Core Viewpoint - Douglas Emmett, Inc. has declared a quarterly cash dividend of $0.19 per share, amounting to an annualized total of $0.76, to be paid on October 15, 2025, to shareholders of record as of September 30, 2025 [1][7]. Company Overview - Douglas Emmett, Inc. is a fully integrated, self-administered, and self-managed real estate investment trust (REIT) that owns and operates high-quality office and multifamily properties in prime coastal submarkets of Los Angeles and Honolulu [2]. - The company focuses on acquiring top-tier office properties and premier multifamily communities in areas with significant supply constraints and high-end amenities [2]. Financial Information - The company has released its Second Quarter 2025 Earnings Results and Operating Information, which can be accessed on its investor relations website [5]. - A live conference call to discuss the earnings results is scheduled for August 6, 2025, at 11:00 a.m. Pacific Time [6].

Group 1 - The article discusses the author's long-term investment approach, focusing on REITs, preferred stocks, and high-yield bonds, which began in high school in 2011 [1] - The author has recently combined long stock positions with covered calls and cash secured puts, indicating a strategy that balances risk and return [1] - The primary focus of the author's coverage on Seeking Alpha includes REITs and financials, with occasional insights on ETFs and macro-driven stock ideas [1]

Glossary and Defined Terms This section defines key abbreviations and terms for consistent understanding of the financial and operational context - The report defines numerous abbreviations and terms, such as AOCI, FFO, REIT, Annualized Rent, and Occupancy Rate, to ensure consistent understanding of financial and operational context[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) Forward Looking Statements Forward-looking statements are subject to various risks and uncertainties, potentially causing actual outcomes to differ materially - The report contains forward-looking statements based on beliefs and assumptions, subject to known and unknown risks, trends, uncertainties, and factors beyond the company's control, with actual outcomes potentially differing materially from expectations[12](index=12&type=chunk) - Key risks include adverse economic, political, or real estate developments; competition; decreasing rental rates or increasing vacancy rates; reduced demand for office space due to remote work; tenant defaults; increases in interest rates, operating, and construction costs; insufficient cash flows; difficulties in raising capital; inability to liquidate investments; adverse changes to rent control laws; environmental uncertainties; natural disasters; property damage; insufficient insurance; inability to expand into new markets or successfully operate acquired properties; risks associated with JVs; conflicts of interest; changes in zoning laws; adverse litigation results; non-compliance with laws; potential terrorist attacks or cyber attacks; adverse changes to accounting or tax laws; and weaknesses in internal controls[14](index=14&type=chunk) PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=9&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents unaudited consolidated financial statements, including balance sheets, income statements, cash flows, and equity, with notes on accounting policies, investments, debt, and segment performance [Consolidated Balance Sheets](index=9&type=section&id=Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position at specific dates, detailing assets, liabilities, and equity | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (YoY) | | :--------------------------------- | :----------------------------- | :------------------------------- | :----------- | | Investment in real estate, net | $8,793,399 | $8,578,627 | +2.5% | | Cash and cash equivalents | $426,889 | $444,623 | -4.0% | | Total Assets | $9,433,532 | $9,403,700 | +0.3% | | Secured notes payable, net | $5,562,721 | $5,498,022 | +1.2% | | Total Liabilities | $5,842,104 | $5,745,460 | +1.7% | | Total Equity | $3,591,428 | $3,658,240 | -1.8% | [Consolidated Statements of Operations](index=10&type=section&id=Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net income or loss over specific periods | Metric (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :------------------ | :------------------ | :----------- | | Total revenues | $503,969 | $490,746 | +2.7% | | Total operating expenses | $405,697 | $380,498 | +6.6% | | Interest expense | $(125,413) | $(110,287) | -13.7% | | Net (loss) income | $29,516 | $15,362 | +92.1% | | Net (loss) income attributable to common stockholders | $33,965 | $19,787 | +71.6% | | Net (loss) income per common share – basic and diluted | $0.20 | $0.11 | +81.8% | [Consolidated Statements of Comprehensive (Loss) Income](index=11&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20(Loss)%20Income) This section presents the company's comprehensive income or loss, including net income and other comprehensive income items | Metric (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :------------------ | :------------------ | :----------- | | Net (loss) income | $29,516 | $15,362 | +92.1% | | Other comprehensive loss: cash flow hedges | $(50,368) | $(22,630) | -122.6% | | Comprehensive loss | $(20,852) | $(7,268) | -186.9% | | Comprehensive (loss) income attributable to common stockholders | $3,990 | $4,497 | -11.4% | [Consolidated Statements of Equity](index=12&type=section&id=Consolidated%20Statements%20of%20Equity) This section outlines changes in the company's equity over time, including net income, dividends, and other adjustments | Metric (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :------------------ | :------------------ | :----------- | | Total Equity - Beginning balance | $3,658,240 | $3,845,397 | -4.9% | | Net (loss) income | $29,516 | $15,362 | +92.1% | | Cash flow hedge adjustments | $(50,368) | $(22,630) | -122.6% | | Dividends | $(63,630) | $(63,606) | -0.04% | | Total Equity - Ending balance | $3,591,428 | $3,762,995 | -4.5% | | Dividends declared per common share | $0.38 | $0.38 | 0% | [Consolidated Statements of Cash Flows](index=15&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section summarizes the cash inflows and outflows from operating, investing, and financing activities over specific periods | Metric (Six Months Ended June 30) | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :-------------------------------- | :------------------ | :------------------ | :------------------ | | Net cash provided by operating activities | $213,927 | $230,888 | -7.3% | | Net cash used in investing activities | $(105,175) | $(110,230) | +4.6% | | Net cash used in financing activities | $(126,486) | $(82,674) | -53.0% | | (Decrease) increase in cash and cash equivalents and restricted cash | $(17,734) | $37,984 | -146.7% | | Cash and cash equivalents and restricted cash - ending balance | $426,918 | $561,167 | -23.9% | [Notes to Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the consolidated financial statements [Overview](index=17&type=section&id=Overview) This section provides a brief introduction to Douglas Emmett, Inc., its business focus, and portfolio composition - Douglas Emmett, Inc. is a fully integrated REIT specializing in high-quality office and multifamily properties in Los Angeles County, California, and Honolulu, Hawaii[35](index=35&type=chunk) - As of June 30, 2025, the Total Portfolio included an **18.0 million square foot office portfolio**, **5,442 multifamily apartment units**, and fee interests in two ground lease parcels[36](index=36&type=chunk) - The company consolidates its Operating Partnership and six JVs, including Partnership X, which was consolidated on January 1, 2025, after becoming a Variable Interest Entity (VIE) where the company is the primary beneficiary[39](index=39&type=chunk) [Summary of Significant Accounting Policies](index=18&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) This section outlines the key accounting principles and methods used in preparing the financial statements - No changes have been made to the significant accounting policies disclosed in the 2024 Annual Report on Form 10-K[42](index=42&type=chunk) - Rental revenues, tenant recoveries, and certain parking revenues are accounted for on a combined basis in accordance with Topic 842, with tenant recoveries increasing to **$25.1 million** for the six months ended June 30, 2025, from **$20.5 million** in the prior year[44](index=44&type=chunk) - The company has elected to be taxed as a REIT, generally exempting it from corporate-level income tax on qualifying earnings, but earnings from Taxable REIT Subsidiaries (TRS) are subject to corporate income tax[49](index=49&type=chunk) [Investment in Real Estate](index=19&type=section&id=Investment%20in%20Real%20Estate) This section details the composition and changes in the company's real estate investments | (In thousands) | June 30, 2025 | December 31, 2024 | | :--------------- | :------------ | :---------------- | | Land | $1,199,291 | $1,185,977 | | Buildings and improvements | $10,448,766

Financial Data and Key Metrics Changes - Revenue increased by 2.7% compared to 2024, while FFO decreased to $0.37 per share and AFFO decreased to $54,500,000 [15] - Same property cash NOI was down 1.1%, primarily due to a large property tax refund in the prior year creating a tough comparison [15] - G&A expenses remained low at approximately 4.9% of revenue relative to the benchmark group [15] - Guidance for 2025 net income per common share diluted is expected to be between $0.07 and $0.11, with FFO per fully diluted share narrowed to between $1.43 and $1.47 [15] Business Line Data and Key Metrics Changes - The office portfolio leased 973,000 square feet, including over 300,000 square feet of new leases, achieving positive absorption for three of the last four quarters [6][13] - The multifamily portfolio maintained full occupancy with cash NOI growth exceeding 10% [7] - Average leasing costs during the second quarter were $6.06 per square foot per year, remaining below the average for other office REITs [13] Market Data and Key Metrics Changes - The office leasing pipeline is robust, with remaining office expirations in 2025 and 2026 below historical averages [13] - The residential portfolio remained essentially fully leased at 99.3% with strong demand [14] Company Strategy and Development Direction - The company is focused on four key growth strategies: leasing up the office portfolio, redeveloping properties, re-tenanting Studio Plaza, and augmenting the portfolio with best-in-class properties [7] - Plans to convert a recently acquired 10,900 square foot office property into 320 apartments in the Westwood submarket, aiming to enhance property value and reduce office vacancy [8][10] - The company has addressed all 2025 debt maturities and is refinancing 2026 debt maturities at competitive rates [9][12] Management's Comments on Operating Environment and Future Outlook - Management has not seen any impact on leasing from macroeconomic concerns, with strong results in both office and residential portfolios [6] - The company remains optimistic about leasing activity, despite challenges in the market [25] - Management noted that the LA tech scene is primarily driven by the entertainment industry, with expectations for growth in medical research and quantum computing due to significant investments [51][52] Other Important Information - The conversion of the 10,900 Wilshire property is expected to cost approximately $200 million to $250 million, with the first apartments anticipated to be delivered in the next 18 months [10] - The company is experiencing a strong market