Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
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 | 2020 | |
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, $0.01 par value per share | |
Trading Symbol | DEI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 175,374,886 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Investment in real estate: | ||
Land | $ 1,152,684 | $ 1,152,684 |
Buildings and improvements | 9,329,652 | 9,308,481 |
Tenant improvements and lease intangibles | 922,909 | 905,753 |
Property under development | 158,949 | 111,715 |
Investment in real estate, gross | 11,564,194 | 11,478,633 |
Less: accumulated depreciation and amortization | (2,679,255) | (2,518,415) |
Investment in real estate, net | 8,884,939 | 8,960,218 |
Ground lease right-of-use asset | 7,475 | 7,479 |
Cash and cash equivalents | 176,393 | 153,683 |
Tenant receivables | 16,996 | 5,302 |
Deferred rent receivables | 118,210 | 134,968 |
Acquired lease intangible assets, net | 5,736 | 6,407 |
Interest rate contract assets | 0 | 22,381 |
Investment in unconsolidated Fund | 47,742 | 42,442 |
Other assets | 13,886 | 16,421 |
Total Assets | 9,271,377 | 9,349,301 |
Liabilities | ||
Secured notes payable and revolving credit facility, net | 4,666,603 | 4,619,058 |
Ground lease liability | 10,877 | 10,882 |
Interest payable, accounts payable and deferred revenue | 139,607 | 131,410 |
Security deposits | 58,419 | 60,923 |
Acquired lease intangible liabilities, net | 43,126 | 52,367 |
Interest rate contract liabilities | 259,293 | 54,616 |
Dividends payable | 49,113 | 49,111 |
Total liabilities | 5,227,038 | 4,978,367 |
Douglas Emmett, Inc. stockholders' equity: | ||
Common Stock, $0.01 par value, 750,000,000 authorized, 175,374,886 and 175,369,746 outstanding at June 30, 2020 and December 31, 2019, respectively | 1,754 | 1,754 |
Additional paid-in capital | 3,486,442 | 3,486,356 |
Accumulated other comprehensive loss | (179,471) | (17,462) |
Accumulated deficit | (827,748) | (758,576) |
Total Douglas Emmett, Inc. stockholders' equity | 2,480,977 | 2,712,072 |
Noncontrolling interests | 1,563,362 | 1,658,862 |
Total equity | 4,044,339 | 4,370,934 |
Total Liabilities and Equity | $ 9,271,377 | $ 9,349,301 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
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) | 175,374,886 | 175,369,746 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues | ||||
Revenues | $ 207,796 | $ 230,534 | $ 459,146 | $ 454,720 |
Operating Expenses | ||||
General and administrative expenses | 9,863 | 9,159 | 20,198 | 18,991 |
Depreciation and amortization | 98,765 | 78,724 | 196,542 | 158,597 |
Total operating expenses | 177,785 | 159,903 | 364,917 | 320,612 |
Operating income | 30,011 | 70,631 | 94,229 | 134,108 |
Other income | 325 | 2,892 | 2,314 | 5,790 |
Other expenses | (478) | (1,807) | (1,874) | (3,652) |
(Loss) income from unconsolidated Funds | (140) | 2,207 | 183 | 3,758 |
Interest expense | (35,190) | (34,063) | (70,610) | (67,356) |
Net (loss) income | (5,472) | 39,860 | 24,242 | 72,648 |
Less: Net loss (income) attributable to noncontrolling interests | 7,502 | (5,894) | 4,711 | (9,981) |
Net income attributable to common stockholders | $ 2,030 | $ 33,966 | $ 28,953 | $ 62,667 |
Net income per common share – basic and diluted (usd per share) | $ 0.01 | $ 0.20 | $ 0.16 | $ 0.36 |
Office rental | ||||
Revenues | ||||
Revenues | $ 176,989 | $ 202,189 | $ 396,878 | $ 399,479 |
Operating Expenses | ||||
Expenses | 60,301 | 64,308 | 129,965 | 127,757 |
Office rental | Rental revenues and tenant recoveries | ||||
Revenues | ||||
Revenues | 158,813 | 171,674 | 344,640 | 338,909 |
Office rental | Parking and other income | ||||
Revenues | ||||
Revenues | 18,176 | 30,515 | 52,238 | 60,570 |
Multifamily rental | ||||
Revenues | ||||
Revenues | 30,807 | 28,345 | 62,268 | 55,241 |
Operating Expenses | ||||
Expenses | 8,856 | 7,712 | 18,212 | 15,267 |
Multifamily rental | Rental revenues | ||||
Revenues | ||||
Revenues | 25,872 | 26,308 | 54,958 | 51,201 |
Multifamily rental | Parking and other income | ||||
Revenues | ||||
Revenues | $ 4,935 | $ 2,037 | $ 7,310 | $ 4,040 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (5,472) | $ 39,860 | $ 24,242 | $ 72,648 |
Other comprehensive loss: cash flow hedges | (20,795) | (81,613) | (228,254) | (114,921) |
Comprehensive loss | (26,267) | (41,753) | (204,012) | (42,273) |
Less: Comprehensive loss attributable to noncontrolling interests | 14,698 | 18,923 | 70,956 | 25,143 |
Comprehensive loss attributable to common stockholders | $ (11,569) | $ (22,830) | $ (133,056) | $ (17,130) |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Thousands | Total | ASU 2016-02 adoption | Common Stock | Additional Paid-in Capital | AOCI | Accumulated Deficit | Accumulated DeficitASU 2016-02 adoption | Noncontrolling Interests | Noncontrolling InterestsASU 2016-02 adoption |
Beginning balance (in shares) at Dec. 31, 2018 | 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 | 175,223,000 | ||||||||
