours. And I just want to see if you have any information why they might be so different. They have pre-leased percentage of 38%, you mentioned 70%. They have subleased space going up. I think you said going down. I'm just curious. Has there been some recent activity that maybe has closed the gap between what they see and what you see, or do you just have no comment because you don't know what their metrics are?

Well, I mean, listen. I didn't get Slide 387, and I didn't get Slide 387 either. So, I can't speak to what their numbers include. I can tell you what ours do. First of all, ours include active construction projects that are going to be delivered and have been approved. Ours include everything south of Palo Alto. Ours do not include R&D because it's not competitive to our space.

Okay.

We do include owner/user data on that basis. So, we're confident with the experts that give us that information on that. In terms of the sublease, I mean I can go market by market in terms of San Mateo and Foster City, Palo Alto and Santa Clara as to where we see that is. And we look at what's leased and what's coming in the sublease market. And again, we are out there verifying the numbers that we are given by JLL and CB and the experts in those markets. So, I don't know if...

I think it might be just geographic. They even have lower under construction at 4.5 million square feet. You said 5.7 million square feet. So, I think it might be just geography differentials or something like that. I just wanted to see if you had any comment on it. I believe I'm getting...

Yes. Don't forget, I mean, we heavily look at San Jose and North San Jose, and they don't. That's not part of their landscape.

Yes, fair enough. Okay, thanks very much.

Ladies and gentlemen, we've reached the end of the question-and-answer session. At this point, I'd like to turn the call back to Victor Coleman for final comments.

Thank you so much for participating. And again, I'd like to thank the senior management team for their exceptional work and dedication to making Hudson Pacific what it is today. Have a good day.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.