Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-33106 | |
Entity Registrant Name | Douglas Emmett, Inc. | |
Entity Central Index Key | 0001364250 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 20-3073047 | |
Entity Address, Address Line One | 1299 Ocean Avenue, Suite 1000 | |
Entity Address, City or Town | Santa Monica | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90401 | |
City Area Code | 310 | |
Local Phone Number | 255-7700 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | DEI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 175,250,468 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Investment in real estate: | ||
Land | $ 1,100,412 | $ 1,065,099 |
Buildings and improvements | 8,436,246 | 7,995,203 |
Tenant improvements and lease intangibles | 859,618 | 840,653 |
Property under development | 70,834 | 129,753 |
Investment in real estate, gross | 10,467,110 | 10,030,708 |
Less: accumulated depreciation and amortization | (2,374,596) | (2,246,887) |
Investment in real estate, net | 8,092,514 | 7,783,821 |
Ground lease right-of-use asset | 7,481 | |
Cash and cash equivalents | 303,962 | 146,227 |
Tenant receivables, net | 5,199 | 4,371 |
Deferred rent receivables, net | 131,518 | 124,834 |
Acquired lease intangible assets, net | 2,993 | 3,251 |
Interest rate contract assets | 16,788 | 73,414 |
Investment in unconsolidated real estate funds | 106,017 | 111,032 |
Other assets | 11,239 | 14,759 |
Total Assets | 8,677,711 | 8,261,709 |
Liabilities | ||
Secured notes payable and revolving credit facility, net | 4,304,913 | 4,134,030 |
Ground lease liability | 10,885 | |
Interest payable, accounts payable and deferred revenue | 117,672 | 130,154 |
Security deposits | 52,141 | 50,733 |
Acquired lease intangible liabilities, net | 42,503 | 52,569 |
Interest rate contract liabilities | 51,672 | 1,530 |
Dividends payable | 45,565 | 44,263 |
Total liabilities | 4,625,351 | 4,413,279 |
Douglas Emmett, Inc. stockholders' equity: | ||
Common Stock, $0.01 par value, 750,000,000 authorized, 175,222,968 and 170,214,809 outstanding at June 30, 2019 and December 31, 2018, respectively | 1,752 | 1,702 |
Additional paid-in capital | 3,484,180 | 3,282,316 |
Accumulated other comprehensive (loss) income | (25,853) | 53,944 |
Accumulated deficit | (964,927) | (935,630) |
Total Douglas Emmett, Inc. stockholders' equity | 2,495,152 | 2,402,332 |
Noncontrolling interests | 1,557,208 | 1,446,098 |
Total equity | 4,052,360 | 3,848,430 |
Total Liabilities and Equity | $ 8,677,711 | $ 8,261,709 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common Stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common Stock, authorized (in shares) | 750,000,000 | 750,000,000 |
Common Stock, outstanding (in shares) | 175,222,968 | 170,214,809 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues | ||||
Revenues | $ 230,534 | $ 219,469 | $ 454,720 | $ 431,716 |
Operating Expenses | ||||
General and administrative expenses | 9,159 | 9,437 | 18,991 | 19,004 |
Depreciation and amortization | 78,724 | 73,379 | 158,597 | 145,877 |
Total operating expenses | 159,903 | 151,542 | 320,612 | 300,661 |
Operating income | 70,631 | 67,927 | 134,108 | 131,055 |
Other income | 2,892 | 2,792 | 5,790 | 5,422 |
Other expenses | (1,807) | (2,086) | (3,652) | (3,819) |
Income, including depreciation, from unconsolidated real estate funds | 2,207 | 1,668 | 3,758 | 3,174 |
Interest expense | (34,063) | (33,268) | (67,356) | (66,168) |
Net income | 39,860 | 37,033 | 72,648 | 69,664 |
Less: Net income attributable to noncontrolling interests | (5,894) | (5,349) | (9,981) | (9,774) |
Net income attributable to common stockholders | $ 33,966 | $ 31,684 | $ 62,667 | $ 59,890 |
Net income attributable to common stockholders per share – basic (usd per share) | $ 0.20 | $ 0.19 | $ 0.36 | $ 0.35 |
Net income attributable to common stockholders per share – diluted (usd per share) | 0.20 | 0.19 | 0.36 | 0.35 |
Dividends declared per common share (usd per share) | $ 0.26 | $ 0.25 | $ 0.52 | $ 0.50 |
Office rental | ||||
Revenues | ||||
Revenues | $ 202,189 | $ 193,761 | $ 399,479 | $ 381,094 |
Operating Expenses | ||||
Operating expenses | 64,308 | 61,818 | 127,757 | 122,174 |
Office rental | Rental revenues and tenant recoveries | ||||
Revenues | ||||
Revenues | 171,674 | 164,815 | 338,909 | 323,639 |
Office rental | Parking and other income | ||||
Revenues | ||||
Revenues | 30,515 | 28,946 | 60,570 | 57,455 |
Multifamily rental | ||||
Revenues | ||||
Revenues | 28,345 | 25,708 | 55,241 | 50,622 |
Operating Expenses | ||||
Operating expenses | 7,712 | 6,908 | 15,267 | 13,606 |
Multifamily rental | Rental revenues | ||||
Revenues | ||||
Revenues | 26,308 | 23,655 | 51,201 | 46,716 |
Multifamily rental | Parking and other income | ||||
Revenues | ||||
Revenues | $ 2,037 | $ 2,053 | $ 4,040 | $ 3,906 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 39,860 | $ 37,033 | $ 72,648 | $ 69,664 |
Other comprehensive (loss) income: cash flow hedges | (81,613) | 18,994 | (114,921) | 63,363 |
Comprehensive (loss) income | (41,753) | 56,027 | (42,273) | 133,027 |
Less: Comprehensive loss (income) attributable to noncontrolling interests | 18,923 | (10,878) | 25,143 | (28,750) |
Comprehensive (loss) income attributable to common stockholders | $ (22,830) | $ 45,149 | $ (17,130) | $ 104,277 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | AOCI | Accumulated Deficit | Noncontrolling Interests |
Beginning balance (in shares) at Dec. 31, 2017 | 169,565,000 | |||||
Stockholders' Equity [Roll Forward] | ||||||
Exchange of OP units for common stock (in shares) | 339,000 | 342,000 | ||||
Exercise of stock options (in shares) | 32,000 | 14,000 | ||||
Ending balance (in shares) at Jun. 30, 2018 | 169,921,000 | |||||
Beginning balance at Dec. 31, 2017 | $ 3,902,049 | $ 1,696 | $ 3,272,539 | $ 43,099 | $ (879,810) | $ 1,464,525 |
Stockholders' Equity [Roll Forward] | ||||||
Exchange of OP units for common stock | 3 | 5,477 | (5,480) | |||
Net income | 69,664 | 59,890 | 9,774 | |||
Cash flow hedge fair value adjustments | 63,363 | 44,176 | 18,976 | |||
Cash flow hedge fair value adjustments | 63,152 | |||||
Repurchase of OP Units with cash | (108) | (59) | (49) | |||
Taxes paid on exercise of stock options | (314) | (314) | ||||
Dividends | (84,954) | (84,954) | ||||
Distributions | (26,115) | (26,115) | ||||
Stock-based compensation | 6,912 | 6,912 | ||||
Ending balance at Jun. 30, 2018 | 3,930,286 | $ 1,699 | 3,277,643 | 87,486 | (905,085) | 1,468,543 |
Beginning balance (in shares) at Mar. 31, 2018 | 169,901,000 | |||||
Stockholders' Equity [Roll Forward] | ||||||
Exchange of OP units for common stock (in shares) | 20,000 | |||||
Ending balance (in shares) at Jun. 30, 2018 | 169,921,000 | |||||
Beginning balance at Mar. 31, 2018 | 3,926,467 | $ 1,699 | 3,277,421 | 74,021 | (894,289) | 1,467,615 |
Stockholders' Equity [Roll Forward] | ||||||
Exchange of OP units for common stock | 281 | (281) | ||||
Net income | 37,033 | 31,684 | 5,349 | |||
Cash flow hedge fair value adjustments | 18,994 | 13,465 | 5,529 | |||
Cash flow hedge fair value adjustments | 18,994 | |||||
Repurchase of OP Units with cash | (108) | (59) | (49) | |||
Dividends | (42,480) | (42,480) | ||||
Distributions | (13,029) | (13,029) | ||||
Stock-based compensation | 3,409 | 3,409 | ||||
Ending balance at Jun. 30, 2018 | $ 3,930,286 | $ 1,699 | 3,277,643 | 87,486 | (905,085) | 1,468,543 |
Beginning balance (in shares) at Dec. 31, 2018 | 170,214,809 | 170,215,000 | ||||
Stockholders' Equity [Roll Forward] | ||||||
Exchange of OP units for common stock (in shares) | 75,000 | 76,000 | ||||
Issuance of common stock (in shares) | 4,900,000 | 4,932,000 | ||||
Ending balance (in shares) at Jun. 30, 2019 | 175,222,968 | 175,223,000 | ||||
Beginning balance at Dec. 31, 2018 | $ 3,848,430 | $ 1,702 | 3,282,316 | 53,944 | (935,630) | 1,446,098 |
Stockholders' Equity [Roll Forward] | ||||||
Exchange of OP units for common stock | 1 | 1,222 | (1,223) | |||
Net income | 72,648 | 62,667 | 9,981 | |||
Cash flow hedge fair value adjustments | (114,921) | (79,797) | (35,124) | |||
Issuance of common stock, net | 200,982 | 49 | 200,933 | |||
Repurchase of OP Units with cash | (507) | (291) | (216) | |||
Contributions | 176,000 | 176,000 | ||||
Dividends | (89,820) | (89,820) | ||||
Distributions | (43,974) | (43,974) | ||||
Stock-based compensation | 6,021 | 6,021 | ||||
Ending balance at Jun. 30, 2019 | $ 4,052,360 | $ 1,752 | 3,484,180 | (25,853) | (964,927) | 1,557,208 |
Beginning balance (in shares) at Mar. 31, 2019 | 170,237,000 | |||||
Stockholders' Equity [Roll Forward] | ||||||
Exchange of OP units for common stock (in shares) | 54,000 | |||||
Issuance of common stock (in shares) | 4,932,000 | |||||
Ending balance (in shares) at Jun. 30, 2019 | 175,222,968 | 175,223,000 | ||||
Beginning balance at Mar. 31, 2019 | $ 3,788,182 | $ 1,702 | 3,282,388 | 30,943 | (953,335) | 1,426,484 |
Stockholders' Equity [Roll Forward] | ||||||
Exchange of OP units for common stock | 1 | 859 | (860) | |||
Net income | 39,860 | 33,966 | 5,894 | |||
Cash flow hedge fair value adjustments | (81,613) | (56,796) | (24,817) | |||
Issuance of common stock, net | 200,982 | 49 | 200,933 | |||
Contributions | 176,000 | 176,000 | ||||
Dividends | (45,558) | (45,558) | ||||
Distributions | (28,214) | (28,214) | ||||
Stock-based compensation | 2,721 | 2,721 | ||||
Ending balance at Jun. 30, 2019 | $ 4,052,360 | $ 1,752 | $ 3,484,180 | $ (25,853) | $ (964,927) | $ 1,557,208 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Operating Activities | ||
Net income | $ 72,648 | $ 69,664 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Income, including depreciation, from unconsolidated real estate funds | (3,758) | (3,174) |
Depreciation and amortization | 158,597 | 145,877 |
Net accretion of acquired lease intangibles | (8,516) | (12,295) |
Straight-line rent | (6,684) | (9,191) |
Increase in the allowance for doubtful accounts | 9 | 1,335 |
Deferred loan costs amortized and written off | 4,380 | 4,279 |
Amortization of loan premium | (102) | (102) |
Derivative non-cash market value adjustments | (7) | 0 |
Amortization of stock-based compensation | 5,013 | 5,964 |
Operating distributions from unconsolidated real estate funds | 3,756 | 3,174 |
Change in working capital components: | ||
Tenant receivables | (837) | (1,616) |
Interest payable, accounts payable and deferred revenue | (2,222) | 4,974 |
Security deposits | 501 | 95 |
Other assets | 5,398 | 6,896 |
Net cash provided by operating activities | 228,176 | 215,880 |
Investing Activities | ||
Capital expenditures for improvements to real estate | (83,944) | (73,127) |
Capital expenditures for developments | (30,327) | (26,474) |
Property acquisition | (364,524) | 0 |
Acquisition of additional interests in unconsolidated real estate funds | (7,518) | 0 |
Capital distributions from unconsolidated real estate funds | 3,869 | 3,774 |
Net cash used in investing activities | (482,444) | (95,827) |
Financing Activities | ||
Proceeds from borrowings | 832,318 | 535,000 |
Repayment of borrowings | (657,673) | (546,979) |
Loan cost payments | (6,625) | (2,924) |
Contributions from noncontrolling interests in consolidated JVs | 163,556 | 0 |
Distributions paid to noncontrolling interests | (31,530) | (26,114) |
Dividends paid to common stockholders | (88,518) | (84,868) |
Taxes paid on exercise of stock options | 0 | (314) |
Repurchase of OP Units | (507) | (108) |
Proceeds from issuance of common stock, net | 200,982 | 0 |
Net cash provided by (used in) financing activities | 412,003 | (126,307) |
Increase (decrease) in cash and cash equivalents and restricted cash | 157,735 | (6,254) |
Cash and cash equivalents and restricted cash - beginning balance | 146,348 | 176,766 |
Cash and cash equivalents and restricted cash - ending balance | 304,083 | 170,512 |
Operating Activities | ||
Cash paid for interest, net of capitalized interest | 62,985 | 61,228 |
Capitalized interest paid | 1,897 | 1,558 |
Non-cash Investing Transactions | ||
Accrual for additions to real estate and developments | 16,687 | 16,329 |
Capitalized stock-based compensation for improvements to real estate and developments | 1,008 | 948 |
Removal of fully depreciated and amortized tenant improvements and lease intangibles | 30,586 | 22,157 |
Removal of fully amortized acquired lease intangible assets | 1,859 | 1,180 |
Removal of fully accreted acquired lease intangible liabilities | 4,212 | 8,899 |
Property acquisition accrual | 1,361 | 0 |
Recognition of ground lease right-of-use asset - Adoption of ASU 2016-02 | 10,885 | |
Above-market ground lease intangible liability offset against right-of-use asset - Adoption of ASU 2016-02 | 3,408 | |
Recognition of ground lease liability - Adoption of ASU 2016-02 | 10,885 | |
Non-cash Financing Transactions | ||
Gain recorded in AOCI - Adoption of ASU 2017-12 - consolidated derivatives | 0 | 211 |
Gain (loss) recorded in AOCI - derivatives | (89,483) | 58,890 |
Non-cash contributions from noncontrolling interests in consolidated JVs | 12,444 | 0 |
Non-cash distributions to noncontrolling interests | 12,444 | 0 |
Dividends declared | 89,820 | 84,954 |
Exchange of OP units for common stock | 1,223 | 5,480 |
Unconsolidated Funds | ||
Non-cash Financing Transactions | ||
Gain (loss) recorded in AOCI - derivatives | $ (6,928) | $ 6,404 |
Overview
Overview | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Overview | Overview Organization and Business Description Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed 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. Through our interest in our Operating Partnership and its subsidiaries, consolidated JVs and unconsolidated Funds, we focus on owning, acquiring, developing and managing a significant market 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. The terms "us," "we" and "our" as used in the financial statements refer to Douglas Emmett, Inc. and its subsidiaries on a consolidated basis. At June 30, 2019 , our Consolidated Portfolio consisted of (i) a 16.6 million square foot office portfolio, (ii) 4,069 multifamily apartment units and (iii) fee interests in two parcels of land from which we receive rent under ground leases. We also manage and own equity interests in unconsolidated Funds which, at June 30, 2019 , owned an additional 1.8 million square feet of office space. We manage our unconsolidated Funds alongside our Consolidated Portfolio, and we therefore present the statistics for our office portfolio on a Total Portfolio basis. As of June 30, 2019 , our portfolio (not including two parcels of land from which we receive rent under ground leases), consisted of the following properties (both of which include ancillary retail space): Consolidated Portfolio Total Portfolio Office Wholly-owned properties 53 53 Consolidated JV properties 11 11 Unconsolidated Fund properties — 8 64 72 Multifamily Wholly-owned properties 10 10 Consolidated JV properties 1 1 11 11 Total 75 83 Basis of Presentation The accompanying financial statements are the consolidated financial statements of Douglas Emmett, Inc. and its subsidiaries, including our Operating Partnership and our consolidated JVs. All significant intercompany balances and transactions have been eliminated in our consolidated financial statements. Our Operating Partnership and consolidated JVs are VIEs of which we are the primary beneficiary. As of June 30, 2019 , the total consolidated assets, liabilities and equity of the VIEs was $8.68 billion (of which $8.09 billion related to investment in real estate), $4.63 billion and $4.05 billion (of which $1.56 billion related to noncontrolling interests), respectively. We report our office rental revenues and tenant recoveries on a combined basis as Rental revenues and tenant recoveries under Office rental in our consolidated statements of operations, and we reclassified the comparable periods to conform to the current period presentation. The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in the financial statements prepared in conformity with US 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 interim 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, 2019 . The interim financial statements should be read in conjunction with the consolidated financial statements in our 2018 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies On January 1, 2019, we adopted ASUs that changed our accounting policy for leases. See "New Accounting Pronouncements" below. We have not made any other changes to our significant accounting policies disclosed in our 2018 Annual Report on Form 10-K. Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make certain estimates that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Revenue Recognition Office parking revenues, which are included in Parking and other income under Office rental in our consolidated statements of operations, are within the scope of Topic 606 (Revenue from Contracts with Customers). Our lease contracts generally make a specified number of parking spaces available to the tenant, and we bill and recognize parking revenues on a monthly basis in accordance with the lease agreements, generally using the monthly parking rates in effect at the time of billing. Office parking revenues were $26.9 million and $25.7 million for the three months ended June 30, 2019 and 2018 , and $53.3 million and $50.8 million for the six months ended June 30, 2019 and 2018 , respectively. Office parking receivables were $1.1 million as of June 30, 2019 and December 31, 2018 , and are included in Tenant receivables in our consolidated balance sheets. Income Taxes We have elected to be taxed as a REIT under the Code. 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 TRS. New Accounting Pronouncements Changes to US GAAP are implemented by the FASB in the form of ASUs. We consider the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not issued any other ASUs that we expect to be applicable and have a material impact on our financial statements. ASUs Adopted ASU 2016-02 (Topic 842 - "Leases") In February 2016, the FASB issued ASU No. 2016-02, (Topic 842 - "Leases"). The primary impact of the ASU is the recognition of lease assets and liabilities on the balance sheet by lessees for leases classified as operating leases. The accounting applied by lessors is largely unchanged. For example, the vast majority of operating leases remain classified as operating leases, and lessors continue to recognize lease payments for those leases on a straight-line basis over the lease term. We adopted the ASU on January 1, 2019 using the modified retrospective transition method. We recorded cumulative adjustments of $2.1 million and $0.4 million to the opening balances of accumulated deficit and noncontrolling interests, respectively, for leasing expenses related to leases that were entered into before the adoption date but commenced after the adoption date. The ASU provides a practical expedient package, which we elected to use, that allows entities (a) not to reassess whether any expired or existing contracts as of the adoption date are considered or contain leases; (b) not to reassess the lease classification for any expired or existing leases as of the adoption date; and (c) not to reassess initial direct costs for any existing leases as of the adoption date. All leases entered into on or after the adoption date were accounted for under the ASU. We lease space to tenants at our office and multifamily properties. Under the ASU, all of our tenant leases continue to be classified as operating leases. The ASU continues to require that lease payments for operating leases be recognized over the lease term on a straight-line basis unless another systematic and rational basis is more representative of the pattern in which benefit is expected to be derived from the use of the underlying asset. If collectibility of the lease payments is not probable at the commencement date, then the lease income should be limited to the lesser of the income recognized on a straight-line basis or cash basis. If the assessment of collectibility changes after the commencement date, any difference between the lease income that would have been recognized on a straight-line basis and cash basis must be recognized as a current-period adjustment to lease income. The ASU requires separation of the lease from the non-lease components (for example, maintenance services or other activities that transfer a good or service to the customer) in a contract. Only the lease components are accounted for in accordance with the ASU. The consideration in the contract is allocated to the lease and non-lease components on a relative standalone selling price basis and the non-lease component would be accounted for in accordance with ASC 606 ("Revenue from Contracts with Customers"). In July 2018, the FASB issued ASU No. 2018-11 which includes an optional practical expedient for lessors to elect, by class of underlying asset, to not separate the lease from the non-lease components if certain criteria are met. Our office tenant leases include a lease component for the rental income and a non-lease component for the related tenant recoveries. We determined that our office tenant leases qualify for the single component presentation and we adopted the practical expedient. We account for the combined components under the ASU. Rental revenues and tenant recoveries from our office tenant leases is included in Rental revenues and tenant recoveries under Office rental in our consolidated statements of operations. Rental revenues from our multifamily tenant leases is included in multifamily Rental revenues in our consolidated statements of operations. Rental revenue recognized on a straight-line basis in excess of billed rents is included in Deferred rent receivables in our consolidated balance sheets. See Note 15 for more information regarding the future lease rental receipts from our operating leases. The ASU defines initial direct costs of a lease, which may be capitalized, as costs that would not have been incurred had the lease not been executed. Costs to negotiate a lease that would have been incurred regardless of whether the lease was executed, such as employee salaries, are not considered to be initial direct costs, and may not be capitalized. We historically capitalized most of our leasing costs. We expensed $1.1 million and $2.1 million during the three and six months ended June 30, 2019 , respectively, of leasing costs related to our tenant leases that did not qualify as initial direct costs of a lease, which are included in General and administrative expenses in our consolidated statements of operations. We pay rent under a ground lease which expires on December 31, 2086 . Upon adoption of the ASU, we continued to classify the lease as an operating lease, and we recognized a right-of-use asset for the land and a lease liability for the future lease payments of $10.9 million . We calculated the carrying value of the right-of-use asset and lease liability by discounting the future lease payments using our incremental borrowing rate. We adjusted the right-of-use asset carrying value for a related above-market ground lease liability of $3.4 million , which reduced the carrying value of the asset to $7.5 million . We continued to recognize the lease payments as expense, which is included in Office expenses in our Consolidated Statements of Operations. See Note 4 for more information regarding this ground lease. See Note 13 for the fair value disclosures related to the ground lease liability. In December 2018, the FASB issued ASU 2018-20, an update to ASU 2016-02, which provides guidance on accounting for sales and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and nonlease components. We adopted the ASU and it did not have a material impact on our financial statements. In March 2019, the FASB issued ASU 2019-01, an update to ASU 2016-02, which provides guidance on transition disclosures related to Topic 250 "Accounting Changes and Error Corrections" and other technical updates. We adopted the ASU and it did not have a material impact on our financial statements. |
Investment in Real Estate
Investment in Real Estate | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Investment in Real Estate | Investment in Real Estate We account for our property acquisitions as asset acquisitions. The acquired property's results of operations are included in our results of operations from the respective acquisition date. On June 7, 2019, we acquired The Glendon, a residential community in Westwood, and on June 28, 2019, we contributed the property to a consolidated JV that we manage and in which we own a twenty percent capital interest. The table below summarizes the purchase price allocation for the acquisition. The contract and purchase prices differ due to prorations and similar adjustments: (In thousands, except number of units) The Glendon Submarket West Los Angeles Acquisition date June 7 Contract price $ 365,100 Number of multifamily units 350 Retail square footage 50 Investment in real estate: Land $ 32,773 Buildings and improvements 333,624 Tenant improvements and lease intangibles 2,301 Acquired above- and below-market leases, net (2,114 ) Net assets and liabilities acquired $ 366,584 |
Ground Lease
Ground Lease | 6 Months Ended |
Jun. 30, 2019 | |
Lessee Disclosure [Abstract] | |
Ground Lease | Ground Lease We pay rent under a ground lease located in Honolulu, Hawaii, which expires on December 31, 2086 . The rent is fixed at $733 thousand per year until February 28, 2029 , after which it will reset to the greater of the existing ground rent or market. As of June 30, 2019 , the right-of-use asset carrying value of this ground lease was $7.5 million and the ground lease liability was $10.9 million . We incurred ground rent expense of $183 thousand for the three months ended June 30, 2019 and 2018 , and $363 thousand and $366 thousand for the six months ended June 30, 2019 and 2018 , respectively, which is included in Office expenses in our Consolidated Statements of Operations. The table below, which assumes that the ground rent payments will continue to be $733 thousand per year after February 28, 2029 , presents the future minimum ground lease payments as of June 30, 2019 : Twelve months ending June 30: (In thousands) 2020 $ 733 2021 733 2022 733 2023 733 2024 733 Thereafter 45,811 Total future minimum lease payments $ 49,476 |
Acquired Lease Intangibles
Acquired Lease Intangibles | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquired Lease Intangibles | Acquired Lease Intangibles Summary of our Acquired Lease Intangibles (In thousands) June 30, 2019 December 31, 2018 Above-market tenant leases $ 3,759 $ 5,595 Above-market tenant leases - accumulated amortization (1,702 ) (3,289 ) Above-market ground lease where we are the lessor 1,152 1,152 Above-market ground lease - accumulated amortization (216 ) (207 ) Acquired lease intangible assets, net $ 2,993 $ 3,251 Below-market tenant leases $ 110,100 $ 112,175 Below-market tenant leases - accumulated accretion (67,597 ) (63,013 ) Above-market ground lease where we are the tenant (1) — 4,017 Above-market ground lease - accumulated accretion (1) — (610 ) Acquired lease intangible liabilities, net $ 42,503 $ 52,569 ______________________________________________ (1) Upon adoption of ASU 2016-02 on January 1, 2019 we adjusted the ground lease right-of-use asset carrying value for the carrying value of the above-market ground lease - see Notes 2 and 4 . Impact on the Consolidated Statements of Operations The table below summarizes the net amortization/accretion related to our above- and below-market leases: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Net accretion of above- and below-market tenant lease assets and liabilities (1) $ 4,400 $ 6,134 $ 8,524 $ 12,277 Amortization of an above-market ground lease asset (2) (4 ) (4 ) (8 ) (8 ) Accretion of an above-market ground lease liability (3) — 13 — 26 Total $ 4,396 $ 6,143 $ 8,516 $ 12,295 ______________________________________________ (1) Recorded as a net increase to office and multifamily rental revenues. (2) Recorded as a decrease to office parking and other income. (3) Recorded as a decrease to office expense. Upon adoption of ASU 2016-02 on January 1, 2019 we adjusted the ground lease right-of-use asset carrying value with the carrying value of the above-market ground lease - see Notes 2 and 4 . |
Investments in Unconsolidated R
Investments in Unconsolidated Real Estate Funds | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate Investments, Net [Abstract] | |
Investments In Unconsolidated Real Estate Funds | Investments in Unconsolidated Real Estate Funds Description of our Funds We manage and own equity interests in three unconsolidated Funds, the Opportunity Fund, Fund X and Partnership X, through which we and investors own eight office properties totaling 1.8 million square feet. During the three months ended June 30, 2019 we purchased an additional 1.4% interest in Fund X. At June 30, 2019 , we held direct and indirect equity interests of 6.2% of the Opportunity Fund, 72.7% of Fund X and 24.6% of Partnership X. Our Funds pay us fees and reimburse us for certain expenses related to property management and other services we provide, which are included in Other income in our consolidated statements of operations. We also receive distributions based on invested capital and on any profits that exceed certain specified cash returns to the investors. The table below presents cash distributions we received from our Funds: Six Months Ended June 30, (In thousands) 2019 2018 Operating distributions received $ 3,756 $ 3,174 Capital distributions received 3,869 3,774 Total distributions received $ 7,625 $ 6,948 Summarized Financial Information for our Funds The tables below present selected financial information for the Funds on a combined basis. The amounts presented reflect 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value: (In thousands) June 30, 2019 December 31, 2018 Total assets $ 678,355 $ 694,713 Total liabilities $ 529,010 $ 525,483 Total equity $ 149,345 $ 169,230 Six Months Ended June 30, (In thousands) 2019 2018 Total revenues $ 41,174 $ 38,963 Operating income $ 11,961 $ 11,504 Net income $ 3,815 $ 3,180 |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2019 | |
Other Assets [Abstract] | |
Other Assets | Other Assets (In thousands) June 30, 2019 December 31, 2018 Restricted cash $ 121 $ 121 Prepaid expenses 3,112 7,830 Other indefinite-lived intangibles 1,988 1,988 Furniture, fixtures and equipment, net 2,396 1,101 Other 3,622 3,719 Total other assets $ 11,239 $ 14,759 |
Secured Notes Payable and Revol