Beginning balance at Dec. 31, 2018 | $ 3,848,430 | $ (2,499) | $ 1,702 | $ 3,282,316 | $ 53,944 | $ (935,630) | $ (2,144) | $ 1,446,098 | $ (355) |
Stockholders' Equity [Roll Forward] | |||||||||
Exchange of OP Units for common stock | 1 | 1,222 | (1,223) | ||||||
Issuance of common stock, net | 200,982 | 49 | 200,933 | ||||||
Repurchase of OP Units with cash | (507) | (291) | (216) | ||||||
Cash flow hedge adjustments | (114,921) | (79,797) | (35,124) | ||||||
Net income attributable to common stockholders | 72,648 | 62,667 | 9,981 | ||||||
Dividends | (89,820) | (89,820) | |||||||
Contributions | 176,000 | 176,000 | |||||||
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 | |||
Stockholders' Equity [Roll Forward] | |||||||||
Accounting standards update | us-gaap:AccountingStandardsUpdate201602Member | ||||||||
Dividends declared per common share (in usd per share) | $ 0.52 | ||||||||
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 | 175,223,000 | ||||||||
Beginning balance at Mar. 31, 2019 | $ 3,788,182 | 0 | $ 1,702 | 3,282,388 | 30,943 | (953,335) | 0 | 1,426,484 | 0 |
Stockholders' Equity [Roll Forward] | |||||||||
Exchange of OP Units for common stock | 1 | 859 | (860) | ||||||
Issuance of common stock, net | 200,982 | 49 | 200,933 | ||||||
Repurchase of OP Units with cash | 0 | 0 | 0 | ||||||
Cash flow hedge adjustments | (81,613) | (56,796) | (24,817) | ||||||
Net income attributable to common stockholders | 39,860 | 33,966 | 5,894 | ||||||
Dividends | (45,558) | (45,558) | |||||||
Contributions | 176,000 | 176,000 | |||||||
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 | |||
Stockholders' Equity [Roll Forward] | |||||||||
Dividends declared per common share (in usd per share) | $ 0.26 | ||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 175,369,746 | 175,370,000 | |||||||
Stockholders' Equity [Roll Forward] | |||||||||
Exchange of OP Units for common stock (in shares) | 5,000 | 5,000 | |||||||
Issuance of common stock (in shares) | 0 | ||||||||
Ending balance (in shares) at Jun. 30, 2020 | 175,374,886 | 175,375,000 | |||||||
Beginning balance at Dec. 31, 2019 | $ 4,370,934 | 0 | $ 1,754 | 3,486,356 | (17,462) | (758,576) | 0 | 1,658,862 | 0 |
Stockholders' Equity [Roll Forward] | |||||||||
Exchange of OP Units for common stock | 0 | 90 | (90) | ||||||
Issuance of common stock, net | 0 | 0 | 0 | ||||||
Repurchase of OP Units with cash | (7) | (4) | (3) | ||||||
Cash flow hedge adjustments | (228,254) | (162,009) | (66,245) | ||||||
Net income attributable to common stockholders | 24,242 | 28,953 | (4,711) | ||||||
Dividends | (98,125) | (98,125) | |||||||
Contributions | 0 | 0 | |||||||
Distributions | (31,814) | (31,814) | |||||||
Stock-based compensation | 7,363 | 7,363 | |||||||
Ending balance at Jun. 30, 2020 | $ 4,044,339 | $ 1,754 | 3,486,442 | (179,471) | (827,748) | 1,563,362 | |||
Stockholders' Equity [Roll Forward] | |||||||||
Dividends declared per common share (in usd per share) | $ 0.56 | ||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 175,375,000 | ||||||||
Stockholders' Equity [Roll Forward] | |||||||||
Exchange of OP Units for common stock (in shares) | 0 | ||||||||
Issuance of common stock (in shares) | 0 | ||||||||
Ending balance (in shares) at Jun. 30, 2020 | 175,374,886 | 175,375,000 | |||||||
Beginning balance at Mar. 31, 2020 | $ 4,129,707 | $ 0 | $ 1,754 | 3,486,442 | (165,872) | (780,562) | $ 0 | 1,587,945 | $ 0 |
Stockholders' Equity [Roll Forward] | |||||||||
Exchange of OP Units for common stock | 0 | 0 | 0 | ||||||
Issuance of common stock, net | 0 | 0 | 0 | ||||||
Repurchase of OP Units with cash | 0 | 0 | 0 | ||||||
Cash flow hedge adjustments | (20,795) | (13,599) | (7,196) | ||||||
Net income attributable to common stockholders | (5,472) | 2,030 | (7,502) | ||||||
Dividends | (49,216) | (49,216) | |||||||
Contributions | 0 | 0 | |||||||
Distributions | (13,448) | (13,448) | |||||||
Stock-based compensation | 3,563 | 3,563 | |||||||
Ending balance at Jun. 30, 2020 | $ 4,044,339 | $ 1,754 | $ 3,486,442 | $ (179,471) | $ (827,748) | $ 1,563,362 | |||
Stockholders' Equity [Roll Forward] | |||||||||
Dividends declared per common share (in usd per share) | $ 0.28 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating Activities | ||
Net (loss) income | $ 24,242 | $ 72,648 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Income from unconsolidated Funds | (183) | (3,758) |
Depreciation and amortization | 196,542 | 158,597 |
Net accretion of acquired lease intangibles | (8,571) | (8,516) |
Straight-line rent | 16,758 | (6,684) |
Write-off of uncollectible amounts | 15,992 | 9 |
Loan premium amortized and written off | (2,043) | (102) |
Deferred loan costs amortized and written off | 3,791 | 4,380 |
Derivative non-cash adjustments | 0 | (7) |
Amortization of stock-based compensation | 5,753 | 5,013 |
Operating distributions from unconsolidated Funds | 394 | 3,756 |
Change in working capital components: | ||
Tenant receivables | (27,686) | (837) |
Interest payable, accounts payable and deferred revenue | 9,811 | (2,222) |
Security deposits | (2,504) | 501 |
Other assets | 4,513 | 5,398 |
