Exhibit 99.2
Douglas Emmett, Inc. | | TABLE OF CONTENTS
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Company Background | | 2 | |
Corporate Data | | 3 | |
Investor Information | | 4 | |
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CONSOLIDATED FINANCIAL RESULTS | | | |
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Quarterly Operating Results | | 6 | |
Year to Date Operating Results | | 7 | |
Balance Sheet. | | 8 | |
Debt Balances | | 9 | |
Debt Summary | | 10 | |
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PORTFOLIO DATA | | | |
| | | |
Office Portfolio Summary | | 12 | |
Office Portfolio Occupancy and In-Place Rents | | 13 | |
Multifamily Portfolio Summary | | 14 | |
Tenant Diversification | | 15 | |
Industry Diversification | | 16 | |
Lease Distribution | | 17 | |
Lease Expirations | | 18 | |
Quarterly Lease Expirations – Next Four Quarters | | 19 | |
Office Portfolio Leasing Activity | | 20 | |
This Supplemental Operating and Financial Data contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements. You should not rely on forward-looking statements as predictions of future events. Forward-looking statements involve numerous risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statement made by us. These risks and uncertainties include, but are not limited to: adverse economic and real estate developments in Southern California and Honolulu; decreased rental rates or increased tenant incentives and vacancy rates; defaults on, early terminations of, or non-renewal of leases by tenants; increased interest rates and operating costs; failure to generate sufficient cash flows to service our outstanding indebtedness; difficulties in identifying properties to acquire and completing acquisitions; failure to successfully operate acquired properties and operations; failure to maintain our status as a REIT under the Internal Revenue Code of 1986, as amended; possible adverse changes in rent control laws and regulations; environmental uncertainties; risks related to natural disasters; lack or insufficient amount of insurance; inability to successfully expand into new markets or submarkets; risks associated with property development; conflicts of interest with our officers; changes in real estate and zoning laws and increases in real property tax rates; the consequences of any future terrorist attacks; and other risks and uncertainties detailed in our initial public offering prospectus on form S-11 filed with the Securities and Exchange Commission (SEC) on October 23, 2006.
Douglas Emmett, Inc. | | Corporate Data |
as of December 31, 2006
COMPANY BACKGROUND
We are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and have a growing presence in Honolulu, Hawaii. Our presence in Los Angeles and Honolulu is the result of a consistent and focused strategy of identifying submarkets that are supply constrained, have high barriers to entry and exhibit strong economic characteristics such as population and job growth and a diverse economic base. In our office portfolio, we focus primarily on owning and acquiring a substantial share of top-tier office properties within submarkets located near high-end executive housing and key lifestyle amenities. In our multifamily portfolio, we focus primarily on owning and acquiring select properties at premier locations within these same submarkets.
On October 30, 2006, we completed our initial public offering (IPO) raising approximately $1.52 billion in net proceeds, including exercise of over-allotment options. Concurrently with the IPO, we completed the formation transactions, pursuant to which we acquired, through a series of merger and contribution transactions, all of the interests in Douglas Emmet Realty Advisors, Inc. and its consolidated subsidiaries (our “predecessor”) and the non-predecessor entities. Our office portfolio now consists of 46 properties with approximately 11.6 million rentable square feet, and our multifamily portfolio consists of nine properties with a total of 2,868 units. (As of December 31, 2006, our office portfolio was 94.3% leased, and our multifamily properties were 99.2% leased. Our office portfolio contributed approximately 84.8% of our annualized rent as of December 31, 2006, while our multifamily portfolio contributed approximately 15.2%. As of December 31, 2006, our Los Angeles County office and multifamily portfolio contributed approximately 90.8% of our annualized rent, and our Honolulu, Hawaii office and multifamily portfolio contributed approximately 9.2%).
Our properties are concentrated in nine premier Los Angeles County submarkets—Brentwood, Olympic Corridor, Century City, Santa Monica, Beverly Hills, Westwood, Sherman Oaks/Encino, Warner Center/Woodland Hills and Burbank—as well as in Honolulu, Hawaii.
This Supplemental Operating and Financial Data supplements the information provided in our reports filed with the SEC. Additional information about us and our properties is also available at our website www.douglasemmett.com.
