DEI_XBRL_Filing_Information
DEI XBRL Filing Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
Document And Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'Douglas Emmett Inc | ' |
Entity Central Index Key | '0001364250 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Document Type | '10-Q | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Amendment Flag | 'false | ' |
Entity Common Stock, Shares Outstanding | ' | 144,826,542 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Assets | ' | ' | |
Land | $867,355 | $867,284 | |
Buildings and improvements | 5,402,864 | 5,386,446 | |
Tenant improvements and lease intangibles | 808,194 | 759,003 | |
Investment in real estate, gross | 7,078,413 | 7,012,733 | |
Less: accumulated depreciation and amortization | -1,647,068 | -1,495,819 | |
Investment in real estate, net | 5,431,345 | 5,516,914 | |
Cash and cash equivalents | 12,467 | 44,206 | |
Tenant receivables, net | 1,724 | 1,760 | |
Deferred rent receivables, net | 73,039 | 69,662 | |
Acquired lease intangible assets, net | 3,376 | 3,744 | |
Investment in unconsolidated real estate funds | 174,475 | 182,896 | |
Other assets | 64,225 | 28,607 | |
Total assets | 5,760,651 | 5,847,789 | |
Liabilities | ' | ' | |
Secured notes payable | 3,210,210 | 3,241,140 | |
Interest payable, accounts payable and deferred revenue | 72,929 | 52,763 | |
Security deposits | 36,241 | 35,470 | |
Acquired lease intangible liabilities, net | 48,668 | 59,543 | |
Interest rate contracts | 42,628 | [1] | 63,144 |
Dividends payable | 28,959 | 28,521 | |
Total liabilities | 3,439,635 | 3,480,581 | |
Douglas Emmett, Inc. stockholders' equity: | ' | ' | |
Common Stock, $0.01 par value 750,000,000 authorized, 144,793,591 and 142,605,390 outstanding at September 30, 2014 and December 31, 2013, respectively | 1,448 | 1,426 | |
Additional paid-in capital | 2,677,717 | 2,653,905 | |
Accumulated other comprehensive income (loss) | -34,257 | -50,554 | |
Accumulated deficit | -687,170 | -634,380 | |
Total Douglas Emmett, Inc. stockholders' equity | 1,957,738 | 1,970,397 | |
Noncontrolling interests | 363,278 | 396,811 | |
Total equity | 2,321,016 | 2,367,208 | |
Total liabilities and equity | $5,760,651 | $5,847,789 | |
[1] | As of September 30, 2014, we did not have any derivative instruments in an asset position. |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets Parenthetical (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ' | ' |
Common stock, par value (usd per share) | $0.01 | $0.01 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares outstanding | 144,793,591 | 142,605,390 |
Consolidated_Statements_Of_Ope
Consolidated Statements Of Operations (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Office rental | ' | ' | ' | ' |
Rental revenues | $97,465 | $99,795 | $296,342 | $296,275 |
Tenant recoveries | 11,093 | 11,867 | 33,720 | 34,170 |
Parking and other income | 19,404 | 18,677 | 58,547 | 55,979 |
Total office revenues | 127,962 | 130,339 | 388,609 | 386,424 |
Multifamily rental | ' | ' | ' | ' |
Rental revenues | 18,767 | 17,929 | 55,447 | 53,146 |
Parking and other income | 1,417 | 1,418 | 4,392 | 4,290 |
Total multifamily revenues | 20,184 | 19,347 | 59,839 | 57,436 |
Total revenues | 148,146 | 149,686 | 448,448 | 443,860 |
Operating Expenses | ' | ' | ' | ' |
Office expense | 47,636 | 46,494 | 135,657 | 130,525 |
Multifamily expense | 5,261 | 5,157 | 15,490 | 15,108 |
General and administrative | 6,658 | 6,546 | 20,181 | 20,724 |
Depreciation and amortization | 50,111 | 47,402 | 151,249 | 141,528 |
Total operating expenses | 109,666 | 105,599 | 322,577 | 307,885 |
Operating income | 38,480 | 44,087 | 125,871 | 135,975 |
Other income | 3,769 | 2,138 | 12,642 | 4,165 |
Other expenses | -1,983 | -1,402 | -5,114 | -2,777 |
Income, including depreciation, from unconsolidated real estate funds | 665 | 811 | 2,725 | 3,335 |
Interest expense | -32,098 | -32,601 | -95,888 | -97,832 |
Acquisition-related expenses | -152 | -290 | -180 | -533 |
Net income | 8,681 | 12,743 | 40,056 | 42,333 |
Less: Net income attributable to noncontrolling interests | -1,292 | -1,992 | -6,328 | -5,865 |
Net income attributable to common stockholders | $7,389 | $10,751 | $33,728 | $36,468 |
Net income attributable to common stockholders per share – basic (usd per share) | $0.05 | $0.08 | $0.23 | $0.26 |
Net income attributable to common stockholders per share – diluted (usd per share) | $0.05 | $0.07 | $0.23 | $0.25 |
Dividends declared per common share (usd per share) | $0.20 | $0.18 | $0.60 | $0.54 |
Consolidated_Statements_Of_Com
Consolidated Statements Of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Statement of Comprehensive Income [Abstract] | ' | ' | ' | ' |
Net income | $8,681 | $12,743 | $40,056 | $42,333 |
Other comprehensive income (loss): cash flow hedges | 12,110 | -1,060 | 20,270 | 31,359 |
Comprehensive income | 20,791 | 11,683 | 60,326 | 73,692 |
Less comprehensive income attributable to noncontrolling interests | -3,388 | -1,818 | -10,301 | -11,857 |
Comprehensive income attributable to common stockholders | $17,403 | $9,865 | $50,025 | $61,835 |
Consolidated_Statements_Of_Cas
Consolidated Statements Of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Operating Activities | ' | ' |
Net income | $40,056 | $42,333 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Income, including depreciation, from unconsolidated real estate funds | -2,725 | -3,335 |
Depreciation and amortization | 151,249 | 141,528 |
Net accretion of acquired lease intangibles | -10,506 | -11,970 |
Amortization of deferred loan costs | 3,027 | 2,972 |
Non-cash market value adjustments on interest rate contracts | 50 | 67 |
Non-cash amortization of equity compensation | 4,049 | 4,560 |
Operating distributions from unconsolidated real estate funds | 660 | 558 |
Change in working capital components: | ' | ' |
Tenant receivables | 36 | -263 |
Deferred rent receivables | -3,377 | -4,717 |
Interest payable, accounts payable and deferred revenue | 21,230 | 20,288 |
Security deposits | 771 | 1,126 |
Other assets | -9,811 | -2,423 |
Net cash provided by operating activities | 194,709 | 190,724 |
Investing Activities | ' | ' |
Capital expenditures for improvements to real estate | -63,278 | -49,697 |
Capital expenditures for developments | -3,099 | -211 |
Property acquisitions | 0 | -150,000 |
Insurance recoveries for damage to real estate | 4,236 | 0 |
Deposits for property acquisitions | -3,000 | 0 |
Note receivable | -27,500 | ' |
Loan to related party | 0 | -2,882 |
Loan payments received from related party | 882 | ' |
Contributions to unconsolidated real estate funds | 0 | -26,405 |
Acquisitions of additional interests in unconsolidated real estate funds | 0 | -8,004 |
Capital distributions received from unconsolidated real estate funds | 8,664 | 4,755 |
Net cash used in investing activities | -83,095 | -232,444 |
Financing Activities | ' | ' |
Deferred loan cost payments | -377 | -157 |
Payment of refundable loan deposit | -1,550 | 0 |
Repayment of borrowings | -30,930 | -90,000 |
Contributions by noncontrolling interests | 250 | 584 |
Distributions to noncontrolling interests | -17,315 | -15,993 |
Repurchase of stock options | -4,524 | 0 |
Repurchase of operating partnership units | -2,827 | -352 |
Cash dividends to common stockholders | -86,080 | -76,754 |
Net cash used in financing activities | -143,353 | -182,672 |
Decrease in cash and cash equivalents | -31,739 | -224,392 |
Cash and cash equivalents at beginning of period | 44,206 | 373,203 |
Cash and cash equivalents at end of period | $12,467 | $148,811 |
Overview
Overview | 9 Months Ended |
Sep. 30, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ' |
Overview | ' |
Overview | |
Organization and Description of Business | |
Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed Real Estate Investment Trust (REIT). We are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and Honolulu, Hawaii. We focus on owning and acquiring a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities. | |
Through our interest in Douglas Emmett Properties, LP (our operating partnership) and its subsidiaries, as well as our investment in our institutional unconsolidated real estate funds (Funds), we own or partially own, manage, lease, acquire and develop real estate, consisting primarily of office and multifamily properties in Los Angeles County, California and Honolulu, Hawaii. As of September 30, 2014, we owned a consolidated portfolio of fifty-two office properties (including ancillary retail space) and nine multifamily properties, as well as the fee interests in two parcels of land subject to ground leases. Alongside our consolidated portfolio, we also manage and own equity interests in our Funds which, at September 30, 2014, owned eight additional office properties, for a combined sixty office properties in our total portfolio. | |
The terms "us," "we" and "our" as used in these financial statements refer to Douglas Emmett, Inc. and its subsidiaries. | |
Basis of Presentation | |
The accompanying consolidated financial statements as of September 30, 2014 and December 31, 2013, and for the three and nine months ended September 30, 2014 and 2013, are the consolidated financial statements of Douglas Emmett, Inc. and our subsidiaries, including our operating partnership. All significant intercompany balances and transactions have been eliminated in our consolidated financial statements, and certain prior period amounts have been reclassified to conform with the current period presentation. | |
The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) may have been condensed or omitted pursuant to SEC rules and regulations, although we believe that the disclosures are adequate to make their presentation not misleading. The accompanying unaudited financial statements include, in our opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set forth therein. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2014. The interim financial statements should be read in conjunction with the consolidated financial statements in our 2013 Annual Report on Form 10-K and the notes thereto. Any references to the number of properties, square footage and geography, are unaudited and outside the scope of our independent registered public accounting firm’s review of our financial statements, in accordance with the standards of the United States Public Company Accounting Oversight Board (PCAOB). |
Summary_Of_Significant_Account
Summary Of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Summary Of Significant Accounting Policies | ' |
Summary of Significant Accounting Policies | |
During the period covered by this report, we have not made any material changes to our significant accounting policies included in our 2013 Annual Report on Form 10-K. During the first quarter of 2014, we added to our policies the accounting for insurance recoveries as follows: | |
The amount by which insurance recoveries related to property damage exceed any losses recognized from that damage are recorded as other income when payment is either received or receipt is determined to be probable. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | |
Income Taxes | |
We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. Provided that we qualify for taxation as a REIT, we are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. We are subject to corporate-level tax on the earnings that we derive through our taxable REIT subsidiaries (TRS). | |
Tenant improvements and lease intangibles | |
Tenant improvements and leasing intangibles are depreciated and amortized on a straight-line basis over the respective lease term. Unamortized lease intangible amounts related to leases terminated prior to their stated expirations are written off in the period of termination. As tenant improvements in our buildings generally remain in place after the expiration of the lease, we continue to carry these items, offset by the related accumulated depreciation, on our balance sheet even after the tenant has moved out. Accordingly, as of September 30, 2014, tenant improvements and leasing intangibles recognized from the purchase of buildings included $354.5 million of fully depreciated and amortized items, and $110.8 million of fully depreciated and amortized items recognized from our leasing activities, compared to $343.6 million and $84.1 million, respectively, at December 31, 2013. Because the inclusion of these items is entirely offset by the related accumulated depreciation and amortization, fully depreciated and amortized items have no impact on our net asset values. | |
Recently Issued Accounting Literature | |
Changes to GAAP are established by the Financial Accounting Standards Board (FASB) in the form of Accounting Standard Updates (ASUs). We consider the applicability and impact of all ASUs. | |
In February 2013, the FASB issued ASU No. 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date (Topic 405), which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date, except for obligations addressed within existing guidance in GAAP. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, which for us was the first quarter of 2014. We adopted ASU No. 2013-04 during the first quarter of 2014, and it did not have a material impact on our financial position or results of operations, as we do not currently have any obligations within the scope of this ASU. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which provides guidance for the accounting of revenue from contracts with customers. The guidance supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, which for us is the first quarter of 2017. Early adoption is not permitted. We do not expect this ASU to have a material impact on our financial position or results of operations, as lease contracts are not within the scope of this ASU. | |
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), which provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures if necessary. The ASU is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter, which for us is the fiscal year ended December 31, 2016. Early application is permitted. We do not expect this ASU to have a material impact on our disclosures. | |
The FASB has not issued any other ASUs during 2014 that we expect to be applicable and have a material impact on our future financial position or results of operations. |
Acquired_Lease_Intangibles
Acquired Lease Intangibles | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Acquired Lease Intangibles [Abstract] | ' | |||||||
Acquired Lease Intangibles | ' | |||||||
Acquired Lease Intangibles | ||||||||
The following summarizes our acquired lease intangibles related to above/below-market leases (in thousands) as of: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Above-market tenant leases(1) | $ | 34,997 | $ | 34,997 | ||||
Accumulated amortization(1) | (34,210 | ) | (33,899 | ) | ||||
Below-market ground leases | 3,198 | 3,198 | ||||||
Accumulated amortization | (609 | ) | (552 | ) | ||||
Acquired lease intangible assets, net | $ | 3,376 | $ | 3,744 | ||||
Below-market tenant leases(2) | $ | 272,413 | $ | 272,413 | ||||
Accumulated accretion(2) | (236,151 | ) | (225,425 | ) | ||||
Above-market ground leases | 16,200 | 16,200 | ||||||
Accumulated accretion | (3,794 | ) | (3,645 | ) | ||||
Acquired lease intangible liabilities, net | $ | 48,668 | $ | 59,543 | ||||
________________________________________ | ||||||||
-1 | Includes fully amortized above-market tenant leases of $32.2 million at September 30, 2014 and $31.1 million at December 31, 2013. | |||||||
-2 | Includes fully accreted below-market tenant leases of $136.9 million at September 30, 2014 and $131.1 million at December 31, 2013. |
Other_Assets
Other Assets | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Other Assets [Abstract] | ' | |||||||
Other Assets | ' | |||||||
Other Assets | ||||||||
