UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			For the quarterly period ended			~~September 30, 2021~~March 31, 2022

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			For the transition period from _____________________ to __________________

Commission File Number: 001-36135

________________________

BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

(Exact name of registrant as specified in its charter)


Maryland						46-2616226
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

250 Vesey Street, 15th Floor

New York, NY, 10281

(Address of principal executive offices and zip code)

(212) 417-7000

(Registrant’s telephone number, including area code)

None

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
7.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share	DTLA-P	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

☑

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of ~~November 5, 2021,~~May 6, 2022, none of the registrant’s common stock was traded on any public market.

BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED ~~SEPTEMBER 30, 2021~~MARCH 31, 2022

TABLE OF CONTENTS


			Page
PART I—FINANCIAL INFORMATION

	Item 1.	Financial Statements (Unaudited).
		Consolidated Balance Sheets as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021	1
		Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~	3
		~~Consolidated Statements of Comprehensive Loss~~ ~~for the three and nine months ended September 30, 2021 and 2020~~	4
		Consolidated Statements of Stockholders’ Deficit for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~	54
		Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~	75
		Notes to Consolidated Financial Statements	97
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	3930
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	6146
	Item 4.	Controls and Procedures.	6146

PART II—OTHER INFORMATION

	Item 1.	Legal Proceedings.	6247
	Item 1A.	Risk Factors.	6247
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	6247
	Item 3.	Defaults Upon Senior Securities.	6247
	Item 4.	Mine Safety Disclosures.	6247
	Item 5.	Other Information.	6247
	Item 6.	Exhibits.	6348
	Signatures		6348

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Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995 (as set forth in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Exchange Act). Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, include statements regarding ~~the potential future impact of the novel strain of coronavirus (“COVID-19”) pandemic,~~ our operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook, as well as the outlook for North American and international economies for the current fiscal year and subsequent periods, and include words such as “expects,” “anticipates,” “plans,” “believes,” “estimates,” “seeks,” “intends,” “targets,” “projects,” “forecasts,” “likely,” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may,” “will,” “should,” “would,” and “could.”

Although Brookfield DTLA Fund Office Trust Investor Inc. (“Brookfield DTLA” or “we”) believes that its anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond its control, which may cause Brookfield DTLA’s actual results, performance or achievements to differ materially from anticipated future results, performance or achievement expressed or implied by such forward-looking statements and information.

In particular, in the near term, we expect to be impacted by the COVID-19 pandemic, which has interrupted business activities and supply chains; disrupted travel; and adversely impacted local, regional, national and international economic conditions, as well as the labor markets.

Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to:

•Risks incidental to the ownership and operation of real estate properties, including local real estate conditions;

•The impact or unanticipated impact of general economic, political and market factors in the regions in which Brookfield DTLA or any of its subsidiaries does business, including ~~as a result~~the ongoing effect of ~~the capacity limits imposed by both local and state governments~~COVID-19 pandemic on ~~higher-risk activities and businesses, such as dine-in restaurants, bars, gyms and conference or convention centers, to combat the spread of the COVID-19 pandemic;~~our business.

•The ability to enter into new leases or renew leases on favorable terms;

•Business competition;

•Dependence on tenants’ financial condition;

•The use of debt to finance Brookfield DTLA’s business or that of its subsidiaries;

•The behavior of financial markets, including fluctuations in interest rates;

•Uncertainties of real estate development or redevelopment;

~~Table of Contents~~

•Global equity and capital markets and the availability of equity and debt financing and refinancing within these markets;

•Risks relating to Brookfield DTLA’s insurance coverage;

•Risks relating to trends in the office real estate industry including employee work-from home arrangements;

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•The possible impact of international conflicts and other developments, including terrorist acts;

•Potential environmental liabilities;

•Changes in tax laws and other tax-related risks;

•Dependence on management personnel;

•Illiquidity of investments in real estate;

•Operational and reputational risks;

•Risks related to climate change;

•Catastrophic events, such as earthquakes or pandemics/epidemics;

•Other factors that are described in Part I, “Item IA. Risk Factors” in Brookfield DTLA’s Annual Report on Form 10-K filed with the SEC on March ~~25, 2021~~24, 2022, and Part II, “Item IA. Risk Factors” in this Report; and

•Other risks and factors detailed from time to time in reports filed by Brookfield DTLA with the United States Securities and Exchange Commission.

Brookfield DTLA cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on Brookfield DTLA’s forward-looking statements or information, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, Brookfield DTLA undertakes no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited; in thousands)


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021

ASSETS	ASSETS					ASSETS
Investments in Real Estate:	Investments in Real Estate:					Investments in Real Estate:
Land	Land	$	222,555	$	222,555	Land	$	222,555	$	222,555
Buildings and improvements	Buildings and improvements	2,309,388		2,307,762		Buildings and improvements	2,309,211		2,308,836
Tenant improvements	Tenant improvements	439,329		437,114		Tenant improvements	421,774		418,460
Investments in real estate, gross	Investments in real estate, gross	2,971,272		2,967,431		Investments in real estate, gross	2,953,540		2,949,851
Less: accumulated depreciation	Less: accumulated depreciation	584,209		517,329		Less: accumulated depreciation	602,224		580,403
Investments in real estate, net	Investments in real estate, net	2,387,063		2,450,102		Investments in real estate, net	2,351,316		2,369,448
Investment in unconsolidated real estate joint venture	Investment in unconsolidated real estate joint venture	42,959		42,395		Investment in unconsolidated real estate joint venture	43,404		43,191
Cash and cash equivalents	Cash and cash equivalents	36,480		37,394		Cash and cash equivalents	49,162		38,901
Restricted cash	Restricted cash	52,503		46,089		Restricted cash	38,509		49,322
Rents, deferred rents and other receivables, net	Rents, deferred rents and other receivables, net	128,165		133,639		Rents, deferred rents and other receivables, net	128,370		125,625
Intangible assets, net	Intangible assets, net	17,444		22,046		Intangible assets, net	14,744		16,023
Deferred charges, net	Deferred charges, net	55,422		63,406		Deferred charges, net	57,033		57,529
Due from affiliates, net of allowance for loan losses of $0 and $2,653 as of September 30, 2021 and December 31, 2020, respectively		7,012		10,847
Due from affiliates						Due from affiliates	7,522		10,062
Prepaid and other assets, net	Prepaid and other assets, net	2,324		10,538		Prepaid and other assets, net	13,305		12,377
Total assets	Total assets	$	2,729,372	$	2,816,456	Total assets	$	2,703,365	$	2,722,478

LIABILITIES AND DEFICIT	LIABILITIES AND DEFICIT					LIABILITIES AND DEFICIT
Liabilities:	Liabilities:					Liabilities:
Secured debt, net	Secured debt, net	$	2,254,072	$	2,239,640	Secured debt, net	$	2,257,654	$	2,255,921
Accounts payable and other liabilities	Accounts payable and other liabilities	85,992		96,041		Accounts payable and other liabilities	77,906		77,612
Due to affiliates	Due to affiliates	1,299		1,700		Due to affiliates	1,641		1,782
Intangible liabilities, net	Intangible liabilities, net	4,835		6,005		Intangible liabilities, net	4,077		4,455
Total liabilities	Total liabilities	2,346,198		2,343,386		Total liabilities	2,341,278		2,339,770

Commitments and Contingencies (See Note 15)		0		0
Commitments and Contingencies (See Note 14)						Commitments and Contingencies (See Note 14)	0		0

See accompanying notes to consolidated financial statements.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

CONSOLIDATED BALANCE SHEETS (continued)

(Unaudited; in thousands, except share amounts)


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021

LIABILITIES AND DEFICIT (continued)	LIABILITIES AND DEFICIT (continued)					LIABILITIES AND DEFICIT (continued)
Mezzanine Equity:	Mezzanine Equity:					Mezzanine Equity:
7.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value, 9,730,370 shares issued and outstanding as of September 30, 2021 and December 31, 2020		$	460,940	$	447,028
7.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value, 9,730,370 shares issued and outstanding as of March 31, 2022 and December 31, 2021						7.625% Series A Cumulative Redeemable Preferred Stock, $0.01 par value, 9,730,370 shares issued and outstanding as of March 31, 2022 and December 31, 2021	$	470,214	$	465,577
Noncontrolling Interests:	Noncontrolling Interests:					Noncontrolling Interests:
Series A-1 preferred interest	Series A-1 preferred interest	448,150		435,242		Series A-1 preferred interest	456,757		452,454
Senior participating preferred interest	Senior participating preferred interest	20,542		20,413		Senior participating preferred interest	20,736		21,191
Series B preferred interest	Series B preferred interest	166,951		198,827		Series B preferred interest	170,570		177,290
Total mezzanine equity	Total mezzanine equity	1,096,583		1,101,510		Total mezzanine equity	1,118,277		1,116,512

Stockholders’ Deficit:	Stockholders’ Deficit:					Stockholders’ Deficit:
Common stock, $0.01 par value, 1,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020		—		—
Common stock, $0.01 par value, 1,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021						Common stock, $0.01 par value, 1,000 shares issued and outstanding as of March 31, 2022 and December 31, 2021	—		—
Additional paid-in capital	Additional paid-in capital	202,869		202,369		Additional paid-in capital	203,869		203,369
Accumulated deficit	Accumulated deficit	(847,595)		(726,369)		Accumulated deficit	(885,749)		(865,927)

Noncontrolling interests	Noncontrolling interests	(68,683)		(104,440)		Noncontrolling interests	(74,310)		(71,246)
Total stockholders’ deficit	Total stockholders’ deficit	(713,409)		(628,440)		Total stockholders’ deficit	(756,190)		(733,804)
Total liabilities and deficit	Total liabilities and deficit	$	2,729,372	$	2,816,456	Total liabilities and deficit	$	2,703,365	$	2,722,478

See accompanying notes to consolidated financial statements.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in thousands)


		For the Three Months Ended				For the Nine Months Ended					For the Three Months Ended
		September 30,				September 30,					March 31,
		2021		2020		2021		2020			2022		2021

Revenue:	Revenue:									Revenue:
Lease income	Lease income	$	61,880	$	63,953	$	188,855	$	192,669	Lease income	$	65,129	$	64,238
Parking	Parking	6,816		6,354		18,187		21,521		Parking	6,548		5,188
Interest and other	Interest and other	124		286		680		779		Interest and other	344		266
Total revenue	Total revenue	68,820		70,593		207,722		214,969		Total revenue	72,021		69,692

Expenses:	Expenses:									Expenses:
Rental property operating and maintenance	Rental property operating and maintenance	24,895		24,544		69,894		71,436		Rental property operating and maintenance	24,154		21,775
Real estate taxes	Real estate taxes	10,132		9,697		30,212		29,077		Real estate taxes	9,855		10,040
Parking	Parking	2,474		2,388		5,940		8,439		Parking	2,373		1,587
Other expenses	Other expenses	707		4,336		6,676		8,910		Other expenses	2,459		3,420
Depreciation and amortization	Depreciation and amortization	26,523		25,509		80,183		78,848		Depreciation and amortization	25,347		27,022
Interest	Interest	18,755		19,576		61,131		63,093		Interest	18,443		23,781
Total expenses	Total expenses	83,486		86,050		254,036		259,803		Total expenses	82,631		87,625

Other Income (Expense):
Other Income:										Other Income:

Equity in earning (loss) of unconsolidated real estate joint venture		268		172		564		(531)
Total other income (expense)		268		172		564		(531)
Equity in earning of unconsolidated real estate joint venture										Equity in earning of unconsolidated real estate joint venture	213		199
Total other income										Total other income	213		199

Net loss	Net loss	(14,398)		(15,285)		(45,750)		(45,365)		Net loss	(10,397)		(17,734)

Net loss (income) attributable to noncontrolling interests:	Net loss (income) attributable to noncontrolling interests:									Net loss (income) attributable to noncontrolling interests:
Series A-1 preferred interest returns	Series A-1 preferred interest returns	4,303		4,303		12,908		12,909		Series A-1 preferred interest returns	4,303		4,303
Senior participating preferred interest redemption measurement adjustment	Senior participating preferred interest redemption measurement adjustment	(325)		(37)		575		(2,343)		Senior participating preferred interest redemption measurement adjustment	(201)		601
Series B preferred interest returns	Series B preferred interest returns	3,896		4,689		12,324		13,464		Series B preferred interest returns	3,750		4,282
Series B common interest – allocation of net income (loss)		27,222		(9,889)		35,757		90,023
Series B common interest – allocation of net (loss) income										Series B common interest – allocation of net (loss) income	(3,064)		15,204
Net loss attributable to Brookfield DTLA	Net loss attributable to Brookfield DTLA	(49,494)		(14,351)		(107,314)		(159,418)		Net loss attributable to Brookfield DTLA	(15,185)		(42,124)
Series A preferred stock dividends	Series A preferred stock dividends	4,637		4,637		13,912		13,911		Series A preferred stock dividends	4,637		4,637
Net loss attributable to common interest holders of Brookfield DTLA	Net loss attributable to common interest holders of Brookfield DTLA	$	(54,131)	$	(18,988)	$	(121,226)	$	(173,329)	Net loss attributable to common interest holders of Brookfield DTLA	$	(19,822)	$	(46,761)

See accompanying notes to consolidated financial statements.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

CONSOLIDATED STATEMENTS OF ~~COMPREHENSIVE LOSS~~

~~(Unaudited; in thousands)~~

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Net loss $ (14,398) $ (15,285) $ (45,750) $ (45,365)
Other comprehensive income:
Interest rate swap contracts designated as cash flow hedges:
Unrealized derivative holding gains — 984 — 562
Reclassification adjustment for realized loss
included in net loss — 1,779 — 1,779
Total other comprehensive income — 2,763 — 2,341
Comprehensive loss (14,398) (12,522) (45,750) (43,024)
Less: comprehensive income (loss) attributable to noncontrolling interests 35,096 (934) 61,564 114,053
Comprehensive loss attributable to common interest holders of Brookfield DTLA $ (49,494) $ (11,588) $ (107,314) $ (157,077)

~~See accompanying notes to consolidated financial statements.~~

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~CONSOLIDATED STATEMENTS OF~~ STOCKHOLDERS’ DEFICIT

(Unaudited; in thousands, except share amounts)


		Number of Shares	Common Stock				Additional Paid-in Capital		Accumulated Deficit				Accumulated Other Comprehensive Loss				Non- controlling Interests			Total Stockholders’ Deficit			Number of Shares			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Non- controlling Interests		Total Stockholders’ Deficit
		Common Stock													Common Stock										Total Stockholders’ Deficit

Balance, December 31, 2020		1,000			$	—					$	202,369				$	(726,369)		$			—	$	(104,440)			$	(628,440)
Balance, December 31, 2021																						Balance, December 31, 2021	1,000			$	—		$	203,369	$	(865,927)	$	(71,246)	$	(733,804)
Net (loss) income	Net (loss) income								(42,124)								24,390			(17,734)		Net (loss) income									(15,185)		4,788		(10,397)
Other comprehensive loss													—							—

Contributions	Contributions						—													—		Contributions							500						500
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity	Dividends, preferred returns and redemption measurement adjustments on mezzanine equity								(4,637)								(9,186)			(13,823)		Dividends, preferred returns and redemption measurement adjustments on mezzanine equity									(4,637)		(7,852)		(12,489)
Balance, March 31, 2021		1,000	—				202,369		(773,130)				—				(89,236)			(659,997)
Net (loss) income									(15,696)								2,078			(13,618)
Other comprehensive income													—				0			—
Contributions							500													500
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity									(4,638)								(8,747)			(13,385)
Balance, June 30, 2021		1,000	—				202,869		(793,464)				—				(95,905)			(686,500)
Net (loss) income									(49,494)								35,096			(14,398)
Other comprehensive income													—				0			—
Contributions							—													—
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity									(4,637)								(7,874)			(12,511)
Balance, September 30, 2021		1,000	$	—			$	202,869	$	(847,595)			$	—			$	(68,683)		$	(713,409)
Balance, March 31, 2022																						Balance, March 31, 2022	1,000			$	—		$	203,869	$	(885,749)	$	(74,310)	$	(756,190)

~~Table of Contents~~


		Number of Shares	Common Stock				Additional Paid-in Capital		Accumulated Deficit				Accumulated Other Comprehensive Loss				Non- controlling Interests			Total Stockholders’ Deficit			Number of Shares			Common Stock			Additional Paid-in Capital		Accumulated Deficit		Non- controlling Interests		Total Stockholders’ Deficit
		Common Stock													Common Stock										Total Stockholders’ Deficit

Balance, December 31, 2019		1,000			$	—					$	197,535				$	(499,793)		$			(2,341)	$	(216,183)			$	(520,782)
Balance, December 31, 2020																						Balance, December 31, 2020	1,000			$	—		$	202,369	$	(726,369)	$	(104,440)	$	(628,440)
Net (loss) income	Net (loss) income								(32,894)								18,108			(14,786)		Net (loss) income									(42,124)		24,390		(17,734)
Other comprehensive loss													(1,242)							(1,242)

Contributions	Contributions						—													—		Contributions							—						—
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity	Dividends, preferred returns and redemption measurement adjustments on mezzanine equity								(4,637)								(8,286)			(12,923)		Dividends, preferred returns and redemption measurement adjustments on mezzanine equity									(4,637)		(9,186)		(13,823)
Balance, March 31, 2020		1,000	—				197,535		(537,324)				(3,583)				(206,361)			(549,733)
Net (loss) income									(112,173)								96,879			(15,294)
Other comprehensive income													820				0			820
Contributions							—													—
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity									(4,637)								(6,789)			(11,426)
Balance, June 30, 2020		1,000	—				197,535		(654,134)				(2,763)				(116,271)			(575,633)
Net loss									(14,351)								(934)			(15,285)
Other comprehensive income													2,763				0			2,763
Contributions							500													500
Dividends, preferred returns and redemption measurement adjustments on mezzanine equity									(4,637)								(8,955)			(13,592)
Balance, September 30, 2020		1,000	$	—			$	198,035	$	(673,122)			$	—			$	(126,160)		$	(601,247)
Balance, March 31, 2021																						Balance, March 31, 2021	1,000			$	—		$	202,369	$	(773,130)	$	(89,236)	$	(659,997)

See accompanying notes to consolidated financial statements.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in thousands)


		For the Nine Months Ended					For the Three Months Ended
		September 30,					March 31,
		2021		2020			2022		2021

Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net loss	Net loss	$	(45,750)	$	(45,365)	Net loss	$	(10,397)	$	(17,734)
Adjustments to reconcile net loss to net cash provided by operating activities:	Adjustments to reconcile net loss to net cash provided by operating activities:					Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	80,183		78,848		Depreciation and amortization	25,347		27,022

Equity in (earning) loss of unconsolidated real estate joint venture		(564)		531
Recovery of lease receivables previously deemed uncollectible		(880)		—
Equity in earning of unconsolidated real estate joint venture						Equity in earning of unconsolidated real estate joint venture	(213)		(199)
(Recovery) write-off of lease receivables previously deemed uncollectible						(Recovery) write-off of lease receivables previously deemed uncollectible	(154)		665

Amortization of acquired below-market leases, net of acquired above-market leases	Amortization of acquired below-market leases, net of acquired above-market leases	207		744		Amortization of acquired below-market leases, net of acquired above-market leases	(15)		110
Straight-line rent amortization	Straight-line rent amortization	(2,414)		4,129		Straight-line rent amortization	(129)		(1,768)
Amortization of tenant inducements	Amortization of tenant inducements	3,233		2,872		Amortization of tenant inducements	390		813
Amortization and write-off of debt financing costs	Amortization and write-off of debt financing costs	5,976		4,095		Amortization and write-off of debt financing costs	1,733		1,973
Loss on early extinguishment of debt		4,575		—
Unrealized (gain) loss on interest rate cap contracts		(2)		52
Realized loss on interest rate swap contracts		—		1,779

Unrealized gain on interest rate cap contracts						Unrealized gain on interest rate cap contracts	(211)		(12)

Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Rents, deferred rents and other receivables, net	Rents, deferred rents and other receivables, net	4,282		(1,290)		Rents, deferred rents and other receivables, net	(1,340)		3,369
Deferred charges, net	Deferred charges, net	(3,415)		(5,574)		Deferred charges, net	(1,096)		(862)
Due from affiliates	Due from affiliates	4,969		938		Due from affiliates	1,032		2,038
Prepaid and other assets, net	Prepaid and other assets, net	8,278		7,228		Prepaid and other assets, net	(743)		(631)
Accounts payable and other liabilities	Accounts payable and other liabilities	7,761		9,613		Accounts payable and other liabilities	713		9,702
Due to affiliates	Due to affiliates	(401)		(373)		Due to affiliates	(141)		(638)
Net cash provided by operating activities	Net cash provided by operating activities	66,038		58,227		Net cash provided by operating activities	14,776		23,848
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Expenditures for real estate improvements	Expenditures for real estate improvements	(20,211)		(40,040)		Expenditures for real estate improvements	(5,104)		(13,674)
Net cash used in investing activities	Net cash used in investing activities	(20,211)		(40,040)		Net cash used in investing activities	(5,104)		(13,674)
Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from secured debt	Proceeds from secured debt	465,000		305,000		Proceeds from secured debt	—		465,000
Principal payments on secured debt	Principal payments on secured debt	(450,000)		(265,000)		Principal payments on secured debt	—		(450,000)
Proceeds from Series B preferred interest	Proceeds from Series B preferred interest	6,000		25,150		Proceeds from Series B preferred interest	10,330		2,600
Proceeds from senior participating preferred interest	Proceeds from senior participating preferred interest	254		440		Proceeds from senior participating preferred interest	125		171
Distributions to Series B preferred interest	Distributions to Series B preferred interest	(12,672)		(13,176)		Distributions to Series B preferred interest	(5,005)		(4,244)
Repurchases of Series B preferred interest	Repurchases of Series B preferred interest	(37,528)		(13,507)		Repurchases of Series B preferred interest	(15,795)		(16,156)
Distributions to senior participating preferred interest	Distributions to senior participating preferred interest	(700)		(1,059)		Distributions to senior participating preferred interest	(379)		(242)
Contributions to additional paid-in capital	Contributions to additional paid-in capital	500		500		Contributions to additional paid-in capital	500		—

Purchase of interest rate cap contracts	Purchase of interest rate cap contracts	(62)		(56)		Purchase of interest rate cap contracts	—		(62)
Payment for early extinguishment of debt	Payment for early extinguishment of debt	(4,575)		(849)		Payment for early extinguishment of debt	—		(4,575)
Debt financing costs paid	Debt financing costs paid	(6,544)		(5,660)		Debt financing costs paid	—		(6,544)
Net cash (used in) provided by financing activities		(40,327)		31,783
Net cash used in financing activities						Net cash used in financing activities	(10,224)		(14,052)
Net change in cash, cash equivalents and restricted cash	Net change in cash, cash equivalents and restricted cash	5,500		49,970		Net change in cash, cash equivalents and restricted cash	(552)		(3,878)
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	83,483		58,988		Cash, cash equivalents and restricted cash at beginning of period	88,223		83,483
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	88,983	$	108,958	Cash, cash equivalents and restricted cash at end of period	$	87,671	$	79,605

See accompanying notes to consolidated financial statements.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(Unaudited; in thousands)


		For the Nine Months Ended					For the Three Months Ended
		September 30,					March 31,
		2021		2020			2022		2021

Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:					Supplemental disclosure of cash flow information:
Cash paid for interest	Cash paid for interest	$	51,383	$	59,258	Cash paid for interest	$	16,532	$	17,899
Cash paid for income taxes		$	1,723	$	167

Supplemental disclosure of non-cash investing and financing activities:	Supplemental disclosure of non-cash investing and financing activities:					Supplemental disclosure of non-cash investing and financing activities:
Accrual for current-period additions to real estate investments	Accrual for current-period additions to real estate investments	$	11,072	$	49,666	Accrual for current-period additions to real estate investments	$	3,588	$	5,633

Increase in fair value of interest rate swaps		$	—	$	562

The following is a reconciliation of Brookfield DTLA’s cash, cash equivalents and restricted cash at the beginning and end of the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020:~~2021:


		For the Nine Months Ended					For the Three Months Ended
		September 30,					March 31,
		2021		2020			2022		2021

Cash and cash equivalents at beginning of period	Cash and cash equivalents at beginning of period	$	37,394	$	33,964	Cash and cash equivalents at beginning of period	$	38,901	$	37,394
Restricted cash at beginning of period	Restricted cash at beginning of period	46,089		25,024		Restricted cash at beginning of period	49,322		46,089
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	$	83,483	$	58,988	Cash, cash equivalents and restricted cash at beginning of period	$	88,223	$	83,483

Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	36,480	$	56,897	Cash and cash equivalents at end of period	$	49,162	$	31,783
Restricted cash at end of period	Restricted cash at end of period	52,503		52,061		Restricted cash at end of period	38,509		47,822
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	88,983	$	108,958	Cash, cash equivalents and restricted cash at end of period	$	87,671	$	79,605

See accompanying notes to consolidated financial statements.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

As used in these notes to consolidated financial statements, tabular amounts are presented in thousands, except share amounts, percentage data and dates.

Note 1—Organization and Description of Business

Brookfield DTLA Fund Office Trust Investor Inc. (“Brookfield DTLA” or the “Company”) is a Maryland corporation and was incorporated on April 19, 2013. Brookfield DTLA was formed for the purpose of consummating the transactions contemplated in the Agreement and Plan of Merger dated as of April 24, 2013, as amended, and the issuance of shares of 7.625% Series A Cumulative Redeemable Preferred Stock (the “Series A preferred stock”) in connection with the acquisition of MPG Office Trust, Inc. and MPG Office, L.P. (together, “MPG”). Brookfield DTLA is a direct subsidiary of Brookfield DTLA Holdings LLC, a Delaware limited liability company (“DTLA Holdings”, and together with its affiliates excluding the Company and its subsidiaries, the “Manager”). DTLA Holdings is an indirect partially‑owned subsidiary of Brookfield Property Partners L.P. (“BPY”), an exempted limited partnership under the Laws of Bermuda, which in turn is the flagship commercial property entity ~~and the primary vehicle through which~~wholly-owned by Brookfield Asset Management Inc. (“BAM”), a corporation under the Laws of Canada, and the primary vehicle through which BAM invests in real estate on a global basis. On April 1, 2021, BAM and BPY announced an agreement for BAM to acquire 100% of the limited partnership units of BPY. The acquisition was completed in July 2021. The acquisition did not have any impact to the Company.

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, Brookfield DTLA owned Bank of America Plaza (“BOA Plaza”), EY Plaza, Wells Fargo Center–North Tower, Wells Fargo Center–South Tower, Gas Company Tower and 777 Tower, which are Class A office properties, and FIGat7th, a retail center nestled between EY Plaza and 777 Tower. Additionally, Brookfield DTLA Fund Properties II LLC (“Fund II”) has a noncontrolling interest in an unconsolidated real estate joint venture with Brookfield DTLA FP IV Holdings LLC (“DTLA FP IV Holdings”), a wholly‑owned subsidiary of DTLA Holdings, which owns 755 South Figueroa, a residential development property. All of these properties are located in the Los Angeles Central Business District (the “LACBD”). in Downtown Los Angeles, which has long been a major office district for law firms, accounting firms and government agencies.

Brookfield DTLA primarily receives its income from lease income, including tenant reimbursements, generated from the operations of its office and retail properties, and to a lesser extent, revenue from its parking garages.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 2—Basis of Presentation

As used in these consolidated financial statements and related notes, unless the context requires otherwise, the terms “Brookfield DTLA,” the “Company,” “us,” “we” and “our” refer to Brookfield DTLA Fund Office Trust Investor Inc. together with its direct and indirect subsidiaries.

Principles of Consolidation and Basis of Presentation

The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles ~~generally accepted~~ in the United States of America (“GAAP”) applicable to interim financial information and with the instructions to Form 10‑Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments, consisting of only those of a normal and recurring nature, considered necessary for a fair presentation of the financial position and interim results of Brookfield DTLA as of and for the periods presented have been included. The results of operations for interim periods are not necessarily indicative of those that may be expected for a full fiscal year.

The consolidated balance sheets as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021 include the accounts of Brookfield DTLA and subsidiaries in which it has a controlling financial interest. All intercompany transactions have been eliminated in consolidation as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, and for each of the three ~~and~~ ~~nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020.~~2021.

The accompanying notes to the unaudited consolidated financial statements do not include all disclosures required by GAAP. The unaudited consolidated financial information included herein should be read in conjunction with the audited consolidated financial statements and related notes included in Brookfield DTLA’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the “SEC”) on March ~~25, 2021.~~24, 2022.

Determination of Controlling Financial Interest

We consolidate entities in which Brookfield DTLA is considered to be the primary beneficiary of a variable interest entity (“VIE”) or has a majority of the voting interest in the entity. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses of, or the right to receive benefits from, the VIE that could potentially be significant to the VIE. We do not consolidate entities in which the other parties have substantive kick-out rights to remove the Company’s power to direct the activities, and most significantly impacting the economic performance, of the VIE. In determining whether we are the primary beneficiary, we consider factors such as ownership interest, management representation, authority to control decisions, and contractual and substantive participating rights of each party.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Brookfield DTLA Fund Properties II LLC. The Company earns a return through an indirect investment in Fund II. DTLA Holdings, the parent of Brookfield DTLA, owns all of the common interest in Fund II. Brookfield DTLA has an indirect preferred stock interest in Fund II and its wholly-owned subsidiary is the managing member of Fund II. The Company determined that Fund II is a VIE. As a result of having the power to direct the significant activities of Fund II that impact Fund II’s economic performance, and the obligation to absorb losses of, or the right to receive benefits from, Fund II that could potentially be significant to the Fund II, Brookfield DTLA meets the two conditions for being the primary beneficiary of Fund II.

We consolidate entities through which we conduct substantially all of our business, and own, directly and through subsidiaries, substantially all of our assets. As of ~~September 30, 2021,~~March 31, 2022, these consolidated VIEs had in aggregate total consolidated assets of $2.7 billion (of which $2.4 billion is related to investments in real estate) and total consolidated liabilities of ~~$2.4~~$2.3 billion (of which $2.3 billion is related to non-recourse debt secured by our office and retail properties). The Company is obligated to repay substantially all of the liabilities of our consolidated VIEs, except for the non-recourse secured debt.

Investment in Unconsolidated Real Estate Joint Venture. Fund II has a noncontrolling interest in a joint venture, Brookfield DTLA Fund Properties IV LLC (“Fund IV”), with DTLA FP IV Holdings. The Company determined that the joint venture is a VIE mainly because its equity investment at risk is insufficient to finance the joint venture’s activities without additional subordinated financial support. While the joint venture meets the definition of a VIE, Brookfield DTLA is not its primary beneficiary as the Company lacks the power through voting or similar rights to direct the activities that most significantly impact the joint venture’s economic performance. Therefore, the Company accounts for its ownership interest in the joint venture under the equity method. Under the equity method of accounting, we initially recognize our investment at cost and subsequently adjust the carrying amount of the investment for our share of the investee’s earnings or losses, distributions received (if any), and other-than-temporary impairments. As of ~~September 30, 2021,~~March 31, 2022, the Company’s ownership interest in the joint venture was ~~37.2%~~30.6%, a decrease from ~~47.8%~~33.6% as of December 31, ~~2020~~2021 as a result of additional capital contributed by DTLA FP IV Holdings to the joint venture during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022.

The liabilities of the joint venture may only be settled using the assets of 755 South Figueroa and are not recourse to the Company. Brookfield DTLA’s exposure to its investment in the joint venture is limited to its investment balance and the Company has no obligation to make future contributions to the joint venture. Pursuant to the operating agreement of the joint venture, DTLA FP IV Holdings may be required to fund additional amounts for the development of 755 South Figueroa, routine operating costs, and guaranties or commitments of the joint venture.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Impact of COVID-19

~~Prior to the end of~~While we have seen continued improvement in our business during the first quarter of ~~2020, there was a global outbreak~~2022 compared to the same period in 2021, the winter surge of ~~a new strain of Coronavirus (“~~COVID-19~~”) which prompted government and businesses~~ infection fueled by the Omicron variant during December 2021 through January 2022 continued to take unprecedented measures in response. Many states, including California where our properties are located, have implemented “stay-at-home” restrictions to help combat the spread of COVID-19. The State of California order included the shutdown of all nonessential services, such as dine-in restaurants, bars, gyms and conference or convention centers, and other businesses not deemed to support critical infrastructure (the “~~Shutdown~~”). Essential services, such as grocery stores, pharmacies, gas stations, food banks, convenience stores and delivery restaurants, were allowed to remain open. Consequently, business activities and supply chains were interrupted; travel was disrupted; and local, regional, national and international economic conditions were adversely impacted.

~~The U.S. began a large-scale COVID-19 vaccination campaign in December 2020.~~ On June 15, 2021, with California fully reopened its economy, restrictions such as physical distancing, capacity limits and the county tier system were lifted. However, the spread of the Delta variant broughtbring uncertainty to ~~the economic recovery. In July 2021, amid a rise~~our tenants’ return-to-office plans. Effective January 2022, well-fitting medical-grade mask, surgical mask or higher-level respirators must be worn by employees in ~~coronavirus cases and hospitalizations,~~ Los Angeles County ~~reinstated its mask mandate that requires~~at all times while indoors at the worksite or facility. Although most masking ~~indoors regardless of vaccination status. In California, after a record number of COVID-19 cases~~requirements were eased by early March 2022 in ~~July 2021, there was a sharp decline in cases reported statewide in September 2021.~~

~~During the nine months ended September 30, 2021, the COVID-19 pandemic~~Los Angeles County, businesses once again reconsidered and the measures taken to combat the spread of the pandemic has continued to impact numerous aspects of our business and our properties, which are located in the City of Los Angeles. Some of the effects include the following:

•Capacity limits were imposed on higher-risk activities and businesses such as indoor dining, bars, fitness centers and movie theaters according to the tier system of the California state’s reopening framework. As a result, our tenants in FIGat7th, which include retail shops, restaurants and a big box gym, experienced the most immediate impact of the restrictions imposed.delayed their return-to-office plans. Due to the uncertainties posed to our office property tenants ~~in FIGat7th~~ by ~~these restrictions, adjustments of $1.7 million and $3.1 million, respectively, were recognized~~the COVID-19 pandemic, during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2022, adjustments of $0.1 million, compared to $0.2 million for the same period in 2021, were recognized to lower our office lease income related to certain leases where we determined that the collection of future lease payments was not probable. ~~In contrast, as a result~~Retail tenants of our properties continued to benefit from higher visitor traffic since the re-opening of California’s economy in June 2021 ~~various retail tenants benefited from higher visitor traffic.~~(the “Reopening”). As such, the Company recorded favorable lease income adjustmentsof ~~$1.0~~$0.3 million ~~and $0.5 million, respectively, during the~~ ~~three and~~ ~~nine~~ ~~months ended September 30, 2021.~~

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~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

•While our office properties have remained open, most of our office tenants have been working remotely since the “stay-at-home” order was issued. Although state and local authorities began easing restrictions on businesses, the physical occupancy of our office properties has remained well below capacity as infection rates fluctuated and most employers continued their COVID-19 response protocols and allowed employees to work from home when possible. As of September 30, 2021, most of our office tenants have been current in paying amounts due to us under their leases. Due to the uncertainties posed to our office property tenants by the COVID-19 pandemic, during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2022, compared to adjustments of ~~$0.9~~$0.5 million ~~and $1.9 million, respectively, were recognized~~ to lower our lease income ~~related to certain leases where we determined that the collection of future lease payments was not probable.~~ ~~In contrast, as a result of the re-opening of California’s economy in June 2021 and~~ ~~office employees returning to offices, the Company recorded favorable lease income adjustments of $0.5 million and $0.4 million, respectively,~~ during the ~~three and~~ ~~nine~~ ~~months ended September 30,~~same period in 2021.

•Decline in property values resulting from lower than anticipated revenues due to reduced increases in forecasted rental rates on new or renewal leases, applied credit losses, lower leasing velocity and reductions in projected leasing of available space. While the carrying values of the properties are recorded at cost less accumulated depreciation, we estimate the undiscounted cashflows and fair values of the properties as part of our impairment review of investments in real estate. See ~~Note 2—“Basis of Presentation—Impairment Review”~~ ~~for further discussion.~~

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods presented. The Company bases its estimates on historical experience and on various other assumptions that it considers to be reasonable under the ~~circumstances, including the impact of events such as the Shutdown and measures taken to combat the spread of the pandemic.~~circumstances. For example, estimates and assumptions have been made with respect to the useful lives of assets, recoverable amounts of receivables, impairment of long-lived assets and the fair value of debt. Actual results could ultimately differ from such estimates.