response to the revitalized Studio Plaza project, with ongoing renovations and tenant occupancy [11] Q&A Session Summary Question: Leasing activity versus occupancy and lease rate - Management acknowledged a wide gap between leased and occupied space, indicating strong leasing activity despite a decrease in occupancy [18][20] Question: Lease rate and timing of NOI contributions from Studio Plaza - Management did not disclose specific leasing stats but expressed satisfaction with the leasing velocity and anticipated NOI contributions over time [29][30] Question: Guidance for full-year occupancy - Management maintained guidance for the full year at $78 million to $80 million, expressing confidence in achieving this range [38] Question: Yield on all-in costs for 10,900 Wilshire - Management indicated confidence in achieving a yield around 10% upon completion of the project [40] Question: LA's overall economic outlook - Management believes the apartment sector is performing better than expected, while office performance remains challenging but on track [49] Question: Impact of California's entertainment tax credits - Management noted limited visibility into the impact of tax credits on demand, as they primarily deal with administrative offices rather than studios [75] Question: Demand from recent catalysts in LA - Management reported a strong leasing pipeline, attributing increased demand to companies returning to office spaces [80]

Financial Data and Key Metrics Changes - Revenue increased by 2.7% compared to 2024, while FFO decreased to $0.37 per share and AFFO decreased to $54,500,000 [14] - Same property cash NOI was down 1.1%, primarily due to a tough comparison with the previous year which included a large property tax refund [14] - G&A expenses remained low at approximately 4.9% of revenue relative to the benchmark group [14] - Guidance for 2025 net income per common share diluted is expected to be between $0.07 and $0.11, with FFO per fully diluted share narrowed to between $1.43 and $1.47 [15] Business Line Data and Key Metrics Changes - The office portfolio leased 973,000 square feet, including over 300,000 square feet of new leases, achieving positive absorption for three of the last four quarters [5][12] - The multifamily portfolio maintained full occupancy with cash NOI growth exceeding 10% [6] - Office rental rates remained steady with low concessions [5] Market Data and Key Metrics Changes - The overall straight-line value of new leases signed increased by 2.4%, while cash spreads decreased by 13.3% [12] - The residential portfolio remained nearly fully leased at 99.3% [13] Company Strategy and Development Direction - The company is focused on four key growth strategies: leasing up the office portfolio, redeveloping the Brentwood apartment property, re-tenanting Studio Plaza, and augmenting the portfolio with high-quality properties [6] - Plans to convert a recently acquired 10,900 square foot office property into 320 apartments in the Westwood submarket were announced, aiming to enhance property value and reduce office vacancy [6][9] Management's Comments on Operating Environment and Future Outlook - Management noted no impact on leasing from macroeconomic concerns, with strong results in both office and residential portfolios [5] - The leasing pipeline is robust, with remaining office expirations in 2025 and 2026 below historical averages [12] - Management expressed optimism about leasing activity despite challenges, indicating a strong pipeline and a focus on larger deals [20][25] Other Important Information - The company has addressed all 2025 debt maturities and is refinancing 2026 debt maturities at competitive rates [7] - The total project cost for the conversion of 10900 Wilshire is expected to be approximately $200 million to $250 million [9] Q&A Session Summary Question: Leasing activity versus occupancy and lease rate - Management acknowledged a significant gap between leased and occupied space, indicating strong leasing activity but longer timelines for larger deals [19][20] Question: Lease rate and timing of NOI contributions from Studio Plaza - Management did not disclose specific leasing stats but confirmed positive velocity in leasing and anticipated NOI contributions over time [30] Question: Overall view of LA's economy and demand for real estate - Management noted that while residential rents are high, their specific market segment remains strong, and they expect to meet their performance expectations for the year [44][48] Question: Impact of California's tax credits on demand - Management indicated limited visibility into the impact of tax credits on demand, as they primarily deal with administrative offices rather than studios [75] Question: Timeline and NOI drag from 10900 Wilshire conversion - Management confirmed that there will be a lag between tenant move-outs and new tenant move-ins, but they expect stable NOI contributions from the building [34][90] Question: Decision to convert 10900 Wilshire to residential - Management explained that the decision was based on unique building characteristics and market conditions, making conversion a cost-effective option [88][90]

Douglas Emmett (DEI) Overview Sharpshooter Focus & Best-in-Class Operating Platform Focused Strategy Fully-Integrated Operating Platform ✓ Includes in-house leasing, space planning, legal, construction and design ✓ Major competitive advantage with our small affluent tenants ✓ Lowers operating, G&A, leasing and tenant improvement costs Strong Internal and External Growth The Landmark Los Angeles www.douglasemmett.com 1 ✓ High barriers to entry reduce competitive pressures from new supply ✓ Proximity to premi ...