Other assets consisted of the following (in thousands) as of: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Deferred loan costs, net of accumulated amortization of $12,256 and $9,395 at September 30, 2014 and December 31, 2013, respectively (1) | $ | 15,096 | $ | 17,745 | ||||
Note receivable(2) | 27,500 | — | ||||||
Restricted cash | 194 | 194 | ||||||
Prepaid expenses | 8,749 | 5,747 | ||||||
Other indefinite-lived intangible | 1,988 | 1,988 | ||||||
Deposits in escrow | 4,550 | — | ||||||
Insurance receivable(3) | 2,270 | — | ||||||
Other | 3,878 | 2,933 | ||||||
Total other assets | $ | 64,225 | $ | 28,607 | ||||
__________________________________________________________________________________ | ||||||||
-1 | We recognized deferred loan cost amortization expense of $1.0 million and $0.9 million for the three months ended September 30, 2014 and 2013, respectively, and $3.0 million and $3.0 million for the nine months ended September 30, 2014 and 2013, respectively. Deferred loan cost amortization is included as a component of interest expense in our consolidated statements of operations. | |||||||
-2 | On February 28, 2014, we loaned $27.5 million to the owner of the land underlying one of our office properties. The loan carries interest of 4.9%, is currently due and payable in 2015, and is secured by that land. | |||||||
-3 | During the three and nine months ended September 30, 2014, we recognized approximately $1.3 million and $6.1 million, respectively, in other income for property repairs, as well as $214 thousand and $684 thousand, respectively, in multifamily rental revenues for lost rental income, and $202 thousand and $654 thousand, respectively, in other expenses for other recoverable expenses, all related to insurance recoveries with respect to a fire at one of our residential properties. At September 30, 2014, we had received cash of $5.2 million, and included in other assets an additional receivable of $2.3 million, the payment which has been confirmed by the insurance companies. |
Secured_Notes_Payable
Secured Notes Payable | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Secured Debt [Abstract] | ' | ||||||||||||||||
Secured Notes Payable | ' | ||||||||||||||||
Secured Notes Payable | |||||||||||||||||
The table below summarizes our secured notes payable: | |||||||||||||||||
Description | Maturity | Outstanding Principal Balance as of September 30, 2014 (in thousands) | Outstanding Principal Balance as of December 31, 2013 (in thousands) | Variable Interest Rate | Effective | Swap Maturity Date | |||||||||||
Date | Annual | ||||||||||||||||
Fixed Interest | |||||||||||||||||
Rate (2) | |||||||||||||||||
Term loan debt (1) | |||||||||||||||||
Fannie Mae Loan (3) | 2/1/15 | $ | 111,920 | $ | 111,920 | DMBS + 0.707% | N/A | -- | |||||||||
Term Loan (4) | 3/1/16 | 16,140 | 16,140 | LIBOR + 1.60% | N/A | -- | |||||||||||
Fannie Mae Loan | 3/1/16 | 82,000 | 82,000 | LIBOR + 0.62% | N/A | -- | |||||||||||
Fannie Mae Loan | 6/1/17 | 18,000 | 18,000 | LIBOR + 0.62% | N/A | -- | |||||||||||
Term Loan | 10/2/17 | 400,000 | 400,000 | LIBOR + 2.00% | 4.45% | 7/1/15 | |||||||||||
Term Loan | 4/2/18 | 510,000 | 510,000 | LIBOR + 2.00% | 4.12% | 4/1/16 | |||||||||||
Term Loan | 8/1/18 | 530,000 | 530,000 | LIBOR + 1.70% | 3.74% | 8/1/16 | |||||||||||
Term Loan (5) | 8/5/18 | 355,000 | 355,000 | N/A | 4.14% | -- | |||||||||||
Term Loan (6) | 2/1/19 | 155,000 | 155,000 | N/A | 4.00% | -- | |||||||||||
Term Loan (7) | 6/5/19 | 285,000 | 285,000 | N/A | 3.85% | -- | |||||||||||
Term Loan (8) | 3/1/20 | (9) | 349,070 | 350,000 | N/A | 4.46% | -- | ||||||||||
Fannie Mae Loans | 11/2/20 | 388,080 | 388,080 | LIBOR + 1.65% | 3.65% | 11/1/17 | |||||||||||
Aggregate term loan principal | $ | 3,200,210 | $ | 3,201,140 | |||||||||||||
Revolving credit line (10) | 12/11/17 | 10,000 | 40,000 | LIBOR + 1.40% | N/A | -- | |||||||||||
Total principal (11) | $ | 3,210,210 | $ | 3,241,140 | |||||||||||||
Aggregate swapped to fixed rate loans | $ | 1,828,080 | $ | 1,828,080 | 3.98% | ||||||||||||
Aggregate fixed rate loans | 1,144,070 | 1,145,000 | 4.15% | ||||||||||||||
Aggregate variable rate loans | 238,060 | 268,060 | N/A | ||||||||||||||
Total principal (11) | $ | 3,210,210 | $ | 3,241,140 | |||||||||||||
______________________________________________________________________________________ | |||||||||||||||||
-1 | As of September 30, 2014, (i) the weighted average remaining life of our outstanding term debt (excluding our revolving credit line) was 4.0 years and (ii) of the $2.97 billion of term debt on which the interest rate was fixed under the terms of the loan or a swap, (a) the weighted average remaining life was 4.3 years, the weighted average remaining period during which interest was fixed was 2.6 years, and the weighted average annual interest rate was 4.05% and (b) including the non-cash amortization of prepaid loan fees, the effective weighted average interest rate was 4.18%. Except as otherwise noted below, each loan is secured by a separate collateral pool consisting of one or more properties, requiring monthly payments of interest only, with the outstanding principal due upon maturity. | ||||||||||||||||
-2 | Includes the effect of interest rate contracts as of September 30, 2014, and excludes amortization of prepaid loan fees, all shown on an actual/360-day basis. See Note 7 for the details of our interest rate contracts. | ||||||||||||||||
-3 | The loan has a $75.0 million tranche bearing interest at DMBS + 0.76%, and a $36.9 million tranche bearing interest at DMBS + 0.60%. The loan was subsequently paid off on October 1, 2014, see Note 16. | ||||||||||||||||
-4 | The borrower is a consolidated entity in which our operating partnership owns a two-thirds interest. | ||||||||||||||||
-5 | Interest-only until February 2016, with principal amortization thereafter based upon a thirty-year amortization schedule. | ||||||||||||||||
-6 | Interest-only until February 2015, with principal amortization thereafter based upon a thirty-year amortization schedule. | ||||||||||||||||
-7 | Interest only until February 2017, with principal amortization thereafter based upon a thirty-year amortization schedule. | ||||||||||||||||
-8 | Interest is fixed until March 1, 2018, and is floating thereafter, with interest-only payments until May 1, 2016, and principal amortization thereafter based upon a thirty-year amortization schedule. | ||||||||||||||||
-9 | We have two one-year extension options which could extend the maturity to March 1, 2020 from March 1, 2018, subject to meeting certain conditions. | ||||||||||||||||
-10 | $300.0 million revolving credit facility secured by 3 separate collateral pools consisting of a total of 6 properties. Unused commitment fees range from 0.15% to 0.20%. | ||||||||||||||||
-11 | See Note 10 for our fair value disclosures. | ||||||||||||||||
The table below presents (in thousands) the minimum future principal payments due on our secured notes payable at September 30, 2014: | |||||||||||||||||
Twelve months ending September 30: | |||||||||||||||||
2015 | $ | 113,728 | |||||||||||||||
2016 | 106,353 | ||||||||||||||||
2017 | 35,963 | ||||||||||||||||
2018 | 2,144,899 | ||||||||||||||||
2019 | 421,187 | ||||||||||||||||
Thereafter | 388,080 | ||||||||||||||||
Total future principal payments | $ | 3,210,210 | |||||||||||||||
Interest_Payable_Accounts_Paya
Interest Payable, Accounts Payable and Deferred Revenue | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ' | |||||||
Interest Payable, Accounts Payable and Deferred Revenue | ' | |||||||
Interest Payable, Accounts Payable and Deferred Revenue | ||||||||
Interest payable, accounts payable and deferred revenue consisted of the following (in thousands) as of: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Interest payable | $ | 9,074 | $ | 9,263 | ||||
Accounts payable and accrued liabilities | 42,869 | 20,761 | ||||||
Deferred revenue | 20,986 | 22,739 | ||||||
Total interest payable, accounts payable and deferred revenue | $ | 72,929 | $ | 52,763 | ||||
Interest_Rate_Contracts
Interest Rate Contracts | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||
Interest Rate Contracts | ' | |||||||
Interest Rate Contracts | ||||||||
Cash Flow Hedges of Interest Rate Risk | ||||||||
We make use of interest rate swap and interest rate cap contracts to manage the risk associated with changes in the interest rates on our floating-rate borrowings. When we enter into a floating-rate term loan, we generally enter into an interest rate swap agreement for the equivalent principal amount, for a period covering the majority of the loan term, which effectively converts our floating-rate debt to a fixed-rate basis during that time. In limited instances, we make use of interest rate caps to limit our exposure to interest rate increases on underlying floating-rate debt. We may enter into derivative contracts that are intended to hedge certain economic risks, even though hedge accounting does not apply, or for which we elect to not apply hedge accounting. We do not make use of any other derivative instruments, and we do not speculate in derivatives. See note 5 for the details of our floating-rate debt that we hedge. | ||||||||
Designated Hedges | ||||||||
As of September 30, 2014, the totals of our existing swaps that qualified as highly effective cash flow hedges were as follows: | ||||||||
Interest Rate Derivative | Number of Instruments | Notional (in thousands) | ||||||
Interest Rate Swaps | 7 | $1,828,080 | ||||||
As of September 30, 2014, the totals of our Funds' existing swaps that qualified as highly effective cash flow hedges were | ||||||||
as follows: | ||||||||
Interest Rate Derivative | Number of Instruments | Notional (in thousands) | ||||||
Interest Rate Swaps | 1 | $325,000 | ||||||
Non-designated Hedges | ||||||||
Derivatives not designated as hedges are not speculative. As of September 30, 2014, we had the following outstanding interest rate derivatives that were not designated for accounting purposes as hedging instruments, but were used to hedge our economic exposure to interest rate risk: | ||||||||
Interest Rate Derivative | Number of Instruments | Notional (in thousands) | ||||||
Purchased Caps | 4 | $100,000 | ||||||
Credit-risk-related Contingent Features | ||||||||
We have agreements with each of our derivative counterparties that contain a provision under which we could also be declared in default on our derivative obligations if we default on the underlying indebtedness that we are hedging, including any default where repayment of the indebtedness has not been accelerated by the lender. There have been no events of default with respect to any of our derivatives. | ||||||||
As of September 30, 2014 and December 31, 2013, the fair value of our derivatives in a net liability position, when aggregated by counterparty, was $46.1 million and $67.2 million, respectively, which includes accrued interest, but excludes any adjustment for nonperformance risk related to these agreements. As of September 30, 2014 and December 31, 2013, our Funds did not have any derivatives in a net liability position. | ||||||||
Accounting for Interest Rate Contracts | ||||||||
For hedging instruments designated as cash flow hedges, gain or loss recognition are generally matched to the earnings effect of the related hedged item or transaction, with any resulting hedge ineffectiveness recorded as interest expense. Hedge ineffectiveness is determined by comparing the changes in the fair value or cash flows of the hedge to the changes in the fair value or cash flows of the related hedged item or transaction. All other changes in the fair value of these hedges are recorded in accumulated other comprehensive income (loss) (AOCI), which is a component of equity outside of earnings. Amounts reported in AOCI related to our hedges are then reclassified to interest expense as interest payments are made on the hedged item or transaction. Amounts reported in AOCI related to our Funds' hedges are reclassified to income, including depreciation, from unconsolidated real estate funds, as interest payments are made by our Funds on their hedged items or transactions. Changes in fair value of derivatives not designated as hedges are recorded as interest expense. | ||||||||
We estimate that $32.6 million of our AOCI related to our derivatives designated as cash flow hedges will be reclassified as an increase to interest expense during the next twelve months, and $773 thousand of our AOCI related to our Funds' derivatives designated as cash flow hedges will be reclassified as a decrease to income, including depreciation, from unconsolidated real estate funds, during the next twelve months. Changes in fair value of derivatives not designated as hedges have been recorded as interest expense for all periods. | ||||||||
The table below presents (in thousands) the effect of our derivative instruments on our AOCI and consolidated statements of operations for the nine months ended September 30: | ||||||||
2014 | 2013 | |||||||
Derivatives Designated as Cash Flow Hedges: | ||||||||
Gain (loss) recognized in other comprehensive income (OCI) (effective portion)(1) | $ | (7,059 | ) | $ | 2,151 | |||
Gain (loss) from investment in unconsolidated real estate funds | $ | (1,048 | ) | $ | 1,810 | |||
recognized in other comprehensive income (OCI) (effective portion)(1) | ||||||||
Gain (loss) reclassified from AOCI into interest expense (effective portion) | $ | (27,576 | ) | $ | (27,029 | ) | ||
Gain (loss) from investment in unconsolidated real estate funds reclassified from AOCI into Income, including depreciation, from unconsolidated real estate funds (effective portion) | $ | (751 | ) | $ | (305 | ) | ||
Gain (loss) reclassified from AOCI into interest expense (ineffective portion and amount excluded from effectiveness testing) | $ | (50 | ) | $ | (64 | ) | ||
Gain (loss) on derivatives recorded as interest expense (ineffective portion and amount excluded from effectiveness testing) | $ | — | $ | — | ||||
Derivatives Not Designated as Cash Flow Hedges: | ||||||||
Realized and unrealized gain (loss) recorded as interest expense | $ | — | $ | (3 | ) | |||
___________________________________________________ | ||||||||
-1 | Gains and losses recognized in AOCI do not impact the income statement. Refer to the reconciliation of our AOCI in Note 8. | |||||||
Fair Value Measurement | ||||||||
We present our derivatives on the balance sheet at fair value, on a gross basis, excluding accrued interest, using the framework for measuring fair value established by the FASB. See Note 10 for our fair value disclosures. The table below presents (in thousands) the fair values of our derivative instruments as of: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Derivative liabilities disclosed as "Interest Rate Contracts":(1) | ||||||||
Derivatives designated as accounting hedges | $ | 42,628 | $ | 63,144 | ||||
Derivatives not designated as accounting hedges | — | — | ||||||
Total derivative liabilities | $ | 42,628 | $ | 63,144 | ||||
_______________________________________________________________________________________ | ||||||||
-1 | As of September 30, 2014, we did not have any derivative assets. |
Equity
Equity | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||||||||||
Equity | ' | |||||||||||||||
Equity | ||||||||||||||||
Equity Sales, Conversions and Repurchases | ||||||||||||||||
During the nine months ended September 30, 2014, approximately 2.2 million units in our operating partnership were exchanged for shares of our common stock, 120 thousand of our operating partnership units were redeemed for cash, for a total purchase price of $2.8 million, for an average price of $23.56 per unit, and options covering 691 thousand shares of our common stock were cash settled for a total cost of $4.5 million, for an average price of $6.55 per option. We did not sell any shares or share equivalents during the nine months ended September 30, 2014. During the nine months ended September 30, 2013, approximately 1.4 million units in our operating partnership were exchanged for shares of our common stock, and 13 thousand of our operating partnership units were redeemed for cash, for a total purchase price of $352 thousand, for an average price of $26.68 per unit. We did not sell any shares or share equivalents during the nine months ended September 30, 2013. | ||||||||||||||||