Net cash provided by operating activities | 236,809 | 228,176 |
Investing Activities | ||
Capital expenditures for improvements to real estate | (74,151) | (83,944) |
Capital expenditures for developments | (53,780) | (30,327) |
Insurance recoveries for damage to real estate | 4,015 | 0 |
Property acquisition | 0 | (364,524) |
Acquisition of additional interests in unconsolidated Fund | (6,591) | (7,518) |
Capital distributions from unconsolidated Funds | 548 | 3,869 |
Net cash used in investing activities | (129,959) | (482,444) |
Financing Activities | ||
Proceeds from borrowings | 544,000 | 832,318 |
Repayment of borrowings | (494,372) | (657,673) |
Loan cost payments | (3,824) | (6,625) |
Contributions from noncontrolling interests in consolidated JVs | 0 | 163,556 |
Distributions paid to noncontrolling interests | (31,814) | (31,530) |
Dividends paid to common stockholders | (98,123) | (88,518) |
Repurchase of OP Units | (7) | (507) |
Proceeds from issuance of common stock, net | 0 | 200,982 |
Net cash used in financing activities | (84,140) | 412,003 |
Increase in cash and cash equivalents and restricted cash | 22,710 | 157,735 |
Cash and cash equivalents and restricted cash - beginning balance | 153,804 | 146,348 |
Cash and cash equivalents and restricted cash - ending balance | 176,514 | 304,083 |
Reconciliation of Ending Cash Balance | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total | 176,514 | 304,083 |
Operating Activities | ||
Cash paid for interest, net of capitalized interest | 68,837 | 62,985 |
Capitalized interest paid | 1,992 | 1,897 |
Non-cash Investing Transactions | ||
Accrual for real estate and development capital expenditures | 31,400 | 16,687 |
Capitalized stock-based compensation for improvements to real estate and developments | 1,610 | 1,008 |
Removal of fully depreciated and amortized tenant improvements and lease intangibles | 32,305 | 30,586 |
Removal of fully amortized acquired lease intangible assets | 175 | 1,859 |
Removal of fully accreted acquired lease intangible liabilities | 3,604 | 4,212 |
Property acquisition accrual | 0 | 1,361 |
Recognition of ground lease right-of-use asset - Adoption of ASU 2016-02 | 0 | 10,885 |
Above-market ground lease intangible liability offset against right-of-use asset - Adoption of ASU 2016-02 | 0 | 3,408 |
Recognition of ground lease liability - Adoption of ASU 2016-02 | 0 | 10,885 |
Non-cash Financing Transactions | ||
Loss recorded in AOCI - derivatives | (241,189) | (89,483) |
Non-cash contributions from noncontrolling interests in consolidated JVs | 0 | 12,444 |
Non-cash distributions to noncontrolling interests | 0 | 12,444 |
Dividends declared | 98,125 | 89,820 |
Exchange of OP Units for common stock | 90 | 1,223 |
Unconsolidated Funds | ||
Non-cash Financing Transactions | ||
Loss recorded in AOCI - derivatives | $ (403) | $ (6,928) |
Overview
Overview | 6 Months Ended |
Jun. 30, 2020 | |
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 Fund, 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 consolidated financial statements refer to Douglas Emmett, Inc. and its subsidiaries on a consolidated basis. At June 30, 2020, our Consolidated Portfolio consisted of (i) a 17.9 million square foot office portfolio, (ii) 4,209 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 an equity interest in an unconsolidated Fund which, at June 30, 2020, owned an additional 0.4 million square feet of office space. We manage our unconsolidated Fund alongside our Consolidated Portfolio, and we therefore present the statistics for our office portfolio on a Total Portfolio basis. As of June 30, 2020, our portfolio (not including two parcels of land from which we receive rent under ground leases), consisted of the following properties (including ancillary retail space): Consolidated Portfolio Total Office Wholly-owned properties 53 53 Consolidated JV properties 17 17 Unconsolidated Fund properties — 2 70 72 Multifamily Wholly-owned properties 11 11 Consolidated JV properties 1 1 12 12 Total 82 84 Basis of Presentation The accompanying consolidated 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. We consolidate entities in which we are considered to be the primary beneficiary of a VIE or have a majority of the voting interest of the entity. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of that VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We do not consolidate entities in which the other parties have substantive kick-out rights to remove our power to direct the activities, most significantly impacting the economic performance, of that VIE. In determining whether we are the primary beneficiary, we consider factors such as ownership interest, management representation, authority to control decisions, and contractual and substantive participating rights of each party. We consolidate our Operating Partnership through which we conduct substantially all of our business, and own, directly and through subsidiaries, substantially all of our assets, and are obligated to repay substantially all of our liabilities, including $3.11 billion of consolidated debt. See Note 8. We also consolidate four JVs. As of June 30, 2020, these consolidated entities had aggregate total consolidated assets of $9.27 billion (of which $8.88 billion related to investment in real estate), aggregate total consolidated liabilities of $5.23 billion (of which $4.67 billion related to debt), and aggregate total consolidated equity of $4.04 billion (of which $1.56 billion related to noncontrolling interests). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies We have not made any changes to our significant accounting policies disclosed in our 2019 Annual Report on Form 10-K. Use of Estimates The preparation of consolidated 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 Rental revenues and tenant recoveries We account for our rental revenues and tenant recoveries in accordance with Topic 842 "Leases". Rental revenues and tenant recoveries are included in: (i) Rental revenues and tenant recoveries under Office rental, and (ii) Rental revenues under Multifamily rental, in our consolidated statements of operations. In accordance with Topic 842, we perform an assessment as to whether or not substantially all of the amounts due under a tenant’s lease agreement is deemed probable of collection. This assessment involves using a methodology that requires judgment and estimates about matters that are uncertain at the time the estimates are made, including tenant specific factors, specific industry conditions, and general economic trends and conditions. For leases where we have concluded it is probable that we will collect substantially all the lease payments due under those leases, we continue to record lease income on a straight-line basis over the lease term. For leases where we have concluded that it is not probable that we will collect substantially all the lease payments due under those leases, we limit the lease income to the lesser of the income recognized on a straight-line basis or cash basis. If our conclusion of collectibility changes, we will record the difference between the lease income that would have been recognized on a straight-line basis and cash basis as a current-period adjustment to rental revenues and tenant recoveries. We write-off tenant receivables and deferred rent receivables as a charge against rental revenues and tenant recoveries in the period we conclude that substantially all of the lease payments are not probable of collection. If we subsequently collect amounts that were previously written off then the amounts collected are recorded as an increase to our rental revenues and tenant recoveries. Charges for uncollectible amounts, related to tenant receivables and deferred rent receivables, which for the three and six months ended June 30, 2020 were primarily due to the impact of the COVID-19 pandemic, reduced our rental revenues and tenant recoveries by $29.8 million and $1.0 million for the three months ended June 30, 2020 and 2019, and $35.0 million and $3.4 million for the six months ended June 30, 2020 and 2019, respectively. Office parking revenues We account for our office parking revenues in accordance with ASC 606 "Revenue from Contracts with Customers". Office parking revenues are included in Parking and other income under Office rental in our consolidated statements of operations. 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 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 consolidated financial statements. ASUs Adopted ASU 2016-13 (Topic 326 - "Financial Instruments-Credit Losses") In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments", which amends "Financial Instruments-Credit Losses" (Topic 326). The ASU provides guidance for measuring credit losses on financial instruments. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, which for us was the first quarter of 2020. The amendments in the ASU should be applied on a modified-retrospective basis. The ASU impacts our measurement of credit losses for our Office parking receivables, which were $0.4 million and $1.3 million as of June 30, 2020 and December 31, 2019, respectively, and are included in Tenant receivables in our consolidated balance sheets. We adopted the ASU in the first quarter of 2020 and it did not have a material impact on our consolidated financial statements. ASU 2020-04 (Topic 848 - "Reference Rate Reform") In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform", which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The practical expedients are optional and may be elected over time as reference rate reform activities occur. We elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the ASU and may apply other elections, as applicable, as additional changes in the market occur. Our election to apply the hedge accounting expedients in the first quarter of 2020 did not have a material impact on our consolidated financial statements. Other Pronouncements FASB COVID-19 Lease Modification Accounting Relief In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under the existing lease accounting guidance, we would be required to determine