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Douglas Emmett, Inc. | | CORPORATE DATA |
as of December 31, 2006
Number of office properties owned | | 46 | |
Square feet owned (in thousands) | | 11,555 | |
Office leased rate as of December 31, 2006 | | 94.3 | % |
Number of multifamily properties owned | | 9 | |
Number of multifamily units owned | | 2,868 | |
Multifamily leased rate as of December 31, 2006 | | 99.2 | % |
Market capitalization (in thousands): | | | |
Total debt(1) | | $ | 2,760,000 | |
Common equity capitalization(2) | | $ | 4,388,100 | |
Total market capitalization(2) | | $ | 7,148,100 | |
Debt/total market capitalization(2) | | 38.6 | % |
Common stock data (NYSE:DEI)(3): | | | |
Highest closing price. | | $ | 26.60 | |
IPO price | | $ | 21.00 | |
Closing price as of December 31, 2006 | | $ | 26.59 | |
Common shares outstanding (in thousands) | | 115,006 | |
Operating partnership units outstanding (in thousands) | | 50,023 | |
Weighted average common shares and units outstanding for the period from October 24, 2006 to December 31, 2006 – diluted | | 166,038 | |
| | | | | |
(1) Excludes loan premium and includes $10.0 million outstanding on revolving credit line facility as of December 31, 2006.
(2) We calculate market capitalization by adding our total debt and total number of common shares and units outstanding multiplied by the closing price of the stock on that date at the end of the period.
(3) For the period from October 24, 2006 to December 31, 2006.
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Douglas Emmett, Inc. | | INVESTOR INFORMATION |
808 Wilshire Boulevard, Suite 200
Santa Monica, California 90401
(310) 255-7700
BOARD OF DIRECTORS |
| | | | | | |
Dan A. Emmett | Chairman of the Board, Douglas Emmett, Inc. | Leslie E. Bider | Former Chairman and Chief Executive Officer, Warner Chapel Music, Inc. and Private Investor | Thomas E. O’Hern | Executive Vice President, Chief Financial Officer and Treasurer, Macerich Company | |
| | | | | | |
Jordan Kaplan | President and Chief Executive Officer, Douglas Emmett, Inc. | Victor J. Coleman | Former President and Chief Operating Officer, Arden Realty, Inc. and Managing Director, Hudson Capital, LLC. | Dr. Andrea L. Rich | Former President and Chief Executive Officer, Los Angeles Museum of Art, and Former Executive Vice Chancellor and Chief Operating Officer, University of California Los Angeles | |
| | | | | | |
Kenneth M. Panzer | Chief Operating Officer, Douglas Emmett, Inc. | Ghebre Selassie Mehreteab | Chief Executive Officer, NHP Foundation | William Wilson III | Former Chairman, Cornerstone Properties, Inc., Managing Partner, Wilson Meany Sullivan, LLC | |
EXECUTIVE AND SENIOR MANAGEMENT |
|
Jordan Kaplan | President and Chief Executive Officer | William Kamer | Chief Financial Officer | Allan B. Golad | SVP, Property Management | |
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Kenneth M. Panzer | Chief Operating Officer | Andres Gavinet | Executive Vice President of Finance | Michael J. Means | SVP, Commercial Leasing | |
| | | | | | |
| | Barbara J. Orr | Chief Accounting Officer | | | |
INVESTOR RELATIONS |
Investor Relations Contact: Mary C. Jensen, Vice President - Investor Relations (310) 255-7700 |
Email Contact: ir@douglasemmett.com |
Please visit our corporate website at: www.douglasemmett.com |
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CONSOLIDATED FINANCIAL RESULTS
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Douglas Emmett, Inc. | | QUARTERLY OPERATING RESULTS For the three months ended December 31, 2006(unaudited and in thousands, except per share data) |
| | Douglas Emmett, Inc. | | The Predecessor(1) | | |
| | October 31, 2006 - | | October 1, 2006 - | | |
| | December 31, 2006 | | October 30, 2006 | | |
Revenues: | | | | | | |
Office rental: | | | | | | |
Rental revenues | | $ | 62,384 | | $ | 25,253 | |
Tenant recoveries | | 5,436 | | 1,939 | | |
Parking and other income | | 7,886 | | 4,041 | | |
Total office revenue | | 75,706 | | 31,233 | | |
| | | | | | |
Multifamily rental: | | | | | | |
Rental revenues | | 10,954 | | 4,215 | | |
Parking and other income | | 335 | | 179 | | |
Total multifamily revenue | | 11,289 | | 4,394 | | |
| | | | | | |
Total revenue | | 86,995 | | 35,627 | | |
| | | | | | |
Operating Expenses: | | | | | | |
Office rental | | 24,515 | | 8,902 | | |
Multifamily rental | | 3,175 | | 1,582 | | |
General and administrative expenses | | 30,201 | | 4,312 | | |
Depreciation and amortization | | 32,521 | | 10,236 | | |
Total operating expenses | | 90,412 | | 25,032 | | |
| | | | | | |
Operating (Loss) Income | | (3,417 | ) | 10,595 | | |
| | | | | | |
Gain on investments in interest contracts, net | | - | | 803 | | |
Interest and other income | | 87 | | 541 | | |
Interest expense | | (26,213 | ) | (9,375 | ) | |
Deficit distributions to minority partners, net | | - | | (5,336 | ) | |
| | | | | | |
Loss before minority interests | | (29,543 | ) | (2,772 | ) | |
| | | | | | |
Minority Interests: | | | | | | |
Minority interests | | 8,952 | | (1,577 | ) | |
Preferred minority investor | | - | | (4,128 | ) | |
| | | | | | |
Net loss | | $ | (20,591 | )(2) | $ | (8,477 | ) | |
| | | | | | |
Net loss per common share – basic and diluted | | $ | (0.18 | ) | | | |
| | | | | | |
Weighted average shares of common stock outstanding – basic and diluted | | 115,006 | | | | |
| | | | | | |
| | | | | | | | | | |
(1) Represents the consolidated operating results for the Predecessor of Douglas Emmett, Inc.
