Douglas Emmett Reports Q2 2024 Results

TL;DR

**DEI Q2 REVENUE $277.9M, OFFICE RENTAL REVENUE $119.1M FOR QTR.**

AI Summary

Douglas Emmett Inc. reported its Q2 2024 results, with total revenues for the six months ended June 30, 2024, reaching $277.9 million. The company's office segment generated $238.4 million in rental revenue and tenant recovery revenue for the same period. For the quarter ended June 30, 2024, office rental revenue was $119.1 million.

Why It Matters

This filing provides insight into Douglas Emmett's financial performance in the office real estate sector, crucial for investors assessing the company's stability and revenue generation capabilities.

Risk Assessment

Risk Level: medium — The company operates in the real estate sector, which can be sensitive to economic downturns and interest rate fluctuations.

Key Numbers

• $277.9M — Total Revenues (YTD) (Represents the total income generated by Douglas Emmett for the first six months of 2024.)
• $238.4M — Office Rental Revenue (YTD) (Key revenue stream from the company's core office properties for the first six months of 2024.)
• $119.1M — Office Rental Revenue (Q2) (Indicates the quarterly performance of the office segment's rental income.)

Key Players & Entities

• Douglas Emmett Inc. (company) — Filer of the 10-Q report
• 20240630 (date) — End of the reporting period
• $277.9 million (dollar_amount) — Total revenues for the six months ended June 30, 2024
• $238.4 million (dollar_amount) — Rental revenue and tenant recovery revenue for the office segment for the six months ended June 30, 2024
• $119.1 million (dollar_amount) — Rental revenue for the office segment for the quarter ended June 30, 2024

FAQ

Key Financial Figures

• $0.01 — ange on Which Registered Common Stock, $0.01 par value per share DEI New York Stock

Filing Documents

• nysedei-20240630.htm (10-Q) — 1652KB
• a2024q2exhibit311-ceo302.htm (EX-31.1) — 11KB
• a2024q2exhibit312-cfo302.htm (EX-31.2) — 11KB
• a2024q2exhibit321-ceo906.htm (EX-32.1) — 7KB
• a2024q2exhibit322-cfo906.htm (EX-32.2) — 7KB
• nysedei-20240630_g1.jpg (GRAPHIC) — 6KB
• nysedei-20240630_g2.jpg (GRAPHIC) — 28KB
• nysedei-20240630_g3.jpg (GRAPHIC) — 30KB
• nysedei-20240630_g4.jpg (GRAPHIC) — 119KB
• 0001364250-24-000040.txt ( ) — 8786KB
• nysedei-20240630.xsd (EX-101.SCH) — 59KB
• nysedei-20240630_cal.xml (EX-101.CAL) — 88KB
• nysedei-20240630_def.xml (EX-101.DEF) — 293KB
• nysedei-20240630_lab.xml (EX-101.LAB) — 656KB
• nysedei-20240630_pre.xml (EX-101.PRE) — 496KB
• nysedei-20240630_htm.xml (XML) — 1199KB

Forward Looking Statements

Forward Looking Statements 6

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION Item 1

Financial Statements (unaudited)

Financial Statements (unaudited) 7 Consolidated Balance Sheets 7 Consolidated Statements of Operations 8 Consolidated Statements of Comprehensive Income (Loss) 9 Consolidated Statements of Equity 10 Consolidated Statements of Cash Flows 12

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 14 Overview 14 Summary of Significant Accounting Policies 15 Investment in Real Estate 17 Ground Lease 17 Acquired Lease Intangibles 18 Investment in Unconsolidated Fund 19 Other Assets 19 Secured Notes Payable, Net 20 Interest Payable, Accounts Payable and Deferred Revenue 22 Derivative Contracts 22 Equity 24 EPS 26 Fair Value of Financial Instruments 27 Segment Reporting 29 Future Minimum Lease Rental Receipts 30 Commitments, Contingencies & Guarantees 30 Item 2

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 33 Item 3

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 48 Item 4

Controls and Procedures

Controls and Procedures 48

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1

Legal Proceedings

Legal Proceedings 49 Item 1A

Risk Factors

Risk Factors 49 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds 49 Item 3 Defaults Upon Senior Securities 49 Item 4 Mine Safety Disclosures 49 Item 5 Other Information 49 Item 6 Exhibits 50

SIGNATURES

SIGNATURES 51 2 Table of Contents Glossary Abbreviations used in this Report: AOCI Accumulated Other Comprehensive Income (Loss) ASC Accounting Standards Codification ASU Accounting Standards Update BOMA Building Owners and Managers Association CEO Chief Executive Officer CFO Chief Financial Officer Code Internal Revenue Code of 1986, as amended COVID-19 Coronavirus Disease 2019 DEI Douglas Emmett, Inc. EPS Earnings Per Share Exchange Act Securities Exchange Act of 1934, as amended FASB Financial Accounting Standards Board FCA Financial Conduct Authority FDIC Federal Deposit Insurance Corporation FFO Funds From Operations Fund Unconsolidated Institutional Real Estate Fund GAAP Generally Accepted Accounting Principles (United States) JV Joint Venture LIBOR London Interbank Offered Rate LTIP Units Long-Term Incentive Plan Units NAREIT National Association of Real Estate Investment Trusts OCI Other Comprehensive Income (Loss) OP Units Operating Partnership Units Operating Partnership Douglas Emmett Properties, LP Partnership X Douglas Emmett Partnership X, LP PCAOB Public Company Accounting Oversight Board (United States) REIT Real Estate Investment Trust Report Quarterly Report on Form 10-Q SEC Securities and Exchange Commission Securities Act Securities Act of 1933, as amended SOFR Secured Overnight Financing Rate TRS Taxable REIT Subsidiary(ies) US United States USD United States Dollar VIE Variable Interest Entity(ies) 3 Table of Contents Glossary Defined terms used in this Report: Annualized Rent Annualized cash base rent (excludes tenant reimbursements, parking and other revenue) before abatements under leases commenced as of the reporting date and expiring after the reporting date. Annualized Rent for our triple net office properties (in Honolulu and one single tenant building in Los Angeles) is calculated by adding expense reimbursements and estimates of normal building expenses paid by tenants to base rent.