on a lease-by-lease basis if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows us, if certain criteria are met, to bypass the lease-by-lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. We will avail ourselves of the election to avoid performing a lease-by-lease analysis. The Lease Modification Q&A did not have material impact on our consolidated financial statements; however, its impact on our future consolidated financial statements is dependent upon the extent of any lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by us at the time of entering into such concessions. FASB COVID-19 Cash Flow Hedge Accounting Relief In April 2020, the FASB staff issued a question and answer document (the “Cash Flow Hedge Accounting Q&A”) on the application of cash flow hedge accounting guidance to cash flow hedges impacted by the COVID-19 pandemic. The Cash Flow Hedge Accounting Q&A clarifies that: (i) when cash flow hedge accounting has been discontinued, the delays in the timing of the forecasted transactions related to the impact of the COVID-19 pandemic may be considered rare cases caused by extenuating circumstances outside the control or influence of an entity, thereby allowing amounts deferred in AOCI to remain in AOCI until the forecasted transaction affects earnings, and (ii) missed forecasts, related to the effects of the COVID-19 pandemic, do not need to be considered when determining whether the entity has exhibited a pattern of missing forecasts that would call into question the entity’s ability to accurately predict forecasted transactions and the propriety of using cash flow hedge accounting in the future for similar transactions. The Cash Flow Hedge Accounting Q&A did not have material impact on our consolidated financial statements; however, its impact on our future consolidated financial statements is dependent upon our cash flow hedge forecasted transactions being impacted by the COVID-19 pandemic in future periods. |
Investment in Real Estate
Investment in Real Estate | 6 Months Ended |
Jun. 30, 2020 | |
Asset Acquisition [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. Six Months Ended June 30, 2020 During six months ended June 30, 2020, we did not purchase any properties. Six Months Ended June 30, 2019 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, 2019 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, 2020 | |
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, 2020, 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, 2020 and 2019, and $365 thousand and $363 thousand for the six months ended June 30, 2020 and 2019, 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, 2020: Twelve months ending June 30: (In thousands) 2021 $ 733 2022 733 2023 733 2024 733 2025 733 Thereafter 45,078 Total future minimum lease payments $ 48,743 |
Acquired Lease Intangibles
Acquired Lease Intangibles | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Acquired Lease Intangibles | Acquired Lease Intangibles Summary of our Acquired Lease Intangibles (In thousands) June 30, 2020 December 31, 2019 Above-market tenant leases $ 7,045 $ 7,220 Above-market tenant leases - accumulated amortization (2,228) (1,741) Above-market ground lease where we are the lessor 1,152 1,152 Above-market ground lease - accumulated amortization (233) (224) Acquired lease intangible assets, net $ 5,736 $ 6,407 Below-market tenant leases $ 98,979 $ 102,583 Below-market tenant leases - accumulated accretion (55,853) (50,216) Acquired lease intangible liabilities, net $ 43,126 $ 52,367 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) 2020 2019 2020 2019 Net accretion of above- and below-market tenant lease assets and liabilities (1) $ 4,320 $ 4,400 $ 8,579 $ 8,524 Amortization of an above-market ground lease asset (2) (5) (4) (8) (8) Total $ 4,315 $ 4,396 $ 8,571 $ 8,516 ______________________________________________ (1) Recorded as a net increase to office and multifamily rental revenues. (2) Recorded as a decrease to office parking and other income. |
Investments in Unconsolidated F
Investments in Unconsolidated Funds | 6 Months Ended |
Jun. 30, 2020 | |
Real Estate Investments, Net [Abstract] | |
Investments In Unconsolidated Funds | Investments in Unconsolidated Funds Description of our Funds As of June 30, 2020, we manage and own an equity interest of 33.5% in an unconsolidated Fund, Partnership X, through which we and other investors in the Fund own two office properties totaling 0.4 million square feet. During the six months ended June 30, 2020 we purchased additional interests of 3.6% in Partnership X for $6.6 million. On November 21, 2019, we restructured Fund X which resulted in Fund X being treated as a consolidated JV from November 21, 2019, and we closed the Opportunity Fund. See Note 6 in our 2019 Annual Report on Form 10-K for more information. At June 30, 2019, we managed and held direct and indirect equity interests in three unconsolidated Funds, consisting of 6.2% of the Opportunity Fund, 72.7% of Fund X and 24.6% of Partnership X, through which we and investors in the Funds' owned eight office properties totaling 1.8 million square feet. We purchased an additional interest of 1.4% in Fund X during the six months ended June 30, 2019. 