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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Douglas Emmett Inc | NYSE:DEI | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.27 | -1.97% | 13.44 | 13.89 | 13.40 | 13.75 | 1,771,412 | 21:16:23 |
Maryland
|
20-3073047
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(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
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808 Wilshire Boulevard, Suite 200, Santa Monica, California
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90401
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(Address of principal executive offices)
|
(Zip Code)
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Large accelerated filer
x
|
Accelerated filer
¨
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Non-accelerated filer
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
¨
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Emerging growth company
¨
|
|
Class
|
|
Outstanding at
|
April 28, 2017
|
Common Stock, $0.01 par value per share
|
|
154,584,972
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shares
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DOUGLAS EMMETT, INC.
FORM 10-Q
|
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Table of Contents
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Page
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ASU
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Accounting Standards Updates
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ATM
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At-the-Market
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BOMA
|
Building Owners and Managers Association
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CEO
|
Chief Executive Officer
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CFO
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Chief Financial Officer
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Code
|
Internal Revenue Code of 1986, as amended
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DEI
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Douglas Emmett, Inc.
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EPS
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Earnings Per Share
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Exchange Act
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Securities Exchange Act of 1934, as amended
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FASB
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Financial Accounting Standards Board
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FDIC
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Federal Deposit Insurance Corporation
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FFO
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Funds from Operations
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Fund X
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Douglas Emmett Fund X, LLC
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Funds
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Unconsolidated institutional real estate funds (Fund X and Partnership X)
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GAAP
|
Generally Accepted Accounting Principles (United States)
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JV
|
Joint Venture
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LIBOR
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London Interbank Offered Rate
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LTIP Units
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Long-Term Incentive Plan Units
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NAREIT
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National Association of Real Estate Investment Trusts
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OP Units
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Operating Partnership Units
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Operating Partnership
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Douglas Emmett Properties, LP
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Partnership X
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Douglas Emmett Partnership X, LP
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PCAOB
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Public Company Accounting Oversight Board (United States)
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REIT
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Real Estate Investment Trust
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Report
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Quarterly Report on Form 10-Q
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SEC
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Securities and Exchange Commission
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Securities Act
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Securities Act of 1933, as amended
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TRS
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Taxable REIT subsidiary(ies)
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US
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United States
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VIE
|
Variable Interest Entity(ies)
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Annualized rent
|
Annualized cash base rent (excludes tenant reimbursements, parking income, lost rent recovered
from insurance and other revenue) before abatements under leases commenced as of the reporting
date. For our triple net Burbank and Honolulu office properties, annualized rent is calculated by
adding expense reimbursements to base rent.
|
Consolidated Portfolio
|
Includes the properties in our consolidated results, which includes the properties owned by our consolidated JVs.
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Leased Rate
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Signed leases not yet commenced as of the reporting date.
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Rentable Square Feet
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Based on the BOMA remeasurement and consists of leased square feet (including square feet with
respect to signed leases not commenced), available square feet, building management use square
feet and square feet of BOMA adjustment on leased space.
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Total Portfolio
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Includes our Consolidated Portfolio plus the properties owned by our unconsolidated real estate
Funds.
|
•
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adverse economic or real estate developments in Southern California and Honolulu, Hawaii;
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•
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a general downturn in the economy, such as the global financial crisis that commenced in 2008;
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•
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competition from other real estate investors in our markets;
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•
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decreased rental rates or increased tenant incentive and vacancy rates;
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•
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defaults on, early termination of, or non-renewal of leases by tenants;
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•
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increased interest rates and operating costs;
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•
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failure to generate sufficient cash flows to service our outstanding debt;
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•
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failure to generate sufficient cash flows to make payments on a ground lease for one of our properties;
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•
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difficulties in raising capital;
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•
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difficulties in identifying properties to acquire and failure to complete acquisitions successfully;
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•
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failure to successfully operate acquired properties;
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•
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real estate investments are generally illiquid and difficult to sell quickly;
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•
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possible adverse changes in rent control laws and regulations;
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•
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environmental uncertainties;
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•
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risks related to natural disasters;
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•
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lack or insufficient amount of insurance, or increases in the cost of maintaining existing insurance coverage;
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•
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inability to successfully expand into new markets and submarkets;
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•
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risks associated with property development;
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•
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risks associated with JVs;
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•
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conflicts of interest with our officers and reliance on key personnel;
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•
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changes in real estate zoning laws and increases in real property tax rates;
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•
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adverse results of litigation or governmental proceedings;
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•
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complying with laws, regulations and covenants that are applicable to our properties;
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•
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difficulty in liquidating our short term investments;
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•
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the consequences of any possible terrorist attacks or wars;
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•
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the consequences of any possible cyber attacks or intrusions;
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•
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adoption of new accounting pronouncements could adversely affect our operating results;
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•
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weaknesses in our internal controls over financial reporting could result in restatements of our operating results;
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•
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failure to maintain our REIT status under federal tax laws; and
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•
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changes to tax laws that could adversely affect us.
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Douglas Emmett, Inc.