(2) Includes one time IPO related non-cash compensation costs totaling approximately $27.7 million.
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Douglas Emmett, Inc. | | YEAR TO DATE OPERATING RESULTSYear ended December 31, 2006(unaudited and in thousands, except per share data) |
| | Douglas Emmett, Inc. | | The Predecessor(1) | |
| | October 31, 2006 - | | January 1, 2006 - | |
| | December 31, 2006 | | October 30, 2006 | |
Revenues: | | | | | |
Office rental: | | | | | |
Rental revenues | | $ | 62,384 | | $ | 252,694 | |
Tenant recoveries | | 5,436 | | 15,206 | |
Parking and other income | | 7,886 | | 33,039 | |
Total office revenue: | | 75,706 | | 300,939 | |
| | | | | |
Multifamily rental: | | | | | |
Rental revenues | | 10,954 | | 44,241 | |
Parking and other income | | 335 | | 1,488 | |
Total multifamily revenue: | | 11,289 | | 45,729 | |
| | | | | |
Total revenue | | 86,995 | | 346,668 | |
| | | | | |
Operating Expenses: | | | | | |
Office rental | | 24,515 | | 104,524 | |
Multifamily rental | | 3,175 | | 15,041 | |
General and administrative expenses | | 30,201 | | 17,863 | |
Depreciation and amortization | | 32,521 | | 95,456 | |
Total operating expenses | | 90,412 | | 232,884 | |
| | | | | |
Operating (Loss) Income. | | (3,417 | ) | 113,784 | |
| | | | | |
Gain on investments in interest contracts, net | | - | | 6,795 | |
Interest and other income | | 87 | | 4,515 | |
Interest expense | | (26,213 | ) | (95,938 | ) |
Deficit distributions to minority partners, net | | - | | (10,642 | ) |
| | | | | |
(Loss) income before minority interests | | (29,543 | ) | 18,514 | |
| | | | | |
Minority Interests: | | | | | |
Minority interests | | 8,952 | | (18,673 | ) |
Preferred minority investor | | - | | (16,203 | ) |
| | | | | |
Net loss | | $ | (20,591 | )(2) | $ | (16,362 | ) |
| | | | | |
Net loss per common share – basic and diluted | | $ | (0.18 | ) | | |
| | | | | |
Weighted average shares of common stock outstanding – basic and diluted | | 115,006 | | | |
| | | | | |
(1) Represents the consolidated operating results for the Predecessor of Douglas Emmett, Inc.
(2) Includes one time IPO related non-cash compensation costs totaling approximately $27.7 million.