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) 2020 2019 Operating distributions received (1) $ 394 $ 3,756 Capital distributions received (1) 548 3,869 Total distributions received (1) $ 942 $ 7,625 _________________________________________________ (1) The distributions are not directly comparable to the prior period; the distributions during the six months ended June 30, 2020 reflect distributions only from Partnership X, whereas the distributions during the six months ended June 30, 2019 reflect distributions from the Opportunity Fund, Fund X and Partnership X. Summarized Financial Information for our Funds The tables below present selected financial information for the Funds. 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, 2020 December 31, 2019 Total assets (1) $ 134,245 $ 136,479 Total liabilities (1) $ 113,592 $ 113,330 Total equity (1) $ 20,653 $ 23,149 ______________________________________________ (1) The balances reflect the financial position of Partnership X. Six Months Ended June 30, (In thousands) 2020 2019 Total revenues (1) $ 7,597 $ 41,174 Operating income (1) $ 1,686 $ 11,961 Net income (1) $ 372 $ 3,815 ______________________________________________ (1) The results of operations are not directly comparable to the prior period; the balances for the six months ended June 30, 2020 reflect only the operations of Partnership X, whereas the balances for the six months ended June 30, 2019 reflect the combined operations of the Opportunity Fund, Fund X and Partnership X. |
Other Assets
Other Assets | 6 Months Ended |
Jun. 30, 2020 | |
Other Assets [Abstract] | |
Other Assets | Other Assets (In thousands) June 30, 2020 December 31, 2019 Restricted cash $ 121 $ 121 Prepaid expenses 3,632 8,711 Other indefinite-lived intangibles 1,988 1,988 Furniture, fixtures and equipment, net 2,532 2,368 Other 5,613 3,233 Total other assets $ 13,886 $ 16,421 |
Secured Notes Payable and Revol
Secured Notes Payable and Revolving Credit Facility, Net | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 Principal Balance as of December 31, 2019 Variable Interest Rate Fixed Interest Rate (2) Swap Maturity Date (In thousands) Consolidated Wholly Owned Subsidiaries Term loan (3) 1/1/2024 $ 300,000 $ 300,000 LIBOR + 1.55% 3.46% 1/1/2022 Term loan (3) 3/3/2025 335,000 335,000 LIBOR + 1.30% 3.84% 3/1/2023 Fannie Mae loan (3) 4/1/2025 102,400 102,400 LIBOR + 1.25% 2.76% 3/1/2023 Term loan (3) 8/15/2026 415,000 415,000 LIBOR + 1.10% 3.07% 8/1/2025 Term loan (3) 9/19/2026 400,000 400,000 LIBOR + 1.15% 2.44% 9/1/2024 Term loan (3)(4) 9/26/2026 200,000 200,000 LIBOR + 1.20% 2.77% 10/1/2024 Term loan (3)(5) 11/1/2026 400,000 400,000 LIBOR + 1.15% 2.18% 10/1/2024 Fannie Mae loan (3) 6/1/2027 550,000 550,000 LIBOR + 1.37% 3.16% 6/1/2022 Fannie Mae loan (3) 6/1/2029 255,000 255,000 LIBOR + 0.98% 3.26% 6/1/2027 Fannie Mae loan (3)(6) 6/1/2029 125,000 125,000 LIBOR + 0.98% 2.55% 6/1/2027 Term loan (7) 6/1/2038 30,492 30,864 N/A 4.55% N/A Revolving credit facility (8) 8/21/2023 — — LIBOR + 1.15% N/A N/A Total Wholly Owned Subsidiary Debt 3,112,892 3,113,264 Consolidated JVs Term loan (9) — — 400,000 — — — Term loan (3) 2/28/2023 580,000 580,000 LIBOR + 1.40% 2.37% 3/1/2021 Term loan (3) 12/19/2024 400,000 400,000 LIBOR + 1.30% 3.47% 1/1/2023 Term loan (3)(10) 5/15/2027 450,000 — LIBOR + 1.35% 3.04% 4/1/2025 Term loan (3) 6/1/2029 160,000 160,000 LIBOR + 0.98% 3.25% 7/1/2027 Total Consolidated Debt (11) 4,702,892 4,653,264 Unamortized loan premium, net 4,699 6,741 Unamortized deferred loan costs, net (40,988) (40,947) Total Consolidated Debt, net $ 4,666,603 $ 4,619,058 _______________________________________________________________________ Except as noted below, our loans and revolving credit facility: (i) are non-recourse, (ii) are secured by separate collateral pools consisting of one or more properties, (iii) require interest-only monthly payments with the outstanding principal due upon maturity, and (iv) contain certain financial covenants which could require us to deposit excess cash flow with the lender under certain circumstances unless we (at our option) either provide a guarantee or additional collateral or pay down the loan within certain parameters set forth in the loan documents. Certain loans with maturity date extensions require us to meet minimum financial thresholds in order to exercise those extensions. (1) Maturity dates include the effect of extension options. (2) Effective rate as of June 30, 2020. 