Condensed consolidated statements of equity | ||||||||||||||||
The tables below present (in thousands) our condensed consolidated statements of equity: | ||||||||||||||||
Douglas Emmett, Inc. Stockholders' Equity | Noncontrolling Interests | Total Equity | ||||||||||||||
Balance as of January 1, 2014 | $ | 1,970,397 | $ | 396,811 | $ | 2,367,208 | ||||||||||
Net income | 33,728 | 6,328 | 40,056 | |||||||||||||
Cash flow hedge adjustment | 16,297 | 3,973 | 20,270 | |||||||||||||
Contributions | — | 250 | 250 | |||||||||||||
Dividends and distributions | (86,518 | ) | (17,315 | ) | (103,833 | ) | ||||||||||
Repurchase of stock options | (4,524 | ) | — | (4,524 | ) | |||||||||||
Conversion of operating partnership units | 29,555 | (29,555 | ) | — | ||||||||||||
Repurchase of operating partnership units | (1,197 | ) | (1,630 | ) | (2,827 | ) | ||||||||||
Equity compensation | — | 4,416 | 4,416 | |||||||||||||
Balance as of September 30, 2014 | $ | 1,957,738 | $ | 363,278 | $ | 2,321,016 | ||||||||||
Douglas Emmett, Inc. Stockholders' Equity | Noncontrolling Interests | Total Equity | ||||||||||||||
Balance as of January 1, 2013 | $ | 1,979,656 | $ | 410,803 | $ | 2,390,459 | ||||||||||
Net income | 36,468 | 5,865 | 42,333 | |||||||||||||
Cash flow hedge adjustment | 25,367 | 5,992 | 31,359 | |||||||||||||
Contributions | — | 584 | 584 | |||||||||||||
Dividends and distributions | (76,998 | ) | (15,993 | ) | (92,991 | ) | ||||||||||
Conversion of operating partnership units | 18,630 | (18,630 | ) | — | ||||||||||||
Repurchase of operating partnership units | (172 | ) | (180 | ) | (352 | ) | ||||||||||
Equity compensation | — | 4,864 | 4,864 | |||||||||||||
Balance as of September 30, 2013 | $ | 1,982,951 | $ | 393,305 | $ | 2,376,256 | ||||||||||
Noncontrolling Interests | ||||||||||||||||
Noncontrolling interests in our operating partnership are interests that are not owned by us. Noncontrolling interests represented approximately 16% of our operating partnership at September 30, 2014. A unit in our operating partnership and a share of our common stock have essentially the same economic characteristics, as they share equally in the total net income or loss distributions of our operating partnership. Investors who own units in our operating partnership have the right to cause our operating partnership to redeem any or all of their units in our operating partnership for an amount of cash per unit equal to the then current market value of one share of common stock, or, at our election, shares of our common stock on a one-for-one basis. Noncontrolling interests also include a one-third interest of a minority partner in a consolidated joint venture which owns an office building in Honolulu, Hawaii. | ||||||||||||||||
The table below presents (in thousands) the net income attributable to common stockholders and transfers (to) from the noncontrolling interests: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income attributable to common stockholders | $ | 7,389 | $ | 10,751 | $ | 33,728 | $ | 36,468 | ||||||||
Transfers from the noncontrolling interests: | ||||||||||||||||
Increase in common stockholders paid-in capital for redemption of operating partnership units | 9,054 | 100 | 29,534 | 18,616 | ||||||||||||
Change from net income attributable to common stockholders and transfers from noncontrolling interests | $ | 16,443 | $ | 10,851 | $ | 63,262 | $ | 55,084 | ||||||||
AOCI Reconciliation | ||||||||||||||||
The table below presents (in thousands) the changes in our AOCI balance, which consists solely of adjustments related to our cash flow hedges and the cash flow hedges of our unconsolidated Funds for the nine months ended September 30: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Balance at beginning of period | $ | (50,554 | ) | $ | (82,991 | ) | ||||||||||
Other comprehensive income (loss) before reclassifications1 | (8,107 | ) | 3,961 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income2 | 28,377 | 27,398 | ||||||||||||||
Net current period other comprehensive income (loss) | 20,270 | 31,359 | ||||||||||||||
Less other comprehensive (income) loss attributable to noncontrolling interests | (3,973 | ) | (5,992 | ) | ||||||||||||
Other comprehensive income (loss) attributable to common stockholders | 16,297 | 25,367 | ||||||||||||||
Balance at end of period | $ | (34,257 | ) | $ | (57,624 | ) | ||||||||||
___________________________________________________ | ||||||||||||||||
-1 | Includes (i) fair value adjustments to our derivatives designated as cash flow hedges of $(7.1) million and $2.2 million for the nine months ended September 30, 2014 and 2013, respectively, as well as (ii) our share of the fair value adjustments to derivatives designated as cash flow hedges of our unconsolidated Funds of $(1.0) million and $1.8 million for the nine months ended September 30, 2014 and 2013, respectively. | |||||||||||||||
-2 | Includes (i) a reclassification from AOCI to interest expense of $27.6 million and $27.1 million for the nine months ended September 30, 2014 and 2013, respectively, of our derivatives that qualified and were designated as cash flow hedges, as well as (ii) a reclassification from AOCI to income, including depreciation, of our unconsolidated real estate funds of $751 thousand and $305 thousand for the nine months ended September 30, 2014 and 2013, respectively, related to derivatives that qualified and were designated as cash flow hedges of our unconsolidated Funds. | |||||||||||||||
-3 | See Note 7 for the details of our derivatives that qualified and were designated as cash flow hedges. | |||||||||||||||
-4 | See Note 10 for our fair value disclosures. | |||||||||||||||
Equity Compensation | ||||||||||||||||
The Douglas Emmett, Inc. 2006 Omnibus Stock Incentive Plan, as amended, our stock incentive plan, is administered by the compensation committee of our board of directors. All officers, employees, directors and consultants are eligible to participate in our stock incentive plan. For more information on our stock incentive plan, please refer to note 11 to the consolidated financial statements in our 2013 Annual Report on Form 10-K. | ||||||||||||||||
We grant equity compensation as a part of the annual incentive compensation to our key employees each year, a portion of which is fully vested at the date of grant, and the remainder which vests in three equal annual installments over the three calendar years following the grant date. Certain amounts of equity-based compensation expense are capitalized for employees who provide leasing and construction services. | ||||||||||||||||
Total net equity compensation expense for equity grants was $1.3 million and $1.5 million for the three months ended September 30, 2014 and 2013, respectively, and $4.0 million and $4.6 million for the nine months ended September 30, 2014 and 2013, respectively. These amounts do not include capitalized equity compensation totaling $97 thousand and $97 thousand for the three months ended September 30, 2014 and 2013, respectively, and $367 thousand and $304 thousand for the nine months ended September 30, 2014 and 2013, respectively. Total net equity compensation expense is included in general and administrative expenses in the consolidated statements of operations. |
Earnings_Per_Share_EPS
Earnings Per Share (EPS) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Earnings Per Share (EPS) | ' | |||||||||||||||
Earnings Per Share (EPS) | ||||||||||||||||
We calculate basic EPS by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. We calculate diluted EPS by dividing the net income attributable to common stockholders and noncontrolling interests in our consolidated operating partnership for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method. The table below presents the calculation of basic and diluted EPS: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Numerator (in thousands): | ||||||||||||||||
Net income attributable to common stockholders | $ | 7,389 | $ | 10,751 | $ | 33,728 | $ | 36,468 | ||||||||
Add back: Net income attributable to noncontrolling interests in our operating partnership | 1,362 | 2,134 | 6,533 | 7,261 | ||||||||||||
Numerator for diluted net income attributable to all equity holders | $ | 8,751 | $ | 12,885 | $ | 40,261 | $ | 43,729 | ||||||||
Denominator (in thousands): | ||||||||||||||||
Weighted average shares of common stock outstanding - basic | 144,361 | 142,598 | 143,741 | 142,540 | ||||||||||||
Effect of dilutive securities (1) : | ||||||||||||||||
Operating partnership units and vested long term incentive plan (LTIP) units | 27,223 | 28,323 | 27,841 | 28,382 | ||||||||||||
Stock options | 4,280 | 3,205 | 4,103 | 3,375 | ||||||||||||
Unvested LTIP units | 549 | 630 | 497 | 577 | ||||||||||||
Weighted average shares of common stock and common stock equivalents outstanding - diluted | 176,413 | 174,756 | 176,182 | 174,874 | ||||||||||||
Basic earnings per share: | ||||||||||||||||
Net income attributable to common stockholders per share | $ | 0.05 | $ | 0.08 | $ | 0.23 | $ | 0.26 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Net income attributable to common stockholders per share | $ | 0.05 | $ | 0.07 | $ | 0.23 | $ | 0.25 | ||||||||
____________________________________________________ | ||||||||||||||||
-1 | Diluted shares are calculated in accordance with GAAP, and represent ownership in our company through shares of common stock, units in our operating partnership and other convertible equity instruments. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Fair Value Disclosures [Abstract] | ' | ||||||
Fair Value of Financial Instruments | ' | ||||||
Fair Value of Financial Instruments | |||||||
Our estimates of the fair value of financial instruments were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop an estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts. The FASB fair value framework includes a hierarchy that distinguishes between assumptions based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market-based inputs. The hierarchy is as follows: | |||||||
Level 1 - inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities. | |||||||
Level 2 - inputs are observable either directly or indirectly for similar assets and liabilities in active markets. | |||||||
Level 3 - inputs are unobservable assumptions generated by the reporting entity. | |||||||
As of September 30, 2014, we did not have any fair value measurements using Level 3 inputs. | |||||||
Short term financial instruments | |||||||
The carrying amounts for cash and cash equivalents, tenant receivables, deferred rent receivables, revolving credit lines, interest payable, accounts payable and deferred revenue, security deposits and dividends payable, approximate fair value because of the short-term nature of these instruments. | |||||||
Secured notes receivable | |||||||
See Notes 4 and 15 for the details of our secured notes receivable. The fair value of our secured notes receivable is determined using Level 2 inputs based on current market interest rates. The carrying value of our secured notes receivable approximates their fair values at September 30, 2014. | |||||||
Secured notes payable | |||||||
See Note 5 for the details of our secured notes payable. We calculate the fair value of our secured notes payable by calculating the credit-adjusted present value of the principal and interest payments using current market interest rates (assuming the loans are outstanding through maturity). We determined that the fair value of our secured notes payable is calculated using Level 2 inputs. The table below presents (in thousands) the estimated fair value of our secured notes payable: | |||||||
Secured Notes Payable: | September 30, 2014 | December 31, 2013 | |||||
Fair value | $ | 3,237,716 | $ | 3,234,993 | |||
Carrying value | $ | 3,200,210 | $ | 3,201,140 | |||
Derivative instruments | |||||||
See Note 7 for the details of our derivatives. We present our derivatives on the balance sheet at fair value, on a gross basis, excluding accrued interest, without reflecting any net settlement positions with the same counterparty, using the framework for measuring fair value established by the FASB. The valuation of our interest rate swaps and caps is determined using widely accepted valuation methods, including discounted cash flow analysis of the expected future cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees. We determined that the fair value of our derivatives is calculated using Level 2 inputs. The table below presents (in thousands) the estimated fair value of our derivative liabilities: | |||||||
Derivative Instruments in a liability position:(1) | September 30, 2014 | ||||||
Level 1 | $ | — | |||||
Level 2 | 42,628 | ||||||
Level 3 | — | ||||||
Fair Value of Derivative Instruments | $ | 42,628 | |||||
_______________________________________________________________________________________ | |||||||
-1 | As of September 30, 2014, we did not have any derivative instruments in an asset position. |
Future_Minimum_Lease_Receipts
Future Minimum Lease Receipts | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Operating Leases, Future Minimum Payments Receivable [Abstract] | ' | |||
Future Minimum Lease Receipts | ' | |||
Future Minimum Lease Receipts | ||||
We lease space to tenants primarily under non-cancelable operating leases that generally contain provisions for a base rent plus reimbursement for certain operating expenses. Operating expense reimbursements are reflected in our consolidated statements of operations as tenant recoveries. | ||||
We also lease space to certain tenants under non-cancelable leases that provide for percentage rents based upon tenant revenues. Percentage rental income totaled $125 thousand and $162 thousand for the three months ended September 30, 2014 and 2013, respectively, and $368 thousand and $432 thousand for the nine months ended September 30, 2014 and 2013, respectively. | ||||
The table below presents (in thousands) the future minimum base rentals on our non-cancelable office and ground operating leases at September 30, 2014: | ||||
Twelve months ending September 30: | ||||
2015 | $ | 369,228 | ||
2016 | 331,731 | |||
2017 | 280,913 | |||
2018 | 226,199 | |||
2019 | 178,563 | |||
Thereafter | 445,366 | |||
Total future minimum base rentals | $ | 1,832,000 | ||
The above future minimum lease receipts exclude residential leases, which typically have a term of one year or less, as well as tenant reimbursements, amortization of deferred rent receivables, and amortization of acquired above/below-market lease intangibles. Some leases are subject to termination options, generally upon payment of a termination fee. The preceding table assumes that these termination options are not exercised. |
Future_Minimum_Lease_Payments
Future Minimum Lease Payments | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ' | |||
Future Minimum Lease Payments | ' | |||
Future Minimum Lease Payments | ||||
We currently lease portions of the land underlying two of our office properties. We expensed ground lease payments of $718 thousand and $547 thousand for the three months ended September 30, 2014 and 2013, respectively and $1.9 million and $1.6 million for the nine months ended September 30, 2014 and 2013, respectively. We currently expect to exercise our right to purchase the land involved in one of these two leases in 2015 for a purchase price of $27.5 million. See Note 4. Because we have the ability to exercise our right to purchase this land, we have excluded payments under this lease from the future minimum rent payments in the table below. The table below presents (in thousands) our minimum ground lease payments as of September 30, 2014: | ||||
