Douglas Emmett, Inc. Q2 FY2025 earnings call

• Leasing Activity: Leased 973,000 square feet of office space, achieving positive absorption in 3 of the last 4 quarters. Multifamily portfolio had full occupancy, increasing rents, and same-property cash NOI growth over 10%. - Growth Strategies: Focus on leasing up office portfolio, redeveloping The Landmark Residences, retenanting Studio Plaza, and converting 10900 Wilshire office property into apartments. - Financing: Refinanced a $200 million office loan with a nonrecourse interest-only loan, swapped to fixed rate of 5.6% until August 2030, maturing in August 2032.

Office Portfolio: Leased 973,000 square feet of office space, including over 300,000 square feet of new leases. Office rental rates steady, concessions low. Residential Portfolio: Full occupancy, increasing rents, same-property cash NOI growth exceeding 10%. Revenue contribution details not explicitly provided in absolute terms with percentages, but key performance highlights for each segment are as described.

• 2025 Net Income: Expected to be between $0.07 and $0.11 per common share diluted. - FFO Guidance: Narrowing guidance range for FFO per fully diluted share to between $1.43 and $1.47. Guidance does not assume impact of future property acquisitions/dispositions, common stock sales/repurchases, financings, etc.

• Macroeconomic Concerns: General macroeconomic factors could pose risks to leasing and operations. - Property Conversion/Redevelopment Risks: Uncertainties in timing and costs associated with office to residential conversions and apartment redevelopments.

Q: John Kim on leasing activity vs occupancy and lease rate A: Jordan Kaplan discussed the wide gap between leased and occupied space as a good sign, indicating strong leasing activity, with a historical average gap of 150-180 basis points, currently at 270 basis points.

Q: Blaine Heck on Studio Plaza lease rate and NOI contribution A: Stuart McElhinney stated they don't give leasing stats on individual buildings, but are pleased with leasing velocity, with first tenant moved in, and NOI contribution to come over time.

Q: Anthony Paolone on occupancy guidance A: Stuart McElhinney confirmed guidance range of 78%-80% for full year, comfortable with the range.

Q: Alexander Goldfarb on L.A. real estate demand A: Jordan Kaplan discussed L.A. apartment market strength in specific submarkets like Westside, differing from broader L.A. County, and L.A.'s tech scene focused on entertainment and research.

Q: Upal Rana on Studio Plaza leasing timing and Barrington Plaza redevelopment A: Stuart McElhinney expected other tenants to move in Studio Plaza this year; Jordan Kaplan mentioned Barrington Plaza redevelopment costs higher due to known contracts, still in the $400 million range, with good yield.

Q: Nicholas Yulico on Westwood office market impact and stabilized lease rate A: Jordan Kaplan discussed Westwood office market impact of converting space, and stabilized lease rate driven by economy and industry mix.

Q: Seth Bergey on Studio Plaza rents and tax credits A: Peter Seymour said rents in Studio Plaza in line with expectations, timing varies by tenant size; Jordan Kaplan mentioned limited visibility on entertainment tax credits impact.

Q: Jana Galan on L.A. catalysts and cash re-leasing spreads A: Jordan Kaplan noted positive catalysts in L.A. and cash re-leasing spreads positive due to high rent escalators in leases.

Q: Peter Abramowitz on converting 10900 Wilshire to residential A: Jordan Kaplan explained reasons for converting, including building layout, subway stop impact, and cost-effectiveness