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~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Impairment Review

Investments in long-lived assets, including our investments in real estate, are reviewed for impairment quarterly or if events or changes in circumstances indicate that the carrying amount of the long-lived assets might not be recoverable, which is referred to as a “triggering event” or an “impairment indicator.” The carrying amount of long-lived assets to be held and used is deemed not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. Triggering events or impairment indicators for long-lived assets to be held and used are assessed by property and include significant fluctuations in estimated net operating income, changes in ~~occupancy,~~leasing activity, significant near-term lease expirations, current and historical operating and/or cash flow losses, rental rates, and other market factors. ~~The impact~~

Table of the measures imposed to combat the spread of the COVID-19 pandemic on economic and market conditions, together with many of our office property tenants working from home, was deemed to be a triggering event during the ~~three and~~ ~~nine months ended September 30, 2021.~~Contents

BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

When conducting the impairment review of our investments in real estate, we assessed the expected undiscounted cash flows based upon numerous ~~factors, including the impact of the Shutdown and measures taken to combat the spread of the pandemic.~~factors. These factors include, but are not limited to, the credit quality of our tenants, available market information, known trends, current market/economic conditions that may affect the asset, and historical and forecasted financial and operating information relating to the property, such as net operating income, ~~occupancy~~leasing activity statistics, vacancy projections, renewal percentage, and rent collection rates. If the undiscounted cash flows expected to be generated by a property are less than its carrying amount, the Company determines the fair value of the property and an impairment loss would be recorded to write down the carrying amount of such property to its fair value. Based on its review, management concluded that none of Brookfield DTLA’s real estate properties were impaired as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~2021.

The Company’s investment in its unconsolidated real estate joint venture is also reviewed for impairment quarterly or ~~if events or changes in circumstances~~when conditions exist that may indicate that the decrease in the carrying amount of ~~our~~the investment ~~might not be recoverable using similar criteria~~has occurred and is other than temporary. Triggering events or impairment indicators for the Company’s unconsolidated real estate joint venture include its recurring operating losses, and other events such as ~~its investments~~significant changes in ~~real estate. An~~construction costs, estimated completion dates, intended holding periods, and other factors related to 755 South Figueroa development. Upon determination that an other-than-temporary impairment ~~loss~~has occurred, a write-down is ~~measured based on the excess of~~recognized to reduce the carrying amount of anthe investment ~~compared~~ to its estimated fair value. ~~Impairment analyses are based on current plans, intended holding periods and information available at the time the analyses are prepared.~~ Based on its review, management concluded that Brookfield DTLA’s investment in its unconsolidated real estate joint venture was not impaired as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020.~~

Our future results may continue to be impacted by risks associated with the measures taken to combat the spread of the pandemic and the related global reduction in services, investments, commerce, and travel, which may result in a decrease in our cash flows and a potential increase in impairment losses and/or revaluations of our investments in real estate and unconsolidated real estate joint venture.2021.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Rents, Deferred Rents and Other Receivables

Under Accounting Standards Codification (“ASC”) Topic 842, Leases, Brookfield DTLA must assess on an individual lease basis whether it is probable that the Company will collect the future lease payments throughout the term of the lease. The Company considers the tenant’s payment history and current credit status when assessing collectibility. If the collectibility of the lease payments is probable at lease commencement, the Company recognizes lease income over the term of the lease on a straight-line basis. During the term of the lease, Brookfield DTLA monitors the credit quality and any related material changes of our tenants by (i) reviewing financial statements of the tenants that are publicly available or that are required to be delivered to us pursuant to the applicable lease, (ii) monitoring news reports regarding our tenants and their respective businesses, ~~including the impact of the measures taken to combat the spread of the COVID-19 pandemic on the tenant’s business,~~ (iii) monitoring the tenant’s payment history and current credit status, and (iv) analyzing current economic ~~trends.~~trends, and reasonable and supportable forecasts of future economic conditions. When collectibility is not deemed probable at the lease commencement date, the Company’s lease income is constrained to the lesser of (i) the income that would have been recognized if collection were probable, or (ii) the lease payments that have been collected from the lessee. If the collectibility assessment changes to probable after the lease commencement date, any difference between the lease income that would have been recognized if collectibility had always been assessed as probable and the lease income recognized to date is recognized as a current-period adjustment to lease income. If the collectibility assessment changes to not probable after the lease commencement date, lease income is reversed to the extent that the lease payments that have been collected from the lessee are less than the lease income recognized to date. Changes to the collectibility of operating leases are recorded as adjustments to lease income in the consolidated statements of operations. As the result of our assessment of the collectibility of amounts due under leases with our tenants, the Company recognized a recovery of lease income totaling ~~$1.5~~$0.2 million ~~and~~ ~~$0.9 million, respectively,~~ during the three ~~and nine~~ months ended ~~September 30, 2021, and~~March 31, 2022, compared to a reduction ~~in lease income~~ totaling ~~$2.7~~$0.7 million ~~and $5.1 million, respectively,~~ during the ~~three and nine months ended September 30, 2020.~~same period in 2021.

~~The Company received certain rent relief requests for certain periods in 2020 and 2021~~ from many of our retail tenants and some of our office tenants as a result of the measures taken to combat the spread of the COIVD-19 pandemic. Some of our tenants have availed themselves of various federal and state relief funds, such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program, which can be utilized to partially meet rental obligations. While our tenants are required to fulfill their commitments to us under their leases, we have implemented and will continue to carefully consider temporary rent deferrals and rent abatements on a lease-by-lease basis and only consider those which have a justifiable financial basis. For leases with deferrals, the Company elected to account for the lease concessions as if they were part of the enforceable rights rather than as a modification. For leases with abatements, the Company accounted for the lease concessions on a lease-by-lease basis in accordance with the existing lease modification accounting framework. During the three and nine months ended September 30, 2021 and ~~2020, the impact of lease concessions granted did not have a material effect on the Company’s consolidated financial statements.~~

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~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Income Taxes

Brookfield DTLA has elected to be taxed as a real estate investment trust (“REIT”) pursuant to Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with its tax period ended December 31, 2013. Brookfield DTLA conducts its operations with the intent to continue to qualify as a REIT. Accordingly, Brookfield DTLA is not subject to U.S. federal income tax, provided that it continues to qualify as a REIT and makes distributions to its stockholders, if any, that generally equal or exceed its taxable income.

Brookfield DTLA has elected to treat certain of its subsidiaries as taxable REIT subsidiaries (“TRS”). A TRS is permitted to engage in activities that a REIT cannot engage in directly, such as performing non‑customary services for the Company’s tenants, holding assets that the Company cannot hold directly and conducting certain affiliate transactions. A TRS is subject to both federal and state income taxes. D~~The~~uring the three months ended March 31, 2022 and 2021, the Company’s various TRS ~~did not have significant~~incurred income tax ~~provisions or deferred taxes during the three and nine months ended September 30, 2021~~expenses of $0.2 million and ~~2020~~$0.9 million, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 3—Recently Issued Accounting Literature

New Accounting Pronouncements Adopted

There have been no new accounting pronouncements adopted during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022.

Accounting Pronouncements Issued But Not Yet Adopted

~~In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,~~ which provides accounting relief from the future impact of the cessation of LIBOR by, among other things, providing optional expedients to treat contract modifications resulting from such reference rate reform as a continuation of the existing contract and for hedging relationships to not be de-designated resulting from such changes provided certain criteria are met. The ~~guidance is effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively through December 31, 2022. In January 2021, the FASB issued ASU 2021-01,~~ ~~Reference Rate Reform (Topic 848): Scope~~, which refines the scope of ASC Topic 848, Reference Rate Reform, and clarifies some of its guidance as part of the FASB’s ongoing monitoring of global reference rate reform activities. ASU 2021-01 permits entities to elect certain optional expedients and exceptions when accounting for derivative contracts and certain hedging relationships affected by changes in the interest rates used for discounting cash flows, computing variation margin settlements, and calculating price alignment interest in connection with reference rate reform activities under way in global financial markets. ASU 2021-01 became effective upon issuance and may be applied on a full retrospective basis as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 or prospectively for contract modifications made on or before December 31, 2022. The Company’s variable debt and interest rate cap contracts currently reference LIBOR. The Company is currently in the process of identifying its LIBOR-based contracts that will be impacted by the cessation of LIBOR, incorporating fallback language in negotiated contracts and incorporating non-LIBOR reference rate and/or fallback language in new contracts to prepare for these changes. Notwithstanding these efforts, the Company expects to utilize the optional expedients provided by ASU 2020-04 for debt contracts left unmodified. In addition, the fair value of interest rate cap contracts was de minimis as of ~~September 30, 2021~~ ~~and the~~ Company does not ~~use hedge~~anticipate any recently issued accounting ~~for these contracts. As such, we do not expect the adoption of ASU 2020-04 and 2021-01~~standards pronouncements to have a ~~material effect~~significant impact on the ~~Company’s~~consolidated financial position or results of operations in these or future consolidated financial statements.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Note 4—Rents, Deferred Rents and Other Receivables, Net

Brookfield DTLA’s rents, deferred rents and other receivables are comprised of the following:


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021

Straight-line and other deferred rents	Straight-line and other deferred rents	$	110,476	$	109,196	Straight-line and other deferred rents	$	110,551	$	108,913
Tenant inducements receivable	Tenant inducements receivable	32,737		33,280		Tenant inducements receivable	28,386		28,445
Tenant receivables	Tenant receivables	3,498		5,057		Tenant receivables	4,747		3,316
Other receivables	Other receivables	660		2,079		Other receivables	488		362
Rents, deferred rents and other receivables, gross	Rents, deferred rents and other receivables, gross	147,371		149,612		Rents, deferred rents and other receivables, gross	144,172		141,036
Less: accumulated amortization of tenant inducements	Less: accumulated amortization of tenant inducements	19,206		15,973		Less: accumulated amortization of tenant inducements	15,802		15,411

Rents, deferred rents and other receivables, net	Rents, deferred rents and other receivables, net	$	128,165	$	133,639	Rents, deferred rents and other receivables, net	$	128,370	$	125,625

See Note 2 “Basis of Presentation—Rents, Deferred Rents and Other Receivables” for a discussion of assessments regarding the collectibility of rents and deferred rent receivables and related adjustments made during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020 due to the measures taken to combat the spread of the COVID-19 pandemic.~~2021.

~~Note 5—Intangible Assets and Liabilities~~

~~Brookfield DTLA’s intangible assets and liabilities are summarized as follows:~~

September 30, 2021 December 31, 2020
Intangible Assets
In-place leases $ 46,448 $ 46,448
Tenant relationships 6,900 6,900
Above-market leases 19,874 19,874
Intangible assets, gross 73,222 73,222
Less: accumulated amortization 55,778 51,176
Intangible assets, net $ 17,444 $ 22,046
Intangible Liabilities
Below-market leases $ 46,945 $ 46,945
Less: accumulated amortization 42,110 40,940
Intangible liabilities, net $ 4,835 $ 6,005

~~A summary of the effect of amortization/accretion of intangible assets and liabilities reported in the consolidated financial statements is as follows:~~

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Lease income $ (49) $ (578) $ (207) $ (744)
Depreciation and amortization expense $ 1,058 $ 1,634 $ 3,225 $ 4,596

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 5—Intangible Assets and Liabilities

Brookfield DTLA’s intangible assets and liabilities are summarized as follows:


	March 31, 2022		December 31, 2021

Intangible Assets
In-place leases	$	41,422	$	41,422
Tenant relationships	6,432		6,432
Above-market leases	16,734		16,734
Intangible assets, gross	64,588		64,588
Less: accumulated amortization	49,844		48,565
Intangible assets, net	$	14,744	$	16,023

Intangible Liabilities
Below-market leases	$	33,416	$	33,416
Less: accumulated amortization	29,339		28,961
Intangible liabilities, net	$	4,077	$	4,455

A summary of the effect of amortization/accretion of intangible assets and liabilities reported in the consolidated financial statements is as follows:


	For the Three Months Ended
	March 31,
	2022		2021

Lease income	$	15	$	(110)
Depreciation and amortization expense	$	916	$	1,101

As of ~~September 30, 2021,~~March 31, 2022, the estimated amortization/accretion of intangible assets and liabilities in future periods is as follows:


		In-Place Leases		Other Intangible Assets		Intangible Liabilities			In-Place Leases		Other Intangible Assets		Intangible Liabilities

Remainder of 2021		$	748	$	606	$	381
2022		2,757		2,275		1,493
Remainder of 2022								Remainder of 2022	$	2,062	$	1,676	$	1,115
2023	2023	1,947		1,949		794		2023	1,947		1,934		794
2024	2024	1,091		1,864		278		2024	1,091		1,849		278
2025	2025	951		1,191		263		2025	951		1,177		263
2026	2026	580		449		245		2026	580		444		245
2027								2027	115		—		154
Thereafter	Thereafter	1,033		3		1,381		Thereafter	918		—		1,228
Total future amortization/accretion of intangibles	Total future amortization/accretion of intangibles	$	9,107	$	8,337	$	4,835	Total future amortization/accretion of intangibles	$	7,664	$	7,080	$	4,077

1914

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 6—Secured Debt, Net

Brookfield DTLA’s secured debt is as follows:


		Maturity Date (1)	Contractual Interest Rates			Principal Amount as of						Maturity Date (1)			Contractual Interest Rates			Principal Amount as of
					September 30, 2021			December 31, 2020						March 31, 2022				December 31, 2021
Variable-Rate Loans:	Variable-Rate Loans:													Variable-Rate Loans:
Wells Fargo Center–North Tower (2)	Wells Fargo Center–North Tower (2)	10/9/2023	LIBOR + 1.65%			$	400,000		$	400,000	Wells Fargo Center–North Tower (2)		10/9/2023			LIBOR + 1.65%			$	400,000		$	400,000
Wells Fargo Center–North Tower (2)	Wells Fargo Center–North Tower (2)	10/9/2023	LIBOR + 4.00%			65,000			65,000		Wells Fargo Center–North Tower (2)	10/9/2023			LIBOR + 4.00%			65,000			65,000
Wells Fargo Center–North Tower (2)(3)	Wells Fargo Center–North Tower (2)(3)	10/9/2023	LIBOR + 5.00%			35,000			35,000		Wells Fargo Center–North Tower (2)(3)	10/9/2023			LIBOR + 5.00%			35,000			35,000
Wells Fargo Center–South Tower (4)	Wells Fargo Center–South Tower (4)	11/4/2023	LIBOR + 1.80%			260,796			260,796		Wells Fargo Center–South Tower (4)	11/4/2023			LIBOR + 1.80%			260,796			260,796
777 Tower (5)	777 Tower (5)	10/31/2024	LIBOR + 1.60%			231,842			231,842		777 Tower (5)	10/31/2024			LIBOR + 1.60%			231,842			231,842
777 Tower (6)	777 Tower (6)	10/31/2024	LIBOR + 4.15%			43,158			43,158		777 Tower (6)	10/31/2024			LIBOR + 4.15%			43,158			43,158
EY Plaza (7)	EY Plaza (7)	10/9/2025	LIBOR + 2.86%			275,000			275,000		EY Plaza (7)	10/9/2025			LIBOR + 2.86%			275,000			275,000
EY Plaza (7)	EY Plaza (7)	10/9/2025	LIBOR + 6.85%			30,000			30,000		EY Plaza (7)	10/9/2025			LIBOR + 6.85%			30,000			30,000
Gas Company Tower (7)	Gas Company Tower (7)	2/9/2026	LIBOR + 1.89%			350,000			—		Gas Company Tower (7)	2/9/2026			LIBOR + 1.89%			350,000			350,000
Gas Company Tower (7)	Gas Company Tower (7)	2/9/2026	LIBOR + 5.00%			65,000			—		Gas Company Tower (7)	2/9/2026			LIBOR + 5.00%			65,000			65,000
Gas Company Tower (7)	Gas Company Tower (7)	2/9/2026	LIBOR + 7.75%			50,000			—		Gas Company Tower (7)	2/9/2026			LIBOR + 7.75%			50,000			50,000
Total variable-rate loans	Total variable-rate loans					1,805,796			1,340,796		Total variable-rate loans							1,805,796			1,805,796

Fixed-Rate Debt:	Fixed-Rate Debt:										Fixed-Rate Debt:
BOA Plaza	BOA Plaza	9/1/2024	4.05	%		400,000			400,000		BOA Plaza	9/1/2024			4.05		%	400,000			400,000
FIGat7th	FIGat7th	3/1/2023	3.88	%		58,500			58,500		FIGat7th	3/1/2023			3.88		%	58,500			58,500
Total fixed-rate debt	Total fixed-rate debt					458,500			458,500		Total fixed-rate debt							458,500			458,500

Debt Refinanced:
Gas Company Tower						—			319,000
Gas Company Tower						—			131,000
Total debt refinanced						—			450,000

Total secured debt	Total secured debt					2,264,296			2,249,296		Total secured debt							2,264,296			2,264,296
Less: unamortized debt financing costs	Less: unamortized debt financing costs					10,224			9,656		Less: unamortized debt financing costs							6,642			8,375
Total secured debt, net	Total secured debt, net					$	2,254,072		$	2,239,640	Total secured debt, net							$	2,257,654		$	2,255,921

(1)Maturity dates include the effect of extension options that the Company controls, if applicable. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, we meet the criteria specified in the loan agreements to extend the loan maturity dates.

(2)As required by the loan agreements, we have entered into interest rate cap contracts that limit the LIBOR portion of the interest rate to ~~3.85%~~2.57%.

(3)BAM owns a significant interest in a company whose subsidiary is the lender of this loan. See Note ~~13—~~12—“Related Party Transactions.”

(4)As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 3.63%. As of ~~September 30, 2021,~~March 31, 2022, a future advance amount of $29.2 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreement), including tenant improvements and inducements, leasing commissions, and common area improvements.

(5)As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.00%. As of ~~September 30, 2021,~~March 31, 2022, a future advance amount of $36.8 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreement), including tenant improvements and inducements, and leasing commissions. The Company can draw against this future advance amount as long as a pro rata draw is made against the mezzanine loan future advance amount.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

(6)As required by the loan agreement, we have entered into an interest rate cap contract that limits the LIBOR portion of the interest rate to 4.00%. As of ~~September 30, 2021,~~March 31, 2022, a future advance amount of $6.8 million is available under this loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreement), including tenant improvements and inducements, and leasing commissions. The Company can draw against this future advance amount as long as a pro rata draw is made against the mortgage loan future advance amount.