Twelve months ending September 30: | ||||
2015 | $ | 733 | ||
2016 | 733 | |||
2017 | 733 | |||
2018 | 733 | |||
2019 | 733 | |||
Thereafter | 49,293 | |||
Total future minimum lease payments | $ | 52,958 | ||
Commitments_Contingencies_and_
Commitments, Contingencies and Guarantees | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments, Contingencies and Guarantees | ' |
Commitments, Contingencies and Guarantees | |
Legal Proceedings | |
We are subject to various legal proceedings and claims that arise in the ordinary course of business. Excluding ordinary, routine litigation incidental to our business, we are not currently a party to any legal proceedings that we believe would reasonably be expected to have a materially adverse effect on our business, financial condition or results of operations. | |
Concentration of Credit Risk | |
Our properties are located in Los Angeles County, California and Honolulu, Hawaii. The ability of our tenants to honor the terms of their respective leases is dependent upon the economic, regulatory and social factors affecting the markets in which the tenants operate. We perform ongoing credit evaluations of our tenants for potential credit losses. In addition, we have financial instruments that subject us to credit risk, which consist primarily of accounts receivable, deferred rents receivable and interest rate contracts. We maintain our cash and cash equivalents at high quality financial institutions with investment grade ratings. Interest bearing accounts at each U.S. banking institution are insured by the Federal Deposit Insurance Corporation up to $250 thousand. To date, we have not experienced any losses on our deposited cash. | |
Asset Retirement Obligations | |
Conditional asset retirement obligations represent a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement is conditional on a future event that may or may not be within our control. A liability for a conditional asset retirement obligation must be recorded if the fair value of the obligation can be reasonably estimated. Environmental site assessments and investigations have identified twenty properties in our consolidated portfolio, and four properties owned by our Funds, which contain asbestos, and would have to be removed in compliance with applicable environmental regulations if these properties undergo major renovations or are demolished. As of September 30, 2014, the obligations to remove the asbestos from these properties have indeterminable settlement dates, and we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation. | |
Guarantees | |
We made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve outs for a $325.0 million loan of one of our Funds. The loan matures on May 1, 2018, and carries interest that is effectively fixed by an interest rate swap which matures on May 1, 2017. We have also guaranteed the related swap. We have an indemnity from the Fund for any amounts that we would be required to pay under these agreements. As of September 30, 2014, the maximum future payments under the swap agreement were approximately $5.1 million. As of September 30, 2014, all obligations under the loan and swap agreements have been performed by the Fund in accordance with the terms of those agreements. | |
Tenant Concentrations | |
For the three and nine months ended September 30, 2014 and 2013, no tenant accounted for more than 10% of our total rental revenue and tenant recoveries. |
Segment_Reporting
Segment Reporting | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Segment Reporting | ' | |||||||||||||||
Segment Reporting | ||||||||||||||||
Segment information is prepared on the same basis that we review information for operational decision-making purposes. We operate in two business segments: (i) the acquisition, development, ownership and management of office real estate and (ii) the acquisition, development, ownership and management of multifamily real estate. The services for our office segment primarily include rental of office space and other tenant services, including parking and storage space rental. The services for our multifamily segment include rental of apartments and other tenant services, including parking and storage space rental. | ||||||||||||||||
Asset information by segment is not reported because we do not use this measure to assess performance or make decisions to allocate resources. Therefore, depreciation and amortization expense is not allocated among segments. General and administrative expenses and interest expense are not included in segment profit as our internal reporting addresses these items on a corporate level. | ||||||||||||||||
Segment profit is not a measure of operating income or cash flows from operating activities as measured by GAAP, it is not indicative of cash available to fund cash needs, and should not be considered as an alternative to cash flows as a measure of liquidity. Not all companies may calculate segment profit in the same manner. We consider segment profit to be an appropriate supplemental measure to net income because it can assist both investors and management in understanding the core operations of our properties. | ||||||||||||||||
The table below presents (in thousands) the operating activity of our reportable segments: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Office Segment | ||||||||||||||||
Total office revenues | $ | 127,962 | $ | 130,339 | $ | 388,609 | $ | 386,424 | ||||||||
Office expenses | (47,636 | ) | (46,494 | ) | (135,657 | ) | (130,525 | ) | ||||||||
Segment profit | 80,326 | 83,845 | 252,952 | 255,899 | ||||||||||||
Multifamily Segment | ||||||||||||||||
Total multifamily revenues | 20,184 | 19,347 | 59,839 | 57,436 | ||||||||||||
Multifamily expenses | (5,261 | ) | (5,157 | ) | (15,490 | ) | (15,108 | ) | ||||||||
Segment profit | 14,923 | 14,190 | 44,349 | 42,328 | ||||||||||||
Total profit from all segments | $ | 95,249 | $ | 98,035 | $ | 297,301 | $ | 298,227 | ||||||||
The table below (in thousands) is a reconciliation of the total profit from all segments to net income attributable to common stockholders: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Total profit from all segments | $ | 95,249 | $ | 98,035 | $ | 297,301 | $ | 298,227 | ||||||||
General and administrative expense | (6,658 | ) | (6,546 | ) | (20,181 | ) | (20,724 | ) | ||||||||
Depreciation and amortization | (50,111 | ) | (47,402 | ) | (151,249 | ) | (141,528 | ) | ||||||||
Other income | 3,769 | 2,138 | 12,642 | 4,165 | ||||||||||||
Other expenses | (1,983 | ) | (1,402 | ) | (5,114 | ) | (2,777 | ) | ||||||||
Income, including depreciation, from unconsolidated real estate funds | 665 | 811 | 2,725 | 3,335 | ||||||||||||
Interest expense | (32,098 | ) | (32,601 | ) | (95,888 | ) | (97,832 | ) | ||||||||
Acquisition-related expenses | (152 | ) | (290 | ) | (180 | ) | (533 | ) | ||||||||
Net income | 8,681 | 12,743 | 40,056 | 42,333 | ||||||||||||
Less: Net income attributable to noncontrolling interests | (1,292 | ) | (1,992 | ) | (6,328 | ) | (5,865 | ) | ||||||||
Net income attributable to common stockholders | $ | 7,389 | $ | 10,751 | $ | 33,728 | $ | 36,468 | ||||||||
Investments_In_Unconsolidated_
Investments In Unconsolidated Real Estate Funds | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Real Estate Investments, Net [Abstract] | ' | |||||||
Investments In Unconsolidated Real Estate Funds | ' | |||||||
Investments in Unconsolidated Real Estate Funds | ||||||||
We own and manage equity interests in two Funds, Fund X and Partnership X, through which we and institutional investors own eight office properties totaling 1.8 million square feet in our core markets. At September 30, 2014, we held capital interests representing 68.61% of Fund X and 24.25% of Partnership X. We received cash distributions from our Funds totaling $3.1 million and $9.3 million during the three and nine months ended September 30, 2014, respectively, compared to $2.7 million and $5.3 million during the three and nine months ended September 30, 2013, respectively. | ||||||||
We did not acquire any additional interests in our Funds in 2014. During the first quarter of 2013, we acquired an additional 3.3% interest in Fund X and an additional 0.9% interest in Partnership X from an existing investor for an aggregate of approximately $8.0 million in cash. | ||||||||
Our investment in the Funds includes a note receivable. On April 3, 2013, we loaned $2.9 million to a related party investor in connection with a capital call made by Fund X. The loan carries interest at one month LIBOR plus 2.5%, and is due and payable no later than April 1, 2017, with mandatory prepayments equal to any distributions with respect the related party's interest in Fund X. As of September 30, 2014, the balance outstanding on the loan was $1.8 million. | ||||||||
The tables below present (in thousands) selected financial information for the Funds on a combined basis. The accounting policies of the Funds are consistent with those of the Company. The amounts presented represent 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value: | ||||||||
Nine Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 49,276 | $ | 47,627 | ||||
Operating income | 8,627 | 8,797 | ||||||
Net income | 60 | 748 | ||||||
September 30, 2014 | December 31, 2013 | |||||||
Total assets | $ | 709,482 | $ | 722,983 | ||||
Total liabilities | 391,019 | 391,892 | ||||||
Total equity | 318,463 | 331,091 | ||||||
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events | ' |
Subsequent events | |
On October 1, 2014, we closed a $145.0 million interest only five year term loan, with a floating interest rate of one month Libor plus 1.25%. We used $111.9 million of the proceeds to pay off an existing loan that was scheduled to mature on February 1, 2015, and the remaining proceeds for the acquisition mentioned below. See Note 5 for the details of our debt. | |
On October 16, 2014, we purchased a 216,000 square foot Class “A” multi-tenant office property adjacent to our east Beverly Hills properties for a contract price of $75.3 million, or $348 per square foot. We financed the acquisition with proceeds from the October 1, 2014 loan as well as our revolving credit line. |
Summary_Of_Significant_Account1
Summary Of Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Use of Estimates | ' |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. | |
Income Taxes | ' |
Income Taxes | |
We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. Provided that we qualify for taxation as a REIT, we are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. We are subject to corporate-level tax on the earnings that we derive through our taxable REIT subsidiaries (TRS). | |
Recently Issued Accounting Literature | ' |
Recently Issued Accounting Literature | |
Changes to GAAP are established by the Financial Accounting Standards Board (FASB) in the form of Accounting Standard Updates (ASUs). We consider the applicability and impact of all ASUs. | |
In February 2013, the FASB issued ASU No. 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date (Topic 405), which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date, except for obligations addressed within existing guidance in GAAP. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013, which for us was the first quarter of 2014. We adopted ASU No. 2013-04 during the first quarter of 2014, and it did not have a material impact on our financial position or results of operations, as we do not currently have any obligations within the scope of this ASU. | |
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which provides guidance for the accounting of revenue from contracts with customers. The guidance supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance throughout the Industry Topics of the Codification. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, which for us is the first quarter of 2017. Early adoption is not permitted. We do not expect this ASU to have a material impact on our financial position or results of operations, as lease contracts are not within the scope of this ASU. | |
In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40), which provides guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures if necessary. The ASU is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter, which for us is the fiscal year ended December 31, 2016. Early application is permitted. We do not expect this ASU to have a material impact on our disclosures. | |
The FASB has not issued any other ASUs during 2014 that we expect to be applicable and have a material impact on our future financial position or results of operations. |
Acquired_Lease_Intangibles_Tab
Acquired Lease Intangibles (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Acquired Lease Intangibles [Abstract] | ' | |||||||
Summary Of Acquired Lease Intangibles | ' | |||||||
The following summarizes our acquired lease intangibles related to above/below-market leases (in thousands) as of: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Above-market tenant leases(1) | $ | 34,997 | $ | 34,997 | ||||
Accumulated amortization(1) | (34,210 | ) | (33,899 | ) | ||||
Below-market ground leases | 3,198 | 3,198 | ||||||
Accumulated amortization | (609 | ) | (552 | ) | ||||
Acquired lease intangible assets, net | $ | 3,376 | $ | 3,744 | ||||
Below-market tenant leases(2) | $ | 272,413 | $ | 272,413 | ||||
Accumulated accretion(2) | (236,151 | ) | (225,425 | ) | ||||
Above-market ground leases | 16,200 | 16,200 | ||||||
Accumulated accretion | (3,794 | ) | (3,645 | ) | ||||
Acquired lease intangible liabilities, net | $ | 48,668 | $ | 59,543 | ||||
________________________________________ | ||||||||
-1 | Includes fully amortized above-market tenant leases of $32.2 million at September 30, 2014 and $31.1 million at December 31, 2013. | |||||||
-2 | Includes fully accreted below-market tenant leases of $136.9 million at September 30, 2014 and $131.1 million at December 31, 2013. |
Other_Assets_Tables
Other Assets (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Other Assets [Abstract] | ' | |||||||
Schedule Of Other Assets | ' | |||||||
Other assets consisted of the following (in thousands) as of: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Deferred loan costs, net of accumulated amortization of $12,256 and $9,395 at September 30, 2014 and December 31, 2013, respectively (1) | $ | 15,096 | $ | 17,745 | ||||
Note receivable(2) | 27,500 | — | ||||||
Restricted cash | 194 | 194 | ||||||
Prepaid expenses | 8,749 | 5,747 | ||||||
Other indefinite-lived intangible | 1,988 | 1,988 | ||||||
Deposits in escrow | 4,550 | — | ||||||
Insurance receivable(3) | 2,270 | — | ||||||
Other | 3,878 | 2,933 | ||||||
Total other assets | $ | 64,225 | $ | 28,607 | ||||
__________________________________________________________________________________ | ||||||||
-1 | We recognized deferred loan cost amortization expense of $1.0 million and $0.9 million for the three months ended September 30, 2014 and 2013, respectively, and $3.0 million and $3.0 million for the nine months ended September 30, 2014 and 2013, respectively. Deferred loan cost amortization is included as a component of interest expense in our consolidated statements of operations. | |||||||
-2 | On February 28, 2014, we loaned $27.5 million to the owner of the land underlying one of our office properties. The loan carries interest of 4.9%, is currently due and payable in 2015, and is secured by that land. | |||||||
-3 | During the three and nine months ended September 30, 2014, we recognized approximately $1.3 million and $6.1 million, respectively, in other income for property repairs, as well as $214 thousand and $684 thousand, respectively, in multifamily rental revenues for lost rental income, and $202 thousand and $654 thousand, respectively, in other expenses for other recoverable expenses, all related to insurance recoveries with respect to a fire at one of our residential properties. At September 30, 2014, we had received cash of $5.2 million, and included in other assets an additional receivable of $2.3 million, the payment which has been confirmed by the insurance companies. |