Secured Notes Payable and Revolving Credit Facility, Net | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Secured Notes Payable and Revolving Credit Facility, Net | Secured Notes Payable and Revolving Credit Facility, Net Description Maturity Date (1) Principal Balance as of June 30, 2019 Principal Balance as of December 31, 2018 Variable Interest Rate Fixed Interest Rate (2) Swap Maturity Date (In thousands) Wholly Owned Subsidiaries Fannie Mae loan (3) — $ — $ 145,000 — — — Fannie Mae loan (3) — — 115,000 — — — Term loan (4) 4/15/2022 340,000 340,000 LIBOR + 1.40% 2.77% 4/1/2020 Term loan (4) 7/27/2022 180,000 180,000 LIBOR + 1.45% 3.06% 7/1/2020 Term loan (4) 11/1/2022 400,000 400,000 LIBOR + 1.35% 2.64% 11/1/2020 Term loan (4) 6/23/2023 360,000 360,000 LIBOR + 1.55% 2.57% 7/1/2021 Term loan (4)(5) 12/23/2023 220,000 220,000 LIBOR + 1.70% 3.62% 12/23/2021 Term loan (4) 1/1/2024 300,000 300,000 LIBOR + 1.55% 3.46% 1/1/2022 Term loan (4) 3/3/2025 335,000 335,000 LIBOR + 1.30% 3.84% 3/1/2023 Fannie Mae loan (4)(6) 4/1/2025 102,400 102,400 LIBOR + 1.25% 2.84% 3/1/2023 Fannie Mae loan (4) 6/1/2027 550,000 550,000 LIBOR + 1.37% 3.16% 6/1/2022 Fannie Mae loan (4)(7) 6/1/2029 255,000 — LIBOR + 0.98% 3.26% 6/1/2027 Fannie Mae loan (4)(7)(8) 6/1/2029 125,000 — LIBOR + 0.98% 2.55% 6/1/2027 Term loan (9) 6/1/2038 31,227 31,582 N/A 4.55% N/A Revolving credit facility (10) 8/21/2023 — 105,000 LIBOR + 1.15% N/A N/A Total Wholly Owned Subsidiary Debt 3,198,627 3,183,982 Consolidated JVs Term loan (4) 2/28/2023 580,000 580,000 LIBOR + 1.40% 2.37% 3/1/2021 Term loan (4) 12/19/2024 400,000 400,000 LIBOR + 1.30% 3.47% 1/1/2023 Term loan (4) 6/1/2029 160,000 — LIBOR + 0.98% 3.25% 7/1/2027 Total Consolidated Debt (11) 4,338,627 4,163,982 Unamortized loan premium, net 3,884 3,986 Unamortized deferred loan costs, net (37,598 ) (33,938 ) Total Consolidated Debt, net $ 4,304,913 $ 4,134,030 _______________________________________________________________________ Except as noted below, each loan (including our revolving credit facility) is non-recourse and secured by one or more separate collateral pools consisting of one or more properties, and requires monthly payments of interest only with the outstanding principal due upon maturity. (1) Maturity dates include the effect of extension options. (2) Includes the effect of interest rate swaps and excludes the effect of prepaid loan fees. See Note 10 for details of our interest rate swaps. See below for details of our loan costs. (3) These loans were paid off during the second quarter of 2019. (4) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor. (5) We paid this loan off on July 1, 2019 and terminated the related swaps. (6) We extended the fixed rate period for three years using a forward interest rate swap. The effective rate will decrease to 2.76% on March 2, 2020 . (7) These loans were closed during the second quarter of 2019. (8) Effective rate will increase to 3.25% on December 2, 2020 . (9) Requires monthly payments of principal and interest. Principal amortization is based upon a 30 -year amortization schedule. (10) In March 2019, we renewed our $400.0 million revolving credit facility, releasing two previously encumbered properties, lowering the borrowing rate and unused facility fees, and extending the maturity date. Unused commitment fees range from 0.10% to 0.15% . (11) The table does not include our unconsolidated Funds' loans - see Note 16 . See Note 13 for our fair value disclosures. Debt Statistics The following table summarizes our consolidated fixed and floating rate debt: (In thousands) Principal Balance as of June 30, 2019 Principal Balance as of December 31, 2018 Aggregate swapped to fixed rate loans $ 4,307,400 $ 3,882,400 Aggregate fixed rate loans 31,227 31,582 Aggregate floating rate loans — 250,000 Total Debt $ 4,338,627 $ 4,163,982 The following table summarizes certain consolidated debt statistics as of June 30, 2019 : Statistics for consolidated loans with interest fixed under the terms of the loan or a swap Principal balance (in billions) $4.34 Weighted average remaining life (including extension options) 5.5 years Weighted average remaining fixed interest period 3.1 years Weighted average annual interest rate 3.08% Future Principal Payments At June 30, 2019 , the minimum future principal payments due on our consolidated secured notes payable and revolving credit facility were as follows: Twelve months ending June 30: Excluding Maturity Extension Options Including Maturity Extension Options (1) (In thousands) 2020 $ 735 $ 735 2021 180,769 769 2022 640,805 340,805 2023 1,675,842 1,520,842 2024 220,881 520,881 Thereafter 1,619,595 1,954,595 Total future principal payments $ 4,338,627 $ 4,338,627 ____________________________________________ (1) Our loan agreements generally require that we meet certain minimum financial thresholds to be able to extend the loan maturity. Loan Costs Deferred loan costs are net of accumulated amortization of $28.0 million and $24.2 million at June 30, 2019 and December 31, 2018 , respectively. The table below presents loan costs, which are included in Interest expense in our consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Loan costs expensed $ 576 $ — $ 576 $ 404 Deferred loan cost amortization 1,887 1,970 3,804 3,875 Total $ 2,463 $ 1,970 $ 4,380 $ 4,279 |
Interest Payable, Accounts Paya
Interest Payable, Accounts Payable and Deferred Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Interest Payable, Accounts Payable and Deferred Revenue | Interest Payable, Accounts Payable and Deferred Revenue (In thousands) June 30, 2019 December 31, 2018 Interest payable $ 10,757 $ 10,657 Accounts payable and accrued liabilities 64,343 75,111 Deferred revenue 42,572 44,386 Total interest payable, accounts payable and deferred revenue $ 117,672 $ 130,154 |
Derivative Contracts
Derivative Contracts | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Contracts | Derivative Contracts We make use of interest rate swap and cap contracts to manage the risk associated with changes in interest rates on our floating-rate debt. 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 also make use of interest rate caps to limit our exposure to interest rate increases on our floating-rate debt. We do not speculate in derivatives and we do not make use of any other derivative instruments. See Note 8 regarding our debt, and our consolidated JVs debt, that is hedged. See Note 16 regarding our unconsolidated Funds debt that is hedged. Derivative Summary As of June 30, 2019 , our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Funds, were designated as cash flow hedges: Number of Interest Rate Swaps Notional (In thousands) Consolidated derivatives (1)(2)(4) 36 $ 4,484,800 Unconsolidated Funds' derivatives (3)(4) 4 $ 510,000 ___________________________________________________ (1) The notional amount reflects 100% , not our pro-rata share, of our consolidated JVs' derivatives. (2) Includes forward swaps with a total notional of $177.4 million . (3) The notional amount reflects 100% , not our pro-rata share, of our unconsolidated Funds' derivatives. (4) See Note 13 for our derivative fair value disclosures. Credit-risk-related Contingent Features Our swaps include credit-risk related contingent features, for example, we have agreements with certain of our interest rate swap counterparties that contain a provision under which we could be declared in default on our derivative obligations if repayment of the underlying indebtedness that we are hedging is accelerated by the lender due to our default on the indebtedness. As of June 30, 2019 , there have been no events of default with respect to our interest rate swaps or our consolidated JVs' or unconsolidated Funds' interest rate swaps. We do not post collateral for our interest rate swap contract liabilities. The fair value of our interest rate swap contract liabilities, including accrued interest and excluding credit risk adjustments, were as follows: (In thousands) June 30, 2019 December 31, 2018 Consolidated derivatives (1) $ 52,887 $ 1,681 Unconsolidated Funds' derivatives $ 1,949 $ — ___________________________________________________ (1) Includes 100% , not our pro-rata share, of our consolidated JVs' derivatives. Counterparty Credit Risk We are subject to credit risk from the counterparties on our interest rate swap contract assets because we do not receive collateral. We seek to minimize that risk by entering into agreements with a variety of high quality counterparties with investment grade ratings. The fair value of our interest rate swap contract assets, including accrued interest and excluding credit risk adjustments, were as follows: (In thousands) June 30, 2019 December 31, 2018 Consolidated derivatives (1) $ 18,749 $ 76,021 Unconsolidated Funds' derivatives (2) $ 1,598 $ 12,576 ___________________________________________________ (1) The amounts reflect 100% , not our pro-rata share, of our consolidated JVs' derivatives. (2) The amounts reflect 100% , not our pro-rata share, of our unconsolidated Funds' derivatives. Impact of Hedges on AOCI and the Consolidated Statements of Operations The table below presents the effect of our derivatives on our AOCI and the consolidated statements of operations: (In thousands) Six Months Ended June 30, 2019 2018 Derivatives Designated as Cash Flow Hedges: Consolidated derivatives: Gain recorded in AOCI - adoption of ASU 2017-12 (1) $ — $ 211 (Loss) gain recorded in AOCI before reclassifications (1) $ (89,483 ) $ 58,890 Gains reclassified from AOCI to Interest Expense (1) $ (17,284 ) $ (2,063 ) Interest Expense presented in the consolidated statements of operations $ (67,356 ) $ (66,168 ) Unconsolidated Funds' derivatives (our share) (2) : (Loss) gain recorded in AOCI before reclassifications (1) $ (6,928 ) $ 6,404 Gains reclassified from AOCI to Income, including depreciation, from unconsolidated real estate funds (1) $ (1,226 ) $ (79 ) Income, including depreciation, from unconsolidated real estate funds presented in the consolidated statements of operations $ 3,758 $ 3,174 ___________________________________________________ (1) See Note 11 for our AOCI reconciliation. (2) We calculate our share by multiplying the total amount for each Fund by our direct and indirect equity interest in the respective Fund. Future Reclassifications from AOCI At June 30, 2019 , our estimate of the AOCI related to derivatives designated as cash flow hedges that will be reclassified to earnings during the next twelve months as interest rate swap payments are made is as follows: (In thousands) Consolidated derivatives: Gains to be reclassified from AOCI to Interest Expense $ 7,417 Unconsolidated Funds' derivatives (our share): Gains to be reclassified from AOCI to Income, including depreciation, from unconsolidated real estate funds $ 436 |
Equity
Equity | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Equity | Equity Transactions During the six months ended June 30, 2019 , (i) we acquired 75 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units, (ii) we acquired 13 thousand OP Units for $507 thousand in cash, and (iii) we issued 4.9 million shares of our common stock under our ATM program for net proceeds of $201.2 million . We also purchased a property on June 7, 2019 for a contract price of $365.1 million , which we subsequently contributed to one of our consolidated JVs on June 28, 2019. We manage and own a twenty percent capital interest in the JV. To partially fund the acquisition of the property, we closed a secured, non-recourse $160.0 million interest-only loan scheduled to mature in June 2029, and the loan was assumed by the consolidated JV to which we contributed the property. Noncontrolling interests in the JV contributed $176.0 million to the JV for the acquisition of the property. See Note 3 for more information regarding the property acquisition and Note 8 for more information regarding the loan. During the six months ended June 30, 2018 , we (i) acquired 339 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units, (ii) acquired 3 thousand OP Units for $108 thousand in cash and (iii) issued 14 thousand shares of our common stock for the exercise of 32 thousand stock options on a net settlement basis (net of the exercise price and related taxes). Noncontrolling Interests Our noncontrolling interests consist of interests in our Operating Partnership and consolidated JVs which are not owned by us. Noncontrolling interests in our Operating Partnership consist of OP Units and fully-vested LTIP Units, and represented approximately 14% of our Operating Partnership's total interests as of June 30, 2019 when we and our Operating Partnership had 175.2 million shares of common stock and 28.1 million OP Units and fully-vested LTIP Units outstanding, respectively. A share of our common stock, an OP Unit and an LTIP Unit (once vested and booked up) have essentially the same economic characteristics, sharing equally in the distributions from our Operating Partnership. Investors who own OP Units have the right to cause our Operating Partnership to acquire their OP Units for an amount of cash per unit equal to the market value of one share of our common stock at the date of acquisition, or, at our election, exchange their OP Units for shares of our common stock on a one-for-one b asis. LTIP Units have been granted to our employees and non-employee directors as part of their compensation. These awards generally vest over a service period and once vested can generally be converted to OP Units provided our stock price increases by more than a specified hurdle. Changes in our Ownership Interest in our Operating Partnership The table below presents the effect on our equity from net income attributable to common stockholders and changes in our ownership interest in our Operating Partnership: Six Months Ended June 30, (In thousands) 2019 2018 Net income attributable to common stockholders $ 62,667 $ 59,890 Transfers from noncontrolling interests: Exchange of OP Units with noncontrolling interests 1,223 5,480 Repurchase of OP Units from noncontrolling interests (291 ) (59 ) Net transfers from noncontrolling interests 932 5,421 Change from net income attributable to common stockholders and transfers from noncontrolling interests $ 63,599 $ 65,311 AOCI Reconciliation (1) The table below presents a reconciliation of our AOCI, which consists solely of adjustments related to derivatives designated as cash flow hedges: Six Months Ended June 30, (In thousands) 2019 2018 Beginning balance $ 53,944 $ 43,099 Adoption of ASU 2017-12 - cumulative opening balance adjustment — 211 Consolidated derivatives: Other comprehensive (loss) income before reclassifications (89,483 ) 58,890 Reclassification of gains from AOCI to Interest Expense (17,284 ) (2,063 ) Unconsolidated Funds' derivatives (our share) (2) : Other comprehensive (loss) income before reclassifications (6,928 ) 6,404 Reclassification of gains from AOCI to Income, including depreciation, from unconsolidated real estate funds (1,226 ) (79 ) Net current period OCI (114,921 ) 63,363 OCI attributable to noncontrolling interests 35,124 (18,976 ) OCI attributable to common stockholders (79,797 ) 44,387 Ending balance $ (25,853 ) $ 87,486 ___________________________________________________ (1) See Note 10 for the details of our derivatives and Note 13 for our derivative fair value disclosures. (2) We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund. Equity Compensation On June 2, 2016, the Douglas Emmett 2016 Omnibus Stock Incentive Plan ("2016 Plan") became effective after receiving stockholder approval, superseding our prior plan, the Douglas Emmett 2006 Omnibus Stock Incentive Plan ("2006 Plan"), both of which allow for awards to our directors, officers, employees and consultants. The key terms of the two plans are substantially identical, except for the date of expiration, the number of shares authorized for grants and various technical provisions. Grants after June 2, 2016 were awarded under the 2016 Plan, while grants prior to that date were awarded under the 2006 Plan (grants under the 2006 Plan remain outstanding according to their terms). Both plans are administered by the compensation committee of our board of directors. Total net stock-based compensation expense was $2.4 million and $2.9 million for the three months ended June 30, 2019 and 2018 , and $5.0 million and $6.0 million for the six months ended June 30, 2019 and 2018 respectively. These amounts are net of capitalized stock-based compensation of $0.3 million and $0.5 million for the three months ended June 30, 2019 and 2018 , and $1.0 million and $0.9 million for the six months ended June 30, 2019 and 2018 respectively. There were no outstanding options during the six months ended June 30, 2019 . The intrinsic value of options exercised was $0.8 million for the six months ended June 30, 2018 |
EPS
EPS | 6 Months Ended |
Jun. 30, 2019 | |
Earnings Per Share [Abstract] | |
EPS | 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 for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method. We account for unvested LTIP awards that contain nonforfeitable rights to dividends as participating securities and include these securities in the computation of basic and diluted EPS using the two-class method. The table below presents the calculation of basic and diluted EPS: Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Numerator (In thousands): Net income attributable to common stockholders $ 33,966 $ 31,684 $ 62,667 $ 59,890 Allocation to participating securities: Unvested LTIP Units (139 ) (156 ) (265 ) (294 ) Numerator for basic and diluted net income attributable to common stockholders $ 33,827 $ 31,528 $ 62,402 $ 59,596 Denominator (In thousands): Weighted average shares of common stock outstanding - basic 172,498 169,916 171,366 169,759 Effect of dilutive securities: Stock options (1) — 10 — 17 Weighted average shares of common stock and common stock equivalents outstanding - diluted 172,498 169,926 171,366 169,776 Basic EPS: Net income attributable to common stockholders per share $ 0.20 $ 0.19 $ 0.36 $ 0.35 Diluted EPS: Net income attributable to common stockholders per share $ 0.20 $ 0.19 $ 0.36 $ 0.35 ____________________________________________________ (1) There were no outstanding options during the six months ended June 30, 2019 . The following securities were excluded from the calculation of diluted EPS because including them would be anti-dilutive to the calculation: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 OP Units 26,283 26,637 26,311 26,790 Vested LTIP Units 1,830 807 1,830 803 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2019 | |