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Douglas Emmett, Inc. | | BALANCE SHEETas of December 31, 2006(unaudited and in thousands) |
Assets | | | |
Investment in real estate: | | | |
Land | | $ | 813,599 | |
Building and improvements | | 5,036,652 | |
Tenant improvements and leasing costs | | 238,365 | |
| | 6,088,616 | |
Less: accumulated depreciation | | (32,521 | ) |
Net investment in real estate | | 6,056,095 | |
| | | |
Cash and cash equivalents | | 4,536 | |
Tenant receivables | | 4,160 | |
Deferred rent receivables | | 3,588 | |
Interest rate contracts | | 70,637 | |
Acquired above-market lease intangibles, net of amortization | | 34,137 | |
Other assets | | 20,687 | |
Total assets | | $ | 6,193,840 | |
| | | |
Liabilities | | | |
Secured notes payable | | $ | 2,750,000 | |
Secured revolving credit facility | | 10,000 | |
Unamortized debt premium | | 29,702 | |
Accrued interest payable | | 12,701 | |
Acquired below-market lease intangibles, net of amortization. | | 263,649 | |
Accounts payable and accrued expenses | | 39,035 | |
Security deposits | | 28,670 | |
Dividends payable | | 13,801 | |
Total liabilities | | 3,147,558 | |
| | | |
Minority interest | | 1,038,375 | |
| | | |
Stockholders’ Equity | | | |
Common stock | | 1,150 | |
Additional paid-in capital. | | 2,040,734 | |
Other comprehensive income | | 415 | |
Accumulated deficit | | (34,392 | ) |
Total stockholders’ equity | | 2,007,907 | |
Total liabilities and stockholders’ equity | | $ | 6,193,840 | |
| | | | | |
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Douglas Emmett, Inc. | | DEBT BALANCESas of December 31, 2006(unaudited and in thousands) |
Type of Debt | | Principal Balance | | Fixed/Floating Rate | | Hedged Annual Interest Rate(1) | | Maturity Date | | Swap Maturity Date | |
| | | | | | | | | | | |
Variable Rate Swapped to Fixed Rate: | | | | | | | | | | | |
Modified Term Loan(2)(3) | | $ | 2,300,000 | | LIBOR + 0.85 | % | 5.13 | % | 09/01/12 | | 08/01/10-08/01/12 | |
Barrington Plaza and Pacific Plaza | | 153,000 | | DMBS + 0.60 | % (4) | 4.70 | | 12/22/11 | | 08/01/11 | |
555 Barrington, The Shores | | 140,000 | | DMBS + 0.60 | % (4) | 4.70 | | 12/22/11 | | 08/01/11 | |
Moanalua Hillside Apartments | | 75,000 | | DMBS + 0.76 | % (4) | 4.86 | | 02/01/15 | | 08/01/11 | |
Villas at Royal Kunia | | 82,000 | | LIBOR + 0.62 | % | 02/01/16 | | 03/01/12 | | | |
Subtotal | | 2,750,000 | | | | | | | | | |
| | | | | | | | | | | |
Variable Rate: | | | | | | | | | | | |
Senior Secured Revolving Credit Facility(5) | | 10,000 | | LIBOR + 0.70 | % | 6.02 | % | 10/30/09 | | N/A | |
Subtotal | | 2,760,000 | | | | | | | | | |
Unamortized Loan Premium(6) | | 29,702 | | | | | | | | | |
Total | | $ | 2,789,702 | | | | | | | | | |
(1) Includes the effect of interest rate contracts, where applicable, and a LIBOR rate of 5.32% as of December 31, 2006. Based on actual/360-day basis and excludes amortization of loan fees and unused fees on credit line.
(2) Secured by the following properties and combined in seven separate cross collateralized pools: Studio Plaza, Gateway Los Angeles, Bundy/Olympic, Brentwood Executive Plaza, Palisades Promenade, 12400 Wilshire, First Federal Square, 11777 San Vicente, Landmark II, Sherman Oaks Galleria, Second Street Plaza, Olympic Center, MB Plaza, Valley Office Plaza, Coral Plaza, Westside Towers, Valley Executive Tower, Encino Terrace, Westwood Place, Century Park Plaza, Lincoln/Wilshire, 100 Wilshire, Encino Gateway, Encino Plaza, 1901 Avenue of the Stars, Columbus Center, Warner Center Towers, Beverly Hills Medical Center, Harbor Court, Bishop Place, Brentwood Court, Brentwood Medical Plaza, Brentwood San Vicente Medical, San Vicente Plaza, and Owensmouth. Requires monthly payments of interest only, with outstanding principal due upon maturity.
(3) Includes $1.11 billion swapped to 4.89% until August 1, 2010; $322.5 million swapped to 4.98% until August 1, 2011; $322.5 million swapped to 5.02% until August 1, 2012; and $545.0 million swapped to 5.75% until December 1, 2010.
(4) Fannie Mae Discount Mortgage-Backed Security (DMBS). The Fannie Mae DMBS generally tracks 90-day LIBOR.
(5) Loan is secured by 9 properties and has two one-year extension options available.
(6) Represents mark-to-market adjustment on variable rate debt associated with office properties.