Secured_Notes_Payable_Tables
Secured Notes Payable (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Secured Debt [Abstract] | ' | ||||||||||||||||
Schedule Of Secured Notes Payable | ' | ||||||||||||||||
The table below summarizes our secured notes payable: | |||||||||||||||||
Description | Maturity | Outstanding Principal Balance as of September 30, 2014 (in thousands) | Outstanding Principal Balance as of December 31, 2013 (in thousands) | Variable Interest Rate | Effective | Swap Maturity Date | |||||||||||
Date | Annual | ||||||||||||||||
Fixed Interest | |||||||||||||||||
Rate (2) | |||||||||||||||||
Term loan debt (1) | |||||||||||||||||
Fannie Mae Loan (3) | 2/1/15 | $ | 111,920 | $ | 111,920 | DMBS + 0.707% | N/A | -- | |||||||||
Term Loan (4) | 3/1/16 | 16,140 | 16,140 | LIBOR + 1.60% | N/A | -- | |||||||||||
Fannie Mae Loan | 3/1/16 | 82,000 | 82,000 | LIBOR + 0.62% | N/A | -- | |||||||||||
Fannie Mae Loan | 6/1/17 | 18,000 | 18,000 | LIBOR + 0.62% | N/A | -- | |||||||||||
Term Loan | 10/2/17 | 400,000 | 400,000 | LIBOR + 2.00% | 4.45% | 7/1/15 | |||||||||||
Term Loan | 4/2/18 | 510,000 | 510,000 | LIBOR + 2.00% | 4.12% | 4/1/16 | |||||||||||
Term Loan | 8/1/18 | 530,000 | 530,000 | LIBOR + 1.70% | 3.74% | 8/1/16 | |||||||||||
Term Loan (5) | 8/5/18 | 355,000 | 355,000 | N/A | 4.14% | -- | |||||||||||
Term Loan (6) | 2/1/19 | 155,000 | 155,000 | N/A | 4.00% | -- | |||||||||||
Term Loan (7) | 6/5/19 | 285,000 | 285,000 | N/A | 3.85% | -- | |||||||||||
Term Loan (8) | 3/1/20 | (9) | 349,070 | 350,000 | N/A | 4.46% | -- | ||||||||||
Fannie Mae Loans | 11/2/20 | 388,080 | 388,080 | LIBOR + 1.65% | 3.65% | 11/1/17 | |||||||||||
Aggregate term loan principal | $ | 3,200,210 | $ | 3,201,140 | |||||||||||||
Revolving credit line (10) | 12/11/17 | 10,000 | 40,000 | LIBOR + 1.40% | N/A | -- | |||||||||||
Total principal (11) | $ | 3,210,210 | $ | 3,241,140 | |||||||||||||
Aggregate swapped to fixed rate loans | $ | 1,828,080 | $ | 1,828,080 | 3.98% | ||||||||||||
Aggregate fixed rate loans | 1,144,070 | 1,145,000 | 4.15% | ||||||||||||||
Aggregate variable rate loans | 238,060 | 268,060 | N/A | ||||||||||||||
Total principal (11) | $ | 3,210,210 | $ | 3,241,140 | |||||||||||||
______________________________________________________________________________________ | |||||||||||||||||
-1 | As of September 30, 2014, (i) the weighted average remaining life of our outstanding term debt (excluding our revolving credit line) was 4.0 years and (ii) of the $2.97 billion of term debt on which the interest rate was fixed under the terms of the loan or a swap, (a) the weighted average remaining life was 4.3 years, the weighted average remaining period during which interest was fixed was 2.6 years, and the weighted average annual interest rate was 4.05% and (b) including the non-cash amortization of prepaid loan fees, the effective weighted average interest rate was 4.18%. Except as otherwise noted below, each loan is secured by a separate collateral pool consisting of one or more properties, requiring monthly payments of interest only, with the outstanding principal due upon maturity. | ||||||||||||||||
-2 | Includes the effect of interest rate contracts as of September 30, 2014, and excludes amortization of prepaid loan fees, all shown on an actual/360-day basis. See Note 7 for the details of our interest rate contracts. | ||||||||||||||||
-3 | The loan has a $75.0 million tranche bearing interest at DMBS + 0.76%, and a $36.9 million tranche bearing interest at DMBS + 0.60%. The loan was subsequently paid off on October 1, 2014, see Note 16. | ||||||||||||||||
-4 | The borrower is a consolidated entity in which our operating partnership owns a two-thirds interest. | ||||||||||||||||
-5 | Interest-only until February 2016, with principal amortization thereafter based upon a thirty-year amortization schedule. | ||||||||||||||||
-6 | Interest-only until February 2015, with principal amortization thereafter based upon a thirty-year amortization schedule. | ||||||||||||||||
-7 | Interest only until February 2017, with principal amortization thereafter based upon a thirty-year amortization schedule. | ||||||||||||||||
-8 | Interest is fixed until March 1, 2018, and is floating thereafter, with interest-only payments until May 1, 2016, and principal amortization thereafter based upon a thirty-year amortization schedule. | ||||||||||||||||
-9 | We have two one-year extension options which could extend the maturity to March 1, 2020 from March 1, 2018, subject to meeting certain conditions. | ||||||||||||||||
-10 | $300.0 million revolving credit facility secured by 3 separate collateral pools consisting of a total of 6 properties. Unused commitment fees range from 0.15% to 0.20%. | ||||||||||||||||
-11 | See Note 10 for our fair value disclosures. | ||||||||||||||||
Schedule Of Minimum Future Principal Payments Due On Secured Notes Payable | ' | ||||||||||||||||
The table below presents (in thousands) the minimum future principal payments due on our secured notes payable at September 30, 2014: | |||||||||||||||||
Twelve months ending September 30: | |||||||||||||||||
2015 | $ | 113,728 | |||||||||||||||
2016 | 106,353 | ||||||||||||||||
2017 | 35,963 | ||||||||||||||||
2018 | 2,144,899 | ||||||||||||||||
2019 | 421,187 | ||||||||||||||||
Thereafter | 388,080 | ||||||||||||||||
Total future principal payments | $ | 3,210,210 | |||||||||||||||
Interest_Payable_Accounts_Paya1
Interest Payable, Accounts Payable and Deferred Revenue (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Accounts Payable and Accrued Liabilities [Abstract] | ' | |||||||
Schedule Of Accounts Payable And Accrued Liabilities | ' | |||||||
Interest payable, accounts payable and deferred revenue consisted of the following (in thousands) as of: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Interest payable | $ | 9,074 | $ | 9,263 | ||||
Accounts payable and accrued liabilities | 42,869 | 20,761 | ||||||
Deferred revenue | 20,986 | 22,739 | ||||||
Total interest payable, accounts payable and deferred revenue | $ | 72,929 | $ | 52,763 | ||||
Interest_Rate_Contracts_Tables
Interest Rate Contracts (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ' | |||||||
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | ' | |||||||
As of September 30, 2014, the totals of our Funds' existing swaps that qualified as highly effective cash flow hedges were | ||||||||
as follows: | ||||||||
Interest Rate Derivative | Number of Instruments | Notional (in thousands) | ||||||
Interest Rate Swaps | 1 | $325,000 | ||||||
As of September 30, 2014, the totals of our existing swaps that qualified as highly effective cash flow hedges were as follows: | ||||||||
Interest Rate Derivative | Number of Instruments | Notional (in thousands) | ||||||
Interest Rate Swaps | 7 | $1,828,080 | ||||||
Non-designated Hedges | ||||||||
Derivatives not designated as hedges are not speculative. As of September 30, 2014, we had the following outstanding interest rate derivatives that were not designated for accounting purposes as hedging instruments, but were used to hedge our economic exposure to interest rate risk: | ||||||||
Interest Rate Derivative | Number of Instruments | Notional (in thousands) | ||||||
Purchased Caps | 4 | $100,000 | ||||||
Effect Of Derivative Instruments On Consolidated Statements Of Operations | ' | |||||||
The table below presents (in thousands) the effect of our derivative instruments on our AOCI and consolidated statements of operations for the nine months ended September 30: | ||||||||
2014 | 2013 | |||||||
Derivatives Designated as Cash Flow Hedges: | ||||||||
Gain (loss) recognized in other comprehensive income (OCI) (effective portion)(1) | $ | (7,059 | ) | $ | 2,151 | |||
Gain (loss) from investment in unconsolidated real estate funds | $ | (1,048 | ) | $ | 1,810 | |||
recognized in other comprehensive income (OCI) (effective portion)(1) | ||||||||
Gain (loss) reclassified from AOCI into interest expense (effective portion) | $ | (27,576 | ) | $ | (27,029 | ) | ||
Gain (loss) from investment in unconsolidated real estate funds reclassified from AOCI into Income, including depreciation, from unconsolidated real estate funds (effective portion) | $ | (751 | ) | $ | (305 | ) | ||
Gain (loss) reclassified from AOCI into interest expense (ineffective portion and amount excluded from effectiveness testing) | $ | (50 | ) | $ | (64 | ) | ||
Gain (loss) on derivatives recorded as interest expense (ineffective portion and amount excluded from effectiveness testing) | $ | — | $ | — | ||||
Derivatives Not Designated as Cash Flow Hedges: | ||||||||
Realized and unrealized gain (loss) recorded as interest expense | $ | — | $ | (3 | ) | |||
___________________________________________________ | ||||||||
-1 | Gains and losses recognized in AOCI do not impact the income statement. Refer to the reconciliation of our AOCI in Note 8. | |||||||
Schedule Of Fair Values Of Derivative Instruments | ' | |||||||
The table below presents (in thousands) the fair values of our derivative instruments as of: | ||||||||
September 30, 2014 | December 31, 2013 | |||||||
Derivative liabilities disclosed as "Interest Rate Contracts":(1) | ||||||||
Derivatives designated as accounting hedges | $ | 42,628 | $ | 63,144 | ||||
Derivatives not designated as accounting hedges | — | — | ||||||
Total derivative liabilities | $ | 42,628 | $ | 63,144 | ||||
_______________________________________________________________________________________ | ||||||||
-1 | As of September 30, 2014, we did not have any derivative assets. |
Equity_Tables
Equity (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Stockholders' Equity Note [Abstract] | ' | |||||||||||||||
Condensed Consolidated Statements Of Equity | ' | |||||||||||||||
The tables below present (in thousands) our condensed consolidated statements of equity: | ||||||||||||||||
Douglas Emmett, Inc. Stockholders' Equity | Noncontrolling Interests | Total Equity | ||||||||||||||
Balance as of January 1, 2014 | $ | 1,970,397 | $ | 396,811 | $ | 2,367,208 | ||||||||||
Net income | 33,728 | 6,328 | 40,056 | |||||||||||||
Cash flow hedge adjustment | 16,297 | 3,973 | 20,270 | |||||||||||||
Contributions | — | 250 | 250 | |||||||||||||
Dividends and distributions | (86,518 | ) | (17,315 | ) | (103,833 | ) | ||||||||||
Repurchase of stock options | (4,524 | ) | — | (4,524 | ) | |||||||||||
Conversion of operating partnership units | 29,555 | (29,555 | ) | — | ||||||||||||
Repurchase of operating partnership units | (1,197 | ) | (1,630 | ) | (2,827 | ) | ||||||||||
Equity compensation | — | 4,416 | 4,416 | |||||||||||||
Balance as of September 30, 2014 | $ | 1,957,738 | $ | 363,278 | $ | 2,321,016 | ||||||||||
Douglas Emmett, Inc. Stockholders' Equity | Noncontrolling Interests | Total Equity | ||||||||||||||
Balance as of January 1, 2013 | $ | 1,979,656 | $ | 410,803 | $ | 2,390,459 | ||||||||||
Net income | 36,468 | 5,865 | 42,333 | |||||||||||||
Cash flow hedge adjustment | 25,367 | 5,992 | 31,359 | |||||||||||||
Contributions | — | 584 | 584 | |||||||||||||
Dividends and distributions | (76,998 | ) | (15,993 | ) | (92,991 | ) | ||||||||||
Conversion of operating partnership units | 18,630 | (18,630 | ) | — | ||||||||||||
Repurchase of operating partnership units | (172 | ) | (180 | ) | (352 | ) | ||||||||||
Equity compensation | — | 4,864 | 4,864 | |||||||||||||
Balance as of September 30, 2013 | $ | 1,982,951 | $ | 393,305 | $ | 2,376,256 | ||||||||||
Net Income Attributable To Common Stockholders And Transfers (To) From Noncontrolling Interests | ' | |||||||||||||||
The table below presents (in thousands) the net income attributable to common stockholders and transfers (to) from the noncontrolling interests: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Net income attributable to common stockholders | $ | 7,389 | $ | 10,751 | $ | 33,728 | $ | 36,468 | ||||||||
Transfers from the noncontrolling interests: | ||||||||||||||||
Increase in common stockholders paid-in capital for redemption of operating partnership units | 9,054 | 100 | 29,534 | 18,616 | ||||||||||||
Change from net income attributable to common stockholders and transfers from noncontrolling interests | $ | 16,443 | $ | 10,851 | $ | 63,262 | $ | 55,084 | ||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | ' | |||||||||||||||
The table below presents (in thousands) the changes in our AOCI balance, which consists solely of adjustments related to our cash flow hedges and the cash flow hedges of our unconsolidated Funds for the nine months ended September 30: | ||||||||||||||||
2014 | 2013 | |||||||||||||||
Balance at beginning of period | $ | (50,554 | ) | $ | (82,991 | ) | ||||||||||
Other comprehensive income (loss) before reclassifications1 | (8,107 | ) | 3,961 | |||||||||||||
Amounts reclassified from accumulated other comprehensive income2 | 28,377 | 27,398 | ||||||||||||||
Net current period other comprehensive income (loss) | 20,270 | 31,359 | ||||||||||||||
Less other comprehensive (income) loss attributable to noncontrolling interests | (3,973 | ) | (5,992 | ) | ||||||||||||
Other comprehensive income (loss) attributable to common stockholders | 16,297 | 25,367 | ||||||||||||||
Balance at end of period | $ | (34,257 | ) | $ | (57,624 | ) | ||||||||||
___________________________________________________ | ||||||||||||||||
-1 | Includes (i) fair value adjustments to our derivatives designated as cash flow hedges of $(7.1) million and $2.2 million for the nine months ended September 30, 2014 and 2013, respectively, as well as (ii) our share of the fair value adjustments to derivatives designated as cash flow hedges of our unconsolidated Funds of $(1.0) million and $1.8 million for the nine months ended September 30, 2014 and 2013, respectively. | |||||||||||||||
-2 | Includes (i) a reclassification from AOCI to interest expense of $27.6 million and $27.1 million for the nine months ended September 30, 2014 and 2013, respectively, of our derivatives that qualified and were designated as cash flow hedges, as well as (ii) a reclassification from AOCI to income, including depreciation, of our unconsolidated real estate funds of $751 thousand and $305 thousand for the nine months ended September 30, 2014 and 2013, respectively, related to derivatives that qualified and were designated as cash flow hedges of our unconsolidated Funds. | |||||||||||||||
-3 | See Note 7 for the details of our derivatives that qualified and were designated as cash flow hedges. | |||||||||||||||
-4 | See Note 10 for our fair value disclosures. |
Earnings_Per_Share_EPS_Tables
Earnings Per Share (EPS) (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Earnings Per Share [Abstract] | ' | |||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | ' | |||||||||||||||
The table below presents the calculation of basic and diluted EPS: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Numerator (in thousands): | ||||||||||||||||
Net income attributable to common stockholders | $ | 7,389 | $ | 10,751 | $ | 33,728 | $ | 36,468 | ||||||||
Add back: Net income attributable to noncontrolling interests in our operating partnership | 1,362 | 2,134 | 6,533 | 7,261 | ||||||||||||
Numerator for diluted net income attributable to all equity holders | $ | 8,751 | $ | 12,885 | $ | 40,261 | $ | 43,729 | ||||||||
Denominator (in thousands): | ||||||||||||||||
Weighted average shares of common stock outstanding - basic | 144,361 | 142,598 | 143,741 | 142,540 | ||||||||||||
Effect of dilutive securities (1) : | ||||||||||||||||
Operating partnership units and vested long term incentive plan (LTIP) units | 27,223 | 28,323 | 27,841 | 28,382 | ||||||||||||
Stock options | 4,280 | 3,205 | 4,103 | 3,375 | ||||||||||||
Unvested LTIP units | 549 | 630 | 497 | 577 | ||||||||||||
Weighted average shares of common stock and common stock equivalents outstanding - diluted | 176,413 | 174,756 | 176,182 | 174,874 | ||||||||||||