Consolidated Balance Sheets
(Unaudited; in thousands, except share data)
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|||||||
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March 31, 2017
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December 31, 2016
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||||
Assets
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|
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Investment in real estate:
|
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Land
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$
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1,022,340
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$
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1,022,340
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Buildings and improvements
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7,223,644
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7,221,124
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Tenant improvements and lease intangibles
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703,537
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696,197
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Property under development
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70,416
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58,459
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Investment in real estate, gross
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9,019,937
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8,998,120
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Less: accumulated depreciation and amortization
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(1,844,009
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)
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(1,789,678
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)
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Investment in real estate, net
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7,175,928
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7,208,442
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Cash and cash equivalents
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85,533
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112,927
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Tenant receivables, net
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3,391
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2,165
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Deferred rent receivables, net
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96,754
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93,165
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Acquired lease intangible assets, net
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4,833
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5,147
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Interest rate contract assets
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41,234
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35,656
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Investment in unconsolidated real estate funds
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142,655
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144,289
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Other assets
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36,371
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|
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11,914
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Total assets
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$
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7,586,699
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$
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7,613,705
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Liabilities
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Secured notes payable and revolving credit facility, net
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$
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4,391,410
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$
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4,369,537
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Interest payable, accounts payable and deferred revenue
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97,316
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75,229
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Security deposits
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46,153
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45,990
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Acquired lease intangible liabilities, net
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62,685
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67,191
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Interest rate contract liabilities
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2,600
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6,830
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Dividends payable
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35,228
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34,857
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Total liabilities
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4,635,392
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4,599,634
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Equity
|
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Douglas Emmett, Inc. stockholders' equity:
|
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Common Stock, $0.01 par value, 750,000,000 authorized, 153,144,327 and 151,530,210 outstanding at March 31, 2017 and December 31, 2016, respectively
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1,531
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1,515
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Additional paid-in capital
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2,676,960
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2,725,157
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Accumulated other comprehensive income
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22,858
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15,156
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Accumulated deficit
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(836,859
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)
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(820,685
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)
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Total Douglas Emmett, Inc. stockholders' equity
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1,864,490
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1,921,143
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Noncontrolling interests
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1,086,817
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1,092,928
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Total equity
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2,951,307
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3,014,071
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Total liabilities and equity
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$
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7,586,699
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$
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7,613,705
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Three Months Ended March 31,
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||||||
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2017
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2016
|
||||
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||||
Revenues
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Office rental
|
|
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|
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Rental revenues
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$
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133,016
|
|
|
$
|
111,006
|
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Tenant recoveries
|
11,050
|
|
|
10,211
|
|
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Parking and other income
|
26,282
|
|
|
23,162
|
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Total office revenues
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170,348
|
|
|
144,379
|
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||
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||||
Multifamily rental
|
|
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Rental revenues
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22,241
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|
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22,427
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Parking and other income
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1,892
|
|
|
1,766
|
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Total multifamily revenues
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24,133
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|
|
24,193
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Total revenues
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194,481
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168,572