(7)As required by the loan agreements, we have entered into interest rate cap contracts that limit the LIBOR portion of the interest rate to 4.00%.

Table of Contents

BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The weighted average interest rate of the Company’s secured debt was ~~2.89%~~3.10% and ~~3.19%~~2.91% as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. As of ~~September 30, 2021,~~March 31, 2022, the weighted average term to maturity of our debt (after the impact of extension options that the Company controls, if applicable) was approximately three years.

Debt Maturities

The following table provides information regarding the Company’s minimum future principal payments due on the Company’s secured debt (after the impact of extension options that the Company controls, if applicable) as of ~~September 30, 2021:~~March 31, 2022:


Remainder of 2021		$	—
2022		—

2023	2023	819,296		2023	$	819,296
2024	2024	675,000		2024	675,000
2025	2025	305,000		2025	305,000
2026	2026	465,000		2026	465,000
Total secured debt	Total secured debt	$	2,264,296	Total secured debt	$	2,264,296

As of ~~September 30, 2021, $1,035.8~~March 31, 2022, $1,805.8 million of the Company’s secured debt may be prepaid without penalty, $400.0 million may be defeased (as defined in the underlying loan agreements) and ~~$828.5~~$58.5 million may be prepaid with prepayment penalties.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~Gas Company Tower—~~

On February 5, 2021, Brookfield DTLA refinanced its Gas Company Tower secured loans. The original $450.0 million secured loans were replaced with secured loans of $465.0 million, comprised of a $350.0 million mortgage loan, a $65.0 million mezzanine loan and a $50.0 million mezzanine loan, each of which bears interest at variable rates equal to LIBOR plus 1.89%, 5.00% and 7.75%, respectively. The initial maturity date of these interest-only loans is February 9, 2023. The mortgage loan can be prepaid, in whole or in part, with prepayment fees (as defined in the underlying loan agreement) until February 2022 after which the loan may be repaid without prepayment fees. A voluntary prepayment of the mortgage or mezzanine loans requires a simultaneous pro-rata prepayment of all loans encumbering this property. Brookfield DTLA has 3 options to extend the loans maturity dates for a period of one year each, as long as the maturity date of the mezzanine loans is extended simultaneously with the mortgage loan, and no Event of Default (as defined in the underlying loan agreements) has occurred. All proceeds from the new secured loans were used to pay off the original $450.0 million encumbrance and to satisfy the new loans’ required reserves. The Company recognized a loss on early extinguishment of debt of $4.6 million, which represented a prepayment premium and debt yield maintenance fee, in interest expense in the consolidated statements of operations.

Non-Recourse Carve Out Guarantees

All of our secured debt is subject to “non-recourse carve out” guarantees that expire upon elimination of the underlying loan obligations. In connection with all of these loans, Brookfield DTLA entered into “non-recourse carve out” guarantees, which provide for these otherwise non-recourse loans to become partially or fully recourse against DTLA Holdings, if certain triggering events (as defined in the loan agreements) occur.

Debt Compliance

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, Brookfield DTLA was in compliance with all material financial covenants contained in the loan agreements.

Certain loan agreements held by Brookfield DTLA contain debt yield and debt service coverage ratios. As of ~~September 30, 2021,~~March 31, 2022, Brookfield DTLA was meeting or exceeding these financial ratios, with the exception of the loans secured by Wells Fargo Center—South Tower and Wells Fargo Center—North Tower that did not meet their respective minimum debt yield ratio.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Wells Fargo Center–South Tower —

Pursuant to the terms of the Wells Fargo Center–South Tower mortgage loan agreement, effective September 2020, a cash sweep event commenced as the borrower’s debt yield ratio was under the minimum debt yield ratio. While this does not constitute an Event of Default under the terms of the mortgage loan agreement, any excess operating cash flows are currently swept to a cash account controlled by the loan administrative agent. Funds within this account shall be applied to the borrower's approved operating expenses, capital expenditures and leasing costs; property taxes and insurance; interest and any other amounts due and payable under the loan and interest rate cap contracts; and fees and expenses due to the loan administrative agent.

Wells Fargo Center–North Tower —

As of ~~September 30, 2021,~~March 31, 2022, the borrower’s debt yield ratio was under the minimum debt yield ratio. While this does not constitute an Event of Default under the terms of the mortgage loan agreement, following the occurrence of such debt yield event, any excess operating cash flows are to be swept to a cash account controlled by the loan administrative agent. Funds within this account shall be applied to the borrower's approved operating ~~expenses, capital expenditures~~expenses; tenant improvement costs and leasing ~~costs;~~commissions (capped at the leasing reserve deposit amount as specified in the loan agreements); property taxes and insurance; interest and any other amounts due and payable under the loan and interest rate cap contracts; reserve accounts; and fees and expenses due to the loan administrative agent. The cash sweep ~~has not~~ started ~~as of September 30, 2021.~~in January 2022.

London Interbank Offered Rate (“LIBOR”) Transition

The chief executive of the United Kingdom Financial Conduct Authority (“FCA”), which regulates ~~the~~ LIBOR, previously announced that the FCA ~~intends~~intended to stop compelling banks to submit rates for the calculation of LIBOR after 2021. In response, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee (“ARRC”) which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to USD-LIBOR in derivatives and other financial contracts. In November 2020, the Intercontinental Exchange (“ICE”) Benchmark Administration Limited, the benchmark administrator for USD-LIBOR rates, proposed extending the publication of certain commonly-used USD-LIBOR settings until June 30, 2023 and the FCA issued a statement supporting such proposal. In connection with this proposal, certain U.S. banking regulators issued guidance strongly encouraging banks to generally cease entering into new contracts referencing USD-LIBOR as soon as practicable and in any event by December 31, 2021. It is not possible to predict the effect of these changes, including when there will be sufficient liquidity in the SOFR markets.

We have outstanding variable debt ~~and~~and interest rate cap contracts that are indexed to LIBOR. The Company is currently in the process of identifying its LIBOR-based contracts that will be impacted by the cessation of LIBOR ~~incorporating fallback language in negotiated contracts~~ and incorporating non-LIBOR reference rate and/or fallback language in new contracts to prepare for these changes. As of March 31, 2022, all of the Company’s variable debt contracts contain fallback languages that lay out the process through which a replacement rate can be identified or used when LIBOR is not available.

If LIBOR changes or is replaced, the interest rates on our debt which is indexed to USD-LIBOR will be determined using a different successor rate, which may adversely affect interest expense and may result in interest obligations which are more than the payments that would have been made on such debt if USD-LIBOR was available in its current form.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

The discontinuation of LIBOR will not affect our ability to borrow or maintain already outstanding borrowings or interest rate caps, but if our contracts indexed to LIBOR are converted to SOFR, the differences between LIBOR and SOFR, plus the recommended spread adjustment, could result in interest costs that are higher than if LIBOR remained available.

Note 7—Accounts Payable and Other Liabilities

Brookfield DTLA’s accounts payable and other liabilities are comprised of the following:


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021

Tenant improvements and inducements payable	Tenant improvements and inducements payable	$	33,696	$	47,679	Tenant improvements and inducements payable	$	30,498	$	32,973
Unearned rent and tenant payables	Unearned rent and tenant payables	28,162		27,331		Unearned rent and tenant payables	27,685		31,249
Accrued capital expenditures and leasing commissions	Accrued capital expenditures and leasing commissions	9,233		15,201		Accrued capital expenditures and leasing commissions	9,157		7,422
Accrued expenses and other liabilities	Accrued expenses and other liabilities	14,901		5,830		Accrued expenses and other liabilities	10,566		5,968
Accounts payable and other liabilities	Accounts payable and other liabilities	$	85,992	$	96,041	Accounts payable and other liabilities	$	77,906	$	77,612

Note 8—Noncontrolling Interests

Mezzanine Equity Component

Mezzanine equity in the consolidated balance sheets is comprised of the following:

Series A Preferred Stock. As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, 9,730,370 shares of Series A preferred stock were outstanding, of which 9,357,469 shares were issued to third parties and 372,901 shares were issued to DTLA Fund Holding Co., a subsidiary of DTLA Holdings.

Series A Preferred Interest. The Series A preferred interest in Fund II is indirectly held by the Company through wholly owned subsidiaries (subject to certain REIT accommodation preferred interests).

Series A-1 Preferred Interest. The Series A-1 preferred interest is held by DTLA Holdings or wholly-owned subsidiaries of DTLA Holdings.

Senior Participating Preferred Interest. Brookfield DTLA Fund Properties III LLC (“Fund III”), a wholly-owned subsidiary of DTLA Holdings, issued a senior participating preferred interest to DTLA Holdings in connection with the formation of Brookfield DTLA and the MPG acquisition.

Table of Contents

BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Series B Preferred Interest. Pursuant to the Limited Liability Company Agreement (“LLCA”) of Fund II and the subsequent amendment to the LLCA, DTLA Holdings made a commitment to contribute up to $310.0 million in cash or property to Fund II, which directly or indirectly owns the Brookfield DTLA properties. As of ~~September 30, 2021, $40.7~~March 31, 2022, $10.8 million is available to the Company under this commitment for future funding. The Series B preferred interest in Fund II held by DTLA Holdings is effectively senior to the interest in Fund II indirectly held by the Company and has a priority on distributions senior to the equity securities of such subsidiaries held indirectly by the Company and, as a result, effectively rank senior to the Series A preferred stock. The Series B preferred interest in Fund II may limit the amount of funds available to the Company for any purpose, including for dividends or other distributions to holders of its capital stock, including the Series A preferred stock.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

The Series A-1 preferred interest, senior participating preferred interest and Series B preferred interest are held by a noncontrolling interest holder. Series A preferred stock, Series A-1 preferred interest, senior participating preferred interest and Series B preferred interest (collectively, the “Preferred Interests”) are classified as mezzanine equity because they are callable, and the holder of the Series A-1 preferred interest, senior participating preferred interest, Series B preferred interest, and some of the Series A preferred stock indirectly controls the ability to elect to redeem such instruments, through its controlling interest in the Company and its subsidiaries. See Note 9—“Mezzanine Equity.”

Stockholders’ Deficit Component

Common interests held by DTLA Holdings are presented as “noncontrolling interests” as part of Stockholders’ Deficit in the consolidated balance sheets.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 9—Mezzanine Equity

A summary of the change in mezzanine equity is as follows:


		Number of Shares of Series A Preferred Stock		Series A Preferred Stock				Noncontrolling Interests												Total Mezzanine Equity					Number of Shares of Series A Preferred Stock		Series A Preferred Stock		Noncontrolling Interests						Total Mezzanine Equity
						Series A-1 Preferred Interest				Senior Participating Preferred Interest				Series B Preferred Interest												Series A-1 Preferred Interest			Senior Participating Preferred Interest		Series B Preferred Interest

Balance, December 31, 2020			9,730,370			$	447,028			$	435,242			$	20,413			$	198,827				$	1,101,510
Balance, December 31, 2021																						Balance, December 31, 2021			9,730,370		$	465,577	$	452,454	$	21,191	$	177,290	$	1,116,512
Issuance of Series B preferred interest	Issuance of Series B preferred interest															2,600				2,600		Issuance of Series B preferred interest											10,330		10,330
Dividends	Dividends			4,637																4,637		Dividends					4,637								4,637
Preferred returns	Preferred returns							4,303								4,282				8,585		Preferred returns							4,303				3,750		8,053
Redemption measurement adjustments	Redemption measurement adjustments											601								601		Redemption measurement adjustments									(201)				(201)
Contributions from noncontrolling interests	Contributions from noncontrolling interests											171								171		Contributions from noncontrolling interests									125				125
Repurchases of noncontrolling interests	Repurchases of noncontrolling interests															(16,156)				(16,156)		Repurchases of noncontrolling interests											(15,795)		(15,795)
Distributions to noncontrolling interests	Distributions to noncontrolling interests											(242)				(4,244)				(4,486)		Distributions to noncontrolling interests									(379)		(5,005)		(5,384)
Balance, March 31, 2021		9,730,370		451,665				439,545				20,943				185,309				1,097,462
Issuance of Series B preferred interest																3,400				3,400
Dividends				4,638																4,638
Preferred returns								4,302								4,146				8,448
Redemption measurement adjustments												299								299
Contributions from noncontrolling interests												—								—
Repurchases of noncontrolling interests																(11,117)				(11,117)
Distributions to noncontrolling interests												(304)				(4,283)				(4,587)
Balance, June 30, 2021		9,730,370		456,303				443,847				20,938				177,455				1,098,543
Issuance of Series B preferred interest																—				—
Dividends				4,637																4,637
Preferred returns								4,303								3,896				8,199
Redemption measurement adjustments												(325)								(325)
Contributions from noncontrolling interests												83								83
Repurchases of noncontrolling interests																(10,255)				(10,255)
Distributions to noncontrolling interests												(154)				(4,145)				(4,299)
Balance, September 30, 2021		9,730,370		$	460,940			$	448,150			$	20,542			$	166,951			$	1,096,583
Balance, March 31, 2022																						Balance, March 31, 2022			9,730,370		$	470,214	$	456,757	$	20,736	$	170,570	$	1,118,277


	Number of Shares of Series A Preferred Stock	Series A Preferred Stock		Noncontrolling Interests						Total Mezzanine Equity
				Series A-1 Preferred Interest		Senior Participating Preferred Interest		Series B Preferred Interest

Balance, December 31, 2020	9,730,370	$	447,028	$	435,242	$	20,413	$	198,827	$	1,101,510
Issuance of Series B preferred interest								2,600		2,600
Dividends		4,637								4,637
Preferred returns				4,303				4,282		8,585
Redemption measurement adjustments						601				601
Contributions from noncontrolling interests						171				171
Repurchases of noncontrolling interests								(16,156)		(16,156)
Distributions to noncontrolling interests						(242)		(4,244)		(4,486)
Balance, March 31, 2021	9,730,370	$	451,665	$	439,545	$	20,943	$	185,309	$	1,097,462

During the three months ended March 31, 2022 and 2021, net repurchases of and distributions to noncontrolling interests were made using the excess operating cash flows generated from properties.

Series A Preferred Stock

As of March 31, 2022, the Series A preferred stock is reported at its redemption value of $470.2 million calculated using the redemption price of $243.3 million plus $227.0 million of accumulated and unpaid dividends on such Series A preferred stock through March 31, 2022.

No dividends were declared on the Series A preferred stock during the three months ended March 31, 2022 and 2021. Dividends on the Series A preferred stock are cumulative, and therefore, will continue to accrue at an annual rate of $1.90625 per share.

Table of Contents

BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Number of
Shares of
Series A
Preferred
Stock Series A
Preferred
Stock Noncontrolling Interests Total
Mezzanine
Equity
Series A-1
Preferred
Interest Senior
Participating
Preferred
Interest Series B
Preferred
Interest
Balance, December 31, 2019 9,730,370 $ 428,480 $ 418,029 $ 22,362 $ 185,352 $ 1,054,223
Issuance of Series B preferred interest 7,800 7,800
Dividends 4,637 4,637
Preferred returns 4,303 4,208 8,511
Redemption measurement adjustments (225) (225)
Contributions from noncontrolling
    interests — —
Repurchases of noncontrolling interests (6,869) (6,869)
Distributions to noncontrolling interests (263) (4,401) (4,664)
Balance, March 31, 2020 9,730,370 433,117 422,332 21,874 186,090 1,063,413
Issuance of Series B preferred interest 17,350 17,350
Dividends 4,637 4,637
Preferred returns 4,303 4,567 8,870
Redemption measurement adjustments (2,081) (2,081)
Contributions from noncontrolling
    interests 302 302
Repurchases of noncontrolling interests — —
Distributions to noncontrolling interests (45) (3,500) (3,545)
Balance, June 30, 2020 9,730,370 437,754 426,635 20,050 204,507 1,088,946
Issuance of Series B preferred interest — —
Dividends 4,637 4,637
Preferred returns 4,303 4,689 8,992
Redemption measurement adjustments (37) (37)
Contributions from noncontrolling
    interests 138 138
Repurchases of noncontrolling interests (6,638) (6,638)
Distributions to noncontrolling interests (751) (5,275) (6,026)
Balance, September 30, 2020 9,730,370 $ 442,391 $ 430,938 $ 19,400 $ 197,283 $ 1,090,012

During the nine months ended September 30, 2021 and 2020, the Company used cash received from the issuance of the Series B preferred interest for capital expenditures and leasing costs. During the three and nine months ended September 30, 2021, repurchases of and distributions to noncontrolling interests were made using the excess operating cash flows generated from properties. During the three months ended September 30, 2020, repurchases of and distributions to noncontrolling interests were made using the excess cash from upsized refinancing of the loans secured by EY Plaza in September 2020. During the ~~six~~ months ended June 30, 2020, repurchases of and distributions to noncontrolling interests were made mainly using the excess cash from upsized refinancing of the loans secured by 777 Tower in October 2019, as well as operating cash flows generated from other properties.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

~~Series A Preferred Stock~~

As of September 30, 2021, the Series A preferred stock is reported at its redemption value of $460.9 million calculated using the redemption price of $243.3 million plus $217.7 million of accumulated and unpaid dividends on such Series A preferred stock through September 30, 2021.

No dividends were declared on the Series A preferred stock during the three and nine months ended September 30, 2021 and 2020. Dividends on the Series A preferred stock are cumulative, and therefore, will continue to accrue at an annual rate of $1.90625 per share.

The Series A preferred stock does not have a stated maturity and is not subject to any sinking fund or mandatory redemption ~~provision.~~provisions. We may, at our option, redeem the Series A preferred stock, in whole or in part, for $25.00 per share, plus all accumulated and unpaid dividends on such Series A preferred stock up to and including the redemption date. There is no commitment or obligation on the part of Brookfield DTLA or DTLA Holdings to redeem the Series A preferred stock. The Series A preferred stock is not convertible into or exchangeable for any other property or securities of Brookfield DTLA.

Noncontrolling Interests

There is no commitment or obligation on the part of Brookfield DTLA or DTLA Holdings to redeem the Preferred Interests.

Series A-1 Preferred Interest

As of ~~September 30, 2021,~~March 31, 2022, the Series A-1 preferred interest is reported at its redemption value of ~~$448.2~~$456.8 million calculated using its liquidation value of $225.7 million plus ~~$222.4~~$231.0 million of unpaid interest through ~~September 30, 2021.~~March 31, 2022. Interest earned on the Series A-1 preferred interest is cumulative and accrues at an annual rate of 7.625%.