Basic earnings per share: | ||||||||||||||||
Net income attributable to common stockholders per share | $ | 0.05 | $ | 0.08 | $ | 0.23 | $ | 0.26 | ||||||||
Diluted earnings per share: | ||||||||||||||||
Net income attributable to common stockholders per share | $ | 0.05 | $ | 0.07 | $ | 0.23 | $ | 0.25 | ||||||||
____________________________________________________ | ||||||||||||||||
-1 | Diluted shares are calculated in accordance with GAAP, and represent ownership in our company through shares of common stock, units in our operating partnership and other convertible equity instruments. |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | ||||||
Sep. 30, 2014 | |||||||
Fair Value Disclosures [Abstract] | ' | ||||||
Schedule of Estimated Fair Value of Secured Notes Payable | ' | ||||||
The table below presents (in thousands) the estimated fair value of our secured notes payable: | |||||||
Secured Notes Payable: | September 30, 2014 | December 31, 2013 | |||||
Fair value | $ | 3,237,716 | $ | 3,234,993 | |||
Carrying value | $ | 3,200,210 | $ | 3,201,140 | |||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | ' | ||||||
The table below presents (in thousands) the estimated fair value of our derivative liabilities: | |||||||
Derivative Instruments in a liability position:(1) | September 30, 2014 | ||||||
Level 1 | $ | — | |||||
Level 2 | 42,628 | ||||||
Level 3 | — | ||||||
Fair Value of Derivative Instruments | $ | 42,628 | |||||
_______________________________________________________________________________________ | |||||||
-1 | As of September 30, 2014, we did not have any derivative instruments in an asset position. |
Future_Minimum_Lease_Receipts_
Future Minimum Lease Receipts (Tables) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Operating Leases, Future Minimum Payments Receivable [Abstract] | ' | |||
Schedule Of Future Minimum Base Rentals On Non-Cancelable Office And Ground Operating Leases | ' | |||
The table below presents (in thousands) the future minimum base rentals on our non-cancelable office and ground operating leases at September 30, 2014: | ||||
Twelve months ending September 30: | ||||
2015 | $ | 369,228 | ||
2016 | 331,731 | |||
2017 | 280,913 | |||
2018 | 226,199 | |||
2019 | 178,563 | |||
Thereafter | 445,366 | |||
Total future minimum base rentals | $ | 1,832,000 | ||
Future_Minimum_Lease_Payments_
Future Minimum Lease Payments (Tables) | 9 Months Ended | |||
Sep. 30, 2014 | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ' | |||
Future Minimum Ground Lease Payments | ' | |||
The table below presents (in thousands) our minimum ground lease payments as of September 30, 2014: | ||||
Twelve months ending September 30: | ||||
2015 | $ | 733 | ||
2016 | 733 | |||
2017 | 733 | |||
2018 | 733 | |||
2019 | 733 | |||
Thereafter | 49,293 | |||
Total future minimum lease payments | $ | 52,958 | ||
Segment_Reporting_Tables
Segment Reporting (Tables) | 9 Months Ended | |||||||||||||||
Sep. 30, 2014 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Operating Activity Within Reportable Segments | ' | |||||||||||||||
The table below presents (in thousands) the operating activity of our reportable segments: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Office Segment | ||||||||||||||||
Total office revenues | $ | 127,962 | $ | 130,339 | $ | 388,609 | $ | 386,424 | ||||||||
Office expenses | (47,636 | ) | (46,494 | ) | (135,657 | ) | (130,525 | ) | ||||||||
Segment profit | 80,326 | 83,845 | 252,952 | 255,899 | ||||||||||||
Multifamily Segment | ||||||||||||||||
Total multifamily revenues | 20,184 | 19,347 | 59,839 | 57,436 | ||||||||||||
Multifamily expenses | (5,261 | ) | (5,157 | ) | (15,490 | ) | (15,108 | ) | ||||||||
Segment profit | 14,923 | 14,190 | 44,349 | 42,328 | ||||||||||||
Total profit from all segments | $ | 95,249 | $ | 98,035 | $ | 297,301 | $ | 298,227 | ||||||||
Reconciliation Of Segment Profit To Net Income Attributable To Common Stockholders | ' | |||||||||||||||
The table below (in thousands) is a reconciliation of the total profit from all segments to net income attributable to common stockholders: | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Total profit from all segments | $ | 95,249 | $ | 98,035 | $ | 297,301 | $ | 298,227 | ||||||||
General and administrative expense | (6,658 | ) | (6,546 | ) | (20,181 | ) | (20,724 | ) | ||||||||
Depreciation and amortization | (50,111 | ) | (47,402 | ) | (151,249 | ) | (141,528 | ) | ||||||||
Other income | 3,769 | 2,138 | 12,642 | 4,165 | ||||||||||||
Other expenses | (1,983 | ) | (1,402 | ) | (5,114 | ) | (2,777 | ) | ||||||||
Income, including depreciation, from unconsolidated real estate funds | 665 | 811 | 2,725 | 3,335 | ||||||||||||
Interest expense | (32,098 | ) | (32,601 | ) | (95,888 | ) | (97,832 | ) | ||||||||
Acquisition-related expenses | (152 | ) | (290 | ) | (180 | ) | (533 | ) | ||||||||
Net income | 8,681 | 12,743 | 40,056 | 42,333 | ||||||||||||
Less: Net income attributable to noncontrolling interests | (1,292 | ) | (1,992 | ) | (6,328 | ) | (5,865 | ) | ||||||||
Net income attributable to common stockholders | $ | 7,389 | $ | 10,751 | $ | 33,728 | $ | 36,468 | ||||||||
Investments_In_Unconsolidated_1
Investments In Unconsolidated Real Estate Funds (Tables) | 9 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
Real Estate Investments, Net [Abstract] | ' | |||||||
Summary Of Statement Of Operations For Investments In Unconsolidated Real Estate Funds | ' | |||||||
The tables below present (in thousands) selected financial information for the Funds on a combined basis. The accounting policies of the Funds are consistent with those of the Company. The amounts presented represent 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value: | ||||||||
Nine Months Ended September 30, | ||||||||
2014 | 2013 | |||||||
Total revenues | $ | 49,276 | $ | 47,627 | ||||
Operating income | 8,627 | 8,797 | ||||||
Net income | 60 | 748 | ||||||
September 30, 2014 | December 31, 2013 | |||||||
Total assets | $ | 709,482 | $ | 722,983 | ||||
Total liabilities | 391,019 | 391,892 | ||||||
Total equity | 318,463 | 331,091 | ||||||
Overview_Details
Overview (Details) | Sep. 30, 2014 |
Number_of_Properties | |
Overview [Line Items] | ' |
Number of office properties owned | 60 |
Wholly Owned Consolidated Properties [Member] | ' |
Overview [Line Items] | ' |
Number of office properties owned | 52 |
Number of multifamily properties owned | 9 |
Number of land parcels | 2 |
Partially Owned Properties [Member] | ' |
Overview [Line Items] | ' |
Number of office properties owned | 8 |
Summary_Of_Significant_Account2
Summary Of Significant Accounting Policies Summary of Significant Accounting Policies (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Building Purchases | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Fully depreciated and amortized items | $354.50 | $343.60 |
Leasing Activity | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Fully depreciated and amortized items | $110.80 | $84.10 |
Acquired_Lease_Intangibles_Sum
Acquired Lease Intangibles (Summary Of Acquired Lease Intangibles) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ||
Acquired lease intangible assets, net | $3,376,000 | $3,744,000 | ||
Acquired lease intangible liabilities, net | 48,668,000 | 59,543,000 | ||
Above Market Tenant Leases [Member] | ' | ' | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ||
Off-market lease, assets | 34,997,000 | [1] | 34,997,000 | [1] |
Accumulated amortization | -34,210,000 | [1] | -33,899,000 | [1] |
Fully amortized above-market tenant leases | 32,200,000 | 31,100,000 | ||
Below Market Ground Leases [Member] | ' | ' | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ||
Off-market lease, assets | 3,198,000 | 3,198,000 | ||
Accumulated amortization | -609,000 | -552,000 | ||
Below Market Tenant Leases [Member] | ' | ' | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ||
Off-market lease, liabilities | 272,413,000 | [2] | 272,413,000 | [2] |
Accumulated accretion | -236,151,000 | [2] | -225,425,000 | [2] |
Acquired In Place Leases, Off Market Leases, Unfavorable, Fully Accreted | 136,900,000 | 131,100,000 | ||
Above Market Ground Leases [Member] | ' | ' | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ' | ' | ||
Off-market lease, liabilities | 16,200,000 | 16,200,000 | ||
Accumulated accretion | ($3,794,000) | ($3,645,000) | ||
[1] | Includes fully amortized above-market tenant leases of $32.2 million at September 30, 2014 and $31.1 million at December 31, 2013. | |||
[2] | Includes fully accreted below-market tenant leases of $136.9 million at September 30, 2014 and $131.1 million at December 31, 2013. |
Other_Assets_Schedule_Of_Other
Other Assets (Schedule Of Other Assets) (Details) (USD $) | Sep. 30, 2014 | Feb. 28, 2014 | Dec. 31, 2013 | |||
In Thousands, unless otherwise specified | ||||||
Other Assets [Abstract] | ' | ' | ' | |||
Deferred loan costs, net of accumulated amortization of $12,256 and $9,395 at September 30, 2014 and December 31, 2013, respectively | $15,096 | [1] | ' | $17,745 | [1] | |
Note receivable | 27,500 | [2] | 27,500 | [2] | 0 | [2] |
Restricted cash | 194 | ' | 194 | |||
Prepaid expenses | 8,749 | ' | 5,747 | |||
Other indefinite-lived intangible | 1,988 | ' | 1,988 | |||
Deposits in escrow | 4,550 | ' | 0 | |||
Insurance receivable | 2,270 | [3] | ' | 0 | [3] | |
Other | 3,878 | ' | 2,933 | |||
Total other assets | $64,225 | ' | $28,607 | |||
[1] | We recognized deferred loan cost amortization expense of $1.0 million and $0.9 million for the three months ended September 30, 2014 and 2013, respectively, and $3.0 million and $3.0 million for the nine months ended September 30, 2014 and 2013, respectively. Deferred loan cost amortization is included as a component of interest expense in our consolidated statements of operations. | |||||
[2] | On February 28, 2014, we loaned $27.5 million to the owner of the land underlying one of our office properties. The loan carries interest of 4.9%, is currently due and payable in 2015, and is secured by that land. | |||||
[3] | During the three and nine months ended September 30, 2014, we recognized approximately $1.3 million and $6.1 million, respectively, in other income for property repairs, as well as $214 thousand and $684 thousand, respectively, in multifamily rental revenues for lost rental income, and $202 thousand and $654 thousand, respectively, in other expenses for other recoverable expenses, all related to insurance recoveries with respect to a fire at one of our residential properties. At September 30, 2014, we had received cash of $5.2 million, and included in other assets an additional receivable of $2.3 million, the payment which has been confirmed by the insurance companies. |
Other_Assets_Other_Assets_Pare
Other Assets Other Assets- Parenthetical (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Other Assets [Abstract] | ' | ' |
Accumulated amortization of deferred loan costs | $12,256 | $9,395 |
Other_Assets_Narrative_Details
Other Assets (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Feb. 28, 2014 | Dec. 31, 2013 | |||||
Rate | Rate | |||||||||
Other Assets [Abstract] | ' | ' | ' | ' | ' | ' | ||||
Amortization of deferred loan costs | $1,022,000 | $913,000 | $3,027,000 | $2,972,000 | ' | ' | ||||
Note receivable | 27,500,000 | [1] | ' | 27,500,000 | [1] | ' | 27,500,000 | [1] | 0 | [1] |
Interest rate on loan receivable | 4.90% | ' | 4.90% | ' | ' | ' | ||||
Loan receivable payable date | ' | ' | 30-Jan-15 | ' | ' | ' | ||||
Business Interruption Loss [Line Items] | ' | ' | ' | ' | ' | ' | ||||
Insurance receivable | 2,270,000 | [2] | ' | 2,270,000 | [2] | ' | ' | 0 | [2] | |
Insurance Settlement [Member] | ' | ' | ' | ' | ' | ' | ||||
Business Interruption Loss [Line Items] | ' | ' | ' | ' | ' | ' | ||||
Property repair expense | 1,300,000 | ' | 6,100,000 | ' | ' | ' | ||||
Lost rental income | 214,000 | ' | 684,000 | ' | ' | ' | ||||
Other expenses | 202,000 | ' | 654,000 | ' | ' | ' | ||||
Insurance Proceeds Received [Member] | ' | ' | ' | ' | ' | ' | ||||
Business Interruption Loss [Line Items] | ' | ' | ' | ' | ' | ' | ||||
Insurance recoveries | ' | ' | $5,200,000 | ' | ' | ' | ||||
[1] | On February 28, 2014, we loaned $27.5 million to the owner of the land underlying one of our office properties. The loan carries interest of 4.9%, is currently due and payable in 2015, and is secured by that land. | |||||||||
[2] | During the three and nine months ended September 30, 2014, we recognized approximately $1.3 million and $6.1 million, respectively, in other income for property repairs, as well as $214 thousand and $684 thousand, respectively, in multifamily rental revenues for lost rental income, and $202 thousand and $654 thousand, respectively, in other expenses for other recoverable expenses, all related to insurance recoveries with respect to a fire at one of our residential properties. At September 30, 2014, we had received cash of $5.2 million, and included in other assets an additional receivable of $2.3 million, the payment which has been confirmed by the insurance companies. |
Secured_Notes_Payable_Schedule
Secured Notes Payable (Schedule Of Secured Notes Payable) (Details) (USD $) | 9 Months Ended | |||
Sep. 30, 2014 | Dec. 31, 2013 | |||
Debt Instrument [Line Items] | ' | ' | ||
Aggregate term loan principal | $3,200,210,000 | [1],[2] | $3,201,140,000 | [1],[2] |
Total future principal payments | 3,210,210,000 | 3,241,140,000 | ||
Weighted average remaining life of outstanding term debt | '4 years 0 months | ' | ||
Debt at fixed interest rate | 2,970,000,000 | ' | ||
Weighted average remaining life of interest rate swaps and fixed rate debt (in years) | '4 years 4 months | ' | ||
Weighted average interest rate for fixed & effectively fixed rate debt | 4.05% | ' | ||
Effective weighted average interest rate for fixed & effectively fixed rate debt | 4.18% | ' | ||
Fixed Interest Rate Loan [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Weighted average life of fixed interest rate on effectively fixed & fixed rate debt | '2 years 7 months | ' | ||
Effective Fixed Rate Loans [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Total future principal payments | 1,828,080,000 | 1,828,080,000 | ||
Effective Annual Fixed Interest Rate | 3.98% | [3] | ' | |
Fixed Rate Loans [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Total future principal payments | 1,144,070,000 | 1,145,000,000 | ||
Effective Annual Fixed Interest Rate | 4.15% | [3] | ' | |
Variable Rate Loans [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Total future principal payments | 238,060,000 | 268,060,000 | ||
Fannie Mae Loan With Interest Rate At 0.707% BPS Over DMBS [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 1-Feb-15 | ' | ||
Total future principal payments | 111,920,000 | [4] | 111,920,000 | [4] |
Variable Interest Rate | 'DMBS + 0.707% | [4] | ' | |
DEG III term loan debt with maturity date of 3/1/16 [Member] [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 1-Mar-16 | ' | ||
Total future principal payments | 16,140,000 | [5] | 16,140,000 | [5] |
Variable Interest Rate | 'LIBOR + 1.60% | ' | ||
Term Loan With Maturity Date 3/1/2016 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 1-Mar-16 | ' | ||
Total future principal payments | 82,000,000 | 82,000,000 | ||
Variable Interest Rate | 'LIBOR + 0.62% | ' | ||
Term Loan With Maturity Date 6/1/2017 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 1-Jun-17 | ' | ||
Total future principal payments | 18,000,000 | 18,000,000 | ||
Variable Interest Rate | 'LIBOR + 0.62% | ' | ||
Term Loan With Maturity Date 10/2/2017 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 2-Oct-17 | ' | ||
Total future principal payments | 400,000,000 | 400,000,000 | ||
Variable Interest Rate | 'LIBOR + 2.00% | ' | ||
Derivative, Fixed Interest Rate | 4.45% | [3] | ' | |
Swap Maturity Date | 1-Jul-15 | ' | ||
Term Loan With Maturity Date 4/2/2018 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 2-Apr-18 | ' | ||