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||||
Operating Expenses
|
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Office expenses
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54,885
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47,883
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Multifamily expenses
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5,947
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6,031
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General and administrative
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10,156
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|
|
8,071
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Depreciation and amortization
|
67,374
|
|
|
55,552
|
|
||
Total operating expenses
|
138,362
|
|
|
117,537
|
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||
|
|
|
|
||||
Operating income
|
56,119
|
|
|
51,035
|
|
||
|
|
|
|
||||
Other income
|
2,162
|
|
|
2,089
|
|
||
Other expenses
|
(1,724
|
)
|
|
(3,004
|
)
|
||
Income, including depreciation, from unconsolidated real estate funds
|
2,177
|
|
|
1,586
|
|
||
Interest expense
|
(36,954
|
)
|
|
(35,660
|
)
|
||
Net income
|
21,780
|
|
|
16,046
|
|
||
Less: Net income attributable to noncontrolling interests
|
(2,731
|
)
|
|
(680
|
)
|
||
Net income attributable to common stockholders
|
$
|
19,049
|
|
|
$
|
15,366
|
|
|
|
|
|
||||
Net income attributable to common stockholders per share – basic
|
$
|
0.124
|
|
|
$
|
0.104
|
|
Net income attributable to common stockholders per share – diluted
|
$
|
0.123
|
|
|
$
|
0.101
|
|
|
|
|
|
||||
Dividends declared per common share
|
$
|
0.23
|
|
|
$
|
0.22
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Net income
|
$
|
21,780
|
|
|
$
|
16,046
|
|
Other comprehensive income (loss): cash flow hedges
|
9,829
|
|
|
(20,608
|
)
|
||
Comprehensive income (loss)
|
31,609
|
|
|
(4,562
|
)
|
||
Less: Comprehensive (income) loss attributable to noncontrolling interests
|
(4,858
|
)
|
|
1,900
|
|
||
Comprehensive income (loss) attributable to common stockholders
|
$
|
26,751
|
|
|
$
|
(2,662
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Operating Activities
|
|
|
|
|
|
||
Net income
|
$
|
21,780
|
|
|
$
|
16,046
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Income, including depreciation, from unconsolidated real estate funds
|
(2,177
|
)
|
|
(1,586
|
)
|
||
Depreciation and amortization
|
67,374
|
|
|
55,552
|
|
||
Net accretion of acquired lease intangibles
|
(4,192
|
)
|
|
(3,304
|
)
|
||
Straight-line rent
|
(3,588
|
)
|
|
(2,919
|
)
|
||
Bad debt (recovery) expense
|
(6
|
)
|
|
679
|
|
||
Amortization of deferred loan costs
|
2,098
|
|
|
1,319
|
|
||
Non-cash market value adjustments on interest rate contracts
|
13
|
|
|
—
|
|
||
Amortization of stock-based compensation
|
2,708
|
|
|
2,379
|
|
||
Operating distributions from unconsolidated real estate funds
|
2,177
|
|
|
375
|
|
||
Change in working capital components:
|
|
|
|
|
|
||
Tenant receivables
|
(1,220
|
)
|
|
(2,440
|
)
|
||
Interest payable, accounts payable and deferred revenue
|
22,641
|
|
|
18,444
|
|
||
Security deposits
|
163
|
|
|
4,331
|
|
||
Other assets
|
(219
|
)
|
|
965
|
|
||
Net cash provided by operating activities
|
107,552
|
|
|
89,841
|
|
||
|
|
|
|
||||
Investing Activities
|
|
|
|
|
|
||
Capital expenditures for improvements to real estate
|
(25,280
|
)
|
|
(15,556
|
)
|
||
Capital expenditures for developments
|
(9,905
|
)
|
|
(1,412
|
)
|
||
Property acquisitions
|
—
|
|
|
(1,257,513
|
)
|
||
Deposits for property acquisitions
|
(24,000
|
)
|
|
—
|
|
||
Loan payments received from related parties
|
—
|
|
|
763
|
|
||
Capital distributions from unconsolidated real estate funds
|
1,407
|
|
|
15,773
|
|
||
Net cash used in investing activities
|
(57,778
|
)
|
|
(1,257,945
|
)
|
||
|
|
|
|
||||
|
|
|
|
||||
Financing Activities
|
|
|
|
|
|
||
Proceeds from borrowings
|
88,000
|
|
|
900,000
|
|
||
Repayment of borrowings
|
(68,145
|
)
|
|
(31,194
|
)
|
||
Loan cost payments
|
(85
|
)
|
|
(11,444
|
)
|
||
Contributions from noncontrolling interests in consolidated JVs
|
250
|
|
|
320,000
|
|
||
Distributions paid to noncontrolling interests
|
(9,632
|
)
|
|
(6,098
|
)
|
||
Dividends paid to common stockholders
|
(34,852
|
)
|
|
(32,322
|
)
|
||
Taxes paid on exercise of stock options
|
(52,704
|
)
|
|
(445
|
)
|
||
Net cash (used in) provided by financing activities
|
(77,168
|
)
|
|
1,138,497
|
|
||
|
|
|
|
||||
Decrease in cash and cash equivalents
|
(27,394
|
)
|
|
(29,607
|
)
|
||
Cash and cash equivalents at the beginning of the year
|
112,927
|
|
|
101,798
|
|
||
Cash and cash equivalents at quarter end
|
$
|
85,533
|
|
|
$
|
72,191
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
SUPPLEMENTAL CASH FLOWS INFORMATION
|
|
|
|
||||
Cash paid for interest, net of capitalized interest
|
$
|
33,400
|
|
|
$
|
32,893
|
|
Capitalized interest paid
|
$
|
521
|
|
|
$
|
238
|
|
|
|
|
|
||||
NON-CASH INVESTING TRANSACTIONS
|
|
|
|
||||
Accrual increase/(decrease) for capital expenditures for improvements to real estate
|
$
|
(2,593
|
)
|
|
$
|
—
|
|
Accrual increase/(decrease) for capital expenditures for developments
|
$
|
2,039
|
|
|
$
|
—
|
|
Capitalized stock-based compensation for improvements to real estate and developments
|
$
|
228
|
|
|
$
|
217
|
|
Removal of fully depreciated and amortized building and tenant improvements and lease intangibles
|
$
|
13,044
|
|
|
$
|
4,230
|
|
Removal of fully amortized acquired lease intangible assets
|
$
|
65
|
|
|
$
|
150
|
|
Removal of fully accreted acquired lease intangible liabilities
|
$
|
2,073
|
|
|
$
|
6,424
|
|
Application of deposit to purchase price of property
|
$
|
—
|
|
|
$
|
75,000
|
|
|
|
|
|
||||
NON-CASH FINANCING TRANSACTIONS
|
|
|
|
||||
Gain (loss) from market value adjustments - consolidated derivatives
|
$
|
4,722
|
|
|
$
|
(28,812
|
)
|
Gain (loss) from market value adjustments - unconsolidated Funds' derivatives
|
$
|
99
|
|
|
$
|
(611
|
)
|
Dividends declared
|
$
|
35,223
|
|
|
$
|
32,424
|
|
Common stock issued in exchange for OP Units
|
$
|
4,523
|
|
|
$
|
5,847
|
|
|
Consolidated Portfolio
(1)
|
|
Total Portfolio
(1)
|
Office
(2)
|
|
|
|
Wholly-owned properties
|
52
|
|
52
|
JV properties
|
7
|
|
7
|
Fund properties
|
—
|
|
8
|
|
59
|
|
67
|
|
|
|
|
Multifamily
|
|
|
|
Wholly-owned properties
|
10
|
|
10
|
|
|
|
|
Total
|
69
|
|
77
|
(1)
|
In addition to our properties, we own
fee interests in
two
parcels of land subject to ground leases from which we earn ground rent income.
|
(2)
|
Office portfolio includes ancillary retail space.
|
Sources and Uses of Funds
|
Actual at Closing
(1)
|
Pro Forma Sell Down Adjustments
(2)
|
Pro Forma
|
||||||
|
|
|
|
||||||
Building square footage
|
1,725
|
|
|
1,725
|
|
||||
|
|
|
|
||||||
Uses of funds - Investment in real estate:
|
|
|
|
||||||
Land
|
$
|
94,996
|
|
|
$
|
94,996
|
|
||
Buildings and improvements
|
1,236,786
|
|
|
1,236,786
|
|
||||
Tenant improvements and lease intangibles
|
50,439
|
|
|
50,439
|
|
||||
Acquired above and below-market leases, net
(3)
|
(49,708
|
)
|
|
(49,708
|
)
|
||||
Net assets and liabilities acquired
(4)
|
$
|
1,332,513
|
|
|
$
|
1,332,513
|
|
||
|
|
|
|
||||||
Source of funds:
|
|
|
|
||||||
Cash on hand
(5)
|
$
|
153,745
|
|
$
|
—
|
|
$
|
153,745
|
|
Credit facility
(6)
|
290,000
|
|
(240,000
|
)
|
50,000
|
|
|||
Non-recourse term loan, net
(7)
|
568,768
|
|
—
|
|
568,768
|
|
|||
Noncontrolling interests
|
320,000
|
|
240,000
|
|
560,000
|
|
|||
Total source of funds
|
$
|
1,332,513
|
|
$
|
—
|
|
$
|
1,332,513
|
|
(1)
|
Reflects the purchase of the Westwood Portfolio on the Acquisition Date when we contributed
sixty
-percent of the equity to the consolidated JV.
|
(2)
|
Reflects our sale of
thirty
-percent of the equity in the JV on the Sell Down Date, presented as of the Acquisition Date, treated as in-substance real estate, which reduced our ownership interest in the JV to
thirty
-percent. We sold the interest for the
$240.0 million
we contributed plus an additional
$1.1 million
to compensate us for our costs of holding the investment. We recognized a gain on the sale of
$1.1 million
. We used the proceeds from the sale to pay down the balance owed on our revolving credit facility.
|
(3)
|
As of the Acquisition Date, the weighted average remaining life of the acquired above-and below-market leases was approximately
4.4 years
.
|
(4)
|
The difference between the contract and purchase price related to credits received for prorations and similar matters.
|
(5)
|
Cash paid included a
$75.0 million
deposit,
$67.5 million
paid at closing and
$11.2 million
spent on loan costs in connection with securing the
$580.0 million
term loan.
|
(6)
|
Reflects borrowings using the Company's credit facility, which bears interest at
LIBOR + 1.40%
.
|
(7)
|
Reflects
100%
(not the Company's pro rata share) of a
$580.0 million
interest-only non-recourse loan, net of deferred loan costs of
$11.2 million
incurred to secure the loan. The loan has a
seven
-year term and is secured by the Westwood Portfolio. Interest on the loan is floating at
LIBOR + 1.40%
, which has been effectively fixed at
2.37%
per annum for
five
years through interest rate swaps. See Note
7
for information regarding our consolidated debt.
|
|
Three Months Ended March 31,
|
|||||
|
2017
|
2016
|
||||
|
|
|
||||
Total office revenues
|
$
|
23,949
|
|
$
|
8,223
|
|
Net income (loss) attributable to common stockholders
(1)
|
$
|
1,034
|
|
$
|
(2,214
|
)
|
(1)
|
Excluding transaction costs, net income (loss) attributable to common stockholders was
$1.0 million
and
$(0.3) million
for the three months ended
March 31, 2017
and
2016
, respectively.