Senior Participating Preferred Interest

As of ~~September 30, 2021,~~March 31, 2022, the senior participating preferred interest is reported at its redemption value of ~~$20.5~~$20.7 million using the 4.0% participating interest in the residual value of BOA Plaza, EY Plaza and FIGat7th upon disposition or liquidation.

Series B Preferred Interest

As of ~~September 30, 2021,~~March 31, 2022, the Series B preferred interest is reported at its redemption value of ~~$167.0~~$170.6 million calculated using its liquidation value of ~~$163.1~~$169.3 million plus ~~$3.9~~$1.3 million of unpaid preferred returns on such Series B preferred interest through ~~September 30, 2021.~~March 31, 2022. Brookfield DTLA is entitled to receive a market rate of return on its contributions, currently 9.0% as of ~~September 30, 2021.~~March 31, 2022.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Distribution Waterfall

Brookfield DTLA may, at its discretion, distribute all or a portion of its available cash (as defined in the limited liability company agreement of Fund II) in the following priority: (1)

First to:

Series B preferred interest unpaid preferred return

Second to:

Series B preferred interest unreturned preferred capital

Third, proportionally in respect of
unpaid preferred return to:

Series A preferred interest unpaid preferred return (2)

Series A-1 preferred interest unpaid preferred return (3)

Fourth, proportionally in respect
of unreturned capital to: (2) (4)

Series A preferred interest unreturned capital

Series A-1 preferred interest unreturned capital (3)

And fifth to:

Common interests to Brookfield DTLA and DTLA Holdings (5)

__________

(1)Cash available to Fund II arises from its interests in its investments. Fund II owns indirectly all of the interests in Gas Company Tower, Wells Fargo Center–South Tower, Wells Fargo Center–North Tower, 777 Tower and an interest in the 755 South Figueroa development site which will decrease as capital is called to fund the development. See Note 1 “Organization and Description of Business”. In addition, Fund II owns 96% indirectly of the interests in EY Plaza, FIGat7th and BOA Plaza (the “Fund III Assets”). DTLA Holdings owns the remaining 4% interest in the Fund III Assets. The amounts due to DTLA Holdings on the senior participating preferred interest for its preferred return and unreturned capital in Fund III were fully paid as of December 31, 2015. All of Fund II’s interests in these assets are subject to certain REIT accommodation preferred interests. This waterfall may be effected by future equity issuances in respect of Fund II, Fund III, Fund IV, or their subsidiaries, and are subject to all of the indebtedness of the entities.

(2)The Fund II Series A preferred interest is comprised of two parts, one is a preferred component with the analogous economic terms as the Company’s Series A Preferred Stock and a common component, which is junior to the preferred component of the Series A interest on analogous terms to the relationship between the Company’s Series A Preferred Stock and Common Stock. The Series A preferred interest is junior to the Fund II Series B preferred interest. See Note 8 “Noncontrolling Interests — Series B Preferred Interest”. Amounts paid in respect of the Fund II’s Series A preferred interest are generally available upon distribution to the Company for further distribution in respect of the Company’s Series A Preferred Stock, and, when and if distributed in respect of the Series A Preferred Stock, will be distributed first to accumulated and unpaid dividends and to reduce its unreturned liquidation capital.

(3)DTLA Holdings in its capacity as the holder of the Series A-1 preferred interest can waive receipt of distributions that would otherwise be made to it in respect of the Series A-1 preferred interest and such amounts shall be paid instead to the Series A preferred interest or as otherwise provided by the subsequent provisions of the waterfall. Any amounts waived by DTLA Holdings shall not reduce the Series A-1 unpaid preferred return or unreturned capital.

(4)Applicable if distribution is (a) in connection with a liquidating event or redemption or (b) at the election of Brookfield DTLA.

(5)Based on the interests of the Series A and Series B interests of the Fund after repayment of the preferred capital portion of each of them, until the Senior A junior unreturned liquidation capital is reduced to zero.

2922

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note 10—~~Accumulated Other Comprehensive Loss~~

~~A summary of the change in accumulated other comprehensive loss related to Brookfield DTLA’s derivative financial instruments designated as cash flow hedges is as follows:~~

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Balance at beginning of period $ — $ (2,763) $ — $ (2,341)
Other comprehensive gain before reclassifications — 984 — 562
Amounts reclassified from accumulated other comprehensive loss — 1,779 — 1,779
Net current-period other comprehensive gain — 2,763 — 2,341
Balance at end of period $ — $ — $ — $ —

~~Note 11—~~Financial Instruments

Derivative Financial Instruments

The following table presents the interest rate cap contracts pursuant to the terms of certain of its loan agreements as of ~~September 30, 2021:~~March 31, 2022:

Notional
Amount Strike
Rate (1) Expiration
Date
Interest Rate Caps:
Wells Fargo Center–North Tower (2) $ 400,000 3.85% 10/15/2021
Wells Fargo Center–North Tower (2) 65,000 3.85% 10/15/2021
Wells Fargo Center–North Tower (2) 35,000 3.85% 10/15/2021
Wells Fargo Center–South Tower 290,000 3.63% 11/4/2022
777 Tower (3) 268,600 4.00% 11/10/2021
777 Tower (3) 50,000 4.00% 11/10/2021
EY Plaza 275,000 4.00% 10/15/2022
EY Plaza 30,000 4.00% 10/15/2022
Gas Company Tower 350,000 4.00% 2/15/2023
Gas Company Tower 65,000 4.00% 2/15/2023
Gas Company Tower 50,000 4.00% 2/15/2023
Total derivatives not designated
as cash flow hedging instruments $ 1,878,600

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~


	Notional Amount		Strike Rate (1)	Expiration Date

Interest Rate Caps:
Wells Fargo Center–North Tower	$	400,000	2.57%	10/15/2022
Wells Fargo Center–North Tower	65,000		2.57%	10/15/2022
Wells Fargo Center–North Tower	35,000		2.57%	10/15/2022
Wells Fargo Center–South Tower	290,000		3.63%	11/4/2022
777 Tower	268,600		4.00%	11/10/2022
777 Tower	50,000		4.00%	11/10/2022
EY Plaza	275,000		4.00%	10/15/2022
EY Plaza	30,000		4.00%	10/15/2022
Gas Company Tower	350,000		4.00%	2/15/2023
Gas Company Tower	65,000		4.00%	2/15/2023
Gas Company Tower	50,000		4.00%	2/15/2023
Total derivatives not designated as cash flow hedging instruments	$	1,878,600

__________

(1)The index used for all derivative financial instruments shown above is 1-Month LIBOR.

~~(2)In September 2021, Brookfield DTLA exercised the second~~ ~~one~~-year option to extend the maturity date of the $500.0 million mortgage and mezzanine loans secured by Wells Fargo Center—North Tower to October 2022. In October 2021, Brookfield DTLA entered interest rate cap contracts of aggregate notional amount of $500.0 million that limit the LIBOR portion of the interest rate to 2.57% with expiration date on October 15, 2022.

~~(3)~~In November 2021, Brookfield DTLA entered interest rate cap contracts of aggregate notional amount of $318.6 million that limit the LIBOR portion of the interest rate to 4.00% with expiration date on November 10, 2022.

A summary of the fair value of Brookfield DTLA’s derivative financial instruments is as follows:

Fair Value as of
Balance Sheet Location September 30, 2021 December 31, 2020
Derivatives not designated as
hedging instruments:
Interest rate caps Prepaid and other assets, net $ 7 $ 5

~~The following table presents the gain recorded on interest rate swaps for the three and nine months ended September 30, 2021 and 2020:~~

Gain
Recognized
in OCL Loss Reclassified from AOCL to Other Expense in Consolidated Statements of Operations
Derivatives designated as cash flow hedging instruments:
For the three months ended:
September 30, 2021 $ — $ —
September 30, 2020 $ 984 $ (1,779)
For the nine months ended:
September 30, 2021 $ — $ —
September 30, 2020 $ 562 $ (1,779)


		Fair Value as of
	Balance Sheet Location	March 31, 2022		December 31, 2021

Derivatives not designated as hedging instruments: Interest rate caps	Prepaid and other assets, net	$	257	$	46

Changes in fair value of interest rate cap contracts recognized in the consolidated statements of operations during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ were de minimis.

Other Financial Instruments

Brookfield DTLA’s other financial instruments that are exposed to concentrations of credit risk consist primarily of bank deposits and rents receivable. Brookfield DTLA places its bank deposits with major commercial banks. Cash balances with any one institution may at times be in excess of the Federal Deposit Insurance Corporation-insured limit of $250,000.

Table of Contents

BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

See Note 2 “Basis of Presentation—Rents, Deferred Rents and Other Receivables” for a discussion of assessments regarding the collectibility of rents and deferred rents receivable and related adjustments made during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020 due to the measures taken to combat the spread of the COVID-19 pandemic.~~2021.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Note ~~12—~~11—Fair Value Measurements and Disclosures

ASC Topic 820, Fair Value Measurement, defines fair value and establishes a framework for measuring fair value. The objective of fair value is to determine the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (the “exit price”).

ASC Topic 820 established a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three categories:


•	Level 1—	Quoted prices (unadjusted) in active markets that are accessible at the measurement date.
•	Level 2—	Observable prices that are based on inputs not quoted in active markets but corroborated by market data.
•	Level 3—	Unobservable prices that are used when little or no market data is available.

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. Brookfield DTLA utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs, to the extent possible, as well as consider counterparty credit risk in its assessment of fair value.

Recurring Measurements—

The fair value of Brookfield DTLA’s interest rate swap contracts was determined using widely accepted valuation techniques, including discounted cash flow analyses on the expected cash flows of the derivatives. These analyses reflect the contractual terms of the derivatives, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The Company has incorporated credit valuation adjustments to appropriately reflect both our and the respective counterparty’s non‑performance risk in the fair value measurements. The interest rate swap contracts were terminated in September 2020. See Note 1110 “Financial Instruments.”

The fair value of interest rate cap contracts was $7$257 thousand and $5$46 thousand as of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. The Company classified them as Level 2 in the fair value hierarchy.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Nonrecurring Measurements—

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company did not have any assets or liabilities that are measured at fair value on a nonrecurring basis. Refer to Note 2—“Basis of Presentation —Impairment Review” for further discussion.

Disclosures about Fair Value of Financial Instruments—

Secured debt — The Company estimates the fair value of its debt by calculating the credit-adjusted present value of principal and interest payments for each loan. The calculation incorporates observable market interest rates (Level 2 inputs), assumes that each loan will be outstanding until maturity, and excludes any options to extend the maturity date of the loan available per the terms of the loan agreement, if any. The table below presents the estimated fair value and carrying value of the Company’s secured debt included in liabilities:


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021

Fair Value	Fair Value	$	2,264,374	$	2,246,225	Fair Value	$	2,258,765	$	2,263,160
Carrying value	Carrying value	$	2,254,072	$	2,239,640	Carrying value	$	2,257,654	$	2,255,921

Other financial instruments — As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the carrying values of cash and cash equivalents, restricted cash, tenant and other receivables, other assets, accounts payable and other liabilities, and balances with affiliates approximate fair value because of the short-term nature of these instruments.

3325

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note ~~13—~~12—Related Party Transactions

Management Agreements

Certain subsidiaries of Brookfield DTLA have entered into arrangements with the Manager, pursuant to which the Manager provides property management and various other services. The following table presents the basis of fees incurred to the Manager and Brookfield affiliates during the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 and ~~2020:~~2021:

Fee Type

Affiliate

Fee Description

Property management ~~fee~~

The Manager

2.75% of rents collected (as defined in the management agreements)

Asset management ~~fee~~

BPY and BAM

0.75% of DTLA Holdings’ invested equity in Brookfield DTLA’s properties

Leasing ~~management fee~~

The Manager and Brookfield affiliates

1.00% to 4.00% of expected rents, depending on the terms of the lease and whether a third-party broker was paid a commission for the transaction

Construction management ~~fee~~

The Manager

3.00% of hard and soft construction costs

Development management ~~fee~~

Other

3.00% of hard and soft construction costs

Entitlement ~~fee~~

Other

20.00% of the entitlement costs incurred by BOA Plaza, if the entitlement budget is less than $3,000,000

A summary of fees and costs incurred by the applicable Brookfield DTLA subsidiaries under these arrangements is as follows:

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Property management fee expense $ 1,949 $ 1,910 $ 5,931 $ 6,038
Asset management fee expense $ 1,538 $ 1,511 $ 4,618 $ 4,538
Leasing and construction management fees $ 292 $ 1,749 $ 928 $ 4,668
Development management fee (1) $ 586 $ 358 $ 1,292 $ 794
Entitlement fee $ 185 $ — $ 394 $ —
General, administrative and reimbursable expenses $ 676 $ 354 $ 1,895 $ 1,806


	For the Three Months Ended
	March 31,
	2022		2021

Property management	$	1,968	$	2,036
Asset management	$	1,559	$	1,547
Leasing	$	81	$	280
Construction management	$	57	$	279
Development management (1)	$	566	$	349
Entitlement	$	55	$	67
General, administrative and reimbursable expenses	$	739	$	585

__________

(1)Amounts presented are calculated by applying the Company’s ownership interest percentage in the unconsolidated real estate joint venture as of period end to the costs incurred during the period.

Expenses incurred under these arrangements are included in rental property operating and maintenance expense in the consolidated statements of operations, with the exception of asset management fee ~~expense~~ which is included in other expenses. Leasing ~~management~~ fees are capitalized as deferred charges, construction management ~~fee~~ and entitlement ~~fee~~fees are capitalized as part of investments in real estate, and development management ~~fee is~~fees are capitalized and included in the investment in unconsolidated real estate joint venture in the consolidated balance sheets.

3426

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Insurance Agreements

Properties held by certain Brookfield DTLA subsidiaries and affiliates are covered under insurance policies entered into by the Manager. Insurance premiums for Brookfield DTLA’s properties are paid by the Manager. Brookfield DTLA reimburses the Manager for the amount of fees and expenses related to such policies that have been allocated to the Company’s properties as determined by the Manager in its reasonable discretion taking into consideration certain facts and circumstances, including the value of the Company’s properties.

A summary of costs incurred by the applicable Brookfield DTLA subsidiaries and affiliates under this arrangement, which are included in rental property operating and maintenance expense in the consolidated statements of operations, is as follows:

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
2021 2020 2021 2020
Insurance expense (1) $ 3,051 $ 2,872 $ 9,442 $ 8,659


	For the Three Months Ended
	March 31,
	2022		2021

Insurance expense (1)	$	3,083	$	3,192

__________

(1)An affiliate of BAM secures insurance policies for the Company through third-party brokers and insurance companies and charges the Company a fee for the services it provides. Fees charged vary but will not exceed 2.50% of the total net insurance premiums of the Company and its covered properties. ~~Fees~~Effective November 1, 2021, this affiliate of BAM ceased charging such fee. During the three months ended March 31, 2021, fees incurred for these services totaled $76 thousand and $74 thousand, respectively, during the three months ended September 30, 2021 and 2020, and $230 thousand and $208 thousand, respectively, during the nine months ended September 30, 2021 and 2020.$78 thousand. Additionally, the Company’s terrorism insurance coverage is purchased through a captive facility that is an affiliate of BPY. Insurance premiums incurred totaled $32 thousand ~~and $38 thousand, respectively,~~ during each of the three months ended ~~September 30, 2021~~March 31, 2022 and ~~2020, and $96 thousand and $115 thousand, respectively, during the nine months ended September 30, 2021 and 2020.~~2021.

3527

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Other Related Party Transactions with BAM Affiliates

A summary of the impact of other related party transactions with BAM affiliates on the Company’s consolidated statements of operations is as follows:


		For the Three Months Ended				For the Nine Months Ended					For the Three Months Ended
		September 30,				September 30,					March 31,
		2021		2020		2021		2020			2022		2021

(Reversal of) lease income (1)		$	(204)	$	3,619	$	8,761	$	11,092
Lease income (1)										Lease income (1)	$	3,610	$	4,776
Parking revenue (1)	Parking revenue (1)	$	248	$	384	$	744	$	1,144	Parking revenue (1)	$	247	$	250
Interest and other revenue		$	—	$	48	$	—	$	147

Rental property operating and maintenance expense (2)	Rental property operating and maintenance expense (2)	$	57	$	182	$	318	$	444	Rental property operating and maintenance expense (2)	$	—	$	111
Other expenses		$	—	$	23	$	—	$	90

Interest expense (3)(4)	Interest expense (3)(4)	$	569	$	462	$	1,629	$	1,521	Interest expense (3)(4)	$	568	$	496

__________

(1)In September 2019, BAM acquired a significant interest in Oaktree Capital Group, LLC (“Oaktree”), an existing tenant at Wells Fargo Center–North Tower. Lease income and parking revenue from Oaktree and its subsidiaries have been reported as related party transactions since the date of acquisition by BAM.

(2)Amounts presented are for purchases of chilled water for air conditioning at one of the Company’s ~~properties.~~properties supplied by an affiliate of BAM. In July 2021, such supplier was acquired by third parties.

(3)A subsidiary of Oaktree is the lender of the $35.0 million mezzanine loan secured by Wells Fargo Center–North Tower. Interest payable to the lender totaled ~~$79~~$89 thousand as of ~~September 30, 2021~~March 31, 2022 and is reported as part of accounts payable and other liabilities in the consolidated balance sheets. See Note 6—“Secured Debt, Net.” Interest expense on this loan has been reported as a related party transaction since the date of acquisition by BAM.

(4)In February 2021, BAM purchased $18.2 million of commercial mortgage-backed securities (“CMBS”) secured by the Gas Company Tower loans in the open market. The CMBS are payable in monthly installments over a two-year period at a fixed interest rate of 2.50%. The transaction was conducted on an arm’s length basis at fair market value. ~~During the~~ ~~three and nine months ended September 30, 2021, the Company incurred interest expense of $113 thousand and $275 thousand, respectively, on this CMBS to BAM.~~ In September 2021, this CMBS was sold to Brookfield Asset Management Reinsurance Partners Ltd., an affiliate of BAM. During the three months ended March 31, 2022 and 2021, the Company incurred interest expense of $114 thousand and $47 thousand, respectively, on this CMBS.

