Douglas Emmett(US:DEI)2025-11-04 21:11Financial Performance - The company reported Q3 2025 revenues of $251 million, unchanged from Q3 2024, but net loss attributable to common stockholders was $(11) million compared to a profit of $5 million in the previous year[6]. - Funds from Operations (FFO) per fully diluted share decreased to $0.34 from $0.43 year-over-year, while Adjusted Funds from Operations (AFFO) fell to $52 million from $69 million[6]. - The company expects 2025 Net Income Per Common Share - Diluted to be between $0.07 and $0.11, and has narrowed its FFO guidance to a range of $1.43 to $1.47 per share[8]. - Total revenues for the three months ended September 30, 2025, were $250.58 million, a slight decrease of 0.1% compared to $250.75 million in the same period of 2024[27]. - Net loss attributable to common stockholders for the three months ended September 30, 2025, was $10.85 million, compared to a net income of $4.62 million in the same period of 2024[30]. - Funds From Operations (FFO) for the three months ended September 30, 2025, was $68.54 million, down 20.3% from $86.02 million in the same period of 2024[30]. - The company declared dividends of $0.19 per common share for both the three months ended September 30, 2025, and 2024[30]. - The AFFO payout ratio for the three months ended September 30, 2025, was 74.9%[18]. Property Performance - The same property cash Net Operating Income (NOI) increased to $150 million, up from $145 million in Q3 2024, reflecting a growth of approximately 3.4%[6]. - The multifamily portfolio maintained a high occupancy rate of 98.8%, with same property cash NOI growth of approximately 7%[6]. - Total Net Operating Income (NOI) for the three months ended September 30, 2025, increased by 2.8% to $152.86 million from $148.67 million in 2024[34]. - The ending percentage leased for office properties as of September 30, 2025, was 79.9%, down from 81.4% in 2024[34]. - Multifamily rental revenues for the three months ended September 30, 2025, were $49.52 million, an increase of 3.0% compared to $48.09 million in 2024[27]. - The company reported a cash NOI of $150.49 million for the three months ended September 30, 2025, representing a 3.5% increase from $145.40 million in 2024[34]. - NOI for Q3 2025 was $159,398 thousand, an increase from $155,987 thousand in Q3 2024, representing a growth of 2.9%[37]. - Same Property NOI for office segment in Q3 2025 was $120,718 thousand, up from $118,110 thousand in Q3 2024, reflecting a 2.2% increase[37]. Leasing Activity - The leasing activity for the total portfolio included 892,000 square feet of office space leased, with 251,000 square feet being new leases, which was below expectations[6]. - The company’s annualized rent across its office portfolio was $642,021,605, with a weighted average rent per leased square foot of $47.79[52]. - The office portfolio's overall occupancy rate was 79.8% as of September 30, 2025[52]. - The company holds a market share of 38.6% in its office portfolio regions[52]. - New leases signed during the quarter totaled 199,141 square feet, with a weighted average lease term of 61 months[79]. - The average cash rent for new leases was $48.74, reflecting an 11.4% decrease compared to the previous rate of $43.16[79]. - In the next twelve months, 1,963,149 square feet of leases are set to expire, representing 11.2% of the total portfolio[75]. Debt and Financing - The company closed a $200 million office term loan refinancing with a fixed interest rate of 5.6% through July 2030, maturing in July 2032[10]. - The total consolidated loans amounted to $5,602,462 thousand as of September 30, 2025[48]. - Interest expense for Q3 2025 was $72,809 thousand, compared to $56,824 thousand in Q3 2024, indicating a significant increase[37]. - The company has no loan maturities in 2025 and is actively working to refinance remaining 2026 loan maturities[7]. - Interest expense is expected to remain stable at approximately $260 million to $270 million[101]. Development Projects - The Landmark Residences redevelopment project is estimated to cost approximately $400 million and will take several years to complete[90]. - Studio Plaza in Burbank is undergoing redevelopment at an estimated cost of $75 million to $100 million, converting it into a multi-tenant building[93]. - The company is planning a 323-unit apartment community by converting an existing 247,000 square foot office building, with total project costs estimated between $200 million to $250 million[95]. - The first apartments from the existing office tower are expected to be delivered within the next 18 months, while the new building development will take approximately three years[95]. Market Outlook - Average office occupancy is expected to range from 78% to 79%, while the residential leased rate is anticipated to be essentially fully leased[101]. - Same property cash NOI is projected to decline between -1.0% to 0.0% compared to prior assumptions[101]. - The company expects above/below market net revenue to range from $1 million to $5 million, with straight-line revenue projected between $8 million to $11 million[101]. - The weighted average fully diluted shares outstanding is estimated to be 204.0 million[101]. - The company’s guidance does not account for future property acquisitions, common stock sales, or other capital market activities[102]. Portfolio Overview - As of September 30, 2025, the total portfolio includes 18 office properties totaling 4.6 million square feet and three residential properties with 793 apartments[134]. - The total rentable square feet as of September 30, 2025, is 13,832,542, which includes 397,757 square feet related to signed leases not commenced[129]. - The total available square feet as of September 30, 2025, is 3,544,071, indicating potential for future leasing opportunities[129]. - Recurring capital expenditures are reported to assess cash flow requirements and are focused on maintaining revenues for stabilized properties[127]. - The company uses same property NOI to analyze operating results consistently and compare performance with other REITs[132].