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) The loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor. (4) Effective rate will decrease to 2.36% on July 1, 2020. (5) Effective rate will increase to 2.31% on July 1, 2021. (6) Effective rate will increase to 3.25% on December 1, 2020. (7) Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule. (8) $400 million revolving credit facility. Unused commitment fees range from 0.10% to 0.15%. The loan agreement includes a zero-percent LIBOR floor. (9) We paid this loan off during the second quarter. (10) We closed this loan during the second quarter. The effective rate will decrease to 2.26% on July 1, 2022 (11) The table does not include our unconsolidated Fund's loan - see Note 16. See Note 13 for our fair value disclosures. Debt Statistics The table below summarizes our consolidated fixed and floating rate debt: (In thousands) Principal Balance as of June 30, 2020 Principal Balance as of December 31, 2019 Aggregate swapped to fixed rate loans $ 4,672,400 $ 4,622,400 Aggregate fixed rate loans 30,492 30,864 Total Debt $ 4,702,892 $ 4,653,264 The table below summarizes certain consolidated debt statistics as of June 30, 2020: Statistics for consolidated loans with interest fixed under the terms of the loan or a swap Principal balance (in billions) $4.70 Weighted average remaining life (including extension options) 5.9 years Weighted average remaining fixed interest period 3.6 years Weighted average annual interest rate 3.02% Future Principal Payments At June 30, 2020, the minimum future principal payments due on our consolidated secured notes payable and revolving credit facility were as follows: Twelve months ending June 30: Including Maturity Extension Options (1) (In thousands) 2021 $ 769 2022 805 2023 580,842 2024 300,881 2025 838,322 Thereafter 2,981,273 Total future principal payments $ 4,702,892 ____________________________________________ (1) Some of our loan agreements require that we meet certain minimum financial thresholds to be able to extend the loan maturity. Loan Premium and Loan Costs Loan premium is net of accumulated amortization of $0.9 million and $0.5 million at June 30, 2020 and December 31, 2019, respectively. Deferred loan costs are net of accumulated amortization of $34.4 million and $30.7 million at June 30, 2020 and December 31, 2019, respectively. The table below presents loan premium and 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) 2020 2019 2020 2019 Loan premium amortized and written off $ (1,828) $ (51) $ (2,043) $ (102) Deferred loan costs amortized and written off 1,915 1,887 3,791 3,804 Loan costs expensed 965 576 965 576 Total $ 1,052 $ 2,412 $ 2,713 $ 4,278 |
Interest Payable, Accounts Paya
Interest Payable, Accounts Payable and Deferred Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Interest Payable, Accounts Payable and Deferred Revenue | Interest Payable, Accounts Payable and Deferred Revenue (In thousands) June 30, 2020 December 31, 2019 Interest payable $ 11,732 $ 11,707 Accounts payable and accrued liabilities 79,731 66,437 Deferred revenue 48,144 53,266 Total interest payable, accounts payable and deferred revenue $ 139,607 $ 131,410 |
Derivative Contracts
Derivative Contracts | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Contracts | Derivative Contracts We make use of interest rate swap 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. 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 Fund's debt that is hedged. Derivative Summary As of June 30, 2020, our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Fund, were designated as cash flow hedges: Number of Interest Rate Swaps Notional Consolidated derivatives (1)(2)(4)(5) 45 $ 5,517,400 Unconsolidated Fund's derivatives (3)(4)(5) 1 $ 110,000 ___________________________________________________ (1) The notional amount reflects 100%, not our pro-rata share, of our consolidated JVs' derivatives. (2) The notional amount includes: (a) swaps with a total initial notional amount of $120.0 million, that will increase to $1.18 billion in the future to replace existing swaps as they expire, and (b) forward swaps (swaps effective after June 30, 2020) with a total initial notional of $845.0 million, that will increase to $1.03 billion in the future to replace existing swaps as they expire. (3) The notional amount reflects 100%, not our pro-rata share, of our unconsolidated Fund's derivatives. (4) Our derivative contracts do not provide for right of offset between derivative contracts. (5) 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, 2020, there have been no events of default with respect to our interest rate swaps, our consolidated JVs' or our unconsolidated Fund's 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, was as follows: (In thousands) June 30, 2020 December 31, 2019 Consolidated derivatives (1) $ 271,726 $ 56,896 Unconsolidated Fund's derivatives (2) $ 613 $ — ___________________________________________________ (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 Fund's 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 counterparties with investment grade ratings. The fair value of our interest rate swap contract assets, including accrued interest and excluding credit risk adjustments, was as follows: (In thousands) June 30, 2020 December 31, 2019 Consolidated derivatives (1) $ — $ 23,275 Unconsolidated Fund's derivatives (2) $ — $ 963 ___________________________________________________ (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 Fund's 