Forward Looking Statements

Forward Looking Statements This Report contains forward-looking statements within the meaning of the Section 27A of the Securities Act and Section 21E of the Exchange Act. You can find many (but not all) of these statements by looking for words such as "believe", "expect", "anticipate", "estimate", "approximate", "intend", "plan", "would", "could", "may", "future" or other similar expressions in this Report. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995. We caution investors that any forward-looking statements used in this Report, or those that we make orally or in writing from time to time, are based on our beliefs and assumptions, as well as information currently available to us. Actual outcomes will be affected by known and unknown risks, trends, uncertainties and factors beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. As a result, our future results can be expected to differ from our expectations, and those differences may be material. Accordingly, investors should use caution when relying on previously reported forward-looking statements, which were based on results and trends at the time they were made, to anticipate future results or trends. Some of the risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include the following: adverse economic, political or real estate developments affecting Southern California or Honolulu, Hawaii; competition from other real estate investors in our markets; decreasing rental rates or increasing tenant incentive and vacancy rates; reduced demand for office space, including as a result of remote work and flexible working arrangements that allow work from remote locations other than the employer's of

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Douglas Emmett, Inc. Consolidated Balance Sheets (Unaudited; In thousands, except share data) June 30, 2024 December 31, 2023 Assets Investment in real estate, gross $ 12,458,771 $ 12,405,814 Less: accumulated depreciation and amortization ( 3,792,294 ) ( 3,652,630 ) Investment in real estate, net 8,666,477 8,753,184 Ground lease right-of-use asset 7,443 7,447 Cash and cash equivalents 561,066 523,082 Tenant receivables 5,342 6,096 Deferred rent receivables 116,265 115,321 Acquired lease intangible assets, net 2,727 2,971 Interest rate contract assets 144,224 170,880 Investment in unconsolidated Fund 25,198 15,977 Other assets 34,912 49,260 Total Assets $ 9,563,654 $ 9,644,218 Liabilities Secured notes payable, net $ 5,546,371 $ 5,543,171 Ground lease liability 10,829 10,836 Interest payable, accounts payable and deferred revenue 133,585 131,237 Security deposits 62,787 61,958 Acquired lease intangible liabilities, net 15,269 19,838 Dividends payable 31,818 31,781 Total Liabilities 5,800,659 5,798,821 Equity Douglas Emmett, Inc. stockholders' equity: Common Stock, $ 0.01 par value, 750,000,000 authorized, 167,398,611 and 167,206,267 outstanding at June 30, 2024 and December 31, 2023, respectively 1,674 1,672 Additional paid-in capital 3,395,909 3,392,955 Accumulated other comprehensive income 100,627 115,917 Accumulated deficit ( 1,334,501 ) ( 1,290,682 ) Total Douglas Emmett, Inc. stockholders' equity 2,163,709 2,219,862 Noncontrolling interests 1,599,286 1,625,535 Total Equity 3,762,995 3,845,397 Total Liabilities and Equity $ 9,563,654 $ 9,644,218 See accompanying notes to the consolidated financial statements. 7 Table of Contents Douglas Emmett, Inc. Consolidated Statements of Operations (Unaudited; in thousands, except per share data) Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Revenues Office rental Rental revenues and tenant recoveries $ 171,06

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 1. Overview Organization and Business Description Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed REIT. We are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and Honolulu, Hawaii. Through our interest in our Operating Partnership and its subsidiaries, consolidated JVs and unconsolidated Fund, we focus on owning, acquiring, developing and managing a substantial market share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities. The terms "us," "we" and "our" as used in the consolidated financial statements refer to Douglas Emmett, Inc. and its subsidiaries on a consolidated basis. At June 30, 2024, our Consolidated Portfolio consisted of (i) a 17.6 million square foot office portfolio, (ii) 4,483 multifamily apartment units and (iii) fee interests in two parcels of land from which we receive rent under ground leases. We also manage and own an equity interest in an unconsolidated Fund which, at June 30, 2024, owned an additional 0.4 million square feet of office space. We manage our unconsolidated Fund alongside our Consolidated Portfolio, and we therefore present the statistics for our office portfolio on a Total Portfolio basis. As of June 30, 2024, our portfolio consisted of the following (including ancillary retail space and excluding two parcels of land from which we receive rent under ground leases): Consolidated Portfolio Total Portfolio Office Wholly-owned properties 52 52 Consolidated JV properties 16 16 Unconsolidated Fund properties — 2 68 70 Multifamily Wholly-owned properties 12 12 Consolidated JV properties 2 2 14 14 Total 82 84 Basis of Presentation The accompanying consolidated financial statements are the consolidated financial statements o

View Full Filing

View this 10-Q filing on SEC EDGAR