|
|
Three months ended March 31, 2016
|
||
|
|
||
Pro forma revenues
|
$
|
181,900
|
|
Pro forma net income attributable to common stockholders
|
$
|
16,404
|
|
Pro forma net income attributable to common stockholders per share – basic
|
$
|
0.111
|
|
Pro forma net income attributable to common stockholders per share – diluted
|
$
|
0.108
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
Above-market tenant leases
|
$
|
5,045
|
|
|
$
|
5,110
|
|
Accumulated amortization - above-market tenant leases
|
(2,608
|
)
|
|
(2,379
|
)
|
||
Below-market ground leases
|
3,198
|
|
|
3,198
|
|
||
Accumulated amortization - below-market ground leases
|
(802
|
)
|
|
(782
|
)
|
||
Acquired lease intangible assets, net
|
$
|
4,833
|
|
|
$
|
5,147
|
|
|
|
|
|
||||
Below-market tenant leases
|
$
|
102,852
|
|
|
$
|
104,925
|
|
Accumulated accretion - below-market tenant leases
|
(43,662
|
)
|
|
(41,241
|
)
|
||
Above-market ground leases
|
4,017
|
|
|
16,200
|
|
||
Accumulated accretion - above-market ground leases
|
(522
|
)
|
|
(12,693
|
)
|
||
Acquired lease intangible liabilities, net
|
$
|
62,685
|
|
|
$
|
67,191
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Net accretion of above/below-market tenant leases
(1)
|
$
|
4,184
|
|
|
$
|
3,295
|
|
Amortization of above-market ground lease
(2)
|
(4
|
)
|
|
(4
|
)
|
||
Accretion of above-market ground lease
(3)
|
12
|
|
|
13
|
|
||
Total
|
$
|
4,192
|
|
|
$
|
3,304
|
|
(1)
|
Recorded as a net increase to office and multifamily rental revenues.
|
(2)
|
Ground lease from which we earn ground rent income. Recorded as a decrease to office parking and other income.
|
(3)
|
Ground lease from which we incur ground rent expense. Recorded as a decrease to office expense.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Operating distributions received
|
$
|
2,177
|
|
|
$
|
375
|
|
Capital distributions received
|
1,407
|
|
|
15,773
|
|
||
Total distributions received
|
$
|
3,584
|
|
|
$
|
16,148
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
Total assets
|
$
|
688,492
|
|
|
$
|
689,991
|
|
Total liabilities
|
$
|
449,994
|
|
|
$
|
448,522
|
|
Total equity
|
$
|
238,498
|
|
|
$
|
241,469
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
Restricted cash
|
$
|
121
|
|
|
$
|
121
|
|
Prepaid expenses
|
7,300
|
|
|
6,779
|
|
||
Other indefinite-lived intangible
|
1,988
|
|
|
1,988
|
|
||
Deposits in escrow
|
24,000
|
|
|
—
|
|
||
Furniture, fixtures and equipment, net
|
984
|
|
|
1,093
|
|
||
Other
|
1,978
|
|
|
1,933
|
|
||
Total other assets
|
$
|
36,371
|
|
|
$
|
11,914
|
|
Description
|
|
Maturity
Date
(1)
|
|
Principal Balance as of March 31, 2017
|
|
Principal Balance as of December 31, 2016
|
|
Variable Interest Rate
|
|
Fixed Interest
Rate
(2)
|
|
Swap Maturity Date
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Wholly Owned Subsidiaries
|
||||||||||||||||
Term Loan
(3)
|
|
|
|
$
|
—
|
|
|
$
|
1,000
|
|
|
N/A
|
|
3.00%
|
|
--
|
Term Loan
(4)
|
|
8/5/2018
|
|
348,379
|
|
|
349,933
|
|
|
N/A
|
|
4.14%
|
|
--
|
||
Term Loan
(4)
|
|
2/1/2019
|
|
149,188
|
|
|
149,911
|
|
|
N/A
|
|
4.00%
|
|
--
|
||
Term Loan
(4)
|
|
6/5/2019
|
|
284,578
|
|
|
285,000
|
|
|
N/A
|
|
3.85%
|
|
--
|
||
Fannie Mae Loan
|
|
10/1/2019
|
|
145,000
|
|
|
145,000
|
|
|
LIBOR + 1.25%
|
|
N/A
|
|
--
|
||
Term Loan
(4)(5)
|
|
3/1/2020
|
|
344,314
|
|
|
345,759
|
|
|
N/A
|
|
4.46%
|
|
--
|
||
Fannie Mae Loans
|
|
11/1/2020
|
|
388,080
|
|
|
388,080
|
|
|
LIBOR + 1.65%
|
|
3.65%
|
|
11/1/2017
|
||
Term Loan
(6)
|
|
4/15/2022
|
|
340,000
|
|
|
340,000
|
|
|
LIBOR + 1.40%
|
|
2.77%
|
|
4/1/2020
|
||
Term Loan
(6)
|
|
7/27/2022
|
|
180,000
|
|
|
180,000
|
|
|
LIBOR + 1.45%
|
|
3.06%
|
|
7/1/2020
|
||
Term Loan
(6)
|
|
11/1/2022
|
|
400,000
|
|
|
400,000
|
|
|
LIBOR + 1.35%
|
|
2.64%
|
|
11/1/2020
|
||
Term Loan
(6)
|
|
6/23/2023
|
|
360,000
|
|
|
360,000
|
|
|
LIBOR + 1.55%
|
|
2.57%
|
|
7/1/2021
|
||
Term Loan
(6)
|
|
12/23/2023
|
|
220,000
|
|
|
220,000
|
|
|
LIBOR + 1.70%
|
|
3.62%
|
|
12/23/2021
|
||
Term Loan
(6)
|
|
1/1/2024
|
|
300,000
|
|
|
300,000
|
|
|
LIBOR + 1.55%
|
|
3.46%
|
|
1/1/2022
|
||
Fannie Mae Loan
(6)
|
|
4/1/2025
|
|
102,400
|
|
|
102,400
|
|
|
LIBOR + 1.25%
|
|
2.84%
|
|
3/1/2020
|
||
Fannie Mae Loan
(6)
|
|
12/1/2025
|
|
115,000
|
|
|
115,000
|
|
|
LIBOR + 1.25%
|
|
2.76%
|
|
12/1/2020
|
||
Revolving credit facility
(7)
|
|
8/21/2020
|
|
25,000
|
|
|
—
|
|
|
LIBOR + 1.40%
|
|
N/A
|
|
--
|
||
Total Wholly Owned Debt
|
3,701,939
|
|
|
3,682,083
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consolidated JVs
|
||||||||||||||||
Term Loan
|
|
7/21/2019
|
|
146,000
|
|
|
146,000
|
|
|
LIBOR + 1.55%
|
|
N/A
|
|
--
|
||
Term Loan
(6)
|
|
2/28/2023
|
|
580,000
|
|
|
580,000
|
|
|
LIBOR + 1.40%
|
|
2.37%
|
|
3/1/2021
|
||
Total Consolidated Debt
(8) (9)(10)
|
4,427,939
|
|
|
4,408,083
|
|
|
|
|
|
|
|
|||||
Deferred loan costs, net
(11)
|
|
(36,529
|
)
|
|
(38,546
|
)
|
|
|
|
|
|
|
||||
Total Consolidated Debt, net
|
$
|
4,391,410
|
|
|
$
|
4,369,537
|
|
|
|
|
|
|
|
(1)
|
Maturity dates include the effect of extension options.