The Manager or its affiliates may incur certain out-of-pocket expenses on behalf of the Company and pass through such expenses at cost to the Company.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Note ~~14—~~13—Future Minimum Base Rents

Brookfield DTLA leases space to tenants primarily under non-cancelable operating leases that generally contain provisions for payment of base rent plus reimbursement of certain operating expenses. The table below presents the undiscounted cash flows for future minimum base rents to be received from tenants under executed non-cancelable office and retail leases as of ~~September 30, 2021:~~March 31, 2022:


Remainder of 2021		$	41,273
2022		153,639
Remainder of 2022				Remainder of 2022	$	116,385
2023	2023	140,748		2023	147,104
2024	2024	125,285		2024	133,152
2025	2025	111,510		2025	120,612
2026	2026	99,252		2026	108,712
2027				2027	83,460
Thereafter	Thereafter	471,713		Thereafter	436,009
Total future minimum base rents	Total future minimum base rents	$	1,143,420	Total future minimum base rents	$	1,145,434

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

(Unaudited)

Note ~~15—~~14—Commitments and Contingencies

Litigation

Brookfield DTLA and its subsidiaries may be subject to pending legal proceedings and litigation incidental to its business. After consultation with legal counsel, management believes that any liability that may potentially result upon resolution of such matters is not expected to have a material adverse effect on the Company’s business, financial condition or consolidated financial statements as a whole.

Concentration of Tenant Credit Risk

Credit risk arises from the possibility that tenants may be unable to fulfill their lease commitments. Brookfield DTLA’s properties are typically leased to high credit-rated tenants for lease terms ranging from five to ten years, although we also enter into some ~~short-term as well as~~shorter or longer-term leases. As our entire portfolio is located in the LACBD, any specific economic changes within that location could affect our tenant base, and by extension, our profitability.

Brookfield DTLA generally does not require collateral or other security from its tenants, other than security deposits or letters of credit. Our credit risk is mitigated by the high quality of our existing tenant base, review of prospective tenants’ risk profiles prior to lease execution, and frequent monitoring of our tenant portfolio to identify problem tenants. However, since we may have a concentration of lease income from certain tenants, the inability of those tenants to make payments under their leases could have a material adverse effect on our results of operations, cash flows or financial condition.

The measures taken to combat the spread of the COVID-19 pandemic have increased the risk in the near term of our tenants’ ability to fulfill their lease commitments. Certain tenants could declare bankruptcy or become insolvent and cease business operations as a result of prolonged mitigation efforts. See ~~Note 2 “Basis of Presentation—Rents, Deferred Rents and Other Receivables”~~ ~~for a discussion of collectibility of lease income for the three and nine months ended September 30, 2021 and 2020.~~

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)~~

~~(Unaudited)~~

Capital Commitments

As of ~~September 30, 2021,~~March 31, 2022, the Company had ~~$38.2~~$34.6 million in tenant-related commitments, including tenant improvements, tenant inducements and leasing commissions, which are based on executed leases. As of ~~September 30, 2021, $10.9~~March 31, 2022, $29.1 million of our tenant-related commitments were expected to be paid during the remainder of ~~2021.~~2022. Additionally, we had $0.2 million in construction-related commitments, mainly related to retention payable to contractors for the atrium redevelopment project at Wells Fargo Center as of ~~September 30, 2021.~~March 31, 2022.

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Item 2. Management’s Discussion and Analysis of Financial Condition

and Results of Operations.

BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our Forward-Looking Statements disclaimer, and the consolidated financial statements and related notes thereto that appear in Item 1. “Financial Statements” of this Quarterly Report on Form 10-Q.

As used in this section unless otherwise indicated, tabular amounts are presented in thousands, except leasing information, percentage data and years.

Overview and Background

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Brookfield DTLA owns and manages six Class A office properties and a retail center, consisting of ~~7,580,957~~7,580,113 rentable square feet in total. Additionally, Brookfield DTLA also has an indirect noncontrolling interest in an unconsolidated real estate joint venture that owns a multifamily residential development property. All of these properties are located in the Los Angeles Central Business District (the “LACBD”). in Downtown Los Angeles, which has long been a major office district for law firms, accounting firms and government agencies. The following table sets forth information regarding these eight properties as of ~~September 30, 2021:~~March 31, 2022:


Name	Property Type	Rentable Square Feet	Ownership Percentage	Percentage Leased (1)	Weighted-Average Remaining Lease Term (Years) (2)

Bank of America Plaza (“BOA Plaza”)	Office (4)	1,405,428	100%	85.1%	6.4
Wells Fargo Center–North Tower	Office (4)	1,399,795	100%	83.5%	6.9
Gas Company Tower	Office (4)	1,345,163	100%	72.9%	5.5
EY Plaza	Office (4)	963,682	100%	78.8%	6.6
Wells Fargo Center–South Tower	Office (4)	1,124,960	100%	61.9%	5.1
777 Tower	Office (4)	1,024,835	100%	78.8%	4.0
FIGat7th	Retail	316,250	100%	88.9%	6.9
755 South Figueroa	Multifamily (3)	N/A	30.6%	N/A	N/A
Total		7,580,113		77.7%	5.9

Name Property Type Rentable Square Feet Ownership Percentage
Occupancy (1)
Weighted-Average Remaining Lease Term (Years) (2)
Bank of America Plaza (“BOA Plaza”)
Class A office 1,405,428 100% 86.1% 6.9
Wells Fargo Center–North Tower Class A office 1,400,639 100% 79.8% 6.7
Gas Company Tower Class A office 1,345,163 100% 76.0% 5.8
EY Plaza Class A office 963,682 100% 80.2% 5.9
Wells Fargo Center–South Tower Class A office 1,124,960 100% 62.0% 4.6
777 Tower Class A office 1,024,835 100% 76.6% 4.1
FIGat7th Retail center 316,250 100% 89.2% 7.2
755 South Figueroa Multifamily (under development) N/A 37.2% N/A N/A
Total 7,580,957 77.7% 5.9

(1)Represents properties’ leased square feet over total rentable square feet for executed leases as of ~~September 30, 2021.~~March 31, 2022.

(2)Represents weighted-average of the period remaining (denominated in years) for executed lease as of ~~September 30, 2021,~~March 31, 2022, excluding tenant lease extension options.

(3)Under development as of March 31, 2022.

(4)Classified as Class A office properties as they are centrally-located buildings that are professionally managed and maintained, attract high-quality tenants and command upper-tier rental rates, and that are modern structures or have been modernized to compete with newer buildings.

Our goal is to continue to be the leading owner and operator of high-quality office properties in the LACBD and to focus on executing long-term leases with financially strong tenants. We operate our business to achieve these objectives with a long term view and will continue to make decisions with that in mind.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Current Period Highlights

COVID-19 Update

~~During the~~ ~~nine months ended September 30, 2021,~~ ~~the COVID-19 pandemic~~Los Angeles County, businesses once again reconsidered and the measures taken to combat the spread of the pandemic has continued to impact numerous aspects of our business and our properties, which are located in the City of Los Angeles. Some of the effects include the following:

•~~Capacity limits were imposed on h~~igher-risk activities and businesses such as indoor dining, bars, fitness centers and movie theaters according to the tier system of the California state’s reopening framework. As a result, our tenants in FIGat7th, which include retail shops, restaurants and a big box gym, experienced the most immediate impact of the restrictions imposed. During the three and nine months ended September 30, 2021, total lease income and parking revenue from FIGat7th represented approximately 6% and 5%, respectively, of the consolidated total, compared to 2% and 3% for the three and nine months ended September 30, 2020, respectively.delayed their return-to-office plans. Due to the uncertainties posed to our office property tenants ~~in FIGat7th~~ by ~~these restrictions, adjustments of $1.7 million and $3.1 million, respectively, were recognized~~the COVID-19 pandemic, during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2022, adjustments of $0.1 million, compared to $0.2 million for the same period in 2021, were recognized to lower our office lease income related to certain leases where we determined that the collection of future lease payments was not probable. ~~In contrast, as a result~~Retail tenants of our properties continued to benefit from higher visitor traffic since the re-opening of California’s economy in June 2021 ~~various retail tenants benefited from higher visitor traffic.~~(the “Reopening”). As such, the Company recorded favorable lease income adjustmentsof ~~$1.0~~$0.3 million ~~and $0.5 million, respectively, during the~~ ~~three and~~ ~~nine~~ ~~months ended September 30, 2021.~~

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

•While our office properties have remained open, most of our office tenants have been working remotely since the “stay-at-home” order was issued. Although state and local authorities began easing restrictions on businesses, the physical occupancy of our office properties has remained well below capacity as infection rates fluctuated and most employers continued their COVID-19 response protocols and allowed employees to work from home when possible. As of September 30, 2021, most of our office tenants have been current in paying amounts due to us under their leases. Due to the uncertainties posed to our office property tenants by the COVID-19 pandemic, during the three ~~and nine~~ months ended ~~September 30, 2020,~~March 31, 2022, compared to adjustments of ~~$0.9~~$0.5 million ~~and $1.9 million, respectively, were recognized~~ to lower our lease income ~~related to certain leases where we determined that the collection of future lease payments was not probable.~~ ~~In contrast, as a result of the re-opening of California’s economy in June 2021 and~~ ~~office employees returning to offices, the Company recorded favorable lease income adjustments of $0.5 million and $0.4 million, respectively, during the~~ ~~three and~~ ~~nine~~ ~~months ended September 30, 2021.~~

•~~As a result of the restrictions imposed by state and local authorities that impacted the physical occupancy of both~~ ~~our office and retail properties, parking net operating income, which represents parking revenue less parking expense, declined~~ by ~~$0.8 million~~ or 6% ~~from~~ ~~$13.1 million~~ ~~during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2020~~ to ~~$12.2 million~~during the same period in 2021.

•Decline in property values resulting from lower than anticipated revenues due to reduced increases in forecasted rental rates on new or renewal leases, applied credit losses, lower leasing velocity and reductions in projected leasing of available space. While the carrying values of the properties are recorded at cost less accumulated depreciation, we estimate the undiscounted cashflows and fair values of the properties as part of our impairment review of investments in real estate. See ~~Item 1. “Financial Statements — Notes to Consolidated Financial Statements — Note 2 — Basis of Presentation — Impairment Review”~~ ~~for further discussion.~~

~~The Company received certain rent relief requests for certain periods in 2020 and 2021 from many of our retail tenants and some of our office tenants~~ ~~as a result of the measures taken to combat the spread of the COIVD-19 pandemic~~. Some of our tenants have availed themselves of various federal and state relief funds, such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the Paycheck Protection Program, which can be utilized to partially meet rental obligations. While our tenants are required to fulfill their commitments to us under their leases, we have implemented and will continue to carefully consider temporary rent deferrals and rent abatements on a lease-by-lease basis ~~and only consider those which have a justifiable financial basis~~.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

~~The following table sets forth information regarding the collection percentage as of~~ ~~September 30, 2021~~ ~~related to the amounts due from our tenants:~~

As of September 30, 2021
Property Type
Second Quarter of 2020
Billings Collected(1)
Third Quarter of 2020
Billings Collected(1)
Fourth Quarter of 2020
Billings Collected(1)
First Quarter of 2021
Billings Collected(1)
Second Quarter of 2021
Billings Collected(1)
Third Quarter of 2021
Billings Collected(1)
Office 100 % 100 % 100 % 100 % 100 % 99 %
Retail 68 % 76 % 77 % 77 % 86 % 83 %
Total 99 % 99 % 99 % 99 % 99 % 99 %

~~(1) Adjusted for rent concessions granted to tenants.~~

~~See~~ ~~Item 1. “Financial Statements — Notes to Consolidated Financial Statements — Note 2 — Basis of Presentation — Rents, Deferred Rents and Other Receivables, Net”~~ ~~for a discussion of how we assess the collectibility of amounts due under leases with our tenants.~~

While we cannot be certain as to the duration of the impact of COVID-19, we expect impacts of COVID-19 to ~~affect~~continue affecting our financial results at least through the ~~rest~~remaining of ~~2021.~~2022, albeit modestly. The future impact of the pandemic on the demand for office space is unclear, as companies consider the repercussion of the pandemic on their business and their demand for labor while, at the same time, evaluate their space requirements in light of their current and projected ~~headcounts~~headcount and the continued focus on social distancing and employees’ desire for more work-location flexibility. See “Risk Factors—The Company’s business, results of operations and financial condition have been adversely affected and could in the future be materially adversely affected by the ongoing global pandemic of novel strain of the coronavirus.” and “Risk Factors—We may be adversely affected by trends in the office real estate industry.” in Brookfield DTLA’s Annual Report on Form 10-K filed with the SEC on March ~~25, 2021~~24, 2022 for additional information.

Leasing Activity ~~and Occupancy Level~~

~~The first three quarters of 2021 has continued to be dominated by~~Following the ~~COVID-19 pandemic causing significant uncertainty for most sectors, including the commercial real estate industry. Leasing~~Reopening, leasing activity ~~compared to the same period in~~ ~~2020, decreased as a result. During the~~ ~~nine months ended September 30, 2021~~, ~~we executed~~improved with new and renewal leases totaling ~~185,747~~104,879 square feetfeet within our portfolio in the three months ended March 31, 2022, compared to ~~319,823~~35,317 square feet for the same period in ~~2020, a decrease~~2021, an increase of ~~42%~~197% year over year.Contractual expirations and early terminations of leases totaled ~~294,324~~71,463 square feet during the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, compared to ~~530,147~~149,207 square feet for the same period in ~~2020,~~2021, a decrease of ~~44%~~52% year over year. As a result of the ~~negative~~positive net absorption, ~~occupancy decreased~~leased space increased slightly from ~~80.2%~~77.6% during the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 to 77.7% for the same period in ~~2021.~~2022. See “Leasing Activity” for details.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

~~Financing~~

In February 2021, Brookfield DTLA closed a $465.0 million interest-only debt secured by Gas Company Tower. This debt, which is scheduled to mature in February 2026, bears interest at LIBOR plus 2.95%. All the proceeds from this debt were used to pay off the original $450.0 million debt that previously encumbered the property and to satisfy the new loans’ required reserves. See “~~Indebtedness” for details.~~

Capital Improvements

The atrium development project at Wells Fargo Center was completed ~~during the third quarter of~~in 2020 and the construction of the various food vendor spaces is ~~ongoing~~in progress with openings starting in the second ~~and third~~ quarter of ~~2021.~~2021 and expected to be completed in the second quarter of 2022.

In response to the measures taken to combat the spread of the COVID-19 pandemic, Brookfield DTLA strategically deferred and cancelled various capital expenditure projects of lower priority since April 2020. Further, during the first three quarters of 2021, expenditures for tenant improvements has continued to decline in response to decreased leasing activity. Accordingly, expendituresExpenditures for real estate improvements decreased from ~~$54.7~~$5.6 million in the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 to ~~$10.9~~$3.7 million for the same period in ~~2021,~~2022, a decrease of ~~$43.8~~$1.9 million or ~~80%~~34% year over year. This is mainly attributable to capital expenditures for a tenant improvement project of $4.3 million in EY Plaza that was completed in 2021. Such decrease was partially offset by increases in capital expenditures in 777 Tower, Wells Fargo Center and BOA Plaza as the economy continues to recover since the Reopening.

755 South Figueroa Development

The 755 South Figueroa multifamily site is held by an unconsolidated real estate joint venture in which the Company had an ownership interest of ~~37.2%.~~30.6% as of March 31, 2022. As of ~~September 30, 2021, construction is actively underway with concrete construction complete through eight levels of parking and twenty floors~~the end of the ~~superblock.~~first quarter of 2022, core concrete walls for the development site are complete, with the final pour completed in April 2022. Interior work started from level 4 through 39. Substantial completion is expected in the fourth quarter of ~~2022. During~~2022 and will accommodate 785 rental units, approximately 5,300 square feet of retail space and 800 parking spaces. As the ~~three and nine months ended September 30, 2021, net proceeds of $25.3~~development progresses towards the targeted completion in 2022, $64.1 million ~~and $57.6 million, respectively, compared to $11.0 million and $27.2 million, respectively, for the three and nine months ended September 30, 2020, were generated from loan draws to fund~~was capitalized as development ~~costs. Furthermore,~~cost during the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, compared to $27.6 million during the same period in 2021. As such, during the three months ended March 31, 2022, additional capital contributions of ~~$13.0~~$13.2 million, ~~and $26.8 million, respectively,~~ compared to ~~$9.0~~$8.8 million ~~and $11.0 million, respectively, for~~during the same period in ~~2020,~~2021, were made by DTLA FP IV Holdings to fund development costs.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Liquidity and Capital Resources

General

The following table presents the major sources of Brookfield DTLA’s liquidity as of March 31, 2022 and December 31, 2021:


	March 31, 2022		December 31, 2021
Cash and cash equivalents	$	49,162	$	38,901
Unused capital contribution commitments available on Series B preferred interest	10,848		21,178
Availability under secured debt to fund approved leasing costs	72,804		72,804
Total Liquidity	$	132,814	$	132,883

Brookfield DTLA’s business requires continued access to adequate cash to fund its liquidity needs. ~~As of~~ ~~September 30, 2021,~~ we have $150.0 million of liquidity comprised of $36.5 million of cash and cash equivalents, $40.7 million of unused capital contribution commitments available on Series B preferred interest, and $72.8 million available on our secured debt for future drawdown to fund approved leasing costs. The amount of cash Brookfield DTLA currently generates from its operations is not sufficient to cover its investing and financing activities without issuing additional debt or equity, resulting in “negative cash burn,” and there can be no assurance that the amount of Brookfield DTLA’s negative cash burn will decrease, or that it will not increase, in the future. If Brookfield DTLA’s operating cash flows and capital are not sufficient to cover its operating costs or to repay its indebtedness as it comes due, we may issue additional debt and/or equity, including to affiliates of Brookfield DTLA, which issuances could further adversely impact the amount of funds available to Brookfield DTLA for any purpose, including for dividends or other distributions to holders of its capital stock, including the Series A preferred stock. In many cases, such securities may be issued if authorized by the board of directors of Brookfield DTLA without the approval of holders of the Series A preferred stock.

Brookfield DTLA’s primary liquidity sources and uses during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021 ~~and 2020~~ are as follows:

Sources:

•Cash provided by operating activities, see “Discussion of Consolidated Cash Flows — Operating Activities” ;

•Proceeds from additional secured debt financings, see “Indebtedness”; and

•Contributions from noncontrolling interests, see “Discussion of Consolidated Cash Flows — Financing Activities”.

Uses:

•Cash used in operating activities, see “Discussion of Consolidated Cash Flows — Operating Activities”;

•Capital expenditures and leasing costs, see “Capital Expenditures and Leasing Costs”;

•Payments in connection with secured debt, see “Indebtedness”; and

•Distributions to noncontrolling interests, see “Discussion of Consolidated Cash Flows — Financing Activities”.