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 widely used valuation methods. Considerable judgment is necessary to interpret market data and determine an estimated fair value. The use of different market assumptions or valuation methods may have a material effect on the estimated fair values. The FASB fair value framework hierarchy 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 June 30, 2019 , we did not have any fair value estimates of financial instruments using Level 3 inputs. Financial instruments disclosed at fair value Short term financial instruments: The carrying amounts for cash and cash equivalents, tenant receivables, revolving credit line, interest payable, accounts payable, security deposits and dividends payable approximate fair value because of the short-term nature of these instruments. Secured notes payable: See Note 8 for the details of our secured notes payable. We estimate the fair value of our consolidated secured notes payable by calculating the credit-adjusted present value of the principal and interest payments for each secured note payable. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs, assumes that the loans will be outstanding through maturity, and excludes any maturity extension options. The table below presents the estimated fair value and carrying value of our secured notes payable (excluding our revolving credit facility), the carrying value includes unamortized loan premium and excludes unamortized deferred loan fees: (In thousands) June 30, 2019 December 31, 2018 Fair value $ 4,358,148 $ 4,087,979 Carrying value $ 4,338,627 $ 4,062,968 Ground lease liability: See Note 4 for the details of our ground lease. We estimate the fair value of our ground lease liability by calculating the present value of the future lease payments disclosed in Note 4 using our incremental borrowing rate. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs. The table below presents the estimated fair value and carrying value of our ground lease liability: (In thousands) June 30, 2019 Fair value $ 11,846 Carrying value $ 10,885 Financial instruments measured at fair value Derivative instruments: See Note 10 for the details of our derivatives. We present our derivatives on the balance sheet at fair value, on a gross basis, excluding accrued interest. We estimate the fair value of our derivative instruments by calculating the credit-adjusted present value of the expected future cash flows of each derivative. The calculation incorporates the contractual terms of the derivatives, observable market interest rates which we consider to be Level 2 inputs, and credit risk adjustments to reflect the counterparty's as well as our own nonperformance risk. Our derivatives are not subject to master netting arrangements. The table below presents the estimated fair value of our derivatives: (In thousands) June 30, 2019 December 31, 2018 Derivative Assets: Fair value - consolidated derivatives (1) $ 16,788 $ 73,414 Fair value - unconsolidated Funds' derivatives (2) $ 1,465 $ 12,228 Derivative Liabilities: Fair value - consolidated derivatives (1) $ 51,672 $ 1,530 Fair value - unconsolidated Funds' derivatives (2) $ 2,095 $ — ____________________________________________________ (1) Consolidated derivatives, which include 100% , not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts in our consolidated balance sheets. The fair values exclude accrued interest which is included in interest payable in the consolidated balance sheets. (2) Reflects 100% , not our pro-rata share, of our unconsolidated Funds' derivatives. Our pro-rata share of the amounts related to the unconsolidated Funds' derivatives is included in our Investment in unconsolidated real estate funds in our consolidated balance sheets. See Note 16 regarding our unconsolidated Funds debt and derivatives. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Segment information is prepared on the same basis that our management reviews 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. The table below presents the operating activity of our reportable segments: (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Office Segment Total office revenues $ 202,189 $ 193,761 $ 399,479 $ 381,094 Office expenses (64,308 ) (61,818 ) (127,757 ) (122,174 ) Office segment profit 137,881 131,943 271,722 258,920 Multifamily Segment Total multifamily revenues 28,345 25,708 55,241 50,622 Multifamily expenses (7,712 ) (6,908 ) (15,267 ) (13,606 ) Multifamily segment profit 20,633 18,800 39,974 37,016 Total profit from all segments $ 158,514 $ 150,743 $ 311,696 $ 295,936 The table below presents a reconciliation of the total profit from all segments to net income attributable to common stockholders: (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Total profit from all segments $ 158,514 $ 150,743 $ 311,696 $ 295,936 General and administrative expenses (9,159 ) (9,437 ) (18,991 ) (19,004 ) Depreciation and amortization (78,724 ) (73,379 ) (158,597 ) (145,877 ) Other income 2,892 2,792 5,790 5,422 Other expenses (1,807 ) (2,086 ) (3,652 ) (3,819 ) Income, including depreciation, from unconsolidated real estate funds 2,207 1,668 3,758 3,174 Interest expense (34,063 ) (33,268 ) (67,356 ) (66,168 ) Net income 39,860 37,033 72,648 69,664 Less: Net income attributable to noncontrolling interests (5,894 ) (5,349 ) (9,981 ) (9,774 ) Net income attributable to common stockholders $ 33,966 $ 31,684 $ 62,667 $ 59,890 |
Future Minimum Lease Rental Rec
Future Minimum Lease Rental Receipts | 6 Months Ended |
Jun. 30, 2019 | |
Lessor Disclosure [Abstract] | |
Future Minimum Lease Rental Receipts | Future Minimum Lease Rental Receipts We lease space to tenants primarily under non-cancelable operating leases that generally contain provisions for a base rent plus reimbursement of certain operating expenses, and we own fee interests in two parcels of land from which we receive rent under ground leases. The table below presents the future minimum base rentals on our non-cancelable office tenant and ground leases at June 30, 2019 : Twelve months ending June 30: (In thousands) 2020 $ 598,559 2021 530,270 2022 434,864 2023 351,412 2024 263,368 Thereafter 617,827 Total future minimum base rentals (1) $ 2,796,300 _____________________________________________________ (1) Does not include (i) residential leases, which typically have a term of one year or less, (ii) holdover rent, (iii) other types of rent such as storage and antenna rent, (iv) tenant reimbursements, (v) straight- line rent, (vi) amortization/accretion of acquired above/below-market lease intangibles and (vii) percentage rents. The amounts assume that early termination options held by tenants are not exercised. |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Guarantees | Commitments, Contingencies and Guarantees Legal Proceedings From time to time, we are party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our 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 Risk We are subject to credit risk with respect to our tenant receivables and deferred rent receivables related to our tenant leases. Our tenants' ability to honor the terms of their respective leases remains dependent upon economic, regulatory and social factors. We seek to minimize our credit risk from our tenant leases by (i) targeting smaller, more affluent tenants, from a diverse mix of industries, (ii) performing credit evaluations of prospective tenants and (iii) obtaining security deposits or letters of credit from our tenants. For the six months ended June 30, 2019 and 2018 , no tenant accounted for more than 10% of our total revenues. All of our properties, including the properties of our consolidated JVs and unconsolidated Funds, are located in Los Angeles County, California and Honolulu, Hawaii, and we are therefore susceptible to adverse economic and regulatory developments, as well as natural disasters, in those markets. We are subject to credit risk with respect to our interest rate swap counterparties that we use to manage the risk associated with our floating rate debt. We do not post or receive collateral with respect to our swap transactions. See Note 10 for the details of our interest rate contracts. We seek to minimize our credit risk by entering into agreements with a variety of high quality counterparties with investment grade ratings. We have significant cash balances invested in a variety of short-term money market funds that are intended to preserve principal value and maintain a high degree of liquidity while providing current income. These investments are not insured against loss of principal and there is no guarantee that our investments in these funds will be redeemable at par value. We also have significant cash balances in bank accounts with high quality financial institutions with investment grade ratings. Interest bearing bank accounts at each U.S. banking institution are insured by the FDIC up to $250 thousand . 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 have identified twenty-eight buildings in our Consolidated Portfolio and four buildings owned by our unconsolidated Funds which contain asbestos, and would have to be removed in compliance with applicable environmental regulations if these properties are demolished or undergo major renovations. As of June 30, 2019 , the obligations to remove the asbestos from these properties if they were demolished or undergo major renovations have indeterminable settlement dates, and we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation. As of June 30, 2019 , the obligations to remove the asbestos from properties that are currently undergoing major renovations, or that we plan to renovate in the future, are not material to our financial statements. Development and Other Contracts In West Los Angeles, we are building a high-rise apartment building with 376 apartments. In downtown Honolulu, we are converting a 25 story, 490,000 square foot office tower into approximately 500 rental apartments. We expect the conversion to occur in phases over a number of years as the office space is vacated. As of June 30, 2019 , we had an aggregate remaining contractual commitment for these and other development projects of approximately $187.4 million . As of June 30, 2019 , we had an aggregate remaining contractual commitment for repositionings, capital expenditure projects and tenant improvements of approximately $32.7 million . Guarantees We have made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve- outs for our unconsolidated Funds' debt. We have also guaranteed the related swaps. Our Funds have agreed to indemnify us for any amounts that we would be required to pay under these agreements. As of June 30, 2019 , all of the obligations under the related debt and swap agreements have been performed in accordance with the terms of those agreements. The table below summarizes our Funds' debt as of June 30, 2019 . The amounts represent 100% (not our pro-rata share) of the amounts related to our Funds: Fund (1) Loan Maturity Date Principal Balance (In Millions) Variable Interest Rate Swap Fixed Interest Rate Swap Maturity Date Partnership X (2)(4) 3/1/2023 $ 110.0 LIBOR + 1.40% 2.30% 3/1/2021 Fund X (3)(4) 7/1/2024 400.0 LIBOR + 1.65% 3.44% 7/1/2022 $ 510.0 ___________________________________________________ (1) See Note 6 for more information regarding our unconsolidated Funds. (2) Floating rate term loan, swapped to fixed, which is secured by two properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of June 30, 2019 , assuming a zero -percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $1.7 million . (3) Floating rate term loan, swapped to fixed, which is secured by six properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of June 30, 2019 , assuming a zero -percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $21.8 million . Loan agreement includes the requirement to purchase an interest rate cap if one-month LIBOR equals or exceeds 3.56% for fourteen consecutive days after the related swap matures. (4) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 1, 2019, we paid off a $220 million |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statements are the consolidated financial statements of Douglas Emmett, Inc. and its subsidiaries, including our Operating Partnership and our consolidated JVs. All significant intercompany balances and transactions have been eliminated in our consolidated financial statements. Our Operating Partnership and consolidated JVs are VIEs of which we are the primary beneficiary. As of June 30, 2019 , the total consolidated assets, liabilities and equity of the VIEs was $8.68 billion (of which $8.09 billion related to investment in real estate), $4.63 billion and $4.05 billion (of which $1.56 billion related to noncontrolling interests), respectively. We report our office rental revenues and tenant recoveries on a combined basis as Rental revenues and tenant recoveries under Office rental in our consolidated statements of operations, and we reclassified the comparable periods to conform to the current period presentation. The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in the financial statements prepared in conformity with US 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 interim 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, 2019 . The interim financial statements should be read in conjunction with the consolidated financial statements in our 2018 Annual Report on Form 10-K and the notes thereto. Any references to the number or class of properties, square footage, per square footage amounts, apartment units and geography, are outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the PCAOB. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make certain estimates that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. |
Revenue Recognition | Revenue Recognition |
Income Taxes | Income Taxes We have elected to be taxed as a REIT under the Code. 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 TRS. |