Core Insights - Douglas Emmett (DEI) reported revenue of $252.43 million for the quarter ended June 2025, marking a year-over-year increase of 2.7% and exceeding the Zacks Consensus Estimate of $251.14 million by 0.52% [1] - The company's earnings per share (EPS) for the same period was $0.37, a significant increase from $0.06 a year ago, aligning with the consensus EPS estimate [1] Revenue Breakdown - Total multifamily revenues reached $49.62 million, surpassing the average estimate of $48.48 million by analysts, reflecting a year-over-year change of 6.6% [4] - Total office revenues amounted to $202.81 million, slightly above the average estimate of $201.8 million, with a year-over-year increase of 1.8% [4] Stock Performance - Over the past month, shares of Douglas Emmett have returned -3.3%, contrasting with the Zacks S&P 500 composite's increase of 1% [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

[Executive Summary](index=2&type=section&id=Executive%20Summary) Provides an overview of Q2 2025 financial and operational performance, including key acquisitions, leasing, and guidance updates [Executive Summary Overview](index=2&type=section&id=Executive%20Summary%20Overview) Q2 2025 results show impact of 10900 Wilshire acquisition and JV consolidation, with positive multifamily NOI growth and narrowed 2025 FFO guidance - The company's portfolio is located in premier coastal submarkets of Los Angeles and Honolulu, comprising **17.5 million square feet** of Class A office properties and **4,410 apartment units** in its In-Service Portfolio, with additional development projects[4](index=4&type=chunk) Q2 2025 Financial Highlights | (In millions, except per share data) | Q2 2025 | Q2 2024 | | :--------------------------------- | :------ | :------ | | Revenues | $252 | $246 | | Net (loss) income attributable to common stockholders | $(6) | $11 | | FFO per fully diluted share | $0.37 | $0.46 | | AFFO | $54 | $74 | | Same Property Cash NOI | $151 | $152 | - During Q2 2025, **973,000 square feet** of office space was leased, including over **300,000 square feet** of new leases, achieving positive absorption across the Total Portfolio for three of the last four quarters. Straight-line rents increased by **2.4%**, while cash rents decreased by **13.3%** for signed office leases[6](index=6&type=chunk) - The multifamily portfolio maintained a **99.3%** leased rate with strong demand and same property cash NOI growth exceeding **10%**[6](index=6&type=chunk) - A significant office-to-residential conversion is planned for 10900 Wilshire, transforming a **247,000 square foot** office tower into a **320-unit** apartment community with estimated total project costs of **$200 million** to **$250 million**[7](index=7&type=chunk) - The company refinanced a **$200 million** office loan, securing a new non-recourse, interest-only term loan with a fixed rate of **5.6%** through 2030, maturing in August 2032[8](index=8&type=chunk) - A quarterly cash dividend of **$0.19** per common share (**$0.76** annualized) was paid on July 15, 2025[9](index=9&type=chunk) 2025 Guidance Update | Metric | Guidance Range | | :-------------------------------- | :------------- | | Net Income Per Common Share - Diluted | $0.07 to $0.11 | | FFO per fully diluted share | $1.43 to $1.47 | [Company Overview](index=4&type=section&id=COMPANY%20OVERVIEW) Presents corporate data, portfolio composition, and leadership structure as of June 30, 2025 [Corporate Data](index=4&type=section&id=Corporate%20Data) Corporate data details portfolio composition, leasing statistics, market capitalization, and net debt as of June 30, 2025 Portfolio Composition (as of June 30, 2025) | | In-Service Portfolio | Development Portfolio | Total | | :-------------------- | :------------------- | :-------------------- | :---- | | Office Properties | 69 | 1 | 70 | | Office Rentable Square Feet | 17,526,068 | 456,205 | 17,982,273 | | Multifamily Properties | 13 | 2 | 15 | | Multifamily Units | 4,410 | 1,032 | 5,442 | In-Service Portfolio Leasing Statistics | Metric | Value | | :-------------------------- | :------ | | Office Portfolio Leased Rate | 80.7 % | | Office Portfolio Occupancy Rate | 78.0 % | | Multifamily Portfolio Leased Rate | 99.3 % | Market Capitalization and Net Debt (as of June 30, 2025) | Metric | Value (in thousands, except per share) | | :------------------------------------ | :----------------------------------- | | Fully Diluted Shares outstanding | 204,022 | | Common stock closing price per share | $15.04 | | Equity Capitalization | $3,068,493 | | Consolidated Net Debt | $5,151,129 | | Our Share of Net Debt | $4,253,246 | | Our Share of Net Debt to Pro Forma Enterprise Value | 58 % | - The AFFO Payout Ratio for the three months ended June 30, 2025, was **71.5%**[20](index=20&type=chunk) [Property Map](index=5&type=section&id=Property%20Map) Property map visually represents company's property locations, primarily in Los Angeles and Honolulu [Board of Directors and Executive Officers](index=6&type=section&id=Board%20of%20Directors%20and%20Executive%20Officers) Lists Board of Directors and Executive Officers as of June 30, 2025, detailing key leadership roles - The Board of Directors includes Jordan L. Kaplan (Chairman, CEO, President), Kenneth M. Panzer (COO), Leslie E. Bider, Dorene C. Dominguez, Virginia A. McFerran, Thomas E. O'Hern, William E. Simon, Jr., and Shirley Wang[23](index=23&type=chunk) - Key Executive Officers are Jordan L. Kaplan (Chairman, CEO, President), Kenneth M. Panzer (COO), Peter D. Seymour (CFO), Kevin A. Crummy (CIO), and Michele L. Aronson (EVP, General Counsel and Secretary)[24](index=24&type=chunk) [Financial Results](index=7&type=section&id=FINANCIAL%20RESULTS) Details the company's consolidated financial performance, including balance sheets, operating results, FFO, NOI, and loan data [Consolidated Balance Sheets](index=7&type=section&id=Consolidated%20Balance%20Sheets) Consolidated balance sheets as of June 30, 2025, show increased real estate investment and secured notes, with decreased total equity Consolidated Balance Sheet