Table of Contents

BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Capital Expenditures and Leasing Costs

Capital expenditures fluctuate in any given period, subject to the nature, extent and timing of improvements required to maintain Brookfield DTLA’s properties. Leasing costs also fluctuate in any given period, depending upon such factors as the type of property, the length and type of lease, the involvement of external leasing agents and overall market conditions.

~~Table~~As of ~~Contents~~March 31, 2022, the Company had $34.6 million in tenant-related commitments, including tenant improvements, tenant inducements and leasing commissions, which are based on executed leases. As of March 31, 2022, $29.1 million of our tenant-related commitments were expected to be paid during the remainder of 2022, relating mainly to tenant improvement works performed for a major tenant in the Wells Fargo Center–North Tower of $20.4 million.

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

Brookfield DTLA expects that capital improvements and leasing activities at its properties will require material amounts of cash for at least several years. According to our ~~2021~~2022 business plan, Brookfield DTLA projects spending approximately ~~$254.6~~$448.4 million over the next five years consisting of ~~$174.5~~$336.8 million for tenant improvements ~~$68.9~~and landlord works, $96.2 million for leasing costs and ~~$11.2~~$15.4 million for capital expenditures. The expected capital improvements include, but are not limited to, renovations and physical capital upgrades to Brookfield DTLA’s properties, elevator modernization, replacement of transformers and boilers, and upgrades to emergency ~~generators and replacement of transformers.~~generators. These projections are estimates and may be subject to changes per future revisions of speculative leasing plans.

See “Indebtedness” below for more information regarding future advance amounts available as of ~~September 30, 2021~~March 31, 2022 under the loans secured by the Wells Fargo Center–South Tower and 777 Tower office properties that can be drawn to fund approved leasing costs, including tenant improvements and inducements and leasing commissions, and, in the case of Wells Fargo Center–South Tower, common area improvements.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Indebtedness

~~During the nine months ended September 30, 2021, our issuances and repayments of debt included the following:~~

Interest Rate Type Effective Date Maturity Date/Term to Maturity Interest Rate as of Effective Date Principal Amount
Issuances
Gas Company Tower Variable 2/5/2021
2/9/2026 (1)
2.01 % $ 350,000
Gas Company Tower Variable 2/5/2021
2/9/2026 (1)
5.12 % 65,000
Gas Company Tower Variable 2/5/2021
2/9/2026 (1)
7.87 % 50,000
Weighted average/total 5 years 3.07 % $ 465,000
Repayments of debt
Gas Company Tower Fixed 2/5/2021 8/6/2021 3.47 % $ 319,000
Gas Company Tower Fixed 2/5/2021 8/6/2021 6.50 % 131,000
Weighted average/total N/A 4.35 % $ 450,000

~~(1) Maturity dates include the effect of extension options that the Company controls.~~

~~N/A Not applicable since the loans were fully repaid as ofSeptember 30, 2021.~~

On February 5, 2021, Brookfield DTLA refinanced its Gas Company Tower secured loans. The original $450.0 million secured loans were replaced with secured loans of $465.0 million, comprised of a $350.0 million mortgage loan, a $65.0 million mezzanine loan and a $50.0 million mezzanine loan, each of which bears interest at variable rates equal to LIBOR plus 1.89%, 5.00% and 7.75%, respectively. The initial maturity date of these interest-only loans is February 9, 2023. The mortgage loan can be prepaid, in whole or in part, with prepayment fees (as defined in the underlying loan agreement) until February 2022 after which the loan may be repaid without prepayment fees. A voluntary prepayment of the mortgage or mezzanine loans requires a simultaneous pro-rata prepayment of all loans encumbering this property. Brookfield DTLA has three options to extend the loans maturity dates for a period of one year each, as long as the maturity date of the mezzanine loans is extended simultaneously with the mortgage loan, and no Event of Default (as defined in the underlying loan agreements) has occurred. All proceeds from the new secured loans were used to pay off the original $450.0 million encumbrance and to satisfy the new loans’ required reserves. The Company recognized a loss on early extinguishment of debt of $4.6 million, which represented a prepayment premium and debt yield maintenance fee, in interest expense in the consolidated statements of operations.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

As of ~~September 30, 2021,~~March 31, 2022, Brookfield DTLA’s debt was comprised of mortgage and mezzanine loans secured by seven properties. A summary of our debt as of ~~September 30, 2021~~March 31, 2022 is as follows:


		Principal Amount		Percent of Total Debt		Effective Interest Rate		Weighted Average Term to Maturity (3)		Principal Amount		Percent of Total Debt		Effective Interest Rate		Weighted Average Term to Maturity (3)

Fixed-rate	Fixed-rate	$	458,500	20	%	4.03	%	3 years	Fixed-rate	$	458,500	20	%	4.03	%	2 years
Variable-rate (1) (2)	Variable-rate (1) (2)	1,805,796		80	%	2.60	%	3 years	Variable-rate (1) (2)	1,805,796		80	%	2.87	%	3 years
Total secured debt	Total secured debt	$	2,264,296	100	%	2.89	%	3 years	Total secured debt	$	2,264,296	100	%	3.10	%	3 years

__________

(1)As of ~~September 30, 2021~~March 31, 2022 and through the date of this Report, a future advance amount of $29.2 million is available under the Wells Fargo Center–South Tower mortgage loan that can be drawn to fund approved leasing costs (as defined in the underlying loan agreement), including tenant improvements and inducements, leasing commissions, and common area improvements.

(2)As of ~~September 30, 2021~~March 31, 2022 and through the date of this Report, a future advance amount of $43.6 million is available under the 777 Tower mortgage and mezzanine loans that can be drawn to fund approved leasing costs (as defined in the underlying loan agreements), including tenant improvements and inducements, and leasing commissions.

(3)Includes the effect of extension options that the Company controls, if applicable. As of ~~September 30, 2021,~~March 31, 2022, we meet the criteria specified in the loan agreements to extend the loan maturity dates.

The following table provides information with respect to Brookfield DTLA’s commitments as of March 31, 2022, including any guaranteed or minimum commitments under contractual obligations:


	Remainder of 2022		2023		2024		2025		2026		Thereafter		Total

Principal payments on secured debt (1)(2)	$	—	$	819,296	$	675,000	$	305,000	$	465,000	$	—	$	2,264,296
Interest payments –
Fixed-rate debt (3)	14,109		16,803		11,025		—		—		—		41,937
Variable-rate debt (4)	39,590		48,725		32,912		24,509		1,732		—		147,468
	$	53,699	$	884,824	$	718,937	$	329,509	$	466,732	$	—	$	2,453,701

__________

(1)BAM owns a significant interest in a company whose subsidiary is the lender of the $35.0 million mezzanine loan secured by Wells Fargo Center–North Tower, which matures in October 2023. See Item 1. “Financial Statements—Notes to Consolidated Financial Statements—Note 12—Related Party Transactions.”

(2)Based on the maturity dates after the impact of extension options that the Company controls, if applicable.

(3)Interest payments on fixed-rate debt are calculated based on the maturity dates (after the impact of extension options that the Company controls, if applicable) and contractual interest rates.

(4)Interest payments on variable-rate debt are calculated based on the maturity dates (after the impact of extension options that the Company controls, if applicable) and the one-month LIBOR rate (or, from 2023 onwards, its successor rate) in place on the debt as of March 31, 2022 plus the contractual spread per the loan agreements. Interest payments due to the related party lender of the loan described in (1) above total $1.4 million for the remainder of 2022 and $1.5 million for 2023.

The Company may use operating cash flows and contributions from noncontrolling interests to satisfy the secured debt-related commitment disclosed in the table above before or as they come due.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Non-Recourse Carve Out Guarantees

Debt Compliance

As of ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, Brookfield DTLA was in compliance with all material financial covenants contained in the loan agreements.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

Wells Fargo Center–South Tower —

Wells Fargo Center–North Tower —

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Leasing Activity

~~Occupancy level.~~The following table summarizes leasing activity at Brookfield DTLA’s properties for the ~~nine~~three months ended ~~September 30, 2021:~~March 31, 2022:


		Leasing Activity	Percentage Leased			Leasing Activity	Percentage Leased

Leased square feet as of December 31, 2020		5,995,517	79.1	%
Leased square feet as of December 31, 2021					Leased square feet as of December 31, 2021	5,855,604	77.2	%
Contractual expirations and early terminations	Contractual expirations and early terminations	(294,324)	(3.9)	%	Contractual expirations and early terminations	(71,463)	(0.9)	%
New leases	New leases	72,406	1.0	%	New leases	101,317	1.4	%
Renewals	Renewals	113,341	1.5	%	Renewals	3,562	—	%

Leased square feet as of September 30, 2021		5,886,940	77.7	%
Remeasurement adjustments					Remeasurement adjustments	(77)	—	%
Leased square feet as of March 31, 2022					Leased square feet as of March 31, 2022	5,888,943	77.7	%

Lease contractual expirations and early terminations. The following table summarizes the large contractual expiries and early terminations at Brookfield DTLA’s properties during the ~~nine~~three months ended ~~September 30, 2021:~~March 31, 2022:

Tenant

Property

Leased
Square Feet

~~Latham & Watkins LLP~~The Capital Group Companies

Wells Fargo Center–South Tower ~~Gas Company~~

26,658

HyreCar Inc.

Wells Fargo Center–South Tower

~~76,607~~11,839

~~Convene~~Mindshow, Inc.

Wells Fargo Center–North Tower

~~51,954~~5,829

~~Nossaman LLP~~Progressive Affordable Development, LLC

Gas Company Tower

5,673

Wilson Associates

Wells Fargo Center–South Tower

4,817

Aspen Insurance U.S. Services, Inc.

777 Tower

~~35,317~~4,606

~~Los Angeles Corporate Fitness,~~Charles Schwab & Co., Inc.

~~FIGat7th~~

~~34,730~~

~~CallisonRTKL~~

~~BOA Plaza~~

~~33,473~~

~~Gibson, Dunn & Crutcher LLP~~ (1)

Wells Fargo Center–~~North~~South Tower

~~27,009~~3,562

Total

~~259,090~~62,984

(1) All expired leased square feet were renewed during the three months ended March 31, 2022.

~~Decline in occupancy~~Improvement during the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 was mainly attributable to ~~contractual expirations and early terminations of lease agreements. Leasing volume for the nine months ended September 30, 2021, compared~~new leases as LACBD continued to ~~the same period in 2020, is down significantly due to the continued impact of the measures taken to combat the spread of~~recover from the COVID-19 pandemic. Many companies ~~have paused anticipated leasing transactions while they re-direct their focus on addressing~~continued to consider the ~~impact~~repercussion of the ~~COVID-19 restrictive measures~~pandemic on their business ~~including protecting~~and their ~~employees and managing financial and operating matters. At~~demand for labor while, at the same time, weevaluate their space requirements in light of their current and projected headcount and the continued focus on social distancing and employees’ desire for more work-location flexibility. We have ongoing interest and lease negotiations with existing tenants on lease renewals/extensions and expansion of space and continued negotiations with prospective tenants on leasing of space.

Although state and local authorities began easing restrictions on businesses throughout the first half of 2021, and while California reopened its economy in June 2021, the physical occupancy of our office properties has remained well below capacity as infection rates fluctuated and most employers continued their COVID-19 response protocols and allowed employees to work from home when possible.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Rental rates. The following table presents leasing information for executed leases at Brookfield DTLA’s properties as of ~~September 30, 2021:~~March 31, 2022:


		Square Feet										Square Feet
Property	Property	Net Building Rentable	% of Net Rentable		% Leased		Annualized Rent (1)		Annualized Rent $/RSF (2)		Property	Net Building Rentable	% of Net Rentable		% Leased		Annualized Rent (1)		Annualized Rent $/RSF (2)

BOA Plaza	BOA Plaza	1,405,428	18.5	%	86.1	%	$	33,882,451	$	28.01	BOA Plaza	1,405,428	18.5	%	85.1	%	$	35,575,753	$	29.74
Wells Fargo Center–North Tower	Wells Fargo Center–North Tower	1,400,639	18.5	%	79.8	%	32,665,814		29.23		Wells Fargo Center–North Tower	1,399,795	18.5	%	83.5	%	35,634,666		30.50
Gas Company Tower	Gas Company Tower	1,345,163	17.8	%	76.0	%	27,882,460		27.28		Gas Company Tower	1,345,163	17.8	%	72.9	%	27,253,657		27.80
EY Plaza	EY Plaza	963,682	12.7	%	80.2	%	20,936,025		27.07		EY Plaza	963,682	12.7	%	78.8	%	22,176,911		29.19
FIGat7th	FIGat7th	316,250	4.2	%	89.2	%	6,571,685		23.29		FIGat7th	316,250	4.2	%	88.9	%	6,731,309		23.93
Wells Fargo Center–South Tower	Wells Fargo Center–South Tower	1,124,960	14.8	%	62.0	%	19,349,701		27.75		Wells Fargo Center–South Tower	1,124,960	14.8	%	61.9	%	20,687,199		29.73
777 Tower	777 Tower	1,024,835	13.5	%	76.6	%	21,433,566		27.31		777 Tower	1,024,835	13.5	%	78.8	%	22,820,869		28.26
		7,580,957	100.0	%	77.7	%	$	162,721,702	$	27.64		7,580,113	100.0	%	77.7	%	$	170,880,364	$	29.02

__________

(1)Annualized rent represents the annualized monthly contractual rent under executed leases as of ~~September 30, 2021.~~March 31, 2022. This amount reflects total base rent before any rent abatements as of ~~September 30, 2021.~~March 31, 2022. Total abatements for executed leases as of ~~September 30, 2021~~March 31, 2022 for the twelve months ending ~~September 30, 2022~~March 31, 2023 are approximately ~~$9.2~~$15.3 million, or ~~$1.56~~$2.59 per leased square foot.

(2)Annualized rent per rentable square foot represents annualized rent as computed above, divided by leased square feet as of ~~September 30, 2021.~~March 31, 2022.

Average asking net effective rents in the LACBD were essentially flat during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022. Management believes that on average our current rents approximate market in the LACBD.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

The following table presents a summary of lease expirations at Brookfield DTLA’s properties for executed leases as of ~~September 30, 2021,~~March 31, 2022, plus currently available space, for future periods. This table assumes that none of our tenants will exercise renewal options or early termination rights, if any, at or prior to their scheduled expirations.


Year	Year	Total Area in Square Feet Covered by Expiring Leases	Percentage of Leased Square Feet		Annualized Rent (1)		Percentage of Annualized Rent		Current Rent per Leased Square Foot (2)		Rent per Leased Square Foot at Expiration (3)		Year	Total Area in Square Feet Covered by Expiring Leases	Percentage of Leased Square Feet		Annualized Rent (1)		Percentage of Annualized Rent		Current Rent per Leased Square Foot (2)		Rent per Leased Square Foot at Expiration (3)

Remainder of 2021		38,960	0.7	%	$	827,900	0.5	%	$	21.25	$	21.25
2022		496,175	8.4	%	13,828,397		8.5	%	27.87		28.36
Remainder of 2022													Remainder of 2022	242,512	4.1	%	$	7,163,804	4.2	%	$	29.54	$	29.54
2023	2023	930,912	15.8	%	23,607,928		14.5	%	25.36		27.10		2023	927,521	15.8	%	24,310,325		14.2	%	26.21		27.19
2024	2024	544,819	9.3	%	15,374,792		9.4	%	28.22		30.87		2024	542,525	9.2	%	16,536,162		9.7	%	30.48		32.30
2025	2025	719,922	12.2	%	20,712,156		12.7	%	28.77		31.49		2025	737,090	12.5	%	22,245,376		13.0	%	30.18		32.35
2026	2026	560,465	9.5	%	14,095,695		8.7	%	25.15		28.85		2026	571,174	9.7	%	14,901,930		8.7	%	26.09		29.53
2027	2027	193,883	3.3	%	5,574,136		3.4	%	28.75		34.05		2027	299,991	5.1	%	9,161,725		5.4	%	30.54		35.86
2028	2028	104,486	1.8	%	3,139,804		1.9	%	30.05		37.03		2028	114,648	1.9	%	3,677,908		2.2	%	32.08		40.14
2029	2029	303,025	5.1	%	9,684,679		6.0	%	31.96		42.03		2029	303,025	5.1	%	9,866,494		5.8	%	32.56		42.05
2030	2030	329,995	5.6	%	10,015,348		6.2	%	30.35		37.55		2030	329,006	5.6	%	10,133,385		5.9	%	30.80		39.86
2031													2031	308,309	5.2	%	9,166,027		5.4	%	29.73		39.73
Thereafter	Thereafter	1,664,298	28.3	%	45,860,867		28.2	%	27.56		41.28		Thereafter	1,513,142	25.8	%	43,717,228		25.5	%	28.89		42.40
Total expiring leases	Total expiring leases	5,886,940	100.0	%	$	162,721,702	100.0	%	$	27.64	$	33.99	Total expiring leases	5,888,943	100.0	%	$	170,880,364	100.0	%	$	29.02	$	35.36
Currently available	Currently available	1,694,017											Currently available	1,691,170
Total rentable square feet	Total rentable square feet	7,580,957											Total rentable square feet	7,580,113

__________

(2)Current rent per leased square foot represents base rent for executed leases, divided by total leased square feet as of ~~September 30, 2021.~~March 31, 2022.

(3)Rent per leased square foot at expiration represents base rent, including any future rent steps, and thus represents the base rent that will be in place at lease expiration.

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BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Discussion of Consolidated Cash Flows

The following discussion of Brookfield DTLA’s cash flows is based on the consolidated statements of cash flows in Item 1. “Financial Statements” and is not meant to be an all‑inclusive discussion of the changes in its cash flows for the periods presented below.