|
(2)
|
Includes the effect of interest rate swaps and excludes the effect of prepaid loan fees. See Note
9
for details of our interest rate swaps.
|
(3)
|
At
March 31, 2017
, this loan had been paid off.
|
(4)
|
Requires monthly payments of principal and interest. Principal amortization is based upon a
30
-year amortization schedule.
|
(5)
|
Interest is fixed until
March 2018
.
|
(6)
|
Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor.
|
(7)
|
$400.0 million
revolving credit facility. Unused commitment fees range from
0.15%
to
0.20%
.
|
(8)
|
See Note
12
for our fair value disclosures.
|
(9)
|
At
March 31, 2017
, the minimum future principal payments due on our secured notes payable and revolving credit facility, excluding any maturity extension options, were as follows (in thousands):
|
(10)
|
At
March 31, 2017
, the weighted average remaining life, including extension options, of our total consolidated term debt (excluding our revolving credit facility) was
4.6 years
. For the
$4.11 billion
of term debt on which the interest rate was fixed under the terms of the loan or a swap, the weighted average (i) remaining life was
4.8 years
, (ii) remaining period during which interest was fixed was
2.9 years
, (iii) annual interest rate was
3.28%
and (iv) effective interest rate was
3.43%
(including the non-cash amortization of deferred loan costs). Except as otherwise noted below, each loan (including our revolving credit facility) is secured by one or more separate collateral pools consisting of one or more properties, requiring monthly payments of interest only, with the outstanding principal due upon maturity. The following table summarizes (in thousands) our fixed and floating rate debt:
|
Description
|
|
Principal Balance as of March 31, 2017
|
|
Principal Balance as of December 31, 2016
|
||||
|
|
|
|
|
||||
Aggregate swapped to fixed rate loans
|
|
$
|
2,985,480
|
|
|
$
|
2,985,480
|
|
Aggregate fixed rate loans
|
|
1,126,459
|
|
|
1,131,603
|
|
||
Aggregate floating rate loans
|
|
316,000
|
|
|
291,000
|
|
||
Total Debt
|
|
$
|
4,427,939
|
|
|
$
|
4,408,083
|
|
(11)
|
Deferred
loan costs are net of accumulated amortization of
$17.5 million
and
$15.4 million
at
March 31, 2017
and
December 31, 2016
respectively. The table below (in thousands) sets forth amortization of deferred loan costs, which is included in Interest Expense in our consolidated statement of operations:
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Deferred loan cost amortization
|
$
|
2,098
|
|
|
$
|
1,319
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
Interest payable
|
$
|
11,000
|
|
|
$
|
9,561
|
|
Accounts payable and accrued liabilities
|
57,111
|
|
|
36,880
|
|
||
Deferred revenue
|
29,205
|
|
|
28,788
|
|
||
Total interest payable, accounts payable and deferred revenue
|
$
|
97,316
|
|
|
$
|
75,229
|
|
|
|
Number of Interest Rate Swaps
|
|
Notional
(in thousands)
|
||
|
|
|
|
|
||
Consolidated derivatives
(1)
|
|
22
|
|
$
|
2,985,480
|
|
Unconsolidated Funds' derivatives
(2)
|
|
2
|
|
$
|
435,000
|
|
(1)
|
The notional amount includes
100%
, not our pro-rata share, of our consolidated JVs' derivatives.
|
(2)
|
The notional amount includes
100%
, not our pro-rata share, of our unconsolidated Funds' derivatives.
|
Fair value of derivatives in a liability position
(1)
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
|
||||
Consolidated derivatives
(2)
|
|
$
|
3,596
|
|
|
$
|
7,689
|
|
Unconsolidated Funds' derivatives
(3)
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Includes accrued interest and excludes adjustments for credit risk.
|
(2)
|
Includes
100%
, not our pro-rata share, of our consolidated JVs' derivatives.
|
(3)
|
Our
unconsolidated
Funds did not have any derivatives in a liability position.
|
Fair value of derivatives in an asset position
(1)
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
|
||||
Our derivatives
(2)
|
|
$
|
40,748
|
|
|
$
|
35,144
|
|
Our Funds' derivatives
(3)
|
|
$
|
3,904
|
|
|
$
|
3,724
|
|
(1)
|
Includes accrued interest and excludes adjustments for credit risk.
|
(2)
|
Includes
100%
, not our pro-rata share, of our consolidated JVs' derivatives.
|
(3)
|
Includes
100%
, not our pro-rata share, of our unconsolidated Funds' derivatives.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Derivatives Designated as Cash Flow Hedges:
|
|
|
|
||||
Gain (loss) recorded in AOCI - Consolidated derivatives
(1)(5)
|
$
|
4,722
|
|
|
$
|
(28,812
|
)
|
Gain (loss) recorded in AOCI - unconsolidated Funds' derivatives
(2)(5)
|
$
|
99
|
|
|
$
|
(611
|
)
|
Loss reclassified from AOCI - Consolidated derivatives
(3)(5)
|
$
|
(5,100
|
)
|
|
$
|
(8,710
|
)
|
Gain (loss) reclassified from AOCI - unconsolidated Funds' derivatives
(4)(5)
|
$
|
92
|
|
|
$
|
(105
|
)
|
Gain (loss) recorded - Consolidated derivatives
(6)
|
$
|
13
|
|
|
$
|
—
|
|
|
|
|
|
||||
Derivatives Not Designated as Cash Flow Hedges:
|
|
|
|
|
|
||
Gain (loss) recorded as interest expense
(7)
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Represents the effective portion of the change in fair value of interest rate swaps.