Highlights (In thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Investment in real estate, net | $8,793,399 | $8,578,627 | +$214,772 | | Cash and cash equivalents | $426,889 | $444,623 | -$17,734 | | Total assets | $9,433,532 | $9,403,700 | +$29,832 | | Secured notes payable, net | $5,562,721 | $5,498,022 | +$64,699 | | Total liabilities | $5,842,104 | $5,745,460 | +$96,644 | | Total Douglas Emmett, Inc. stockholders' equity | $1,999,161 | $2,058,649 | -$59,488 | | Total equity | $3,591,428 | $3,658,240 | -$66,812 | [Consolidated Operating Results](index=8&type=section&id=Consolidated%20Operating%20Results) Q2 2025 operating results show increased revenues but a net loss, while six-month results improved due to JV consolidation gain Consolidated Operating Results (Three Months Ended June 30, In thousands, except per share data) | Metric | 2025 | 2024 | Change | | :---------------------------------------- | :----- | :----- | :----- | | Total revenues | $252,434 | $245,777 | +$6,657 | | Total operating expenses | $206,789 | $190,088 | +$16,701 | | Net (loss) income attributable to common stockholders | $(5,835) | $10,878 | -$16,713 | | Net (loss) income per common share - basic and diluted | $(0.04) | $0.06 | -$0.10 | | Dividends declared per common share | $0.19 | $0.19 | Unchanged | Consolidated Operating Results (Six Months Ended June 30, In thousands, except per share data) | Metric | 2025 | 2024 | Change | | :---------------------------------------- | :----- | :----- | :----- | | Total revenues | $503,969 | $490,746 | +$13,223 | | Total operating expenses | $405,697 | $380,498 | +$25,199 | | Net (loss) income attributable to common stockholders | $33,965 | $19,787 | +$14,178 | | Net (loss) income per common share - basic and diluted | $0.20 | $0.11 | +$0.09 | | Dividends declared per common share | $0.38 | $0.38 | Unchanged | - A gain from consolidation of a joint venture contributed **$47.2 million** to net income for the six months ended June 30, 2025[29](index=29&type=chunk) [Funds From Operations & Adjusted Funds From Operations](index=9&type=section&id=Funds%20From%20Operations%20%26%20Adjusted%20Funds%20From%20Operations) FFO and AFFO decreased for Q2 and YTD June 30, 2025, despite JV consolidation, as reconciled from net income FFO & AFFO (Three Months Ended June 30, In thousands, except per share data) | Metric | 2025 | 2024 | Change | | :-------------------------------- | :----- | :----- | :----- | | Net (loss) income attributable to common stockholders | $(5,835) | $10,878 | -$16,713 | | FFO | $74,575 | $92,074 | -$17,499 | | AFFO | $54,471 | $74,235 | -$19,764 | | FFO per share - fully diluted | $0.37 | $0.46 | -$0.09 | FFO & AFFO (Six Months Ended June 30, In thousands, except per share data) | Metric | 2025 | 2024 | Change | | :-------------------------------- | :------- | :------- | :------- | | Net (loss) income attributable to common stockholders | $33,965 | $19,787 | +$14,178 | | FFO | $155,535 | $182,130 | -$26,595 | | AFFO | $116,817 | $148,951 | -$32,134 | | FFO per share - fully diluted | $0.76 | $0.90 | -$0.14 | - On January 1, 2025, the company commenced consolidating a joint venture that was previously unconsolidated, which owns two Class A office properties[31](index=31&type=chunk) [Same Property Statistics & Net Operating Income (NOI)](index=10&type=section&id=Same%20Property%20Statistics%20%26%20Net%20Operating%20Income%20(NOI)) Same property statistics and NOI for Q2 2025 show slight total NOI decrease, driven by office, offset by strong multifamily growth Same Property Statistics (as of June 30) | Metric | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Office Ending % leased | 80.8 % | 81.0 % | | Office Ending % occupied | 78.1 % | 79.4 % | | Multifamily Ending % leased | 99.3 % | 99.0 % | Net Operating Income (Three Months Ended June 30, In thousands) | Metric | 2025 | 2024 | % Favorable (Unfavorable) | | :------------------ | :----- | :----- | :------------------------ | | Office NOI | $119,420 | $125,647 | (5.0)% | | Multifamily NOI | $33,140 | $30,463 | 8.8 % | | Total NOI | $152,560 | $156,110 | (2.3)% | Cash Net Operating Income (Three Months Ended June 30, In thousands) | Metric | 2025 | 2024 | % Favorable (Unfavorable) | | :------------------ | :----- | :----- | :------------------------ | | Office Cash NOI | $118,109 | $122,930 | (3.9)% | | Multifamily Cash NOI | $32,496 | $29,323 | 10.8 % | | Total Cash NOI | $150,605 | $152,253 | (1.1)% | [Same Property NOI Reconciliation](index=11&type=section&id=Same%20Property%20NOI%20Reconciliation) Reconciles Net (loss) income to NOI and Same Property NOI for Q2 2025 and 2024, detailing non-GAAP adjustments NOI and Same Property NOI Reconciliation (Three Months Ended June 30, In thousands) | Metric | 2025 | 2024 | | :---------------------------------------- | :----- | :----- | | Net (loss) income attributable to common stockholders | $(5,835) | $10,878 | | NOI | $159,645 | $162,669 | | Same Property NOI | $152,560 | $156,110 | | Same Property Office NOI | $119,420 | $125,647 | | Same Property Multifamily NOI | $33,140 | $30,463 | [Financial Data for Wholly-Owned Properties and Consolidated JVs](index=12&type=section&id=Financial%20Data%20for%20Wholly-Owned%20Properties%20and%20Consolidated%20JVs) Presents Q2 and YTD June 30, 2025, financial data for wholly-owned properties and consolidated JVs, including revenues and cash NOI Q2 2025 Financial Data (In thousands) | Metric | Wholly-Owned Properties | Consolidated JVs | | :-------------------------------- | :---------------------- | :--------------- | | Revenues | $181,904 | $70,530 | | Office and multifamily operating expenses | $66,831 | $25,958 | | Our share of cash NOI | $113,417 | $21,413 | Six Months Ended June 30, 2025 Financial Data (In thousands) | Metric | Wholly-Owned Properties | Consolidated JVs | | :-------------------------------- | :---------------------- | :--------------- | | Revenues | $362,939 | $141,030 | | Office and multifamily operating expenses | $131,847 | $50,550 | | Our share of cash NOI | $226,846 | $43,478 | - The company owns a weighted average interest of approximately **47%** in six consolidated JVs, which collectively own **eighteen Class A office properties** (**4.6 million sq ft**) and **three residential properties** (**790 apartments**)[44](index=44&type=chunk) [Loans](index=13&type=section&id=Loans) Details consolidated loans as of June 30, 2025, including fixed-interest loan statistics and a comprehensive list for wholly-owned and JVs Consolidated Loans with Fixed Interest Statistics | Metric | Value | | :------------------------------------------ | :------ | | Principal balance (in billions) | $2.72 | | Weighted average remaining life (including extension options) | 3.7 years | | Weighted average remaining fixed interest period | 2.3 years | | Weighted average annual interest rate | 3.78% | Total Consolidated Loans (as of June 30, 2025, In thousands) | Loan Type | Principal Balance | Our Share | | :------------------------------------ | :---------------- | :---------- | | Consolidated Wholly-Owned Subsidiary Loans | $3,750,606 | $3,750,606 | | Consolidated JV Loans | $1,841,750 | $790,055 | | **Total Consolidated Loans** | **$5,592,356** | **$4,573,161** | - Most loans are non-recourse, secured by separate collateral pools, and require interest-only monthly payments with principal due at maturity[45](index=45&type=chunk) - In May 2025, one of the joint ventures made a **$70.0 million** loan principal payment to extend a term loan for up to two years[47](index=47&type=chunk) [Portfolio Data](index=14&type=section&id=PORTFOLIO%20DATA) Summarizes the in-service office and multifamily portfolios, including leasing activity, tenant diversification, and development projects [Office Portfolio Summary](index=14&type=section&id=Office%20Portfolio%20Summary) Detailed summary of in-service office portfolio as of June 30, 2025, by region, including property counts, square feet, and rent metrics In-Service Office Portfolio by Region (as of June 30, 2025) | Region | Number of Office Properties | Our Rentable Square Feet | Our Market Share | Our Percent Leased | Annualized Rent | Annualized Rent Per Leased Square Foot | | :--------------- | :------------------------ | :----------------------- | :--------------- | :----------------- | :---------------- | :------------------------------------- | | Westside | 52 | 10,000,661 | 35.2 % | 80.5 % | $439,975,021 | $57.34 | | Valley | 15 | 6,334,572 | 47.1 % | 78.9 % | $164,619,503 | $34.29 | | Honolulu | 2 | 1,190,835 | 22.4 % | 92.2 % | $38,889,848 | $37.12 | | **Total / Weighted Average** | **69** | **17,526,068** | **38.6 %** | **80.7 %** | **$643,484,372** | **$47.59** | Recurring Office Capital Expenditures per Rentable Square Foot | Period | Cost per SF | | :-------------------------- | :---------- | | Three months ended June 30, 2025 | $0.06 | | Six months ended June 30, 2025 | $0.07 | [Office Lease Diversification](index=15&type=section&id=Office%20Lease%20Diversification) Analyzes in-service office portfolio lease diversification by tenant size as of June 30, 2025, detailing distribution of leases and rent Office Lease Diversification by Tenant Size (as of June 30, 2025) | Square Feet Under Lease | Number of Leases | Percent | Rentable Square Feet | Percent | Annualized Rent | Percent | | :---------------------- | :--------------- | :------ | :------------------- | :------ | :-------------- | :------ | | 2,500 or less | 1,348 | 50.8 % | 1,947,970 | 14.4 % | $86,254,821 | 13.4 % | | 2,501-10,000 | 1,006 | 37.9 | 4,926,729 | 36.4 | $226,920,846 | 35.2 | | 10,001-20,000 | 195 | 7.3 | 2,698,972 | 20.0 | $129,183,050 | 20.1 | | 20,001-40,000 | 78 | 2.9 | 2,090,198 | 15.5 | $100,403,716 | 15.6 | | 40,001-100,000 | 28 | 1.1 | 1,601,805 | 11.9 | $83,414,292 | 13.0 | | Greater than 100,000 | 1 | — | 255,884 | 1.8 | $17,307,647 | 2.7 | | **Total for all leases** | **2,656** | **100.0 %** | **13,521,558** | **100.0 %** | **$643,484,372** | **100.0 %** | - The median office tenant size is **2,500 square feet**, and the average is **5,100 square feet**[58](index=58&type=chunk) [Largest Office Tenants](index=16&type=section&id=Largest%20Office%20Tenants) Identifies largest office tenants (1%+ of Annualized Rent) in the in-service portfolio as of June 30, 2025, detailing their contributions Largest Office Tenants (Tenants paying 1% or more of aggregate Annualized Rent) | Tenant | Number of Leases | Number of Properties | Total Leased Square Feet | Percent of Annualized Rent | | :-------------------- | :--------------- | :------------------- | :----------------------- | :------------------------- | | William Morris Endeavor | 1 | 1 | 255,884 | 2.7 % | | UCLA | 14 | 8 | 195,028 | 1.8 % | | Morgan Stanley | 5 | 5 | 145,062 | 1.7 % | | Equinox Fitness | 6 | 5 | 185,236 | 1.7 % | | NKSFB | 2 | 2 | 135,066 | 1.0 % | | **Total** | **28** | **21** | **916,276** | **8.9 %** | [Office Industry Diversification](index=17&type=section&id=Office%20Industry%20Diversification) Illustrates in-service office portfolio's annualized rent diversification by tenant industry as of June 30, 2025, with Legal, Financial Services, and Real Estate leading Annualized Rent by Tenant Industry (as of June 30, 2025) | Industry | Number of Leases | Annualized Rent as a Percent of Total | | :-------------------------- | :--------------- | :---------------------------------- | | Legal | 572 | 19.6 % | | Financial Services | 365 | 16.4 | | Real Estate | 317 | 13.4 | | Health Services | 395 | 9.9 | | Entertainment | 130 | 9.7 | | Accounting & Consulting | 297 | 8.8 | | Retail | 161 | 5.8 | | Technology | 92 | 5.0 | | Insurance | 86 | 3.0 | | Public Administration | 71 | 2.7 | | Educational Services | 37 | 2.7 | | Manufacturing & Distribution | 48 | 1.3 | | Advertising | 31 | 0.9 | | Other | 54 | 0.8 | | **Total** | **2,656** | **100.0 %** | [Office Lease Expirations](index=18&type=section&id=Office%20Lease%20Expirations) Schedule of in-service office lease expirations as of June 30, 2025, detailing leases, square feet, and annualized rent expiring annually Office Lease Expirations by Year (as of June 30, 2025) | Year of Lease Expiration | Number of Leases | Rentable Square Feet | Annualized Rent at June 30, 2025 | Annualized Rent Per Leased Square Foot at Expiration | | :----------------------- | :--------------- | :------------------- | :------------------------------- | :------------------------------------------------- | | Short Term Leases | 67 | 255,409 | $9,453,444 | $37.03 | | 2025 | 236 | 914,386 | $43,433,719 | $47.85 | | 2026 | 605 | 2,385,813 | $107,803,386 | $46.50 | | 2027 | 505 | 2,222,202 | $106,473,164 | $51.02 | | 2028 | 439 | 1,877,754 | $86,431,788 | $50.58 | | 2029 | 262 | 1,435,315 | $64,712,526 | $50.38 | | 2030 | 215 | 1,339,545 | $65,376,023 | $55.61 | | 2031 | 115 | 773,059 | $37,297,205 | $55.68 | | 2032 | 61 | 560,109 | $26,953,031 | $58.20 | | 2033 | 54 | 398,484 | $20,734,546 | $67.39 | | 2034 | 35 | 307,885 | $14,668,382 | $63.97 | | Thereafter | 62 | 1,051,597 | $60,147,158 | $78.96 | | **Subtotal/weighted average** | **2,656** | **13,521,558** | **$643,484,372** | **$53.58** | - Total leased square feet represent **77.2%** of the total rentable square feet, with an additional **465,181 square feet** (**2.6%**) from signed leases not yet commenced[72](index=72&type=chunk) [Office Lease Expirations – Next Four Quarters](index=19&type=section&id=Office%20Lease%20Expirations%20%E2%80%93%20Next%20Four%20Quarters) Focused view of in-service office lease expirations for the next four quarters (Q3 2025-Q2 2026), by region, including square feet and rent Office Lease Expirations - Next Four Quarters (as of June 30, 2025) | Quarter | Expiring Square Feet | Percentage of Portfolio | Expiring Rent per Square Foot | | :-------- | :------------------- | :---------------------- | :---------------------------- | | Q3 2025 | 350,318 | 2.0 % | $49.78 | | Q4 2025 | 564,068 | 3.2 % | $46.65 | | Q1 2026 | 612,011 | 3.5 % | $47.04 | | Q2 2026 | 617,154 | 3.5 % | $47.70 | | **Next Twelve Months** | **2,143,551** | **12.2 %** | **$47.58** | - The next twelve months (Q3 2025 - Q2 2026) show **2,143,551 square feet** of office leases expiring, representing **12.2%** of the portfolio[77](index=77&type=chunk) [Office Leasing Activity](index=20&type=section&id=Office%20Leasing%20Activity) Reports Q2 2025 office leasing activity, detailing new/renewal leases, square feet, lease terms, rental rate changes, and transaction costs Office Leases Signed (Three Months ended June 30, 2025) | Office Leases Signed During Quarter | Number of Leases | Rentable Square Feet | Weighted Average Lease Term (months) | | :---------------------------------- | :--------------- | :------------------- | :----------------------------------- | | New leases | 86 | 275,197 | 56 | | Renewal leases | 154 | 669,115 | 63 | | **All leases** | **240** | **944,312** | **60** | Change in Rental Rates for Office Leases Executed during Q2 2025 | Rate Type | Expiring Rate | New/Renewal Rate | Percentage Change | | :------------------ | :------------ | :--------------- | :---------------- | | Cash Rent | $49.99 | $43.32 | (13.3)% | | Straight-line Rent | $44.57 | $45.62 | 2.4% | Average Office Lease Transaction Costs (per SF) | Lease Type | Lease Transaction Costs per SF | | :-------------------------------- | :----------------------------- | | New leases signed during the quarter | $34.52 | | Renewal leases signed during the quarter | $21.79 | | All leases signed during the quarter | $25.51 | [Multifamily Portfolio Summary](index=21&type=section&id=Multifamily%20Portfolio%20Summary) Overview of in-service multifamily portfolio as of June 30, 2025, by region, detailing properties, units, leased rates, and rent metrics In-Service Multifamily Portfolio by Region (as of June 30, 2025) | Region | Number of Properties | Number of Units | Percent Leased | Annualized Rent | Monthly Rent Per Leased Unit | | :--------------- | :------------------- | :-------------- | :------------- | :-------------- | :--------------------------- | | Santa Monica | 3 | 940 | 99.6 % | $51,508,212 | $4,591 | | West Los Angeles | 6 | 964 | 98.5 % | $55,764,732 | $4,907 | | Honolulu | 4 | 2,506 | 99.5 % | $71,389,908 | $2,392 | | **Total / Weighted Average** | **13** | **4,410** | **99.3 %** | **$178,662,852** | **$3,408** | Recurring Multifamily Capital Expenditures per Unit | Period | Cost per Unit | | :-------------------------- | :------------ | | Three months ended June 30, 2025 | $222 | | Six months ended June 30, 2025 | $386 | [Development Portfolio Summary](index=22&type=section&id=Development%20Portfolio%20Summary) Outlines key development projects: Landmark Residences, Studio Plaza conversion, and 10900 Wilshire office-to-residential, detailing scope and costs - The Landmark Residences in Brentwood, California, is undergoing a phased redevelopment of three towers into a **712-unit** apartment community, with an estimated cost of approximately **$400 million**[92](index=92&type=chunk) - Studio Plaza in Burbank, California, a **456,000 square foot** office property, is being redeveloped into a multi-tenant building at an estimated cost of **$75 million** to **$100 million**, with the first new tenant already in occupancy[95](index=95&type=chunk) - At 10900 Wilshire in Westwood, California, plans are underway to convert the existing **247,000 square foot** office building into a **320-unit** apartment community, integrated with a new residential building, with total project costs estimated between **$200 million** and **$250 million**[97](index=97&type=chunk)[98](index=98&type=chunk) [Guidance](index=23&type=section&id=GUIDANCE) Outlines