2025-06-09-Jefferies-HPP（HPP）_KRC（KRC）_DEI（DEI）_2025年第一季度后模型更新-西海岸办公室_20页_879kb

Summary of Equity Research: USA West Coast Office REITs

Highlights and Key Findings

Deelas Equity:

• MAINTAIN HOLD rating with a price target of $13.
• FY25 FFO per share estimated at $1.46 (consensus adjacent), FY26 at $1.44 (-2% below consensus).
• Downside risks include slower West Coast office market recovery and potential negative demand trends in LA/Honolulu.

Kilroy Realty:

• MAINTAIN HOLD rating with a price target of $31.
• FY25 FFO per share revised down to $3.94 from $4.00, driven by lower NOI and higher interest expense; FY26 estimate lowered to $3.49 from $3.53.
• Key concerns: Stubborn West Coast recovery, slow stabilization of lab and office spaces, potentially deteriorating leasing spreads.

Hudson Pacific Properties:

• MAINTAIN HOLD rating with a price target of $2.20, reduced by 20c from $2.40.
• FY25 FFO per share estimate raised to $0.26, FY26 to $0.40 (+7% and +9% YoY), primarily due to lower G&A; however, higher interest expense partially offsets gains.
• Strongholds: West Coast exposure, anchor tenants, but risks include high occupancy pressure and slower studio business recovery.

Overall Market Outlook

• West Coast Recovery Lag: Occupancy and leasing remain limited, with foot traffic data indicating slow stabilization (e.g., single-digit net absorption).
• Consensus Alignment: Revised estimates generally align with or adjust downward to Street consensus, reflecting cautious market view.
• Price Targets: Hold ratings upheld based on Discounted Dividend Models (DDM), valuations factor in normalized growth rates, debt covenants, and regional economic risks.
• Key Risks: West Coast underperformance, revenue concentration (e.g., tech/media for KRC), studio business volatility (HPP), and interest rate/swap expirations.

Financial and Operating Insights

• Estimate Changes: Summarized adjustments for FFO, AFFO, dividend payouts, and occupancy rates for each REIT.
• Valuation Metrics: Forward P/FFO and P/AFFO multiples show varying discounts and growth expectations.
• ESG Details: Focus on energy management for operational efficiency and tenant attraction.

Recommendations and Thesis

• Maintain Hold due to ongoing market uncertainties: West Coast lagging recovery, debt concerns, and internal caps.
• Opportunity exists for accretive acquisitions but subject to economic and leasing environment.