|
(2)
|
Represents our share of the effective portion of the change in fair value of our unconsolidated Funds' interest rate swaps.
|
(3)
|
Reclassified from AOCI as an increase to Interest expense.
|
(4)
|
Reclassified from AOCI as a increase (decrease) to Income, including depreciation, from unconsolidated real estate funds (our share).
|
(5)
|
See the reconciliation of our AOCI in Note
10
.
|
(6)
|
Represents the ineffective portion of the change in fair value of interest rate swaps, which is recorded as a reduction (increase) to interest expense.
|
(7)
|
We do not have any derivatives that are not designated as cash flow hedges.
|
Consolidated derivatives
(1)
|
$
|
5,279
|
|
Unconsolidated Funds' derivatives
(2)
|
$
|
(158
|
)
|
(1)
|
Reclassified as an increase to Interest expense.
|
(2)
|
Reclassified as a decrease to Income, including depreciation, from unconsolidated real estate funds (our share).
|
|
DEI Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||
|
|
|
|
|
|
||||||
Balance as of January 1, 2017
|
$
|
1,921,143
|
|
|
$
|
1,092,928
|
|
|
$
|
3,014,071
|
|
Net income
|
19,049
|
|
|
2,731
|
|
|
21,780
|
|
|||
Cash flow hedge fair value adjustments
|
7,702
|
|
|
2,127
|
|
|
9,829
|
|
|||
Contributions to consolidated JV
|
—
|
|
|
250
|
|
|
250
|
|
|||
Dividends and distributions
|
(35,223
|
)
|
|
(9,632
|
)
|
|
(44,855
|
)
|
|||
Exchange of OP units for common stock
|
4,523
|
|
|
(4,523
|
)
|
|
—
|
|
|||
Exercise of stock options
(1)
|
(52,704
|
)
|
|
—
|
|
|
(52,704
|
)
|
|||
Stock-based compensation
|
—
|
|
|
2,936
|
|
|
2,936
|
|
|||
Balance as of March 31, 2017
|
$
|
1,864,490
|
|
|
$
|
1,086,817
|
|
|
$
|
2,951,307
|
|
|
DEI Stockholders' Equity
|
|
Noncontrolling Interests
|
|
Total Equity
|
||||||
|
|
|
|
|
|
||||||
Balance as of January 1, 2016
|
$
|
1,926,211
|
|
|
$
|
355,337
|
|
|
$
|
2,281,548
|
|
Net income
|
15,366
|
|
|
680
|
|
|
16,046
|
|
|||
Cash flow hedge fair value adjustments
|
(18,028
|
)
|
|
(2,580
|
)
|
|
(20,608
|
)
|
|||
Contributions
|
—
|
|
|
320,000
|
|
|
320,000
|
|
|||
Dividends and distributions
|
(32,424
|
)
|
|
(6,098
|
)
|
|
(38,522
|
)
|
|||
Exchange of OP units for common stock
|
5,847
|
|
|
(5,847
|
)
|
|
—
|
|
|||
Exercise of stock options
|
(445
|
)
|
|
—
|
|
|
(445
|
)
|
|||
Stock-based compensation
|
—
|
|
|
2,596
|
|
|
2,596
|
|
|||
Balance as of March 31, 2016
|
$
|
1,896,527
|
|
|
$
|
664,088
|
|
|
$
|
2,560,615
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Net income attributable to common stockholders
|
$
|
19,049
|
|
|
$
|
15,366
|
|
|
|
|
|
||||
Transfers from noncontrolling interests:
|
|
|
|
||||
Exchange of OP Units with noncontrolling interests
|
4,523
|
|
|
5,847
|
|
||
Net transfers from noncontrolling interests
|
4,523
|
|
|
5,847
|
|
||
|
|
|
|
||||
Change from net income attributable to common stockholders and transfers from noncontrolling interests
|
$
|
23,572
|
|
|
$
|
21,213
|
|
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Beginning balance
|
$
|
15,156
|
|
|
$
|
(9,285
|
)
|
|
|
|
|
||||
Other comprehensive income (loss) before reclassifications - our derivatives
|
4,722
|
|
|
(28,812
|
)
|
||
Other comprehensive income (loss) before reclassifications - our Fund's derivatives
|
99
|
|
|
(611
|
)
|
||
Reclassifications from AOCI - our derivatives
(2)
|
5,100
|
|
|
8,710
|
|
||
Reclassifications from AOCI - our Fund's derivatives
(3)
|
(92
|
)
|
|
105
|
|
||
Net current period OCI
|
9,829
|
|
|
(20,608
|
)
|
||
Less OCI attributable to noncontrolling interests
|
(2,127
|
)
|
|
2,580
|
|
||
OCI attributable to common stockholders
|
7,702
|
|
|
(18,028
|
)
|
||
|
|
|
|
||||
Ending balance
|
$
|
22,858
|
|
|
$
|
(27,313
|
)
|
(1)
|
See Note
9
for the details of our derivatives and Note
12
for our derivative fair value disclosures.
|
(2)
|
Reclassification as an increase to Interest expense.