New Accounting Pronouncements | New Accounting Pronouncements Changes to US GAAP are implemented by the FASB in the form of ASUs. We consider the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not issued any other ASUs that we expect to be applicable and have a material impact on our financial statements. ASUs Adopted ASU 2016-02 (Topic 842 - "Leases") In February 2016, the FASB issued ASU No. 2016-02, (Topic 842 - "Leases"). The primary impact of the ASU is the recognition of lease assets and liabilities on the balance sheet by lessees for leases classified as operating leases. The accounting applied by lessors is largely unchanged. For example, the vast majority of operating leases remain classified as operating leases, and lessors continue to recognize lease payments for those leases on a straight-line basis over the lease term. We adopted the ASU on January 1, 2019 using the modified retrospective transition method. We recorded cumulative adjustments of $2.1 million and $0.4 million to the opening balances of accumulated deficit and noncontrolling interests, respectively, for leasing expenses related to leases that were entered into before the adoption date but commenced after the adoption date. The ASU provides a practical expedient package, which we elected to use, that allows entities (a) not to reassess whether any expired or existing contracts as of the adoption date are considered or contain leases; (b) not to reassess the lease classification for any expired or existing leases as of the adoption date; and (c) not to reassess initial direct costs for any existing leases as of the adoption date. All leases entered into on or after the adoption date were accounted for under the ASU. We lease space to tenants at our office and multifamily properties. Under the ASU, all of our tenant leases continue to be classified as operating leases. The ASU continues to require that lease payments for operating leases be recognized over the lease term on a straight-line basis unless another systematic and rational basis is more representative of the pattern in which benefit is expected to be derived from the use of the underlying asset. If collectibility of the lease payments is not probable at the commencement date, then the lease income should be limited to the lesser of the income recognized on a straight-line basis or cash basis. If the assessment of collectibility changes after the commencement date, any difference between the lease income that would have been recognized on a straight-line basis and cash basis must be recognized as a current-period adjustment to lease income. The ASU requires separation of the lease from the non-lease components (for example, maintenance services or other activities that transfer a good or service to the customer) in a contract. Only the lease components are accounted for in accordance with the ASU. The consideration in the contract is allocated to the lease and non-lease components on a relative standalone selling price basis and the non-lease component would be accounted for in accordance with ASC 606 ("Revenue from Contracts with Customers"). In July 2018, the FASB issued ASU No. 2018-11 which includes an optional practical expedient for lessors to elect, by class of underlying asset, to not separate the lease from the non-lease components if certain criteria are met. Our office tenant leases include a lease component for the rental income and a non-lease component for the related tenant recoveries. We determined that our office tenant leases qualify for the single component presentation and we adopted the practical expedient. We account for the combined components under the ASU. Rental revenues and tenant recoveries from our office tenant leases is included in Rental revenues and tenant recoveries under Office rental in our consolidated statements of operations. Rental revenues from our multifamily tenant leases is included in multifamily Rental revenues in our consolidated statements of operations. Rental revenue recognized on a straight-line basis in excess of billed rents is included in Deferred rent receivables in our consolidated balance sheets. See Note 15 for more information regarding the future lease rental receipts from our operating leases. The ASU defines initial direct costs of a lease, which may be capitalized, as costs that would not have been incurred had the lease not been executed. Costs to negotiate a lease that would have been incurred regardless of whether the lease was executed, such as employee salaries, are not considered to be initial direct costs, and may not be capitalized. We historically capitalized most of our leasing costs. We expensed $1.1 million and $2.1 million during the three and six months ended June 30, 2019 , respectively, of leasing costs related to our tenant leases that did not qualify as initial direct costs of a lease, which are included in General and administrative expenses in our consolidated statements of operations. We pay rent under a ground lease which expires on December 31, 2086 . Upon adoption of the ASU, we continued to classify the lease as an operating lease, and we recognized a right-of-use asset for the land and a lease liability for the future lease payments of $10.9 million . We calculated the carrying value of the right-of-use asset and lease liability by discounting the future lease payments using our incremental borrowing rate. We adjusted the right-of-use asset carrying value for a related above-market ground lease liability of $3.4 million , which reduced the carrying value of the asset to $7.5 million . We continued to recognize the lease payments as expense, which is included in Office expenses in our Consolidated Statements of Operations. See Note 4 for more information regarding this ground lease. See Note 13 for the fair value disclosures related to the ground lease liability. In December 2018, the FASB issued ASU 2018-20, an update to ASU 2016-02, which provides guidance on accounting for sales and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and nonlease components. We adopted the ASU and it did not have a material impact on our financial statements. In March 2019, the FASB issued ASU 2019-01, an update to ASU 2016-02, which provides guidance on transition disclosures related to Topic 250 "Accounting Changes and Error Corrections" and other technical updates. We adopted the ASU and it did not have a material impact on our financial statements. |
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 widely used valuation methods. Considerable judgment is necessary to interpret market data and determine an estimated fair value. The use of different market assumptions or valuation methods may have a material effect on the estimated fair values. The FASB fair value framework hierarchy 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 |
Overview (Tables)
Overview (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Real Estate Properties | As of June 30, 2019 , our portfolio (not including two parcels of land from which we receive rent under ground leases), consisted of the following properties (both of which include ancillary retail space): Consolidated Portfolio Total Portfolio Office Wholly-owned properties 53 53 Consolidated JV properties 11 11 Unconsolidated Fund properties — 8 64 72 Multifamily Wholly-owned properties 10 10 Consolidated JV properties 1 1 11 11 Total 75 83 |
Investment in Real Estate (Tabl
Investment in Real Estate (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Acquisitions and Net Assets and Liabilities Acquired | The table below summarizes the purchase price allocation for the acquisition. The contract and purchase prices differ due to prorations and similar adjustments: (In thousands, except number of units) The Glendon Submarket West Los Angeles Acquisition date June 7 Contract price $ 365,100 Number of multifamily units 350 Retail square footage 50 Investment in real estate: Land $ 32,773 Buildings and improvements 333,624 Tenant improvements and lease intangibles 2,301 Acquired above- and below-market leases, net (2,114 ) Net assets and liabilities acquired $ 366,584 |
Ground Lease (Tables)
Ground Lease (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Lessee Disclosure [Abstract] | |
Schedule of Future Minimum Ground Lease Payments | The table below, which assumes that the ground rent payments will continue to be $733 thousand per year after February 28, 2029 , presents the future minimum ground lease payments as of June 30, 2019 : Twelve months ending June 30: (In thousands) 2020 $ 733 2021 733 2022 733 2023 733 2024 733 Thereafter 45,811 Total future minimum lease payments $ 49,476 |
Acquired Lease Intangibles (Tab
Acquired Lease Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Acquired Lease Intangibles | Summary of our Acquired Lease Intangibles (In thousands) June 30, 2019 December 31, 2018 Above-market tenant leases $ 3,759 $ 5,595 Above-market tenant leases - accumulated amortization (1,702 ) (3,289 ) Above-market ground lease where we are the lessor 1,152 1,152 Above-market ground lease - accumulated amortization (216 ) (207 ) Acquired lease intangible assets, net $ 2,993 $ 3,251 Below-market tenant leases $ 110,100 $ 112,175 Below-market tenant leases - accumulated accretion (67,597 ) (63,013 ) Above-market ground lease where we are the tenant (1) — 4,017 Above-market ground lease - accumulated accretion (1) — (610 ) Acquired lease intangible liabilities, net $ 42,503 $ 52,569 ______________________________________________ (1) Upon adoption of ASU 2016-02 on January 1, 2019 we adjusted the ground lease right-of-use asset carrying value for the carrying value of the above-market ground lease - see Notes 2 and 4 . |
Schedule of Net Amortization or Accretion of Above- and Below-Market Leases | The table below summarizes the net amortization/accretion related to our above- and below-market leases: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Net accretion of above- and below-market tenant lease assets and liabilities (1) $ 4,400 $ 6,134 $ 8,524 $ 12,277 Amortization of an above-market ground lease asset (2) (4 ) (4 ) (8 ) (8 ) Accretion of an above-market ground lease liability (3) — 13 — 26 Total $ 4,396 $ 6,143 $ 8,516 $ 12,295 ______________________________________________ (1) Recorded as a net increase to office and multifamily rental revenues. (2) Recorded as a decrease to office parking and other income. (3) Recorded as a decrease to office expense. Upon adoption of ASU 2016-02 on January 1, 2019 we adjusted the ground lease right-of-use asset carrying value with the carrying value of the above-market ground lease - see Notes 2 and 4 . |
Investments in Unconsolidated_2
Investments in Unconsolidated Real Estate Funds (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Real Estate Investments, Net [Abstract] | |
Summary of Statement of Operations for Investments in Unconsolidated Real Estate Funds and Cash Received from Funds | The table below presents cash distributions we received from our Funds: Six Months Ended June 30, (In thousands) 2019 2018 Operating distributions received $ 3,756 $ 3,174 Capital distributions received 3,869 3,774 Total distributions received $ 7,625 $ 6,948 The tables below present selected financial information for the Funds on a combined basis. The amounts presented reflect 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value: (In thousands) June 30, 2019 December 31, 2018 Total assets $ 678,355 $ 694,713 Total liabilities $ 529,010 $ 525,483 Total equity $ 149,345 $ 169,230 Six Months Ended June 30, (In thousands) 2019 2018 Total revenues $ 41,174 $ 38,963 Operating income $ 11,961 $ 11,504 Net income $ 3,815 $ 3,180 |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Assets [Abstract] | |
Schedule of Other Assets | (In thousands) June 30, 2019 December 31, 2018 Restricted cash $ 121 $ 121 Prepaid expenses 3,112 7,830 Other indefinite-lived intangibles 1,988 1,988 Furniture, fixtures and equipment, net 2,396 1,101 Other 3,622 3,719 Total other assets $ 11,239 $ 14,759 |
Secured Notes Payable and Rev_2
Secured Notes Payable and Revolving Credit Facility, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of Secured Notes Payable and Revolving Credit Facility | Description Maturity Date (1) Principal Balance as of June 30, 2019 Principal Balance as of December 31, 2018 Variable Interest Rate Fixed Interest Rate (2) Swap Maturity Date (In thousands) Wholly Owned Subsidiaries Fannie Mae loan (3) — $ — $ 145,000 — — — Fannie Mae loan (3) — — 115,000 — — — Term loan (4) 4/15/2022 340,000 340,000 LIBOR + 1.40% 2.77% 4/1/2020 Term loan (4) 7/27/2022 180,000 180,000 LIBOR + 1.45% 3.06% 7/1/2020 Term loan (4) 11/1/2022 400,000 400,000 LIBOR + 1.35% 2.64% 11/1/2020 Term loan (4) 6/23/2023 360,000 360,000 LIBOR + 1.55% 2.57% 7/1/2021 Term loan (4)(5) 12/23/2023 220,000 220,000 LIBOR + 1.70% 3.62% 12/23/2021 Term loan (4) 1/1/2024 300,000 300,000 LIBOR + 1.55% 3.46% 1/1/2022 Term loan (4) 3/3/2025 335,000 335,000 LIBOR + 1.30% 3.84% 3/1/2023 Fannie Mae loan (4)(6) 4/1/2025 102,400 102,400 LIBOR + 1.25% 2.84% 3/1/2023 Fannie Mae loan (4) 6/1/2027 550,000 550,000 LIBOR + 1.37% 3.16% 6/1/2022 Fannie Mae loan (4)(7) 6/1/2029 255,000 — LIBOR + 0.98% 3.26% 6/1/2027 Fannie Mae loan (4)(7)(8) 6/1/2029 125,000 — LIBOR + 0.98% 2.55% 6/1/2027 Term loan (9) 6/1/2038 31,227 31,582 N/A 4.55% N/A Revolving credit facility (10) 8/21/2023 — 105,000 LIBOR + 1.15% N/A N/A Total Wholly Owned Subsidiary Debt 3,198,627 3,183,982 Consolidated JVs Term loan (4) 2/28/2023 580,000 580,000 LIBOR + 1.40% 2.37% 3/1/2021 Term loan (4) 12/19/2024 400,000 400,000 LIBOR + 1.30% 3.47% 1/1/2023 Term loan (4) 6/1/2029 160,000 — LIBOR + 0.98% 3.25% 7/1/2027 Total Consolidated Debt (11) 4,338,627 4,163,982 Unamortized loan premium, net 3,884 3,986 Unamortized deferred loan costs, net (37,598 ) (33,938 ) Total Consolidated Debt, net $ 4,304,913 $ 4,134,030 _______________________________________________________________________ Except as noted below, each loan (including our revolving credit facility) is non-recourse and secured by one or more separate collateral pools consisting of one or more properties, and requires monthly payments of interest only with the outstanding principal due upon maturity. (1) Maturity dates include the effect of extension options. (2) Includes the effect of interest rate swaps and excludes the effect of prepaid loan fees. See Note 10 for details of our interest rate swaps. See below for details of our loan costs. (3) These loans were paid off during the second quarter of 2019. (4) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor. (5) We paid this loan off on July 1, 2019 and terminated the related swaps. (6) We extended the fixed rate period for three years using a forward interest rate swap. The effective rate will decrease to 2.76% on March 2, 2020 . (7) These loans were closed during the second quarter of 2019. (8) Effective rate will increase to 3.25% on December 2, 2020 . (9) Requires monthly payments of principal and interest. Principal amortization is based upon a 30 -year amortization schedule. (10) In March 2019, we renewed our $400.0 million revolving credit facility, releasing two previously encumbered properties, lowering the borrowing rate and unused facility fees, and extending the maturity date. Unused commitment fees range from 0.10% to 0.15% . (11) The table does not include our unconsolidated Funds' loans - see Note 16 . See Note 13 for our fair value disclosures. Debt Statistics The following table summarizes our consolidated fixed and floating rate debt: (In thousands) Principal Balance as of June 30, 2019 Principal Balance as of December 31, 2018 Aggregate swapped to fixed rate loans $ 4,307,400 $ 3,882,400 Aggregate fixed rate loans 31,227 31,582 Aggregate floating rate loans — 250,000 Total Debt $ 4,338,627 $ 4,163,982 The following table summarizes certain consolidated debt statistics as of June 30, 2019 : Statistics for consolidated loans with interest fixed under the terms of the loan or a swap Principal balance (in billions) $4.34 Weighted average remaining life (including extension options) 5.5 years Weighted average remaining fixed interest period 3.1 years Weighted average annual interest rate 3.08% |
Schedule of Future Minimum Principal Payments Due on Secured Notes Payable and Revolving Credit Facility | At June 30, 2019 , the minimum future principal payments due on our consolidated secured notes payable and revolving credit facility were as follows: Twelve months ending June 30: Excluding Maturity Extension Options Including Maturity Extension Options (1) (In thousands) 2020 $ 735 $ 735 2021 180,769 769 2022 640,805 340,805 2023 1,675,842 1,520,842 2024 220,881 520,881 Thereafter 1,619,595 1,954,595 Total future principal payments $ 4,338,627 $ 4,338,627 ____________________________________________ (1) Our loan agreements generally require that we meet certain minimum financial thresholds to be able to extend the loan maturity. |
Schedule of Loan Costs and Amortization of Deferred Loan Costs | The table below presents loan costs, which are included in Interest expense in our consolidated statements of operations: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 Loan costs expensed $ 576 $ — $ 576 $ 404 Deferred loan cost amortization 1,887 1,970 3,804 3,875 Total $ 2,463 $ 1,970 $ 4,380 $ 4,279 |
Interest Payable, Accounts Pa_2
Interest Payable, Accounts Payable and Deferred Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Interest Payable, Accounts Payable and Deferred Revenue | (In thousands) June 30, 2019 December 31, 2018 Interest payable $ 10,757 $ 10,657 Accounts payable and accrued liabilities 64,343 75,111 Deferred revenue 42,572 44,386 Total interest payable, accounts payable and deferred revenue $ 117,672 $ 130,154 |
Derivative Contracts (Tables)
Derivative Contracts (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Swap Derivatives | As of June 30, 2019 , our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Funds, were designated as cash flow hedges: Number of Interest Rate Swaps Notional (In thousands) Consolidated derivatives (1)(2)(4) 36 $ 4,484,800 Unconsolidated Funds' derivatives (3)(4) 4 $ 510,000 ___________________________________________________ (1) The notional amount reflects 100% , not our pro-rata share, of our consolidated JVs' derivatives. (2) Includes forward swaps with a total notional of $177.4 million . (3) The notional amount reflects 100% , not our pro-rata share, of our unconsolidated Funds' derivatives. (4) See Note 13 for our derivative fair value disclosures. |