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Douglas Emmett, Inc. | | DEBT MATURITIESas of December 31, 2006(unaudited and in thousands) |
Property | | 2007 | | 2008 | | 2009 | | 2010 | | 2011 | | Thereafter | | Total | |
Variable Rate Swapped to Fixed Rate: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Modified Term Loan | | $ | - | | $ | - | | $ | - | | $ | - | | $ | - | | $ | 2,300,000 | | $ | 2,300,000 | |
Barrington Plaza and Pacific Plaza | | - | | - | | - | | - | | 153,000 | | - | | 153,000 | |
555 Barrington, The Shores | | - | | - | | - | | - | | 140,000 | | - | | 140,000 | |
Moanalua Hillside Apartments | | - | | - | | - | | - | | - | | 75,000 | | 75,000 | |
Villas at Royal Kunia | | - | | - | | - | | - | | - | | 82,000 | | 82,000 | |
Subtotal | | - | | - | | - | | - | | 293,000 | | 2,457,000 | | 2,750,000 | |
| | | | | | | | | | | | | | | |
Variable Rate: | | | | | | | | | | | | | | | |
Senior Secured Revolving Credit Facility | | - | | - | | 10,000 | | - | | - | | - | | 10,000 | |
Total | | $ | - | | $ | - | | $ | 10,000 | | $ | - | | $ | 293,000 | | $ | 2,457,000 | | $ | 2,760,000 | |
| | | | | | | | | | | | | | | |
Fixed and Floating Rate Debt | | | | Weighted | | Weighted | | | | | | | | | |
| | | | Average | | Average | | | | | | | | | |
| | | | Interest | | Maturity | | | | | | | | | |
Debt | | Amount | | Rate(1) | | (in years) | | | | | | | | | |
| | | | | | | | | | | | | | | |
Fixed | | $ | 2,750,000 | | 5.09 | % | 5.76 | | | | | | | | | |
Floating | | 10,000 | | 6.02 | | 2.83 | | | | | | | | | |
Total | | $ | 2,760,000 | | 5.09 | % | 5.75 | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) Includes the effect of interest rate contracts, where applicable, and a LIBOR rate of 5.32% as of December 31, 2006. Based on actual/360-day basis and excludes amortization of loan fees and unused fees on credit line.
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Douglas Emmett, Inc. | | OFFICE PORTFOLIO SUMMARYas of December 31, 2006 |
| | Number of | | Rentable | | Percent of | |
Submarket | | Properties | | Square Feet (1)(2) | | Total | |
| | | | | | | |
West Los Angeles | | | | | | | |
Brentwood | | 13 | | 1,390,627 | | 12 | % |
Olympic Corridor | | 4 | | 922,414 | | 8 | |
Century City | | 2 | | 866,122 | | 8 | |
Santa Monica | | 7 | | 860,198 | | 7 | |
Beverly Hills | | 4 | | 571,872 | | 5 | |
Westwood | | 2 | | 396,806 | | 3 | |
San Fernando Valley | | | | | | | |
Sherman Oaks/Encino | | 9 | | 2,879,078 | | 25 | |
Warner Center/Woodland Hills | | 2 | | 2,567,823 | | 22 | |
Tri-Cities | | | | | | | |
Burbank | | 1 | | 420,949 | | 4 | |
Honolulu | | 2 | | 678,940 | | 6 | |
Total | | 46 | | 11,554,829 | | 100 | % |
(1) Based on BOMA 1996 remeasurement. Total consists of 10,749,461 leased square feet (includes 171,596 square feet with respect to signed leases not commenced), 660,821 available square feet, 68,528 building management use square feet, and 76,019 square feet of BOMA 1996 adjustment on leased space.
(2) Excludes 30,000 square feet related to a renovation/expansion building currently under construction.
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Douglas Emmett, Inc. | OFFICE PORTFOLIO OCCUPANCY AND IN-PLACE RENTSas of December 31, 2006 |
| | | | | | Annualized | |
| | | | | | Rent Per | |
| | Percent | | Annualized | | Leased | |
Submarket | | Leased(1) | | Rent (2) | | Square Foot(3) | |
| | | | | | | |
West Los Angeles | | | | | | | |
Brentwood | | 97.1 | % | $ | 45,113,290 | | $ | 34.38 | |
Olympic Corridor | | 93.6 | | 22,830,530 | | 27.69 | |
Century City | | 95.4 | | 26,892,424 | | 33.26 | |
Santa Monica(4) | | 98.9 | | 37,171,153 | | 43.97 | |
Beverly Hills | | 100.0 | | 21,447,351 | | 38.26 | |
Westwood | | 96.2 | | 12,632,394 | | 33.49 | |
San Fernando Valley | | | | | | | |
Sherman Oaks/Encino | | 95.9 | | 75,657,561 | | 28.02 | |
Warner Center/Woodland Hills | | 88.1 | | 57,485,606 | | 26.71 | |
Tri-Cities | | | | | | | |
Burbank | | 100.0 | | 13,360,921 | | 31.74 | |
Honolulu | | 89.3 | | 17,649,772 | | 30.64 | |
Total | | 94.3 | % | $ | 330,241,002 | | $ | 31.22 | |
| | | | | | | |
| | | | | | | |
Recurring Capital Expenditures | | | | | | | |
-Office (per rentable square foot) for the three months ended December 31, 2006 | | | | | | $ | 0.16 | |
| | | | | | | | | | |
(1) Includes 171,596 square feet with respect to signed leases not yet commenced.