|
(3)
|
Reclassification as an (increase) decrease to Income, including depreciation, from unconsolidated real estate funds.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Numerator (in thousands):
|
|
|
|
|
|
||
Net income attributable to common stockholders
|
$
|
19,049
|
|
|
$
|
15,366
|
|
Allocation to participating securities: Unvested LTIP Units
|
(98
|
)
|
|
(84
|
)
|
||
Numerator for basic and diluted net income attributable to common stock holders
|
$
|
18,951
|
|
|
$
|
15,282
|
|
|
|
|
|
||||
Denominator (in thousands):
|
|
|
|
||||
Weighted average shares of common stock outstanding - basic
|
152,490
|
|
|
147,236
|
|
||
Effect of dilutive securities: Stock options
(1)
|
1,165
|
|
|
4,215
|
|
||
Weighted average shares of common stock and common stock equivalents outstanding - diluted
|
153,655
|
|
|
151,451
|
|
||
|
|
|
|
||||
Basic EPS:
|
|
|
|
|
|||
Net income attributable to common stockholders per share
|
$
|
0.124
|
|
|
$
|
0.104
|
|
|
|
|
|
||||
Diluted EPS:
|
|
|
|
|
|
||
Net income attributable to common stockholders per share
|
$
|
0.123
|
|
|
$
|
0.101
|
|
(1)
|
The following securities (in thousands) were excluded from the computation of the weighted average shares of common stock and common stock equivalents outstanding - diluted because the effect of including them would be anti-dilutive to the calculation of diluted EPS:
|
Secured Notes Payable:
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
|
|
|
||||
Fair value
|
$
|
4,418,661
|
|
|
$
|
4,429,224
|
|
Carrying value
|
$
|
4,402,939
|
|
|
$
|
4,408,083
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
Derivative Assets:
|
|
|
|
||||
Fair value - consolidated derivatives
(1)
|
$
|
41,234
|
|
|
$
|
35,656
|
|
Fair value - unconsolidated Funds' derivatives
(2)
|
$
|
3,840
|
|
|
$
|
3,605
|
|
|
|
|
|
||||
Derivative Liabilities:
|
|
|
|
||||
Fair value - consolidated derivatives
(1)
|
$
|
2,600
|
|
|
$
|
6,830
|
|
Fair value - unconsolidated Funds' derivatives
(2)
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Consolidated derivatives, which include
100%
, not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts in our consolidated balance sheet. The fair value excludes accrued interest which is included in interest payable in the consolidated balance sheet.
|
(2)
|
Represents
100%
, not our pro-rata share, of our unconsolidated Funds' derivatives. Our pro-rata share of the amounts related to the unconsolidated Funds' derivatives is included in our Investment in unconsolidated real estate funds in our consolidated balance sheet. See Note
5
for more information regarding our unconsolidated Funds.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Office Segment
|
|
|
|
||||
Total office revenues
|
$
|
170,348
|
|
|
$
|
144,379
|
|
Office expenses
|
(54,885
|
)
|
|
(47,883
|
)
|
||
Office Segment profit
|
115,463
|
|
|
96,496
|
|
||
|
|
|
|
||||
Multifamily Segment
|
|
|
|
||||
Total multifamily revenues
|
24,133
|
|
|
24,193
|
|
||
Multifamily expenses
|
(5,947
|
)
|
|
(6,031
|
)
|
||
Multifamily Segment profit
|
18,186
|
|
|
18,162
|
|
||
|
|
|
|
||||
Total profit from all segments
|
$
|
133,649
|
|
|
$
|
114,658
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Total profit from all segments
|
$
|
133,649
|
|
|
$
|
114,658
|
|
General and administrative
|
(10,156
|
)
|
|
(8,071
|
)
|
||
Depreciation and amortization
|
(67,374
|
)
|
|
(55,552
|
)
|
||
Other income
|
2,162
|
|
|
2,089
|
|
||
Other expenses
|
(1,724
|
)
|
|
(3,004
|
)
|
||
Income, including depreciation, from unconsolidated real estate funds
|
2,177
|
|
|
1,586
|
|
||
Interest expense
|
(36,954
|
)
|
|
(35,660
|
)
|
||
Net income
|
21,780
|
|
|
16,046
|
|
||
Less: Net income attributable to noncontrolling interests
|
(2,731
|
)
|
|
(680
|
)
|
||
Net income attributable to common stockholders
|
$
|
19,049
|
|
|
$
|
15,366
|
|
(1)
|
Does not include (i) residential leases, which typically have a term of one year or less, (ii) holdover rent, (iii) other types of rent such as storage rent and antenna rent, (iv) tenant reimbursements, (v) straight line rent, (vi) amortization/accretion of acquired above/below-market lease intangibles and (vii) percentage rents. The amounts assume that early termination options held by tenants are not exercised.
|
(1)
|
Lease term ends on
December 31, 2086
. Ground rent is fixed at
$733 thousand
per year until
February 28, 2019
, and will then reset to the greater of the existing ground rent or market. The table above assumes that the rental payments will continue to be
$733 thousand
per year after
February 28, 2019
.
|
Fund
(1)
|
|
Loan Maturity Date
|
|
Principal Balance
(in millions)
|
|
Variable Interest Rate
|
|
Swap Fixed Interest Rate
|
|
Swap Maturity Date
|
||
|
|
|
|
|
|
|
|
|
|
|
||
Fund X
(2)
|
|
5/1/2018
|
|
$
|
325.0
|
|
|
LIBOR + 1.75%
|
|
2.35%
|
|
5/1/2017
|
Partnership X
(3)
|
|
3/1/2023
|
|
110.0
|
|
|
LIBOR + 1.40%
|
|
2.30%
|
|
3/1/2021
|
|
|
|
|
|
$
|
435.0
|
|
|
|
|
|
|
|
(1)
|
See Note
5
for more information regarding our unconsolidated Funds.
|
(2)
|
Floating rate term loan, swapped to fixed, which is secured by
six
properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of
March 31, 2017
, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were
$0.2 million
.
|
(3)
|
Floating rate term loan, swapped to fixed, which is secured by
two
properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of
March 31, 2017
, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were
$3.9 million
.
|
|
|
|
|
|
|
|
|
Consolidated Portfolio
(1)
|
|
Total Portfolio
(2)
|
|
|
Office
|
|
|
|
|
|
Class A Properties
(3)
|
59
|
|
67
|
|
|
Rentable square feet (in thousands)
|
15,886
|
|
17,710
|
|
|
Leased rate
|
91.7%
|
|
91.7%
|
|
|
Occupied rate
|
89.5%
|
|
89.6%
|
|
|
|
|
|
|
|
|
Multifamily
|
|
|
|
|
|
Properties
|
10
|
|
10
|
|
|
Units
|
3,320
|
|
3,320
|
|
|
Leased rate
|
99.6%
|
|
99.6%
|
|
|
Occupied rate
|
98.1%
|
|
98.1%
|
|
|
|
|
|
|
|
(1)
|
Our Consolidated Portfolio includes all of the properties included in our consolidated results. We own 100% of these properties except for
seven
office properties totaling
2.3 million
square feet, which we own through
three
consolidated JVs. Our Consolidated Portfolio also includes
two
parcels of land from which we earn ground rent income from ground leases to the owners of a Class A office building and a hotel.
|
(2)
|
Our Total Portfolio includes our Consolidated Portfolio plus
eight
properties totaling
1.8 million
square feet owned by our unconsolidated Funds, in which we own a weighted average of approximately
60%
based on square footage. See Note
5
to our consolidated financial statements in
Item 1
of this Report for our unconsolidated Funds' disclosures.