Schedule of Fair Value of Interest Rate Swap Contract Liabilities | The fair value of our interest rate swap contract liabilities, including accrued interest and excluding credit risk adjustments, were as follows: (In thousands) June 30, 2019 December 31, 2018 Consolidated derivatives (1) $ 52,887 $ 1,681 Unconsolidated Funds' derivatives $ 1,949 $ — ___________________________________________________ (1) Includes 100% , not our pro-rata share, of our consolidated JVs' derivatives. |
Schedule of Fair Value of Interest Rate Swap Contract Assets | The fair value of our interest rate swap contract assets, including accrued interest and excluding credit risk adjustments, were as follows: (In thousands) June 30, 2019 December 31, 2018 Consolidated derivatives (1) $ 18,749 $ 76,021 Unconsolidated Funds' derivatives (2) $ 1,598 $ 12,576 ___________________________________________________ (1) The amounts reflect 100% , not our pro-rata share, of our consolidated JVs' derivatives. (2) The amounts reflect 100% , not our pro-rata share, of our unconsolidated Funds' derivatives. |
Effect of Derivative Instruments on Consolidated Statements of Operations | The table below presents the effect of our derivatives on our AOCI and the consolidated statements of operations: (In thousands) Six Months Ended June 30, 2019 2018 Derivatives Designated as Cash Flow Hedges: Consolidated derivatives: Gain recorded in AOCI - adoption of ASU 2017-12 (1) $ — $ 211 (Loss) gain recorded in AOCI before reclassifications (1) $ (89,483 ) $ 58,890 Gains reclassified from AOCI to Interest Expense (1) $ (17,284 ) $ (2,063 ) Interest Expense presented in the consolidated statements of operations $ (67,356 ) $ (66,168 ) Unconsolidated Funds' derivatives (our share) (2) : (Loss) gain recorded in AOCI before reclassifications (1) $ (6,928 ) $ 6,404 Gains reclassified from AOCI to Income, including depreciation, from unconsolidated real estate funds (1) $ (1,226 ) $ (79 ) Income, including depreciation, from unconsolidated real estate funds presented in the consolidated statements of operations $ 3,758 $ 3,174 ___________________________________________________ (1) See Note 11 for our AOCI reconciliation. (2) We calculate our share by multiplying the total amount for each Fund by our direct and indirect equity interest in the respective Fund. |
Schedule of Future Reclassifications from AOCI | At June 30, 2019 , our estimate of the AOCI related to derivatives designated as cash flow hedges that will be reclassified to earnings during the next twelve months as interest rate swap payments are made is as follows: (In thousands) Consolidated derivatives: Gains to be reclassified from AOCI to Interest Expense $ 7,417 Unconsolidated Funds' derivatives (our share): Gains to be reclassified from AOCI to Income, including depreciation, from unconsolidated real estate funds $ 436 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
Net Income Attributable to Common Stockholders and Transfers (to) from Noncontrolling Interests | The table below presents the effect on our equity from net income attributable to common stockholders and changes in our ownership interest in our Operating Partnership: Six Months Ended June 30, (In thousands) 2019 2018 Net income attributable to common stockholders $ 62,667 $ 59,890 Transfers from noncontrolling interests: Exchange of OP Units with noncontrolling interests 1,223 5,480 Repurchase of OP Units from noncontrolling interests (291 ) (59 ) Net transfers from noncontrolling interests 932 5,421 Change from net income attributable to common stockholders and transfers from noncontrolling interests $ 63,599 $ 65,311 |
Schedule of Accumulated Other Comprehensive Income (Loss) | The table below presents a reconciliation of our AOCI, which consists solely of adjustments related to derivatives designated as cash flow hedges: Six Months Ended June 30, (In thousands) 2019 2018 Beginning balance $ 53,944 $ 43,099 Adoption of ASU 2017-12 - cumulative opening balance adjustment — 211 Consolidated derivatives: Other comprehensive (loss) income before reclassifications (89,483 ) 58,890 Reclassification of gains from AOCI to Interest Expense (17,284 ) (2,063 ) Unconsolidated Funds' derivatives (our share) (2) : Other comprehensive (loss) income before reclassifications (6,928 ) 6,404 Reclassification of gains from AOCI to Income, including depreciation, from unconsolidated real estate funds (1,226 ) (79 ) Net current period OCI (114,921 ) 63,363 OCI attributable to noncontrolling interests 35,124 (18,976 ) OCI attributable to common stockholders (79,797 ) 44,387 Ending balance $ (25,853 ) $ 87,486 ___________________________________________________ (1) See Note 10 for the details of our derivatives and Note 13 for our derivative fair value disclosures. (2) We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund. |
EPS (Tables)
EPS (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
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 June 30, Six Months Ended June 30, 2019 2018 2019 2018 Numerator (In thousands): Net income attributable to common stockholders $ 33,966 $ 31,684 $ 62,667 $ 59,890 Allocation to participating securities: Unvested LTIP Units (139 ) (156 ) (265 ) (294 ) Numerator for basic and diluted net income attributable to common stockholders $ 33,827 $ 31,528 $ 62,402 $ 59,596 Denominator (In thousands): Weighted average shares of common stock outstanding - basic 172,498 169,916 171,366 169,759 Effect of dilutive securities: Stock options (1) — 10 — 17 Weighted average shares of common stock and common stock equivalents outstanding - diluted 172,498 169,926 171,366 169,776 Basic EPS: Net income attributable to common stockholders per share $ 0.20 $ 0.19 $ 0.36 $ 0.35 Diluted EPS: Net income attributable to common stockholders per share $ 0.20 $ 0.19 $ 0.36 $ 0.35 ____________________________________________________ (1) There were no outstanding options during the six months ended June 30, 2019 . The following securities were excluded from the calculation of diluted EPS because including them would be anti-dilutive to the calculation: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2019 2018 2019 2018 OP Units 26,283 26,637 26,311 26,790 Vested LTIP Units 1,830 807 1,830 803 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Estimated Fair Value and Carrying Value of Liabilities | The table below presents the estimated fair value and carrying value of our secured notes payable (excluding our revolving credit facility), the carrying value includes unamortized loan premium and excludes unamortized deferred loan fees: (In thousands) June 30, 2019 December 31, 2018 Fair value $ 4,358,148 $ 4,087,979 Carrying value $ 4,338,627 $ 4,062,968 (In thousands) June 30, 2019 Fair value $ 11,846 Carrying value $ 10,885 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The table below presents the estimated fair value of our derivatives: (In thousands) June 30, 2019 December 31, 2018 Derivative Assets: Fair value - consolidated derivatives (1) $ 16,788 $ 73,414 Fair value - unconsolidated Funds' derivatives (2) $ 1,465 $ 12,228 Derivative Liabilities: Fair value - consolidated derivatives (1) $ 51,672 $ 1,530 Fair value - unconsolidated Funds' derivatives (2) $ 2,095 $ — ____________________________________________________ (1) Consolidated derivatives, which include 100% , not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts in our consolidated balance sheets. The fair values exclude accrued interest which is included in interest payable in the consolidated balance sheets. (2) Reflects 100% , not our pro-rata share, of our unconsolidated Funds' derivatives. Our pro-rata share of the amounts related to the unconsolidated Funds' derivatives is included in our Investment in unconsolidated real estate funds in our consolidated balance sheets. See Note 16 regarding our unconsolidated Funds debt and derivatives. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Operating Activity of Reportable Segments | The table below presents the operating activity of our reportable segments: (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Office Segment Total office revenues $ 202,189 $ 193,761 $ 399,479 $ 381,094 Office expenses (64,308 ) (61,818 ) (127,757 ) (122,174 ) Office segment profit 137,881 131,943 271,722 258,920 Multifamily Segment Total multifamily revenues 28,345 25,708 55,241 50,622 Multifamily expenses (7,712 ) (6,908 ) (15,267 ) (13,606 ) Multifamily segment profit 20,633 18,800 39,974 37,016 Total profit from all segments $ 158,514 $ 150,743 $ 311,696 $ 295,936 |
Reconciliation of Segment Profit to Net Income Attributable to Common Stockholders | The table below presents a reconciliation of the total profit from all segments to net income attributable to common stockholders: (In thousands) Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Total profit from all segments $ 158,514 $ 150,743 $ 311,696 $ 295,936 General and administrative expenses (9,159 ) (9,437 ) (18,991 ) (19,004 ) Depreciation and amortization (78,724 ) (73,379 ) (158,597 ) (145,877 ) Other income 2,892 2,792 5,790 5,422 Other expenses (1,807 ) (2,086 ) (3,652 ) (3,819 ) Income, including depreciation, from unconsolidated real estate funds 2,207 1,668 3,758 3,174 Interest expense (34,063 ) (33,268 ) (67,356 ) (66,168 ) Net income 39,860 37,033 72,648 69,664 Less: Net income attributable to noncontrolling interests (5,894 ) (5,349 ) (9,981 ) (9,774 ) Net income attributable to common stockholders $ 33,966 $ 31,684 $ 62,667 $ 59,890 |
Future Minimum Lease Rental R_2
Future Minimum Lease Rental Receipts (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Lessor Disclosure [Abstract] | |
Schedule of Future Minimum Base Rentals on Non-Cancelable Office and Ground Operating Leases | The table below presents the future minimum base rentals on our non-cancelable office tenant and ground leases at June 30, 2019 : Twelve months ending June 30: (In thousands) 2020 $ 598,559 2021 530,270 2022 434,864 2023 351,412 2024 263,368 Thereafter 617,827 Total future minimum base rentals (1) $ 2,796,300 _____________________________________________________ (1) Does not include (i) residential leases, which typically have a term of one year or less, (ii) holdover rent, (iii) other types of rent such as storage and antenna rent, (iv) tenant reimbursements, (v) straight- line rent, (vi) amortization/accretion of acquired above/below-market lease intangibles and (vii) percentage rents. The amounts assume that early termination options held by tenants are not exercised. |
Commitments, Contingencies an_2
Commitments, Contingencies and Guarantees (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Debt Related to Unconsolidated Funds | The table below summarizes our Funds' debt as of June 30, 2019 . The amounts represent 100% (not our pro-rata share) of the amounts related to our Funds: Fund (1) Loan Maturity Date Principal Balance (In Millions) Variable Interest Rate Swap Fixed Interest Rate Swap Maturity Date Partnership X (2)(4) 3/1/2023 $ 110.0 LIBOR + 1.40% 2.30% 3/1/2021 Fund X (3)(4) 7/1/2024 400.0 LIBOR + 1.65% 3.44% 7/1/2022 $ 510.0 ___________________________________________________ (1) See Note 6 for more information regarding our unconsolidated Funds. (2) Floating rate term loan, swapped to fixed, which is secured by two properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of June 30, 2019 , assuming a zero -percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $1.7 million . (3) Floating rate term loan, swapped to fixed, which is secured by six properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of June 30, 2019 , assuming a zero -percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $21.8 million . Loan agreement includes the requirement to purchase an interest rate cap if one-month LIBOR equals or exceeds 3.56% for fourteen consecutive days after the related swap matures. (4) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor. |
Overview - Narrative (Details)
Overview - Narrative (Details) ft² in Millions, $ in Millions | Jun. 30, 2019USD ($)ft²land_parcelunit |
Real Estate Properties [Line Items] | |
Variable interest entity, assets | $ 8,680 |
Variable interest entity, assets related to real estate held for investment | 8,090 |
Variable interest entity, liabilities | 4,630 |
Variable interest entity, equity | 4,050 |
Variable interest entity, equity, portion attributable to noncontrolling interest | $ 1,560 |
Wholly owned and Consolidated properties | |
Real Estate Properties [Line Items] | |
Number of land parcels subject to ground lease | land_parcel | 2 |
Wholly owned and Consolidated properties | Office | |
Real Estate Properties [Line Items] | |
Area of real estate portfolio (sq ft) | ft² | 16.6 |
Wholly owned and Consolidated properties | Multifamily | |
Real Estate Properties [Line Items] | |
Number of multifamily apartment units | unit | 4,069 |
Unconsolidated Fund properties | Office | |
Real Estate Properties [Line Items] | |
Area of real estate portfolio (sq ft) | ft² | 1.8 |
Overview - Schedule of Properti
Overview - Schedule of Properties Portfolio (Details) | Jun. 30, 2019property |
Real Estate Properties [Line Items] | |
Number of properties | 83 |
Office | |
Real Estate Properties [Line Items] | |
Number of properties | 72 |
Office | Wholly-owned properties | |
Real Estate Properties [Line Items] | |
Number of properties | 53 |
Office | Consolidated JV properties | |
Real Estate Properties [Line Items] | |
Number of properties | 11 |
Office | Unconsolidated Fund properties | |
Real Estate Properties [Line Items] | |
Number of properties | 8 |
Multifamily | |
Real Estate Properties [Line Items] | |
Number of properties | 11 |
Multifamily | Wholly-owned properties | |
Real Estate Properties [Line Items] | |
Number of properties | 10 |
Multifamily | Consolidated JV properties | |
Real Estate Properties [Line Items] | |
Number of properties | 1 |
Consolidated Portfolio | |
Real Estate Properties [Line Items] | |
Number of properties | 75 |
Consolidated Portfolio | Office | |
Real Estate Properties [Line Items] | |
Number of properties | 64 |
Consolidated Portfolio | Office | Wholly-owned properties | |
Real Estate Properties [Line Items] | |
Number of properties | 53 |
Consolidated Portfolio | Office | Consolidated JV properties | |
Real Estate Properties [Line Items] | |
Number of properties | 11 |
Consolidated Portfolio | Office | Unconsolidated Fund properties | |
Real Estate Properties [Line Items] | |
Number of properties | 0 |
Consolidated Portfolio | Multifamily | Wholly-owned properties | |
Real Estate Properties [Line Items] | |
Number of properties | 10 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||||
Office parking revenue | $ 26,900 | $ 25,700 | $ 53,300 | $ 50,800 | ||
Office parking receivables | 1,100 | 1,100 | $ 1,100 | |||
New Accounting Pronouncements [Line Items] | ||||||
Leasing costs related to tenant leases expensed | 1,100 | 2,100 | ||||
Lease liability | 10,885 | 10,885 | ||||
Above-market ground lease intangible liability offset against right-of-use asset | 3,408 | |||||
Right-of-use asset | $ 7,481 | $ 7,481 | ||||
ASU No. 2016-02 | ||||||
New Accounting Pronouncements [Line Items] | ||||||
Cumulative adjustment upon adoption of new accounting standard | $ 2,499 | |||||
Lease liability | 10,900 | |||||
Above-market ground lease intangible liability offset against right-of-use asset | 3,400 | |||||
Right-of-use asset | 7,500 | |||||
Accumulated Deficit | ASU No. 2016-02 | ||||||
New Accounting Pronouncements [Line Items] | ||||||
Cumulative adjustment upon adoption of new accounting standard | 2,144 | |||||
Noncontrolling Interests | ASU No. 2016-02 | ||||||
New Accounting Pronouncements [Line Items] | ||||||
Cumulative adjustment upon adoption of new accounting standard | $ 355 |
Investment in Real Estate - Pur
Investment in Real Estate - Purchase Price Allocation for Acquisitions (Details) - Consolidated JV ft² in Thousands, $ in Thousands | Jun. 28, 2019 | Jun. 07, 2019USD ($)ft²unit |