(2) Represents annualized monthly cash rent under leases commenced as of December 31, 2006. The amount reflects total cash rent before abatements. For our Burbank and Honolulu office properties, annualized rent is converted from triple net to gross by adding expense reimbursements to base rent.
(3) Represents annualized rent divided by leased square feet (excluding 171,596 square feet with respect to signed leases not commenced) as set forth in note (1) above for the total.
(4) Includes $1,108,103 of annualized rent attributable to our corporate headquarters at our Lincoln/Wilshire property.
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Douglas Emmett, Inc. | | MULTIFAMILY PORTFOLIO SUMMARYas of December 31, 2006 |
| | Number of | | Number of | | Percent of | |
Submarket | | Properties | | Units | | Total | |
| | | | | | | |
West Los Angeles | | | | | | | |
Brentwood | | 5 | | 950 | | 33 | % |
Santa Monica | | 2 | | 820 | | 29 | |
Honolulu | | 2 | | 1,098 | | 38 | |
Total | | 9 | | 2,868 | | 100 | % |
| | | | | | | |
| | Monthly | | | | | |
| | Percent | | Annualized | | Rent Per | |
Submarket | | Leased | | Rent (1 | ) | Leased Unit | |
| | | | | | | |
West Los Angeles | | | | | | | |
Brentwood | | 98.9 | % | $22,389,839 | | $1,985 | |
Santa Monica(2) | | 99.6 | | 18,597,156 | | 1,897 | |
Honolulu | | 99.2 | | 18,082,332 | | 1,384 | |
Total | | 99.2 | % | $59,069,327 | | $1,730 | |
| | | | | | | |
Recurring Capital Expenditures | | | | | | | |
-Multifamily (per unit) for the three months ended December 31, 2006 | | | | | | $133 | |
(1) Represents December 2006 multifamily rental income annualized.
(2) Excludes 10,013 square feet of ancillary retail space, which generated $278,341 of annualized rent as of December 31, 2006.
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Douglas Emmett, Inc. | | TENANT DIVERSIFICATION(Greater than 1% of Annualized Rent)as of December 31, 2006 |
| | | | | | | | | | Percent | | | | | |
| | | | | | | | Total | | of | | | | Percent | |
| | Number | | Number | | | | Leased | | Rentable | | | | of | |
| | of | | of | | Lease | | Square | | Square | | Annualized | | Annualized | |
| | Leases | | Properties | | Expiration(1) | | Feet | | Feet | | Rent(2) | | Rent | |
| | | | | | | | | | | | | | | |
Time Warner(3) | | 4 | | 4 | | 2008-2019 | | 642,845 | | 5.5 | % | $20,771,144 | | 6.3 | % |
AIG SunAmerica | | 1 | | 1 | | 2013 | | 182,010 | | 1.6 | | 5,192,084 | | 1.6 | |
The Endeavor Agency, LLC | | 1 | | 1 | | 2019 | | 102,241 | | 0.9 | | 4,046,794 | | 1.2 | |
Blue Shield of California | | 1 | | 1 | | 2009 | | 135,106 | | 1.2 | | 3,939,691 | | 1.2 | |
Metrocities Mortgage, LLC | | 4 | | 2 | | 2010-2015 | | 138,040 | | 1.2 | | 3,784,032 | | 1.1 | |
Rubin Postaer & Associates | | 1 | | 1 | | 2007 | | 80,766 | | 0.7 | | 3,628,851 | | 1.1 | |
Pacific Theatres Exhibition Corp(4) | | 1 | | 1 | | 2016 | | 88,300 | | 0.8 | | 3,567,320 | | 1.1 | |
Total | | 13 | | 11 | | | | 1,369,308 | | 11.9 | % | $44,929,916 | | 13.6 | % |
(1) Expiration dates are per leases and do not assume exercise of renewal, extension or termination options. For tenants with multiple leases, expirations are shown as a range.
(2) Represents annualized monthly cash rent under leases commenced as of December 31, 2006. The amount reflects total cash rent before abatements. For our Burbank and Honolulu office properties, annualized rent is converted from triple net to gross by adding expense reimbursements to base rent.
(3) Next scheduled expiration is a 10,000 square foot lease in October 2008.
(4) Annualized rent excludes rent determined as a percentage of sales.