|
•
|
In April 2017, one of our consolidated JVs acquired two office properties. See Note
17
to our consolidated financial statements in
Item 1
of this Report for more information regarding these acquisitions and the related financing.
|
•
|
During April, 2017, we sold approximately 1.1 million shares of our common stock under our ATM program for net proceeds of $43.9 million after commissions.
|
•
|
We are building an additional
475
apartments (net of existing apartments removed) at our Moanalua Hillside Apartments in Honolulu, which we expect will cost approximately
$120.0 million
excluding the cost of the land which we already owned before beginning the project. We also plan to invest additional capital to upgrade the existing apartments, improve the parking and landscaping, build a new leasing and management office, and construct a new recreation and fitness facility with a new pool.
|
•
|
In West Los Angeles, we are planning to build a high-rise apartment building with 376 apartments. We expect the cost of the development to be approximately
$120.0 million
to
$140.0 million
, which does not include the cost of the land or the existing underground parking garage, both of which we owned before beginning the project.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
|
|
Twelve Months Ended December 31,
|
|
||||||
|
Historical straight-line rents:
(1)
|
|
March 31, 2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average rental rate
(2)
|
|
$45.92
|
|
$43.21
|
|
$42.65
|
|
$35.93
|
|
$34.72
|
|
|
Annualized lease transaction costs
(3)
|
|
$5.59
|
|
$5.74
|
|
$4.77
|
|
$4.66
|
|
$4.16
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Because straight-line rent takes into account the full economic value of each lease, including rent concessions and escalations, we believe that it may provide a better comparison than ending cash rents, which include the impact of the annual escalations over the entire term of the lease. However, care should be taken in any comparison, as the averages are often significantly affected from period to period by factors such as the buildings, submarkets, and types of space and terms involved in the leases executed during the respective reporting period.
|
(2)
|
Reflects the weighted average straight-line annualized base rent (i.e., excludes tenant reimbursements, parking and other revenue) per leased square foot. For our triple net leases, annualized rent is calculated by adding estimated expense reimbursements to base rent.
|
(3)
|
Reflects the weighted average leasing commissions and tenant improvement allowances divided by the weighted average number of years for the leases.
|
•
|
Straight-line rent roll up.
The average straight-line rent of
$45.92
per square foot under new and renewed leases that we signed during the
three months
ended
March 31, 2017
was
29.0%
greater than the average straight-line rent of
$35.59
per square foot on the expiring leases for the same space. The rent roll up reflects continuing increases in average starting rental rates and more leases containing annual rent escalations in excess of 3% per annum.
|
•
|
Cash rent roll up.
The average starting cash rental rate of
$43.84
per square foot under new and renewed leases that we signed during the
three months
ended
March 31, 2017
was
28.0%
greater than the average starting cash rental rate of
$34.26
per square foot on the expiring leases for the same space, and
12.9%
greater than the average ending cash rental rate of
$38.83
per square foot on those expiring leases.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Three months ended
|
|
Twelve Months Ended December 31,
|
|
||||||||||||||||
|
Average annual rental rate - new tenants:
|
|
March 31, 2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
Rental rate
(1)
|
|
$
|
28,049
|
|
|
$
|
28,435
|
|
|
$
|
27,936
|
|
|
$
|
28,870
|
|
|
$
|
27,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
2016 and 2015 include the impact of a property acquisition in Honolulu at the end of the 2014, so the numbers are not directly comparable with prior years.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
December 31,
|
|
|||||||||||
|
Occupancy Rates
(1)
as of:
|
|
March 31, 2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Office portfolio
|
|
89.6
|
%
|
|
90.4
|
%
|
|
91.2
|
%
|
|
90.5
|
%
|
|
90.4
|
%
|
|
|
Multifamily portfolio
|
|
98.1
|
%
|
|
97.9
|
%
|
|
98.0
|
%
|
|
98.2
|
%
|
|
98.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Three months ended
|
|
Twelve Months Ended December 31,
|
|
|||||||||||
|
Average Occupancy
Rates
(1)(2)
:
|
|
March 31, 2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Office portfolio
|
|
90.0
|
%
|
|
90.6
|
%
|
|
90.9
|
%
|
|
90.0
|
%
|
|
89.7
|
%
|
|
|
Multifamily portfolio
|
|
98.0
|
%
|
|
97.6
|
%
|
|
98.2
|
%
|
|
98.5
|
%
|
|
98.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Occupancy rates include the impact of property acquisitions, most of whose occupancy rates at the time of acquisition were below that of our existing portfolio.
|
(2)
|
Average occupancy rates are calculated by averaging the occupancy rates at the end of each of the quarters in the period and at the end of the quarter immediately prior to the start of the period.
|
|
|
|
|
|
|
||||
|
|
Three Months Ended March 31,
|
|
||||||
|
|
2017
|
|
2016
|
|
||||
|
|
|
|
|
|
||||
|
Net income attributable to common stockholders
|
$
|
19,049
|
|
|
$
|
15,366
|
|
|
|
Depreciation and amortization of real estate assets
|
67,374
|
|
|
55,552
|
|
|
||
|
Net income attributable to noncontrolling interests
|
2,731
|
|
|
680
|
|
|
||
|
Adjustments attributable to unconsolidated funds
(1)
|
4,036
|
|
|
3,933
|
|
|
||
|
Adjustments attributable to consolidated JVs
(1)
|
(9,521
|
)
|
|
585
|
|
|
||
|
FFO
|
$
|
83,669
|
|
|
$
|
76,116
|
|
|
|
|
|
|
|
|
(1)
|
Adjusts for our share of our unconsolidated Funds depreciation and amortization of real estate assets, and for the net income and depreciation and amortization of real estate assets that is attributable to the noncontrolling interests in our consolidated JVs.
|
|
|
DOUGLAS EMMETT, INC.
|
||
|
|
|
|
|
|
|
|
|
|
Date:
|
May 5, 2017
|
By:
|
/s/ JORDAN L. KAPLAN
|
|
|
|
|
Jordan L. Kaplan
|
|
|
|
|
President and CEO
|
|
|
|
|
|
|
|
|
|
|
|
Date:
|
May 5, 2017
|
By:
|
/s/ MONA M. GISLER
|
|
|
|
|
Mona M. Gisler
|
|
|
|
|
CFO
|
1 Year Douglas Emmett Chart |
1 Month Douglas Emmett Chart |
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