Real Estate Acquisition [Line Items] | ||
Capital interest in consolidated JV (percent) | 20.00% | |
Contract price | $ 365,100 | |
The Glendon | ||
Real Estate Acquisition [Line Items] | ||
Contract price | $ 365,100 | |
Number of multifamily units | unit | 350 | |
Retail square footage | ft² | 50 | |
Investment in real estate: | ||
Land | $ 32,773 | |
Buildings and improvements | 333,624 | |
Tenant improvements and lease intangibles | 2,301 | |
Acquired above- and below-market leases, net | (2,114) | |
Net assets and liabilities acquired | $ 366,584 |
Ground Lease - Narrative (Detai
Ground Lease - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Lessee Disclosure [Abstract] | ||||
Fixed rent payments due per year on ground lease | $ 733 | $ 733 | ||
Ground lease right-of-use asset | 7,481 | 7,481 | ||
Ground lease liability | 10,885 | 10,885 | ||
Ground rent expense | $ 183 | $ 363 | ||
Ground rent expense | $ 183 | $ 366 |
Ground Lease - Future Minimum G
Ground Lease - Future Minimum Ground Lease Payments (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Future Minimum Ground Lease Payments | |
2020 | $ 733 |
2021 | 733 |
2022 | 733 |
2023 | 733 |
2024 | 733 |
Thereafter | 45,811 |
Total future minimum lease payments | $ 49,476 |
Acquired Lease Intangibles - Su
Acquired Lease Intangibles - Summary of Acquired Lease Intangibles (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired lease intangible assets, net | $ 2,993 | $ 3,251 |
Acquired lease intangible liabilities, net | 42,503 | 52,569 |
Above Market Tenant Leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Off-market lease, assets | 3,759 | 5,595 |
Accumulated amortization | (1,702) | (3,289) |
Below Market Tenant Leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Off-market lease, liabilities | 110,100 | 112,175 |
Accumulated accretion | (67,597) | (63,013) |
Above Market Ground Leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Off-market lease, assets | 1,152 | 1,152 |
Accumulated amortization | (216) | (207) |
Off-market lease, liabilities | 0 | 4,017 |
Accumulated accretion | $ 0 | $ (610) |
Acquired Lease Intangibles - Im
Acquired Lease Intangibles - Impact on Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization/accretion of above/below-market leases | $ 4,396 | $ 6,143 | $ 8,516 | $ 12,295 |
Rental revenues | Tenant Lease | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization/accretion of above/below-market leases | 4,400 | 6,134 | 8,524 | 12,277 |
Office parking and other income | Above Market Ground Leases | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization/accretion of above/below-market leases | (4) | (4) | (8) | (8) |
Office expenses | Above Market Ground Leases | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization/accretion of above/below-market leases | $ 0 | $ 13 | $ 0 | $ 26 |
Investments in Unconsolidated_3
Investments in Unconsolidated Real Estate Funds - Narrative (Details) ft² in Millions | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019ft²property | Jun. 30, 2019ft²fundproperty | |
Schedule of Equity Method Investments [Line Items] | ||
Number of properties | 83 | 83 |
Percentage of amounts related to the Fund | 100.00% | 100.00% |
Opportunity Fund | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interest of the Fund, percent | 6.20% | 6.20% |
Fund X | ||
Schedule of Equity Method Investments [Line Items] | ||
Purchase of additional equity interest (percent) | 1.40% | |
Equity interest of the Fund, percent | 72.70% | 72.70% |
Partnership X | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interest of the Fund, percent | 24.60% | 24.60% |
Unconsolidated Fund properties | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of real estate funds owned and managed | fund | 3 | |
Office Buildings | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of properties | 72 | 72 |
Office Buildings | Unconsolidated Fund properties | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of properties | 8 | 8 |
Area of real estate portfolio (sq ft) | ft² | 1.8 | 1.8 |
Investments in Unconsolidated_4
Investments in Unconsolidated Real Estate Funds - Summary of Cash Distributions Received from Funds (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Real Estate Investments, Net [Abstract] | ||
Operating distributions received | $ 3,756 | $ 3,174 |
Capital distributions received | 3,869 | 3,774 |
Total distributions received | $ 7,625 | $ 6,948 |
Investments in Unconsolidated_5
Investments in Unconsolidated Real Estate Funds - Summary of Statement of Financial Position for Investments in Unconsolidated Real Estate Funds (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Real Estate Investments, Net [Abstract] | ||
Total assets | $ 678,355 | $ 694,713 |
Total liabilities | 529,010 | 525,483 |
Total equity | $ 149,345 | $ 169,230 |
Investments in Unconsolidated_6
Investments in Unconsolidated Real Estate Funds - Summary of Statement of Operations for Investments in Unconsolidated Real Estate Funds (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Real Estate Investments, Net [Abstract] | ||
Total revenues | $ 41,174 | $ 38,963 |
Operating income | 11,961 | 11,504 |
Net income | $ 3,815 | $ 3,180 |
Other Assets - Summary of Other
Other Assets - Summary of Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Other Assets [Abstract] | ||
Restricted cash | $ 121 | $ 121 |
Prepaid expenses | 3,112 | 7,830 |
Other indefinite-lived intangibles | 1,988 | 1,988 |
Furniture, fixtures and equipment, net | 2,396 | 1,101 |
Other | 3,622 | 3,719 |
Total other assets | $ 11,239 | $ 14,759 |
Secured Notes Payable and Rev_3
Secured Notes Payable and Revolving Credit Facility, Net - Schedule of Secured Notes Payable and Revolving Credit Facility (Details) | 1 Months Ended | 6 Months Ended | |||
Mar. 31, 2019property | Jun. 30, 2019USD ($) | Dec. 02, 2020 | Mar. 02, 2020 | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |||||
Principal Balance | $ 4,338,627,000 | $ 4,163,982,000 | |||
Unamortized loan premium, net | 3,884,000 | 3,986,000 | |||
Unamortized deferred loan costs, net | (37,598,000) | (33,938,000) | |||
Total Consolidated Debt, Net | 4,304,913,000 | 4,134,030,000 | |||
Number of previously encumbered properties released | property | 2 | ||||
Revolving Credit Facility With Maturity Date of August 21, 2020 | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 400,000,000 | ||||
Revolving Credit Facility With Maturity Date of August 21, 2020 | Minimum | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fees (as a percent) | 0.15% | ||||
Revolving Credit Facility With Maturity Date of August 21, 2020 | Maximum | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fees (as a percent) | 0.10% | ||||
Secured Debt | LIBOR | Minimum | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 0.00% | ||||
Secured Debt | Term Loan With Maturity Date of June 1, 2038 | |||||
Debt Instrument [Line Items] | |||||
Fixed Rate Debt Amortization Period | 30 years | ||||
Wholly Owned Subsidiaries | |||||
Debt Instrument [Line Items] | |||||
Principal Balance | $ 3,198,627,000 | 3,183,982,000 | |||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan With Maturity Date of October 1, 2019 | |||||
Debt Instrument [Line Items] | |||||
Principal Balance | 145,000,000 | ||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of December 1, 2025 | |||||
Debt Instrument [Line Items] | |||||
Principal Balance | 115,000,000 | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.77% | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Apr. 15, 2022 | ||||
Principal Balance | $ 340,000,000 | 340,000,000 | |||
Variable Interest Rate | LIBOR + 1.40% | ||||
Fixed Interest Rate | 2.77% | ||||
Swap Maturity Date | Apr. 1, 2020 | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.77% | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.40% | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.06% | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Jul. 27, 2022 | ||||
Principal Balance | $ 180,000,000 | 180,000,000 | |||
Variable Interest Rate | LIBOR + 1.45% | ||||
Fixed Interest Rate | 3.06% | ||||
Swap Maturity Date | Jul. 1, 2020 | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.06% | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.45% | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.64% | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Nov. 1, 2022 | ||||
Principal Balance | $ 400,000,000 | 400,000,000 | |||
Variable Interest Rate | LIBOR + 1.35% | ||||
Fixed Interest Rate | 2.64% | ||||
Swap Maturity Date | Nov. 1, 2020 | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.64% | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.35% | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.57% | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Jun. 23, 2023 | ||||
Principal Balance | $ 360,000,000 | 360,000,000 | |||
Variable Interest Rate | LIBOR + 1.55% | ||||
Fixed Interest Rate | 2.57% | ||||
Swap Maturity Date | Jul. 1, 2021 | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.57% | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.55% | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.62% | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Dec. 23, 2023 | ||||
Principal Balance | $ 220,000,000 | 220,000,000 | |||
Variable Interest Rate | LIBOR + 1.70% | ||||
Fixed Interest Rate | 3.62% | ||||
Swap Maturity Date | Dec. 23, 2021 | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.62% | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.70% | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.46% | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Jan. 1, 2024 | ||||
Principal Balance | $ 300,000,000 | 300,000,000 | |||
Variable Interest Rate | LIBOR + 1.55% | ||||
Fixed Interest Rate | 3.46% | ||||
Swap Maturity Date | Jan. 1, 2022 | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.46% | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.55% | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.84% | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Mar. 3, 2025 | ||||
Principal Balance | $ 335,000,000 | 335,000,000 | |||
Variable Interest Rate | LIBOR + 1.30% | ||||
Fixed Interest Rate | 3.84% | ||||
Swap Maturity Date | Mar. 1, 2023 | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.84% | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.30% | ||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan With Maturity Date of April 1, 2025 | |||||
Debt Instrument [Line Items] | |||||
Fixed Interest Rate Extension Period | 3 years | ||||
Maturity Date | Apr. 1, 2025 | ||||
Principal Balance | $ 102,400,000 | 102,400,000 | |||
Variable Interest Rate | LIBOR + 1.25% | ||||
Fixed Interest Rate | 2.84% | ||||
Swap Maturity Date | Mar. 1, 2023 | ||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan With Maturity Date of April 1, 2025 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.25% | ||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of June 1, 2027 | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Jun. 1, 2027 | ||||
Principal Balance | $ 550,000,000 | 550,000,000 | |||
Variable Interest Rate | LIBOR + 1.37% | ||||
Fixed Interest Rate | 3.16% | ||||
Swap Maturity Date | Jun. 1, 2022 | ||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of June 1, 2027 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.37% | ||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of June 1, 2029 | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Jun. 1, 2029 | ||||
Principal Balance | $ 255,000,000 | 0 | |||
Variable Interest Rate | LIBOR + 0.98% | ||||
Fixed Interest Rate | 3.26% | ||||
Swap Maturity Date | Jun. 1, 2027 | ||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of June 1, 2029 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 0.98% | ||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of June 1, 2029 B | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Jun. 1, 2029 | ||||
Principal Balance | $ 125,000,000 | 0 | |||
Variable Interest Rate | LIBOR + 0.98% | ||||
Fixed Interest Rate | 2.55% | ||||
Swap Maturity Date | Jun. 1, 2027 | ||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of June 1, 2029 B | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 0.98% | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Maturity Date of June 1, 2038 | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Jun. 1, 2038 | ||||
Principal Balance | $ 31,227,000 | 31,582,000 | |||
Fixed Interest Rate | 4.55% | ||||
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility With Maturity Date of August 21, 2020 | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Aug. 21, 2023 | ||||
Principal Balance | $ 0 | 105,000,000 | |||
Variable Interest Rate | LIBOR + 1.15% | ||||
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility With Maturity Date of August 21, 2020 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.15% | ||||
Consolidated JV | Secured Debt | Term Loan With Maturity Date of February 28, 2023 | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Feb. 28, 2023 | ||||
Principal Balance | $ 580,000,000 | 580,000,000 | |||
Variable Interest Rate | LIBOR + 1.40% | ||||
Fixed Interest Rate | 2.37% | ||||
Swap Maturity Date | Mar. 1, 2021 | ||||
Consolidated JV | Secured Debt | Term Loan With Maturity Date of February 28, 2023 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.40% | ||||
Consolidated JV | Secured Debt | Term Loan With Maturity Date of December 19, 2024 | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Dec. 19, 2024 | ||||
Principal Balance | $ 400,000,000 | 400,000,000 | |||
Variable Interest Rate | LIBOR + 1.30% | ||||
Fixed Interest Rate | 3.47% | ||||
Swap Maturity Date | Jan. 1, 2023 | ||||
Consolidated JV | Secured Debt | Term Loan With Maturity Date of December 19, 2024 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 1.30% | ||||
Consolidated JV | Secured Debt | Term Loan With Maturity Date of June 1, 2029 | |||||
Debt Instrument [Line Items] | |||||
Maturity Date | Jun. 1, 2029 | ||||
Principal Balance | $ 160,000,000 | $ 0 | |||
Variable Interest Rate | LIBOR + 0.98% | ||||
Fixed Interest Rate | 3.25% | ||||
Swap Maturity Date | Jul. 1, 2027 | ||||
Consolidated JV | Secured Debt | Term Loan With Maturity Date of June 1, 2029 | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis Spread on Variable Rate | 0.98% | ||||
Forecast | Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan With Maturity Date of April 1, 2025 | |||||
Debt Instrument [Line Items] | |||||
Fixed Interest Rate | 2.76% | ||||
Forecast | Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of June 1, 2029 B | |||||
Debt Instrument [Line Items] | |||||
Fixed Interest Rate | 3.25% |
Secured Notes Payable and Rev_4
Secured Notes Payable and Revolving Credit Facility, Net - Schedule of Debt Statistics (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Principal balance of consolidated fixed rate debt | $ 4,340,000 | |
Weighted average remaining life (including extension options) of consolidated fixed rate debt (in years) | 5 years 6 months | |
Weighted average remaining fixed interest period of consolidated fixed rate debt (in years) | 3 years 1 month 6 days | |
Weighted average annual interest rate of consolidated fixed rate debt (as a percent) | 3.08% | |
Debt Instrument [Line Items] | ||
Principal Balance | $ 4,338,627 | $ 4,163,982 |
Aggregate Swapped to Fixed Rate Loans | ||
Debt Instrument [Line Items] | ||
Principal Balance | 4,307,400 | 3,882,400 |
Aggregate Fixed Rate Loans | ||
Debt Instrument [Line Items] | ||
Principal Balance | 31,227 | 31,582 |
Aggregate Floating Rate Loans | ||
Debt Instrument [Line Items] | ||
Principal Balance | $ 0 | $ 250,000 |
Secured Notes Payable and Rev_5
Secured Notes Payable and Revolving Credit Facility, Net - Schedule of Minimum Future Principal Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Excluding Maturity Extension Options | ||
2020 | $ 735 | |
2021 | 180,769 | |
2022 | 640,805 | |
2023 | 1,675,842 | |
2024 | 220,881 | |
Thereafter | 1,619,595 | |
Total future principal payments | 4,338,627 | $ 4,163,982 |
Including Maturity Extension Options | ||
2020 | 735 | |
2021 | 769 | |
2022 | 340,805 | |
2023 | 1,520,842 | |
2024 | 520,881 | |
Thereafter | 1,954,595 | |
Total future principal payments | $ 4,338,627 | $ 4,163,982 |
Secured Notes Payable and Rev_6