Total future principal payments | 510,000,000 | 510,000,000 | ||
Variable Interest Rate | 'LIBOR + 2.00% | ' | ||
Derivative, Fixed Interest Rate | 4.12% | [3] | ' | |
Swap Maturity Date | 1-Apr-16 | ' | ||
Term Loan With Maturity Date 8/1/2018 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 1-Aug-18 | ' | ||
Total future principal payments | 530,000,000 | 530,000,000 | ||
Variable Interest Rate | 'LIBOR + 1.70% | ' | ||
Derivative, Fixed Interest Rate | 3.74% | [3] | ' | |
Swap Maturity Date | 1-Aug-16 | ' | ||
Term Loan With Maturity Date 8/5/2018 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 5-Aug-18 | [6] | ' | |
Total future principal payments | 355,000,000 | [6] | 355,000,000 | [6] |
Long-term Debt, Fixed Interest Rate | 4.14% | [3],[6] | ' | |
Debt instrument period of monthly interest-only payments end date | 5-Feb-16 | ' | ||
Amortization period, (in years) | 30 | ' | ||
Term Loan With Maturity Date 2/1/2019 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 1-Feb-19 | [7] | ' | |
Total future principal payments | 155,000,000 | [7] | 155,000,000 | [7] |
Long-term Debt, Fixed Interest Rate | 4.00% | [3],[7] | ' | |
Debt instrument period of monthly interest-only payments end date | 1-Feb-15 | ' | ||
Amortization period, (in years) | 30 | ' | ||
Term Loan With Maturity Date 6/5/2019 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 5-Jun-19 | [8] | ' | |
Total future principal payments | 285,000,000 | [8] | 285,000,000 | [8] |
Long-term Debt, Fixed Interest Rate | 3.85% | [3],[8] | ' | |
Debt instrument period of monthly interest-only payments end date | 5-Feb-17 | ' | ||
Amortization period, (in years) | 30 | ' | ||
Term Loan With Maturity Date 3/1/2020 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 1-Mar-20 | [9] | ' | |
Total future principal payments | 349,070,000 | 350,000,000 | ||
Long-term Debt, Fixed Interest Rate | 4.46% | [10],[3] | ' | |
Debt instrument period of monthly interest-only payments end date | 1-May-16 | ' | ||
Amortization period, (in years) | 30 | ' | ||
Debt instrument period of fixed interest end date | 1-Mar-18 | ' | ||
Number of one-year extension options | 2 | ' | ||
Term Loan With Maturity Date 11/2/2020 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 2-Nov-20 | ' | ||
Total future principal payments | 388,080,000 | 388,080,000 | ||
Variable Interest Rate | 'LIBOR + 1.65% | ' | ||
Derivative, Fixed Interest Rate | 3.65% | [3] | ' | |
Swap Maturity Date | 1-Nov-17 | ' | ||
Revolving Credit Facility With Maturity Date 12/11/17 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Maturity Date | 11-Dec-17 | [11] | ' | |
Revolving credit line | 10,000,000 | [11] | 40,000,000 | [11] |
Variable Interest Rate | 'LIBOR + 1.40% | [11] | ' | |
Maximum borrowing capacity | 300,000,000 | ' | ||
Line of credit facility, collateral | '3 separate collateral pools consisting of a total of 6 properties | ' | ||
Fannie Mae Loan With Interest Rate At 0.76% Over DMBS [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Variable Interest Rate | 'DMBS + 0.76% | ' | ||
Secured loan amount | 75,000,000 | ' | ||
Fannie Mae Loan With Interest Rate At 0.60% Over DMBS [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Variable Interest Rate | 'DMBS + 0.60% | ' | ||
Secured loan amount | $36,900,000 | ' | ||
outstanding principal is greater than $100,000,000 [Member] | Revolving Credit Facility With Maturity Date 12/11/17 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Unused commitment fees | 0.15% | ' | ||
outstanding principal is less than $100,000,000 [Member] | Revolving Credit Facility With Maturity Date 12/11/17 [Member] | ' | ' | ||
Debt Instrument [Line Items] | ' | ' | ||
Unused commitment fees | 0.20% | ' | ||
[1] | See Note 10 for our fair value disclosures. | |||
[2] | As of September 30, 2014, (i) the weighted average remaining life of our outstanding term debt (excluding our revolving credit line) was 4.0 years and (ii) of the $2.97 billion of term debt on which the interest rate was fixed under the terms of the loan or a swap, (a) the weighted average remaining life was 4.3 years, the weighted average remaining period during which interest was fixed was 2.6 years, and the weighted average annual interest rate was 4.05% and (b) including the non-cash amortization of prepaid loan fees, the effective weighted average interest rate was 4.18%. Except as otherwise noted below, each loan is secured by a separate collateral pool consisting of one or more properties, requiring monthly payments of interest only, with the outstanding principal due upon maturity. | |||
[3] | Includes the effect of interest rate contracts as of September 30, 2014, and excludes amortization of prepaid loan fees, all shown on an actual/360-day basis. See Note 7 for the details of our interest rate contracts. | |||
[4] | The loan has a $75.0Â million tranche bearing interest at DMBS + 0.76%, and a $36.9Â million tranche bearing interest at DMBS + 0.60%. The loan was subsequently paid off on October 1, 2014, see Note 16. | |||
[5] | The borrower is a consolidated entity in which our operating partnership owns a two-thirds interest. | |||
[6] | Interest-only until February 2016, with principal amortization thereafter based upon a thirty-year amortization schedule. | |||
[7] | Interest-only until February 2015, with principal amortization thereafter based upon a thirty-year amortization schedule. | |||
[8] | Interest only until February 2017, with principal amortization thereafter based upon a thirty-year amortization schedule. | |||
[9] | We have two one-year extension options which could extend the maturity to March 1, 2020 from March 1, 2018, subject to meeting certain conditions. | |||
[10] | nterest is fixed until March 1, 2018, and is floating thereafter, with interest-only payments until May 1, 2016, and principal amortization thereafter based upon a thirty-year amortization schedule. | |||
[11] | $300.0 million revolving credit facility secured by 3 separate collateral pools consisting of a total of 6 properties. Unused commitment fees range from 0.15% to 0.20%. |
Secured_Notes_Payable_Parenthe
Secured Notes Payable- Parenthetical (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Term Loan With Maturity Date 3/1/2016 [Member] | ' |
Debt Instrument [Line Items] | ' |
Ownership percentage in joint ventures | 66.67% |
Revolving Credit Facility With Maturity Date 12/11/17 [Member] | ' |
Debt Instrument [Line Items] | ' |
Number of Collateral Pools | 3 |
Number of Properties in Collateral Pools | 6 |
DMBS [Member] | Fannie Mae Loan With Interest Rate At 0.707% BPS Over DMBS [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 0.71% |
DMBS [Member] | Fannie Mae Loan With Interest Rate At 0.76% Over DMBS [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 0.76% |
DMBS [Member] | Fannie Mae Loan With Interest Rate At 0.60% Over DMBS [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 0.60% |
LIBOR [Member] | Term Loan With Maturity Date 3/1/2016 [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 1.60% |
LIBOR [Member] | Term Loan With Maturity Date 3/1/2016 [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 0.62% |
LIBOR [Member] | Term Loan With Maturity Date 6/1/2017 [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 0.62% |
LIBOR [Member] | Term Loan With Maturity Date 10/2/2017 [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 2.00% |
LIBOR [Member] | Term Loan With Maturity Date 4/2/2018 [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 2.00% |
LIBOR [Member] | Term Loan With Maturity Date 8/1/2018 [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 1.70% |
LIBOR [Member] | Term Loan With Maturity Date 11/2/2020 [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 1.65% |
LIBOR [Member] | Revolving Credit Facility With Maturity Date 12/11/17 [Member] | ' |
Debt Instrument [Line Items] | ' |
Basis spread | 1.40% |
Secured_Notes_Payable_Schedule1
Secured Notes Payable (Schedule Of Minimum Future Principal Payments Due On Secured Notes Payable) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Secured Debt [Abstract] | ' | ' |
2015 | $113,728 | ' |
2016 | 106,353 | ' |
2017 | 35,963 | ' |
2018 | 2,144,899 | ' |
2019 | 421,187 | ' |
Thereafter | 388,080 | ' |
Total future principal payments | $3,210,210 | $3,241,140 |
Interest_Payable_Accounts_Paya2
Interest Payable, Accounts Payable and Deferred Revenue (Schedule Of Accounts Payable And Accrued Liabilities) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accounts Payable and Accrued Liabilities [Abstract] | ' | ' |
Interest payable | $9,074 | $9,263 |
Accounts payable and accrued liabilities | 42,869 | 20,761 |
Deferred revenue | 20,986 | 22,739 |
Total interest payable, accounts payable and accrued liabilities | $72,929 | $52,763 |
Interest_Rate_Contracts_Intere
Interest Rate Contracts (Interest Rate Derivatives Designated As Hedging Instruments) (Details) (Interest Rate Swaps, USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | Instruments |
Parent [Member] | ' |
Derivative [Line Items] | ' |
Number of Instruments | 7 |
Notional | $1,828,080 |
Fund X [Member] | ' |
Derivative [Line Items] | ' |
Number of Instruments | 1 |
Notional | $325,000 |
Interest_Rate_Contracts_Intere1
Interest Rate Contracts (Interest Rate Derivatives Non-Designated As Hedging Instruments) (Details) (Parent [Member], Purchased Caps, USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | Instruments |
Parent [Member] | Purchased Caps | ' |
Derivative [Line Items] | ' |
Number of Instruments | 4 |
Notional | $100,000 |
Interest_Rate_Contracts_Narrat
Interest Rate Contracts (Narrative) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Parent [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Fair value derivatives, net liability position | $46,100,000 | $67,200,000 |
Derivative designated as cash flow hedge to be reclassified | 32,600,000 | ' |
Fund X [Member] | ' | ' |
Derivative Instruments, Gain (Loss) [Line Items] | ' | ' |
Derivative designated as cash flow hedge to be reclassified | $773,000 | ' |
Interest_Rate_Contracts_Effect
Interest Rate Contracts (Effect Of Derivative Instruments On Consolidated Statements Of Operations) (Details) (Cash Flow Hedging [Member], USD $) | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | ||
Parent [Member] | Derivatives Designated as Cash Flow Hedges: | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Gain (loss) recognized in other comprehensive income (OCI) (effective portion) | ($7,059) | [1] | $2,151 | [1] |
Amount of gain (loss) reclassified from AOCI into earnings under interest expense (effective portion) | -27,576 | -27,029 | ||
Parent [Member] | Interest Expense [Member] | Derivatives Designated as Cash Flow Hedges: | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Gain (loss) reclassified from AOCI into interest expense (ineffective portion and amount excluded from effectiveness testing) | -50 | -64 | ||
Gain (loss) on derivatives recorded as interest expense (ineffective portion and amount excluded from effectiveness testing) | 0 | 0 | ||
Parent [Member] | Interest Expense [Member] | Derivatives Not Designated as Cash Flow Hedges: | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Realized and unrealized gain (loss) recorded as interest expense | 0 | -3 | ||
Fund X [Member] | Derivatives Designated as Cash Flow Hedges: | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Gain (loss) recognized in other comprehensive income (OCI) (effective portion) | -1,048 | [1] | 1,810 | [1] |
Amount of gain (loss) reclassified from AOCI into earnings under interest expense (effective portion) | ($751) | ($305) | ||
[1] | Gains and losses recognized in AOCI do not impact the income statement. Refer to the reconciliation of our AOCI in Note 8. |
Interest_Rate_Contracts_Schedu
Interest Rate Contracts (Schedule Of Fair Values Of Derivative Instruments) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Derivative [Line Items] | ' | ' | ||
Derivative liability, fair value | $42,628 | [1] | $63,144 | |
Derivatives designated as accounting hedges | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Derivative liability, fair value | 42,628 | [2] | 63,144 | [2] |
Derivatives not designated as accounting hedges | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Derivative liability, fair value | 0 | [2] | 0 | [2] |
Total derivative liabilities | ' | ' | ||
Derivative [Line Items] | ' | ' | ||
Derivative liability, fair value | $42,628 | [2] | $63,144 | [2] |
[1] | As of September 30, 2014, we did not have any derivative instruments in an asset position. | |||
[2] | As of September 30, 2014, we did not have any derivative assets. |
Equity_Narrative_Details
Equity (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Stockholders' Equity Note [Abstract] | ' | ' | ' | ' |
Number of operating partnership units converted to shares of common stock | ' | ' | 2,200,000 | 1,400,000 |
Number of operating partnership units redeemed for cash | ' | ' | 120,000 | 13,000 |
Total purchase price | ' | ' | $2,827 | $352 |
Average redemption price (usd per share) | ' | ' | $23.56 | $26.68 |
Common stock options settled | ' | ' | 691,000 | ' |
Purchase price of stock options | ' | ' | 4,524 | 0 |
Average purchase price of options (usd per share) | ' | ' | $6.55 | ' |
Noncontrolling interest, ownership percentage by noncontrolling owners | 16.00% | ' | 16.00% | ' |
Number of shares of common stock issued upon redemption of one OP unit | ' | ' | 1 | ' |
Non-cash amortization of equity compensation | 1,348 | 1,528 | 4,049 | 4,560 |
Capitalized equity compensation | $97 | $97 | $367 | $304 |
Equity_Condensed_Consolidated_
Equity (Condensed Consolidated Statements Of Equity) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Equity [Line Items] | ' | ' | ' | ' |
Douglas Emmett, Inc. Stockholders' Equity, Beginning Balance | ' | ' | $1,970,397 | ' |
Noncontrolling Interests, Beginning Balance | ' | ' | 396,811 | ' |
Total Equity, Beginning Balance | ' | ' | 2,367,208 | 2,390,459 |
Net income attributable to common stockholders | 7,389 | 10,751 | 33,728 | 36,468 |
Noncontrolling Interests, Net Income | 1,292 | 1,992 | 6,328 | 5,865 |
Net income | 8,681 | 12,743 | 40,056 | 42,333 |
Cash flow hedge adjustment | 12,110 | -1,060 | 20,270 | 31,359 |
Contributions | ' | ' | 250 | 584 |
Dividends and distributions | ' | ' | -103,833 | -92,991 |
Repurchase of stock options | ' | ' | -4,524 | 0 |
Conversion of operating partnership units | ' | ' | 0 | 0 |
Repurchase of operating partnership units | ' | ' | -2,827 | -352 |
Equity compensation | ' | ' | 4,416 | 4,864 |
Douglas Emmett, Inc. Stockholders' Equity, Ending Balance | 1,957,738 | ' | 1,957,738 | ' |
Noncontrolling Interests, Ending Balance | 363,278 | ' | 363,278 | ' |
Total Equity, Ending Balance | 2,321,016 | 2,376,256 | 2,321,016 | 2,376,256 |
Douglas Emmett Inc Stockholders Equity [Member] | ' | ' | ' | ' |
Equity [Line Items] | ' | ' | ' | ' |
Douglas Emmett, Inc. Stockholders' Equity, Beginning Balance | ' | ' | 1,970,397 | 1,979,656 |
Net income attributable to common stockholders | ' | ' | 33,728 | 36,468 |
Cash flow hedge adjustment | ' | ' | 16,297 | 25,367 |
Contributions | ' | ' | 0 | 0 |
Dividends and distributions | ' | ' | -86,518 | -76,998 |
Repurchase of stock options | ' | ' | -4,524 | ' |
Conversion of operating partnership units | ' | ' | 29,555 | 18,630 |
Repurchase of operating partnership units | ' | ' | -1,197 | -172 |
Equity compensation | ' | ' | 0 | 0 |
Douglas Emmett, Inc. Stockholders' Equity, Ending Balance | 1,957,738 | 1,982,951 | 1,957,738 | 1,982,951 |
Noncontrolling Interest [Member] | ' | ' | ' | ' |
Equity [Line Items] | ' | ' | ' | ' |
Noncontrolling Interests, Beginning Balance | ' | ' | 396,811 | 410,803 |
Noncontrolling Interests, Net Income | ' | ' | 6,328 | 5,865 |
Cash flow hedge adjustment | ' | ' | 3,973 | 5,992 |
Contributions | ' | ' | 250 | 584 |
Dividends and distributions | ' | ' | -17,315 | -15,993 |
Repurchase of stock options | ' | ' | 0 | ' |
