Douglas Emmett(US:DEI)2026-02-20 21:50Portfolio Overview - As of December 31, 2025, Douglas Emmett, Inc. owned a total portfolio of 18.0 million square feet of office space and 5,445 multifamily apartment units, with 1,035 units under development[18]. - Douglas Emmett, Inc. operates 70 office properties and 15 multifamily properties, including 52 wholly-owned office properties and 12 residential properties[18]. - At December 31, 2025, the company managed and owned equity interests in six consolidated joint ventures, totaling 4.6 million square feet of office space and 793 apartments[23]. - The multifamily portfolio consists of 4,410 units, with an overall leased percentage of 99.5% and an annualized rent of $180,570,960[184]. - As of December 31, 2025, the In-Service Portfolio includes 69 office properties with a total rentable square footage of 17,526,068, and a multifamily portfolio of 13 properties with 4,410 units[204]. Market Position and Strategy - The company holds a 39% market share of Class A office space in its targeted submarkets, indicating a strong competitive position[20]. - The company has a disciplined strategy for acquiring substantial market share in each submarket, enhancing its pricing power and investment opportunities[20]. - The company is committed to increasing its market share in existing submarkets and may explore new submarkets with similar characteristics[18]. Financial Performance - The annualized rent totals $644,022,179, with an average annualized rent per leased square foot of $47.65[162]. - The company declared a consistent dividend of $0.19 per share for each quarter in both 2024 and 2025[192]. - The common stock of the company closed at $10.99 on December 31, 2025[191]. - The total return on the company's stock from December 31, 2020, to December 31, 2025, was 48.13%, compared to 196.16% for the S&P 500[199]. Leasing and Occupancy - The company has a leasing percentage of 80.4%, with 51.1% of office leases being 2,500 square feet or less[168]. - The leased rate for the office portfolio stands at 80.4%, while the occupancy rate is at 78.0%, and the multifamily portfolio has a leased rate of 99.5%[204]. - As of December 31, 2025, 19.7% of the square footage in the total office portfolio was available for lease, and 11.7% was scheduled to expire in 2026[87]. - The average straight-line rental rate for the office portfolio decreased to $44.14 in 2025 from $50.50 in 2024, reflecting a significant change in rental dynamics[214]. Employee and Corporate Culture - The company employed approximately 778 people as of December 31, 2025[50]. - More than a quarter of employees received equity compensation in 2025, promoting a sense of ownership[53]. - The company has a culture of openness and teamwork, with programs like the Daily Exchange for employee training[51]. Sustainability and Environmental Initiatives - As of December 31, 2024, over 84% of stabilized eligible office space qualified for "ENERGY STAR Certification," indicating energy efficiency in the top 25% of buildings nationwide[40]. - The company has implemented water conservation initiatives, including low flow faucets and toilets, and waterless urinals[42]. - The company focuses on sustainable development, avoiding environmentally protected areas and using brownfield sites[47]. - The company has installed almost 400 electric vehicle charging stations and plans to add more[46]. Risks and Challenges - The company faces risks related to inflation, geographic concentration, and competition in the real estate market[58]. - The company has approximately $5.6 billion of debt outstanding as of December 31, 2025, with $1.6 billion being floating rate debt, exposing it to interest rate fluctuation risk[71]. - The company may experience rent roll-down due to competitive pricing pressure, adversely affecting operating results and cash flows[75]. - The geographic concentration of properties in Los Angeles County and Honolulu increases exposure to local economic and regulatory risks[68]. - The company may face challenges in maintaining and renovating properties, which could reduce cash flows and competitiveness[77]. Cybersecurity and Risk Management - The cybersecurity risk management program is integrated into the overall enterprise risk management program, focusing on protecting critical systems and information[153]. - The company has not experienced any material cybersecurity incidents to date, but ongoing risks remain that could materially affect operations and financial condition[155]. - The management team, led by the CIO with 35 years of experience, is responsible for assessing and managing significant cybersecurity risks[158]. Development and Capital Expenditures - The company is developing a mixed-use community at 10900 Wilshire Boulevard, which will include up to 323 apartment units and a conversion of an existing office tower[211]. - Recurring capital expenditures for the office portfolio in 2025 total $2,825,003, with expenditures per square foot at $0.19[180]. - Recurring capital expenditures for the multifamily portfolio in 2025 amount to $3,356,058, averaging $762 per unit[186]. Regulatory and Taxation Risks - Legislative or regulatory changes affecting REITs could have a negative impact on the company's ability to maintain its REIT qualification and affect cash distributions[72]. - Property taxes could increase due to changes in tax rates or reassessments, adversely impacting cash flows[127]. - Legislative efforts to amend Proposition 13 could lead to substantial increases in assessed property values and taxes, affecting financial results[128].