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Douglas Emmett, Inc. | | INDUSTRY DIVERSIFICATIONas of December 31, 2006 |
| | | | Annualized | |
| | | | Rent | |
| | Number | | as of | |
| | of | | Percent of | |
Industry | | Leases | | Total | |
| | | | | |
Financial Services | | 302 | | 17.8 | % |
Legal | | 288 | | 15.2 | |
Entertainment | | 107 | | 11.7 | |
Other. | | 265 | | 9.4 | |
Real Estate | | 166 | | 9.4 | |
Health Services | | 269 | | 8.5 | |
Insurance | | 74 | | 7.1 | |
Retail | | 142 | | 6.7 | |
Accounting | | 116 | | 6.6 | |
Advertising | | 55 | | 4.4 | |
Technology | | 62 | | 3.2 | |
Total. | | 1,846 | | 100.0 | % |
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Douglas Emmett, Inc. | | LEASE DISTRIBUTIONas of December 31, 2006 |
| | | | Leases | | | | Square | | | | Annualized | |
| | Number | | as a | | Rentable | | Feet as | | | | Rent as | |
| | of | | Percent | | Square | | a Percent | | Annualized | | a Percent | |
Square Feet Under Lease | | Leases | | of Total | | Feet(1) | | of Total | | Rent(2) | | of Total | |
| | | | | | | | | | | | | |
Available | | - | | - | % | 660,821 | | 5.7 | % | $ | - | | - | % |
2,500 or less | | 937 | | 50.7 | | 1,251,085 | | 10.8 | | 39,914,981 | | 12.1 | |
2,501-10,000 | | 678 | | 36.7 | | 3,285,851 | | 28.5 | | 101,321,793 | | 30.7 | |
10,001-20,000 | | 151 | | 8.2 | | 2,106,471 | | 18.2 | | 64,961,623 | | 19.7 | |
20,001-40,000 | | 51 | | 2.8 | | 1,412,732 | | 12.2 | | 44,046,520 | | 13.3 | |
40,001-100,000 | | 22 | | 1.2 | | 1,285,823 | | 11.1 | | 42,878,553 | | 13.0 | |
Greater than 100,000 | | 7 | | 0.4 | | 1,235,903 | | 10.7 | | 37,117,532 | | 11.2 | |
BOMA Adjustment(3) | | - | | - | | 76,019 | | 0.7 | | - | | - | |
Building Management Use | | - | | - | | 68,528 | | 0.6 | | - | | - | |
Signed leases not commenced | | - | | - | | 171,596 | | 1.5 | | - | | - | |
Total | | 1,846 | | 100.0 | % | 11,554,829 | | 100.0 | % | $ | 330,241,002 | | 100.0 | % |
| | | | | | | | | | | | | | | |
(1) Based on BOMA 1996 remeasurement. Total consists of 10,749,461 leased square feet (includes 171,596 square feet with respect to signed leases not commenced), 660,821 available square feet, 68,528 building management use square feet, and 76,019 square feet of BOMA 1996 adjustment on leased space.
(2) Represents annualized monthly cash rent under leases commenced as of December 31, 2006. The amount reflects total cash rent before abatements. For our Burbank and Honolulu office properties, annualized rent is converted from triple net to gross by adding expense reimbursements to base rent.
(3) Represents square footage adjustments for leases that do not reflect BOMA 1996 remeasurement.
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Douglas Emmett, Inc. | | LEASE EXPIRATIONSas of December 31, 2006 |
| | | | | | Expiring | | | | | | | | Annualized | |
| | | | | | Square | | | | Annualized | | Annualized | | Rent Per | |
| | Number | | | | Feet | | | | Rent | | Rent | | Leased | |
| | of | | Rentable | | as a | | | | as a | | Per Leased | | Square | |
| | Leases | | Square | | Percent | | Annualized | | Percent | | Square | | Foot at | |
Year of Lease Expiration | | Expiring | | Feet(1) | | of Total | | Rent(2) | | of Total | | Foot(3) | | Expiration(4) | |
| | | | | | | | | | | | | | | |
Available | | - | | 660,821 | | 5.7 | % | $ | - | | - | % | $ | - | | $ | - | |
2007 | | 394 | | 1,352,124 | | 11.7 | | 43,768,881 | | 13.2 | | 32.37 | | 32.53 | |
2008 | | 383 | | 1,552,445 | | 13.4 | | 47,129,416 | | 14.3 | | 30.36 | | 31.30 | |
2009 | | 337 | | 1,506,217 | | 13.0 | | 46,843,424 | | 14.2 | | 31.10 | | 32.97 | |
2010 | | 253 | | 1,377,919 | | 11.9 | | 44,772,902 | | 13.6 | | 32.49 | | 35.48 | |
2011 | | 255 | | 1,359,368 | | 11.8 | | 42,760,251 | | 12.9 | | 31.46 | | 35.69 | |
2012 | | 74 | | 621,873 | | 5.4 | | 18,536,579 | | 5.6 | | 29.81 | | 34.45 | |
2013 | | 56 | | 681,793 | | 5.9 | | 21,000,553 | | 6.4 | | 30.80 | | 36.12 | |
2014 | | 30 | | 361,788 | | 3.1 | | 9,911,238 | | 3.0 | | 27.40 | | 33.68 | |
2015 | | 26 | | 379,650 | | 3.3 | | 10,953,756 | | 3.3 | | 28.85 | | 35.82 | |
Thereafter | | 38 | | 1,384,688 | | 12.0 | | 44,564,002 | | 13.5 | | 32.18 | | 41.26 | |
BOMA Adjustment(5) | | - | | 76,019 | | 0.7 | | - | | - | | - | | - | |
Building Management Use | | - | | 68,528 | | 0.6 | | - | | - | | - | | - | |
Signed leases not commenced | | - | | 171,596 | | 1.5 | | - | | - | | - | | - | |
Total/Weighted Average | | 1,846 | | 11,554,829 | | 100.0 | % | $ | 330,241,002 | | 100.0 | % | $ | 31.22 | | $ | 34.85 | |
(1) Based on BOMA 1996 remeasurement. Total consists of 10,749,461 leased square feet (includes 171,596 square feet with respect to signed leases not commenced), 660,821 available square feet, 68,528 building management use square feet, and 76,019 square feet of BOMA 1996 adjustment on leased space.