A summary of changes in Brookfield DTLA’s cash flows is as follows:


		For the Nine Months Ended				Dollar Change			For the Three Months Ended				Dollar Change
		September 30,							March 31,
		2021		2020					2022		2021

Net cash provided by operating activities	Net cash provided by operating activities	$	66,038	$	58,227	$	7,811	Net cash provided by operating activities	$	14,776	$	23,848	$	(9,072)
Net cash used in investing activities	Net cash used in investing activities	$	(20,211)	$	(40,040)	$	19,829	Net cash used in investing activities	$	(5,104)	$	(13,674)	$	8,570
Net cash (used in) provided by financing activities		$	(40,327)	$	31,783	$	(72,110)
Net cash used in financing activities								Net cash used in financing activities	$	(10,224)	$	(14,052)	$	3,828

Operating Activities

Brookfield DTLA’s cash flows from operating activities are primarily dependent upon (1) the ~~occupancy level~~leasing activity of its portfolio, (2) the rental rates achieved on its leases, (3) the collectibility of rent and other amounts billed to tenants, (4) changes in working capital, and (5) interest ~~expense.~~payments. The ~~increa~~decrease in cash provided by operating activities isis primarily attributable to cash ~~inflows~~outflows from working capital changes by ~~$10.9~~$10.0 million and increase in rental property operating and maintenance expense by $2.4 million, reflecting the increase in physical occupancy. Working capital changes are subject to variability period over period as a result of timing differences, including with respect to the collection of tenant receivables and payments of accounts and tenant payables. The cash outflows were partially offset by decreases in interest payments on secured debt by ~~$7.9 million. The cash inflows were partially offset by decreases~~$1.4 million and increase in cash lease revenue by ~~$11.4 million and rental property operating and maintenance expense by $1.5 million, reflecting the reduction in both contractual and physical occupancy resulting from~~ ~~measures taken to combat the spread of the COVID pandemic since March 2020.~~$1.2 million.

Investing Activities

Brookfield DTLA’s cash flows from investing activities are generally impacted by the amount of capital expenditures and tenant improvement activities for its properties. The decrease in net cash used in investing activities was mainly due to decreases in ~~capital~~tenant improvement expenditures by ~~$13.5~~$5.4 million, following the substantial completion of tenant improvement projects for a major tenant at the ~~atrium development project at Wells Fargo Center in~~EY Plaza during the third quarter of 2020. Furthermore, in response to the measures taken to combat the spread of the COVID-19 pandemic, Brookfield DTLA strategically deferred and cancelled various capital expenditure projects of lower priority since April 2020, which resulted inthree months ended March 31, 2021, as well as decreases in capital expenditures ~~across~~by $3.5 million, as the ~~portfolio.~~

majority of food vendor space construction at Wells Fargo Center’s atrium was completed in 2021.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Financing Activities

Brookfield DTLA’s cash flows from financing activities are generally impacted by its loan activity, and contributions from and distributions to its equity holders, if any. During the ~~nine~~three months ended ~~September 30,~~ March 31, 2022, net proceeds from the issuance of Series B preferred interest of $10.3 million was the main source of cash provided by financing activities. Cash outflows were mainly driven by repurchases of and distributions to Series B preferred interest, using the excess operating cash flows generated from properties. In comparison, during the same period in 2021, net proceeds from the refinancing of the loans secured by the Gas Company Tower ~~and the issuance of Series B preferred interest of~~ ~~$6.0 million~~ were the main source of cash provided by financing activities. All proceeds from the new secured loans were used to pay off the original $450.0 million encumbrance and to satisfy the new loans’ required reserves. As Brookfield DTLA had excess cash from operating activities generated from properties, it repurchased $~~37.5~~16.2 million of the Series B preferred interest and made ~~distributions~~distribution of ~~$12.7~~$4.2 million to the Series B preferred interest. In comparison, during the nine months ended September 30, 2020, net proceeds from the refinancing of the loans secured by EY Plaza office property and proceeds from the issuance of Series B preferred interest of $25.2 million were the main source of cash provided by financing activities. Cash outflows were mainly driven by repurchases of and distributions to Series B preferred interest of $13.5 million and $13.2 million, respectively, using the excess cash from upsized refinancing of the loans secured by 777 Tower and EY Plaza and operating activities generated from other properties.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Discussion of Results of Operations

Comparison of the Three Months Ended ~~September 30,~~March 31, 2022 to March 31, 2021 ~~to September 30, 2020~~

Consolidated Statements of Operations Information

(In millions, except percentage amounts)

For the Three Months Ended Increase/
(Decrease) %
Change
September 30,
2021 2020
Revenue:
Lease income $ 61.9 $ 64.0 $ (2.1) (3) %
Parking 6.8 6.4 0.4 6 %
Interest and other 0.1 0.3 (0.2) (67) %
Total revenue 68.8 70.7 (1.9) (3) %
Expenses:
Rental property operating and maintenance 24.9 24.5 0.4 2 %
Real estate taxes 10.1 9.7 0.4 4 %
Parking 2.5 2.4 0.1 4 %
Other expenses 0.7 4.3 (3.6) (84) %
Depreciation and amortization 26.5 25.5 1.0 4 %
Interest 18.8 19.6 (0.8) (4) %
Total expenses 83.5 86.0 (2.5) (3) %
Other Income:
Equity in earning of unconsolidated
real estate joint venture 0.3 0.2 0.1 50 %
Total other income 0.3 0.2 0.1 50 %
Net loss $ (14.4) $ (15.1) $ 0.7 (5) %

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

~~Other Expenses~~

In ~~September 2020,~~ ~~in conjunction with the extinguishment of the~~ ~~$265.0 million mortgage and mezzanine loans secured by EY Plaza,~~ ~~the Company early terminated the related LIBOR-based interest rate swap and cap contracts with notional amounts of~~ ~~$218.9 million~~ ~~and~~ ~~$35.0 million~~, respectively, and reclassified the entire loss of $1.8 million on interest rate swap contracts designated as cash flow hedges from accumulated other comprehensive loss to other expenses. In addition, the Company recognized a loss on early extinguishment of debt and termination of interest rate swap contracts of $1.0 million in other expenses.

Other expenses also include income tax expenses charged on various TRS. In December 2020, an affiliated tenant signed an early lease termination agreement with the Company. Accordingly, the Company recorded early lease termination income and accrued income tax expenses on such income during the first half of 2021. During the ~~three~~ ~~months ended September 30, 2021, this affiliated tenant rescinded the early lease termination agreement, which resulted in a reversal of accrued income tax expenses of $1.3 million.~~

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

~~Comparison of the Nine Months Ended September 30, 2021 to September 30, 2020~~

~~Consolidated Statements of Operations Information~~

~~(In millions, except percentage amounts)~~

For the Nine Months Ended Increase/
(Decrease) %
Change
September 30,
2021 2020
Revenue:
Lease income $ 188.9 $ 192.7 $ (3.8) (2) %
Parking 18.2 21.5 (3.3) (15) %
Interest and other 0.7 0.8 (0.1) (13) %
Total revenue 207.8 215.0 (7.2) (3) %
Expenses:
Rental property operating and maintenance 69.9 71.4 (1.5) (2) %
Real estate taxes 30.2 29.1 1.1 4 %
Parking 5.9 8.4 (2.5) (30) %
Other expenses 6.7 8.9 (2.2) (25) %
Depreciation and amortization 80.2 78.8 1.4 2 %
Interest 61.1 63.1 (2.0) (3) %
Total expenses 254.0 259.7 (5.7) (2) %
Other Income (Expense):
Equity in earning (loss) of unconsolidated
real estate joint venture 0.6 (0.5) 1.1 (220) %
Total other income (expense) 0.6 (0.5) 1.1 (220) %
Net loss $ (45.6) $ (45.2) $ (0.4) 1 %

~~Lease Income~~

~~Lease income decreased largely as a result of a reduction in occupancy to combat the spread of the COVID-19 pandemic. See~~ ~~“Leasing Activity”~~ ~~for further details.~~


	For the Three Months Ended				Increase/ (Decrease)		% Change
	March 31,
	2022		2021

Revenue:
Lease income	$	65.1	$	64.2	$	0.9	1	%
Parking	6.5		5.2		1.3		25	%
Interest and other	0.3		0.3		—		—	%
Total revenue	71.9		69.7		2.2		3	%

Expenses:
Rental property operating and maintenance	24.2		21.8		2.4		11	%
Real estate taxes	9.9		10.0		(0.1)		(1)	%
Parking	2.4		1.6		0.8		50	%
Other expenses	2.5		3.4		(0.9)		(26)	%
Depreciation and amortization	25.3		27.0		(1.7)		(6)	%
Interest	18.4		23.8		(5.4)		(23)	%
Total expenses	82.7		87.6		(4.9)		(6)	%

Other Income:

Equity in earning of unconsolidated real estate joint venture	0.2		0.2		—		—	%
Total other income	0.2		0.2		—		—	%

Net loss	$	(10.6)	$	(17.7)	$	7.1	(40)	%

Parking revenue and expense

Parking revenue includes monthly and transient parking income. ~~With the restrictive measures imposed on non‑essential businesses and employees working from home, both~~Increase in parking revenue and ~~variable~~ expense ~~decreased accordingly.~~during the three months ended March 31, 2022 was mainly due to higher physical occupancy resulting from the ongoing recovery from the COVID-19 pandemic as discussed above.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Rental Property Operating and Maintenance Expense

Rental property operating and maintenance expense mainly includes janitorial, repairs and maintenance, utilities, insurance, and various other recurring expenses. ~~As most of our office tenants have been working remotely~~With the higher physical occupancy since the ~~issuance of the “stay-at-home” order~~Reopening in ~~March 2020,~~June 2021, rental property operating and maintenance expense ~~decreased.~~increased.

~~Other Expenses~~Interest Expense

~~Other expenses~~Interest expense mainly ~~represent asset management fee, audit~~represents interest expense on secured debt and ~~professional fees, and miscellaneous expenses.~~loss on early extinguishment of debt. Decrease in ~~other expenses~~interest expense during the three months ended March 31, 2022 was mainly due to the nonrecurring ~~charges made during the~~ ~~nine~~ ~~months ended September 30, 2020, including a~~ ~~realized loss on interest rate swap contracts of~~ ~~$1.8 million and a~~ loss on early extinguishment of debt of $4.6 million recorded during the three months ended March 31, 2021 for prepayment premium and ~~termination~~debt yield maintenance fee charged on refinancing of ~~interest rate swap contracts of $1.0 million, partially offset~~loans secured by ~~a $1.0 million write-off charge of deferred cost.~~Gas Company Tower in February 2021.

~~Off-Balance Sheet Arrangements~~

Brookfield DTLA did not have any off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, or capital expenditures or capital resources that is material to stockholders as of the date this report was filed, September 30, 2021 and December 31, 2020, respectively.

~~Table of Contents~~

~~BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF~~

~~FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)~~

~~Contractual Obligations~~

~~The following table provides information with respect to Brookfield DTLA’s commitments as of September 30, 2021, including any guaranteed or minimum commitments under contractual obligations:~~

Remainder
of 2021 2022 2023 2024 2025 Thereafter Total
Principal payments on
secured debt (1)(2) $ — $ — $ 819,296 $ 675,000 $ 305,000 $ 465,000 $ 2,264,296
Interest payments –
Fixed-rate debt (3) 4,720 18,726 16,803 11,025 — — 51,274
Variable-rate debt (4) 11,993 47,575 44,175 30,004 22,284 1,569 157,600
Tenant-related commitments (5) 10,864 21,942 1,159 971 1,848 1,380 38,164
Construction-related
commitments (6)
— 180 — — — — 180
$ 27,577 $ 88,423 $ 881,433 $ 717,000 $ 329,132 $ 467,949 $ 2,511,514

~~__________~~

~~(1)BAM owns a significant interest in a company whose subsidiary is the lender of the $35.0 million mezzanine loan secured by Wells Fargo Center–North Tower, which matures in October 2023. See~~ ~~Item 1. “Financial Statements—Notes to Consolidated Financial Statements—Note 13—Related Party Transactions.”~~

~~(2)Based on the maturity dates after the impact of extension options that the Company controls, if applicable.~~

~~(3)Interest payments on fixed-rate debt are calculated based on the maturity dates (after the impact of extension options that the Company controls, if applicable) and contractual interest rates.~~

~~(4)Interest payments on variable-rate debt are calculated based on the maturity dates (after the impact of extension options that the Company contro~~ls, if applicable) and the one-month LIBOR rate in place on the debt as of September 30, 2021 plus the contractual spread per the loan agreements. Interest payments due to the related party lender of the loan described in (1) above total $0.5 million for the remainder of 2021, $1.8 million for 2022, and $1.4 million for 2023.

~~(5)~~Tenant-related commitments include tenant improvements and leasing commissions and are based on executed leases as of September 30, 2021. Tenant-related commitments due to the related party lender of the loan described in (1) above total $0.3 million for the remainder of 2021.

~~(6)Construction-related commitments include amounts due to contractors related to redevelopment projects at Wells Fargo Center based on executed contracts as of September 30, 2021.~~

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS (continued)

Related Party Transactions

See Item 1. “Financial Statements—Notes to Consolidated Financial Statements—Note ~~13—~~12—Related Party Transactions” of this Quarterly Report on Form 10-Q.

Litigation

See Part II, Item 1. “Legal Proceedings” of this Quarterly Report on Form 10-Q.

Critical Accounting Policies

Please refer to Brookfield DTLA’s Annual Report on Form 10-K filed with the SEC on March ~~25, 2021~~24, 2022 for a discussion of our critical accounting policies for the year ended December 31, ~~2020.~~2021.

See Item 1. “Financial Statements—Notes to Consolidated Financial Statements—Note 2—Basis of Presentation” of this Quarterly Report on Form 10-Q for a discussion of use of estimates, impairment review of investments in real estate and unconsolidated real estate joint venture, and collectibility assessment on rents, deferred rents and other receivables during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022.

Recently Issued Accounting Literature

See Item 1. “Financial Statements—Notes to Consolidated Financial Statements—Note 3—Recently Issued Accounting Literature” of this Quarterly Report on Form 10-Q for information regarding the impact of the adoption of new accounting pronouncements during the ~~nine~~three months ended ~~September 30, 2021.~~March 31, 2022.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

See Part II, Item 7A. “Quantitative and Qualitative Disclosures about Market Risk” in Brookfield DTLA’s Annual Report on Form 10-K filed with the SEC on March ~~25, 2021~~24, 2022 for a discussion regarding our exposure to market risk. Our exposure to market risk has not changed materially since year end ~~2020.~~2021.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Brookfield DTLA maintains disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by SEC Rule 13a-15(b), Brookfield DTLA carried out an evaluation, under the supervision and with the participation of its management, including its principal executive officer and its principal financial officer, of the effectiveness of the design and operation of Brookfield DTLA’s disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, G. Mark Brown, our principal executive officer, and Bryan D. Smith, our principal financial officer, concluded that these disclosure controls and procedures were effective at the reasonable assurance level as of ~~September 30, 2021.~~March 31, 2022.

Changes in Internal Control over Financial Reporting

There have been no changes in Brookfield DTLA’s internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended ~~September 30, 2021~~March 31, 2022 that have materially affected, or that are reasonable likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal control over financial reporting due to the Shutdown. We are continually monitoring and assessing the impact of the Shutdown on our internal controls to minimize the impact on their design and operating effectiveness.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

Item 1A. Risk Factors.

There have been no material changes to the risk factors included in Part I, “Item IA. Risk Factors” in Brookfield DTLA’s Annual Report on Form 10-K filed with the SEC on March ~~25, 2021~~24, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

Dividends on the Series A preferred stock are cumulative and therefore will continue to accrue at an annual rate of $1.90625 per share. As of ~~October 31, 2021,~~April 30, 2022, the cumulative amount of unpaid dividends totaled ~~$219.2~~$228.5 million.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.


Exhibit No.						Exhibit Description

31.1						Certification of Principal Executive Officer dated ~~November~~May 12, ~~2021~~2022
31.2						Certification of Principal Financial Officer dated ~~November~~May 12, ~~2021~~2022 pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*						Certification of Principal Executive Officer and Principal Financial Officer dated ~~November~~May 12, ~~2021~~2022 pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (1)
101.INS						Inline XBRL Instance Document. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH						Inline XBRL Taxonomy Extension Schema Document.
101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

__________


*			Furnished herewith.

(1) This exhibit should not be deemed to be “filed” for purposes of Section 18 of the Exchange Act.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Date: As of ~~November~~May 12, ~~2021~~2022


			BROOKFIELD DTLA FUND OFFICE TRUST INVESTOR INC.
			Registrant

			By:			/s/ G. MARK BROWN
						G. Mark Brown
						Chairman of the Board
						(Principal executive officer)

			By:			/s/ BRYAN D. SMITH
						Bryan D. Smith
						Chief Financial Officer
						(Principal financial officer)

6348


	Gain Recognized in OCL		Loss Reclassified from AOCL to Other Expense in Consolidated Statements of Operations

Derivatives designated as cash flow hedging instruments:
For the three months ended:
September 30, 2021	$	—	$	—
September 30, 2020	$	984	$	(1,779)
For the nine months ended:
September 30, 2021	$	—	$	—
September 30, 2020	$	562	$	(1,779)


	As of September 30, 2021
Property Type		Second Quarter of 2020 Billings Collected(1)		Third Quarter of 2020 Billings Collected(1)		Fourth Quarter of 2020 Billings Collected(1)		First Quarter of 2021 Billings Collected(1)		Second Quarter of 2021 Billings Collected(1)		Third Quarter of 2021 Billings Collected(1)
Office		100	%	100	%	100	%	100	%	100	%	99	%
Retail		68	%	76	%	77	%	77	%	86	%	83	%
Total		99	%	99	%	99	%	99	%	99	%	99	%


	Interest Rate Type	Effective Date	Maturity Date/Term to Maturity	Interest Rate as of Effective Date		Principal Amount
Issuances
Gas Company Tower	Variable	2/5/2021	2/9/2026 (1)	2.01	%	$	350,000
Gas Company Tower	Variable	2/5/2021	2/9/2026 (1)	5.12	%	65,000
Gas Company Tower	Variable	2/5/2021	2/9/2026 (1)	7.87	%	50,000
Weighted average/total			5 years	3.07	%	$	465,000

Repayments of debt
Gas Company Tower	Fixed	2/5/2021	8/6/2021	3.47	%	$	319,000
Gas Company Tower	Fixed	2/5/2021	8/6/2021	6.50	%	131,000
Weighted average/total			N/A	4.35	%	$	450,000


	Remainder of 2021		2022		2023		2024		2025		Thereafter		Total

Principal payments on secured debt (1)(2)	$	—	$	—	$	819,296	$	675,000	$	305,000	$	465,000	$	2,264,296
Interest payments –
Fixed-rate debt (3)	4,720		18,726		16,803		11,025		—		—		51,274
Variable-rate debt (4)	11,993		47,575		44,175		30,004		22,284		1,569		157,600
Tenant-related commitments (5)	10,864		21,942		1,159		971		1,848		1,380		38,164
Construction-related commitments (6)	—		180		—		—		—		—		180
	$	27,577	$	88,423	$	881,433	$	717,000	$	329,132	$	467,949	$	2,511,514