Secured Notes Payable and Revolving Credit Facility, Net - Schedule of Loan Costs and Accumulated Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |||||
Accumulated amortization on deferred loan costs | $ 28,000 | $ 28,000 | $ 24,200 | ||
Loan Costs Included In Interest Expense | |||||
Deferred loan cost amortization | 4,380 | $ 4,279 | |||
Interest Expense | |||||
Loan Costs Included In Interest Expense | |||||
Loan costs expensed | 576 | $ 0 | 576 | 404 | |
Deferred loan cost amortization | 1,887 | 1,970 | 3,804 | 3,875 | |
Total | $ 2,463 | $ 1,970 | $ 4,380 | $ 4,279 |
Interest Payable, Accounts Pa_3
Interest Payable, Accounts Payable and Deferred Revenue - Summary of Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Interest payable | $ 10,757 | $ 10,657 |
Accounts payable and accrued liabilities | 64,343 | 75,111 |
Deferred revenue | 42,572 | 44,386 |
Total interest payable, accounts payable and deferred revenue | $ 117,672 | $ 130,154 |
Derivative Contracts - Summary
Derivative Contracts - Summary of Derivatives (Details) - Interest Rate Swap - Derivatives Designated as Cash Flow Hedges - Cash Flow Hedging $ in Thousands | Jun. 30, 2019USD ($)instrument |
Derivative [Line Items] | |
Number of Interest Rate Swaps | instrument | 36 |
Notional | $ 4,484,800 |
Percent of notional amount related to the Fund | 100.00% |
Unconsolidated Funds | |
Derivative [Line Items] | |
Number of Interest Rate Swaps | instrument | 4 |
Notional | $ 510,000 |
Percent of notional amount related to the Fund | 100.00% |
Forward swap | |
Derivative [Line Items] | |
Notional | $ 177,400 |
Derivative Contracts - Credit-r
Derivative Contracts - Credit-risk related Contingent Features (Details) - Interest Rate Swap - Derivatives Designated as Cash Flow Hedges - Cash Flow Hedging - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value derivatives in net liability position | $ 52,887 | $ 1,681 |
Percent of notional amount related to the Fund | 100.00% | |
Unconsolidated Funds | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value derivatives in net liability position | $ 1,949 | $ 0 |
Percent of notional amount related to the Fund | 100.00% |
Derivative Contracts - Counterp
Derivative Contracts - Counterparty Credit Risk (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of derivatives in an asset position | $ 16,788 | $ 73,414 |
Interest Rate Swap | Derivatives Designated as Cash Flow Hedges | Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of derivatives in an asset position | $ 18,749 | 76,021 |
Percent of notional amount related to the Fund | 100.00% | |
Interest Rate Swap | Derivatives Designated as Cash Flow Hedges | Cash Flow Hedging | Unconsolidated Funds | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of derivatives in an asset position | $ 1,598 | $ 12,576 |
Percent of notional amount related to the Fund | 100.00% |
Derivative Contracts - Impact o
Derivative Contracts - Impact of Hedges on AOCI and Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Derivative [Line Items] | ||||
Gain recorded in AOCI - adoption of ASU 2017-12 | $ 0 | $ 211 | ||
(Loss) gain recorded in AOCI before reclassifications | (89,483) | 58,890 | ||
Interest Expense presented in the consolidated statements of operations | $ (34,063) | $ (33,268) | (67,356) | (66,168) |
Income, including depreciation, from unconsolidated real estate funds | $ 2,207 | $ 1,668 | 3,758 | 3,174 |
Unconsolidated Funds | ||||
Derivative [Line Items] | ||||
(Loss) gain recorded in AOCI before reclassifications | (6,928) | 6,404 | ||
Cash Flow Hedging | Derivatives Designated as Cash Flow Hedges | ||||
Derivative [Line Items] | ||||
Gain recorded in AOCI - adoption of ASU 2017-12 | 211 | |||
(Loss) gain recorded in AOCI before reclassifications | (89,483) | 58,890 | ||
(Gain) loss reclassified from AOCI to Interest Expense | (17,284) | (2,063) | ||
Cash Flow Hedging | Derivatives Designated as Cash Flow Hedges | Unconsolidated Funds | ||||
Derivative [Line Items] | ||||
(Loss) gain recorded in AOCI before reclassifications | (6,928) | 6,404 | ||
(Gain) loss reclassified from AOCI to Interest Expense | $ (1,226) | $ (79) |
Derivative Contracts - Future R
Derivative Contracts - Future Reclassifications from AOCI (Details) $ in Thousands | Jun. 30, 2019USD ($) |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative designated as cash flow hedge to be reclassified | $ 7,417 |
Unconsolidated Funds | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Derivative designated as cash flow hedge to be reclassified | $ 436 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ in Thousands | Jun. 28, 2019 | Jun. 07, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Schedule of Equity Method Investments [Line Items] | ||||||
Number of OP Units converted to shares of common stock (shares) | 75,000 | 339,000 | ||||
Number of OP units redeemed (shares) | 13,000 | 3,000 | ||||
OP Units redeemed with cash | $ 108 | $ 507 | $ 108 | |||
Shares issued under ATM program (shares) | 4,900,000 | |||||
Net proceeds from issuance of common stock | $ 201,200 | |||||
Shares of common stock issued for exercise of stock options (shares) | 14,000 | |||||
Number of stock options exercised (shares) | 32,000 | |||||
Principal amount | $ 4,338,627 | $ 4,163,982 | ||||
Common stock, outstanding (in shares) | 175,222,968 | 170,214,809 | ||||
Number of OP units and fully-vested LTIP units outstanding (shares) | 28,100,000 | |||||
Number of shares of common stock issued upon redemption of one OP unit (shares) | 1 | |||||
Consolidated JV | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Contract price | $ 365,100 | |||||
Capital interest in consolidated JV (percent) | 20.00% | |||||
Noncontrolling interests contributions to joint venture | $ 176,000 | |||||
Partnership Interest | Operating Partnership | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Investors' ownership in joint venture (percent) | 14.00% | |||||
Secured Debt | Term Loan With Maturity Date of June 1, 2029 | Consolidated JV | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Principal amount | $ 160,000 | $ 0 |
Equity - Changes in Ownership I
Equity - Changes in Ownership Interest in Operating Partnership (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | ||||
Net income attributable to common stockholders | $ 33,966 | $ 31,684 | $ 62,667 | $ 59,890 |
Transfers from noncontrolling interests: | ||||
Exchange of OP Units with noncontrolling interests | 1,223 | 5,480 | ||
Repurchase of OP Units from noncontrolling interests | (291) | (59) | ||
Net transfers from noncontrolling interests | 932 | 5,421 | ||
Change from net income attributable to common stockholders and transfers from noncontrolling interests | $ 63,599 | $ 65,311 |
Equity - AOCI Reconciliation (D
Equity - AOCI Reconciliation (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jan. 01, 2018 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | $ 3,848,430 | $ 3,902,049 | |
Other comprehensive (loss) income before reclassifications | (89,483) | 58,890 | |
Reclassification of gains from AOCI | (17,284) | (2,063) | |
Net current period OCI | (114,921) | 63,363 | |
OCI attributable to noncontrolling interests | 35,124 | (18,976) | |
OCI attributable to common stockholders | (79,797) | 44,387 | |
Ending balance | 4,052,360 | 3,930,286 | |
Fund X | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Other comprehensive (loss) income before reclassifications | (6,928) | 6,404 | |
Reclassification of gains from AOCI | (1,226) | (79) | |
AOCI | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Beginning balance | 53,944 | 43,099 | |
Beginning balance adjustment - cumulative effect of new accounting principle | $ 211 | ||
Ending balance | $ (25,853) | $ 87,486 |
Equity - Equity Compensation (D
Equity - Equity Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Stockholders' Equity Note [Abstract] | ||||
Net stock-based compensation expense | $ 2,400 | $ 2,900 | $ 5,013 | $ 5,964 |
Capitalized stock-based compensation | $ 300 | $ 500 | $ 1,008 | 948 |
Options outstanding (shares) | 0 | 0 | ||
Intrinsic value of options exercised | $ 800 |
EPS - Calculation of Basic and
EPS - Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to common stockholders | $ 33,966 | $ 31,684 | $ 62,667 | $ 59,890 |
Allocation to participating securities: Unvested LTIP Units | (139) | (156) | (265) | (294) |
Numerator for basic and diluted net income attributable to common stockholders | $ 33,827 | $ 31,528 | $ 62,402 | $ 59,596 |
Weighted average shares of common stock outstanding - basic (in shares) | 172,498,000 | 169,916,000 | 171,366,000 | 169,759,000 |
Effect of dilutive securities: Stock options (in shares) | 0 | 10,000 | 0 | 17,000 |
Weighted average shares of common stock and common stock equivalents outstanding - diluted (in shares) | 172,498,000 | 169,926,000 | 171,366,000 | 169,776,000 |
Basic EPS: | ||||
Net income attributable to common stockholders per share (usd per share) | $ 0.20 | $ 0.19 | $ 0.36 | $ 0.35 |
Diluted EPS: | ||||
Net income attributable to common stockholders per share (usd per share) | $ 0.20 | $ 0.19 | $ 0.36 | $ 0.35 |
Options outstanding (shares) | 0 | 0 | ||
OP Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from the computation of weighted average diluted shares (in shares) | 26,283,000 | 26,637,000 | 26,311,000 | 26,790,000 |
Vested LTIP Units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from the computation of weighted average diluted shares (in shares) | 1,830,000 | 807,000 | 1,830,000 | 803,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Instruments Disclosed at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Ground lease liability | $ 10,885 | |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Secured notes payable | 4,358,148 | $ 4,087,979 |
Ground lease liability | 11,846 | |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Secured notes payable | 4,338,627 | $ 4,062,968 |
Ground lease liability | $ 10,885 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative Assets: | ||
Fair value - derivatives | $ 16,788 | $ 73,414 |
Derivative Liabilities: | ||
Fair value - derivatives | $ 51,672 | 1,530 |
Fund X | Interest Rate Swap | ||
Derivative Liabilities: | ||
Percent of notional amount related to the Fund | 100.00% | |
Level 2 | ||
Derivative Assets: | ||
Fair value - derivatives | $ 16,788 | 73,414 |
Derivative Liabilities: | ||
Fair value - derivatives | 51,672 | 1,530 |
Level 2 | Fund X | ||
Derivative Assets: | ||
Fair value - unconsolidated Funds' derivatives | 1,465 | 12,228 |
Derivative Liabilities: | ||
Fair value - unconsolidated Funds' derivatives | $ 2,095 | $ 0 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 6 Months Ended |
Jun. 30, 2019segment | |
Segment Reporting [Abstract] | |
Number of reportable business segments | 2 |
Segment Reporting - Operating A
Segment Reporting - Operating Activity Within Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 230,534 | $ 219,469 | $ 454,720 | $ 431,716 |
Segment profit | 158,514 | 150,743 | 311,696 | 295,936 |
Office Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 202,189 | 193,761 | 399,479 | 381,094 |
Operating expenses | (64,308) | (61,818) | (127,757) | (122,174) |
Segment profit | 137,881 | 131,943 | 271,722 | 258,920 |
Multifamily Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 28,345 | 25,708 | 55,241 | 50,622 |
Operating expenses | (7,712) | (6,908) | (15,267) | (13,606) |
Segment profit | $ 20,633 | $ 18,800 | $ 39,974 | $ 37,016 |
Segment Reporting - Reconciliat
Segment Reporting - Reconciliation of Segment Profit to Net Income Attributable to Common Stockholders (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting [Abstract] | ||||
Total profit from all segments | $ 158,514 | $ 150,743 | $ 311,696 | $ 295,936 |
General and administrative expenses | (9,159) | (9,437) | (18,991) | (19,004) |
Depreciation and amortization | (78,724) | (73,379) | (158,597) | (145,877) |
Other income | 2,892 | 2,792 | 5,790 | 5,422 |
Other expenses | (1,807) | (2,086) | (3,652) | (3,819) |
Income, including depreciation, from unconsolidated real estate funds | 2,207 | 1,668 | 3,758 | 3,174 |
Interest expense | (34,063) | (33,268) | (67,356) | (66,168) |
Net income | 39,860 | 37,033 | 72,648 | 69,664 |
Less: Net income attributable to noncontrolling interests | (5,894) | (5,349) | (9,981) | (9,774) |
Net income attributable to common stockholders | $ 33,966 | $ 31,684 | $ 62,667 | $ 59,890 |
Future Minimum Lease Rental R_3
Future Minimum Lease Rental Receipts - Summary of Minimum Rental Receipts (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($)land_parcel | |
Future Minimum Base Rentals | |
2020 | $ 598,559 |
2021 | 530,270 |
2022 | 434,864 |
2023 | 351,412 |
2024 | 263,368 |
Thereafter | 617,827 |
Total future minimum base rentals | $ 2,796,300 |
Maximum term of residential leases not included in total future minimum base rentals | 1 year |
Wholly-owned properties | |
Future Minimum Base Rentals | |
Number of land parcels subject to ground lease | land_parcel | 2 |
Commitments, Contingencies an_3
Commitments, Contingencies and Guarantees - Narrative (Details) ft² in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($)ft²apartmentbuilding | |
Other Commitments [Line Items] | |
Number of properties containing Asbestos | building | 28 |
Percentage of amounts related to the Fund | 100.00% |
Unconsolidated Funds | |
Other Commitments [Line Items] | |
Number of properties containing Asbestos | building | 4 |
Maximum | |
Other Commitments [Line Items] | |
Amount accounts are insured for by Federal Deposit Insurance Corporation | $ 250,000 |
Development Projects | |
Other Commitments [Line Items] | |
Aggregate remaining contractual commitment | $ 187,400,000 |
Development Projects | California | |
Other Commitments [Line Items] | |
Number of apartments under construction | apartment | 376 |
Development Projects | Hawaii | |
Other Commitments [Line Items] | |
Number of apartments under construction | apartment | 500 |
Square footage of office tower conversion (sq ft) | ft² | 490 |
Repositionings, Capital Expenditure Projects, And Tenant Improvements | |
Other Commitments [Line Items] | |
Aggregate remaining contractual commitment | $ 32,700,000 |
Commitments, Contingencies an_4
Commitments, Contingencies and Guarantees - Schedule of Debt Related to Unconsolidated Funds (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019USD ($)property | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | ||
Principal Balance | $ 4,304,913 | $ 4,134,030 |
Partnership X | ||
Debt Instrument [Line Items] | ||
Loan Maturity Date | Mar. 1, 2023 | |
Principal Balance | $ 110,000 | |
Collateral, number of properties | property | 2 | |
Maximum future payments under the swap agreement | $ 1,700 | |
Partnership X | Interest Rate Swap | ||
Debt Instrument [Line Items] | ||
Variable Interest Rate - basis spread | 1.40% | |
Swap Fixed Interest Rate | 2.30% | |
Swap Maturity Date | Mar. 1, 2021 | |
Fund X | ||
Debt Instrument [Line Items] | ||
Loan Maturity Date | Jul. 1, 2024 | |
Principal Balance | $ 400,000 | |
Collateral, number of properties | property | 6 | |
Maximum future payments under the swap agreement | $ 21,800 | |
Loan agreement, one month LIBOR maximum for interest rate cap requirement | 3.56% | |
Loan agreement, number of consecutive days | 14 days | |
Fund X | Interest Rate Swap | ||
Debt Instrument [Line Items] | ||
Variable Interest Rate - basis spread | 1.65% | |
Swap Fixed Interest Rate | 3.44% | |
Swap Maturity Date | Jul. 1, 2022 | |
Unconsolidated Funds | ||
Debt Instrument [Line Items] | ||
Principal Balance | $ 510,000 | |
LIBOR | Partnership X | ||
Debt Instrument [Line Items] | ||
Loan agreement LIBOR floor | 0.00% | |
LIBOR | Fund X | ||
Debt Instrument [Line Items] | ||
Loan agreement LIBOR floor | 0.00% |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) $ in Millions | Jul. 01, 2019USD ($) |
Subsequent Event | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.62% | |
Subsequent Event [Line Items] | |
Repayment of loan | $ 220 |
Uncategorized Items - a2019q210
Label | Element | Value |
Accounting Standards Update 2017-12 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 211,000 |
Accounting Standards Update 2017-12 [Member] | Accumulated Distributions in Excess of Net Income [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (211,000) |