the company's 2025 financial guidance, including per-share metrics and key underlying assumptions [2025 Guidance](index=23&type=section&id=2025%20Guidance) Updated 2025 financial guidance includes narrowed ranges for Net income and FFO per share, with largely unchanged underlying assumptions 2025 Financial Guidance | Metric | Per Share | | :-------------------------------- | :-------------- | | Net income per common share - diluted | $0.07 to $0.11 | | FFO per share - fully diluted | $1.43 to $1.47 | Key 2025 Guidance Assumptions (Unchanged) | Metric | Assumption Range | | :-------------------------------- | :--------------- | | Average Office Occupancy | 78% to 80% | | Residential Leased Rate | Essentially fully leased | | Same Property Cash NOI | -2.5% to -0.5% | | General and Administrative Expenses | $46 to $50 million | | Interest Expense | $260 to $270 million | | Weighted average fully diluted shares outstanding | 204.0 million | - The guidance excludes the impact of future property acquisitions or dispositions, common stock sales or repurchases, financings, property damage insurance recoveries, impairment charges, or other possible capital markets activities[103](index=103&type=chunk) [Reconciliation of 2025 Non-GAAP Guidance](index=24&type=section&id=Reconciliation%20of%202025%20Non-GAAP%20Guidance) Reconciles 2025 Net income per common share to FFO per share, detailing adjustments for depreciation, amortization, noncontrolling interests, and JV consolidation Reconciliation of Net Income to FFO (2025 Guidance, In millions, except per share amounts) | Reconciliation of net income attributable to common stockholders to FFO | Low | High | | :----------------------------------------------------- | :---- | :--- | | Net income attributable to common stockholders | $12.4 | $19.1 | | Adjustments for depreciation and amortization of real estate assets | $405.0 | $395.0 | | Adjustments for noncontrolling interests and consolidated JVs | $(78.5) | $(67.0) | | Adjustment for gain from consolidation of JV | $(47.2) | $(47.2) | | **FFO** | **$291.7** | **$299.9** | Per Share Guidance (2025) | Per share | Low | High | | :-------------------------------- | :---- | :--- | | Net income per common share - diluted | $0.07 | $0.11 | | FFO per share - fully diluted | $1.43 | $1.47 | - The weighted average fully diluted shares outstanding for 2025 guidance is **204.0 million**[106](index=106&type=chunk) [Definitions](index=25&type=section&id=DEFINITIONS) Clarifies key financial and operational terms used throughout the report, including non-GAAP measures [Key Financial and Operational Definitions](index=25&type=section&id=Key%20Financial%20and%20Operational%20Definitions) Provides detailed definitions for key financial and operational terms, including non-GAAP measures and portfolio metrics, clarifying their calculation - Definitions are provided for Adjusted Funds From Operations (AFFO), Annualized Rent, Consolidated Net Debt, Development Portfolio, Equity Capitalization, Fully Diluted Shares, Funds From Operations (FFO), In-Service Portfolio, Joint Ventures (JVs), Lease Transaction Costs, Leased Rate, Net Absorption, Net Income (Loss) Per Common Share - Diluted, Net Operating Income (NOI), Occupancy Rate, Our Share, Pro Forma Enterprise Value, Recurring Capital Expenditures, Rental Rate, Rentable Square Feet, Same Property NOI, and Short Term Leases[110](index=110&type=chunk)[112](index=112&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[135](index=135&type=chunk)

Group 1 - Google has removed the names of 58 DEI groups from its 2024 funding list, which includes organizations like the Latino Leadership Alliance and the ACLU of Illinois [1] - The changes in Google's funding list follow the Trump administration's stance to target companies that openly support DEI initiatives, raising questions about whether Google continues to support these groups in secret [2] - Over the past year, Google has made significant changes to its diversity policies, including the removal of diversity hiring goals and the elimination of terms like "underrepresented" and "diversity" from various platforms, including its 10k filings [3]

Core Points - Google has removed over 50 diversity, equity, and inclusion (DEI) organizations from its funding list, totaling 214 groups removed and 101 added according to a report from The Tech Transparency Project [2][3] - The largest category of purged groups were DEI-related, with 58 groups removed that had mission statements including terms like "diversity," "equity," and "inclusion" [3] - The funding purge reflects a shift in Google's strategy, prioritizing investments in artificial intelligence technology amid changing political and legal landscapes regarding DEI policies [6][7] Company Actions - Google spokesperson stated that the funding list reflects contributions made in 2024 and does not encompass all contributions from other teams within the company [4] - Notable organizations removed from the funding list include the African American Community Service Agency and the Latino Leadership Alliance, which focus on empowering historically excluded communities [5][10] - Despite the removal of DEI-related organizations, Google continues to allocate funds to various groups, including $75,000 to the National Network to End Domestic Violence in 2024 [11] Industry Context - The backlash against DEI programs has intensified following the U.S. Supreme Court's 2023 decision to end affirmative action at colleges, leading to a reevaluation of DEI initiatives across various industries [7][8] - Many companies are still pursuing DEI efforts but are using alternative terminology to avoid the divisive nature of the term "DEI" [9] - Google CEO Sundar Pichai emphasized the importance of diversity in the workforce, stating that a diverse workforce is essential for serving a global user base effectively [9]