(2) Represents annualized monthly cash rent under leases commenced as of December 31, 2006. The amount reflects total cash rent before abatements. For our Burbank and Honolulu office properties, annualized rent is converted from triple net to gross by adding expense reimbursements to base rent.
(3) Represents annualized rent divided by leased square feet.
(4) Represents annualized rent at expiration divided by leased square feet.
(5) Represents square footage adjustments for leases that do not reflect BOMA 1996 remeasurement.
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Douglas Emmett, Inc. | | QUARTERLY LEASE EXPIRATIONS – NEXT FOUR QUARTERSas of December 31, 2006 |
| | Expiring Square Feet | |
| | Q1 2007 | | Q2 2007 | | Q3 2007 | | Q4 2007 | |
| | | | | | | | | |
West Los Angeles | | | | | | | | | |
Brentwood | | 101,101 | | 72,129 | | 46,691 | | 29,800 | |
Olympic Corridor | | 20,687 | | 43,669 | | 33,525 | | 81,954 | |
Century City | | 23,824 | | 14,056 | | 14,640 | | 6,034 | |
Santa Monica | | 4,909 | | 82,958 | | 16,445 | | 11,174 | |
Beverly Hills | | 21,018 | | 18,250 | | 13,701 | | 8,959 | |
Westwood | | 2,491 | | 24,699 | | 13,273 | | 6,938 | |
San Fernando Valley | | | | | | | | | |
Sherman Oaks/ | | | | | | | | | |
Encino | | 110,775 | | 77,032 | | 52,733 | | 91,916 | |
Warner Center/ | | | | | | | | | |
Woodland Hills | | 33,685 | | 51,351 | | 87,242 | | 35,306 | |
Tri-Cities | | | | | | | | | |
Burbank | | - | | - | | - | | - | |
Honolulu | | 34,162 | | 5,201 | | 48,687 | | 11,109 | |
Total | | 352,652 | | 389,345 | | 326,937 | | 283,190 | |
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Douglas Emmett, Inc. | | OFFICE PORTFOLIO LEASING ACTIVITYFor the three months ended December 31, 2006 |
Gross New Leasing Activity | | | | | |
Rentable square feet | | | | 203,923 | |
Number of leases | | | | 66 | |
| | | | | |
Gross Renewal Leasing Activity | | | | | |
Rentable square feet | | | | 163,863 | |
Number of leases | | | | 44 | |
| | | | | |
Cash Rent Growth(1) | | | | | |
Expiring Rate | | | | $ | 32.55 | |
New/Renewal Rate | | | | $ | 35.19 | |
Increase | | | | 8.1 | % |
| | | | | |
Net Absorption | | | | | |
Leased rentable square feet | | | | 62,561 | |
| | | | | |
Weighted Average Lease Terms | | | | | |
New (in months) | | | | 61 | |
Renewal (in months) | | | | 56 | |
| | | | | |
| | Total Lease | | Annual Lease | |
Tenant Improvement and Leasing | | Transaction | | Transaction | |
Commissions (per rentable square foot) | | Costs | | Costs | |
New leases | | $ | 24.27 | | $ | 4.78 | |
Renewal leases | | $ | 13.51 | | $ | 2.92 | |
Blended | | $ | 19.48 | | $ | 3.95 | |
(1) Represents the difference between initial cash rents on new and renewal leases as compared to the expiring cash rents on the same space.
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