Conversion of operating partnership units | ' | ' | -29,555 | -18,630 |
Repurchase of operating partnership units | ' | ' | -1,630 | -180 |
Equity compensation | ' | ' | 4,416 | 4,864 |
Noncontrolling Interests, Ending Balance | $363,278 | $393,305 | $363,278 | $393,305 |
Equity_Net_Income_Attributable
Equity (Net Income Attributable To Common Stockholders And Transfers (To) From Noncontrolling Interests) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Stockholders' Equity Note [Abstract] | ' | ' | ' | ' |
Net income attributable to common stockholders | $7,389 | $10,751 | $33,728 | $36,468 |
Increase in common stockholders paid-in capital for redemption of operating partnership units | 9,054 | 100 | 29,534 | 18,616 |
Change from net income attributable to common stockholders and transfers from noncontrolling interest | $16,443 | $10,851 | $63,262 | $55,084 |
Equity_Accumulated_Other_Compr
Equity Accumulated Other Comprehensive Income Schedule (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' | ' | ' | ||
Balance at beginning of period | ' | ' | ($50,554) | ' | ||
Net current period other comprehensive income (loss) | 12,110 | -1,060 | 20,270 | 31,359 | ||
Balance at end of period | -34,257 | ' | -34,257 | ' | ||
Parent [Member] | ' | ' | ' | ' | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' | ' | ' | ||
Other comprehensive income (loss) before reclassifications1 | ' | ' | -7,100 | [1] | 2,200 | [1] |
Amounts reclassified from accumulated other comprehensive income2 | ' | ' | 27,600 | [2] | 27,100 | [2] |
Fund X [Member] | ' | ' | ' | ' | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' | ' | ' | ||
Other comprehensive income (loss) before reclassifications1 | ' | ' | -1,000 | [1] | 1,800 | [1] |
Amounts reclassified from accumulated other comprehensive income2 | ' | ' | 751 | [2] | 305 | [2] |
Cash Flow Hedging [Member] | ' | ' | ' | ' | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ' | ' | ' | ' | ||
Balance at beginning of period | ' | ' | -50,554 | -82,991 | ||
Other comprehensive income (loss) before reclassifications1 | ' | ' | -8,107 | [1] | 3,961 | [1] |
Amounts reclassified from accumulated other comprehensive income2 | ' | ' | 28,377 | [2] | 27,398 | [2] |
Net current period other comprehensive income (loss) | ' | ' | 20,270 | 31,359 | ||
Less other comprehensive (income) loss attributable to noncontrolling interests | ' | ' | -3,973 | -5,992 | ||
Other comprehensive income (loss) attributable to common stockholders | ' | ' | 16,297 | 25,367 | ||
Balance at end of period | ($34,257) | ($57,624) | ($34,257) | ($57,624) | ||
[1] | Includes (i) fair value adjustments to our derivatives designated as cash flow hedges of $(7.1) million and $2.2 million for the nine months ended September 30, 2014 and 2013, respectively, as well as (ii) our share of the fair value adjustments to derivatives designated as cash flow hedges of our unconsolidated Funds of $(1.0) million and $1.8 million for the nine months ended September 30, 2014 and 2013, respectively. | |||||
[2] | Includes (i) a reclassification from AOCI to interest expense of $27.6 million and $27.1 million for the nine months ended September 30, 2014 and 2013, respectively, of our derivatives that qualified and were designated as cash flow hedges, as well as (ii) a reclassification from AOCI to income, including depreciation, of our unconsolidated real estate funds of $751 thousand and $305 thousand for the nine months ended September 30, 2014 and 2013, respectively, related to derivatives that qualified and were designated as cash flow hedges of our unconsolidated Funds. |
Earnings_Per_Share_Details
Earnings Per Share (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | ||||
Earnings Per Share [Abstract] | ' | ' | ' | ' | ||||
Net income attributable to common stockholders | $7,389 | $10,751 | $33,728 | $36,468 | ||||
Add back: Net income attributable to noncontrolling interests in our operating partnership | 1,362 | 2,134 | 6,533 | 7,261 | ||||
Numerator for diluted net income attributable to all equity holders | $8,751 | $12,885 | $40,261 | $43,729 | ||||
Weighted average shares of common stock outstanding - basic | 144,361 | 142,598 | 143,741 | 142,540 | ||||
Operating partnership units and vested long term incentive plan (LTIP) units | 27,223 | [1] | 28,323 | [1] | 27,841 | [1] | 28,382 | [1] |
Stock options | 4,280 | [1] | 3,205 | [1] | 4,103 | [1] | 3,375 | [1] |
Unvested LTIP units | 549 | [1] | 630 | [1] | 497 | [1] | 577 | [1] |
Weighted average shares of common stock and common stock equivalents outstanding - diluted | 176,413 | [1] | 174,756 | [1] | 176,182 | [1] | 174,874 | [1] |
Net income attributable to common stockholders per share – basic (usd per share) | $0.05 | $0.08 | $0.23 | $0.26 | ||||
Net income attributable to common stockholders per share – diluted (usd per share) | $0.05 | $0.07 | $0.23 | $0.25 | ||||
[1] | Diluted shares are calculated in accordance with GAAP, and represent ownership in our company through shares of common stock, units in our operating partnership and other convertible equity instruments. |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments Fair Value of Financial Instruments - Estimated Fair Value of Secured Notes Payable (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | ||
In Thousands, unless otherwise specified | ||||
Fair Value Disclosures [Abstract] | ' | ' | ||
Fair value | $3,237,716 | $3,234,993 | ||
Carrying value | $3,200,210 | [1],[2] | $3,201,140 | [1],[2] |
[1] | See Note 10 for our fair value disclosures. | |||
[2] | As of September 30, 2014, (i) the weighted average remaining life of our outstanding term debt (excluding our revolving credit line) was 4.0 years and (ii) of the $2.97 billion of term debt on which the interest rate was fixed under the terms of the loan or a swap, (a) the weighted average remaining life was 4.3 years, the weighted average remaining period during which interest was fixed was 2.6 years, and the weighted average annual interest rate was 4.05% and (b) including the non-cash amortization of prepaid loan fees, the effective weighted average interest rate was 4.18%. Except as otherwise noted below, each loan is secured by a separate collateral pool consisting of one or more properties, requiring monthly payments of interest only, with the outstanding principal due upon maturity. |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments Fair Value Table (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | |
Derivative liability, fair value | $42,628 | [1] | $63,144 |
Level 1 | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | |
Derivative liability, fair value | 0 | [1] | ' |
Level 2 | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | |
Derivative liability, fair value | 42,628 | [1] | ' |
Level 3 | ' | ' | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ' | ' | |
Derivative liability, fair value | $0 | [1] | ' |
[1] | As of September 30, 2014, we did not have any derivative instruments in an asset position. |
Future_Minimum_Lease_Receipts_1
Future Minimum Lease Receipts (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Operating Leases, Future Minimum Payments Receivable [Abstract] | ' | ' | ' | ' |
Percentage rental income | $125 | $162 | $368 | $432 |
Future_Minimum_Lease_Receipts_2
Future Minimum Lease Receipts (Schedule Of Future Minimum Base Rentals On Non-Cancelable Office And Ground Operating Leases) (Details) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Operating Leases, Future Minimum Payments Receivable [Abstract] | ' |
2015 | $369,228 |
2016 | 331,731 |
2017 | 280,913 |
2018 | 226,199 |
2019 | 178,563 |
Thereafter | 445,366 |
Total future minimum base rentals | $1,832,000 |
Future_Minimum_Lease_Payments_1
Future Minimum Lease Payments (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
office_property | leases | |||
office_property | ||||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ' | ' | ' | ' |
Number of properties subject to ground leases | 2 | ' | 2 | ' |
Ground lease payments | $718,000 | $547,000 | $1,900,000 | $1,600,000 |
Number of ground leases with purchase options | ' | ' | 1 | ' |
Land under purchase options, not recorded | $27,500,000 | ' | $27,500,000 | ' |
Future_Minimum_Lease_Payments_2
Future Minimum Lease Payments (Future Minimum Ground Lease Payments) (Details) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ' |
2015 | $733 |
2016 | 733 |
2017 | 733 |
2018 | 733 |
2019 | 733 |
Thereafter | 49,293 |
Total future minimum lease payments | $52,958 |
Commitments_Contingencies_and_1
Commitments, Contingencies and Guarantees (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | ||
tenants | tenants | Fund X [Member] | Parent [Member] | Fund X [Member] | ||||
Number_of_Properties | Number_of_Properties | |||||||
Other Commitments [Line Items] | ' | ' | ' | ' | ' | ' | ||
Amount accounts are insured for by Federal Deposit Insurance Corporation | $250,000 | ' | ' | ' | ' | ' | ||
Number of properties containing Asbestos | ' | ' | ' | ' | 20 | 4 | ||
Loan principal | 3,200,210,000 | [1],[2] | 3,201,140,000 | [1],[2] | ' | 325,000,000 | ' | ' |
Maturity Date | ' | ' | ' | 1-May-18 | ' | ' | ||
Swap Maturity Date | ' | ' | ' | 1-May-17 | ' | ' | ||
Maximum future payments under the swap agreement | ' | ' | ' | $5,100,000 | ' | ' | ||
Number of tenants accounting for more than 10% of our total rental revenue and tenant recoveries | 0 | ' | 0 | ' | ' | ' | ||
[1] | See Note 10 for our fair value disclosures. | |||||||
[2] | As of September 30, 2014, (i) the weighted average remaining life of our outstanding term debt (excluding our revolving credit line) was 4.0 years and (ii) of the $2.97 billion of term debt on which the interest rate was fixed under the terms of the loan or a swap, (a) the weighted average remaining life was 4.3 years, the weighted average remaining period during which interest was fixed was 2.6 years, and the weighted average annual interest rate was 4.05% and (b) including the non-cash amortization of prepaid loan fees, the effective weighted average interest rate was 4.18%. Except as otherwise noted below, each loan is secured by a separate collateral pool consisting of one or more properties, requiring monthly payments of interest only, with the outstanding principal due upon maturity. |
Segment_Reporting_Segment_Repo
Segment Reporting Segment Reporting (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Business_Segments | |
Segment Reporting [Abstract] | ' |
Number of reportable business segments | 2 |
Segment_Reporting_Operating_Ac
Segment Reporting (Operating Activity Within Reportable Segments) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total office revenues | $127,962 | $130,339 | $388,609 | $386,424 |
Office expenses | -47,636 | -46,494 | -135,657 | -130,525 |
Total multifamily revenues | 20,184 | 19,347 | 59,839 | 57,436 |
Multifamily expenses | -5,261 | -5,157 | -15,490 | -15,108 |
Segment profit | 95,249 | 98,035 | 297,301 | 298,227 |
Office Segment [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total office revenues | 127,962 | 130,339 | 388,609 | 386,424 |
Office expenses | -47,636 | -46,494 | -135,657 | -130,525 |
Segment profit | 80,326 | 83,845 | 252,952 | 255,899 |
Multifamily Segment [Member] | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Total multifamily revenues | 20,184 | 19,347 | 59,839 | 57,436 |
Multifamily expenses | -5,261 | -5,157 | -15,490 | -15,108 |
Segment profit | $14,923 | $14,190 | $44,349 | $42,328 |
Segment_Reporting_Reconciliati
Segment Reporting (Reconciliation Of Segment Profit To Net Income Attributable To Common Stockholders) (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Segment Reporting [Abstract] | ' | ' | ' | ' |
Total profit from all segments | $95,249 | $98,035 | $297,301 | $298,227 |
General and administrative expense | -6,658 | -6,546 | -20,181 | -20,724 |
Depreciation and amortization | -50,111 | -47,402 | -151,249 | -141,528 |
Other income | 3,769 | 2,138 | 12,642 | 4,165 |
Other expenses | -1,983 | -1,402 | -5,114 | -2,777 |
Income, including depreciation, from unconsolidated real estate funds | 665 | 811 | 2,725 | 3,335 |
Interest expense | -32,098 | -32,601 | -95,888 | -97,832 |
Acquisition-related expenses | -152 | -290 | -180 | -533 |
Net income | 8,681 | 12,743 | 40,056 | 42,333 |
Less: Net income attributable to noncontrolling interests | -1,292 | -1,992 | -6,328 | -5,865 |
Net income attributable to common stockholders | $7,389 | $10,751 | $33,728 | $36,468 |
Investments_In_Unconsolidated_2
Investments In Unconsolidated Real Estate Funds Narrative (Details) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Apr. 03, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 |
Number_of_Properties | Number_of_Properties | Fund X [Member] | Partnership X [Member] | Partially Owned Properties [Member] | Partially Owned Properties [Member] | Fund X [Member] | Fund X [Member] | Partnership X [Member] | Fund X [Member] | Partially Owned Properties [Member] | LIBOR [Member] | |||
Number_of_funds_managed | Number_of_Properties | Fund X [Member] | ||||||||||||
sqft | ||||||||||||||
Schedule of Equity Method Investments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2.50% |
Number of Real Estate Funds owned and managed | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' |
Number of Real Estate Properties | 60 | ' | 60 | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8 | ' |
Square Footage of Real Estate Property | ' | ' | ' | ' | ' | ' | ' | 1,800,000 | ' | ' | ' | ' | ' | ' |
Equity Method Investment, Ownership Percentage | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 24.25% | 68.61% | ' | ' |
Total equity method distributions received | $3.10 | $2.70 | $9.30 | $5.30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional interest acquired, percent | ' | ' | ' | ' | 3.30% | 0.90% | ' | ' | ' | ' | ' | ' | ' | ' |
Additional interest acquired, value | ' | ' | ' | ' | ' | ' | 8 | ' | ' | ' | ' | ' | ' | ' |
Due from Related Parties | ' | ' | ' | ' | ' | ' | ' | ' | $1.80 | $2.90 | ' | ' | ' | ' |
Debt Instrument, Description of Variable Rate Basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 'LIBOR plus 2.5% |
Related Party Transaction Date | ' | ' | ' | ' | ' | ' | ' | ' | 1-Apr-17 | ' | ' | ' | ' | ' |
Percentage of amounts related to the Fund | 100.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Investments_In_Unconsolidated_3
Investments In Unconsolidated Real Estate Funds (Summary Of Statement Of Operations For Investments In Unconsolidated Real Estate Funds) (Details) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Real Estate Investments, Net [Abstract] | ' | ' |
Total revenues | $49,276 | $47,627 |
Operating income | 8,627 | 8,797 |
Net income | $60 | $748 |
Investments_In_Unconsolidated_4
Investments In Unconsolidated Real Estate Funds (Summary Of Statement Of Financial Position For Investments In Unconsolidated Real Estate Funds) (Details) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Real Estate Investments, Net [Abstract] | ' | ' |
Total assets | $709,482 | $722,983 |
Total liabilities | 391,019 | 391,892 |
Total equity | $318,463 | $331,091 |
Subsequent_Events_Details
Subsequent Events (Details) (Subsequent Event [Member], USD $) | 0 Months Ended | 0 Months Ended | |||
Oct. 01, 2014 | Oct. 01, 2014 | Oct. 01, 2014 | Oct. 16, 2014 | Oct. 16, 2014 | |
Interest Only Term Loan [Member] | Interest Only Term Loan [Member] | Office Building [Member] | Office Building [Member] | ||
sqft | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' |
Interest only loan amount | ' | ' | $145,000,000 | ' | ' |
Interest only loan term | ' | '5 years | ' | ' | ' |
Variable rate basis | ' | 'one month Libor | ' | ' | ' |
Basis spread | ' | 1.25% | ' | ' | ' |
Repayment of debt | 111,900,000 | ' | ' | ' | ' |
Square footage of real estate property | ' | ' | ' | ' | 216,000 |
Contract price | ' | ' | ' | $75,300,000 | ' |
Price paid for real estate acquired per square foot | ' | ' | ' | ' | 348 |