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, 2020 2019 Derivatives Designated as Cash Flow Hedges: Consolidated derivatives: Loss recorded in AOCI before reclassifications (1) $ (241,189) $ (89,483) Loss (gain) reclassified from AOCI to Interest Expense (1) $ 13,373 $ (17,284) Interest Expense presented in the consolidated statements of operations $ (70,610) $ (67,356) Unconsolidated Funds' derivatives (our share) (2) : Loss recorded in AOCI before reclassifications (1) $ (403) $ (6,928) Gain reclassified from AOCI to Income from unconsolidated Funds (1) $ (35) $ (1,226) Income from unconsolidated Funds presented in the consolidated statements of operations $ 183 $ 3,758 ___________________________________________________ (1) See Note 11 for our AOCI reconciliation. (2) We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund. Future Reclassifications from AOCI At June 30, 2020, 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: Losses to be reclassified from AOCI to Interest Expense $ (71,439) Unconsolidated Fund's derivative (our share) (1) : Losses to be reclassified from AOCI to Income (loss) from unconsolidated Funds $ (182) _________________________________________ (1) We calculate our share by multiplying the total amount for the Fund by our equity interest in the Fund. |
Equity
Equity | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Equity | Equity Transactions Six Months Ended June 30, 2020 During the six months ended June 30, 2020, (i) we acquired 5 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units, and (ii) we acquired 150 OP Units for $7 thousand in cash. Six Months Ended June 30, 2019 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, and (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. 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 owned 29.1 million OP Units and fully-vested LTIP Units, and represented approximately 14% of our Operating Partnership's total outstanding interests as of June 30, 2020 when we owned 175.4 millions OP Units (to match our 175.4 million shares of outstanding common stock). 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) 2020 2019 Net income attributable to common stockholders $ 28,953 $ 62,667 Transfers from noncontrolling interests: Exchange of OP Units with noncontrolling interests 90 1,223 Repurchase of OP Units from noncontrolling interests (4) (291) Net transfers from noncontrolling interests 86 932 Change from net income attributable to common stockholders and transfers from noncontrolling interests $ 29,039 $ 63,599 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) 2020 2019 Beginning balance $ (17,462) $ 53,944 Consolidated derivatives: Other comprehensive loss before reclassifications (241,189) (89,483) Reclassification of loss (gain) from AOCI to Interest Expense 13,373 (17,284) Unconsolidated Funds' derivatives (our share) (2) : Other comprehensive loss before reclassifications (403) (6,928) Reclassification of gain from AOCI to Income (loss) from unconsolidated Funds (35) (1,226) Net current period OCI (228,254) (114,921) OCI attributable to noncontrolling interests 66,245 35,124 OCI attributable to common stockholders (162,009) (79,797) Ending balance $ (179,471) $ (25,853) ___________________________________________________ (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, as amended (the "2016 Plan"), became effective after receiving stockholder approval, superseding our prior plan, the Douglas Emmett 2006 Omnibus Stock Incentive Plan (the "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. On May 28, 2020, our stockholders approved an amendment to the 2016 Plan to, among other things, increase the number of common shares for future awards by 9.5 million. The table below presents our stock-based compensation expense: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Stock-based compensation expense, net $ 2,812 $ 2,383 $ 5,753 $ 5,013 Capitalized stock-based compensation $ 751 $ 338 $ 1,610 $ 1,008 |
EPS
EPS | 6 Months Ended |
Jun. 30, 2020 | |
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 non-forfeitable 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, 2020 2019 2020 2019 Numerator (In thousands): Net income attributable to common stockholders $ 2,030 $ 33,966 $ 28,953 $ 62,667 Allocation to participating securities: Unvested LTIP Units (206) (139) (413) (265) Net income attributable to common stockholders - basic and diluted $ 1,824 $ 33,827 $ 28,540 $ 62,402 Denominator (In thousands): Weighted average shares of common stock outstanding - basic and diluted (2) 175,375 172,498 175,374 171,366 Net income per common share - basic and diluted $ 0.01 $ 0.20 $ 0.16 $ 0.36 ____________________________________________________ (1) Outstanding OP Units and vested LTIP Units are not included in the denominator in calculating diluted EPS, even though they may be exchanged under certain conditions for common stock on a one-for-one basis, because their associated net income (equal on a per unit basis to the Net income per common share - diluted) was already deducted in calculating Net income attributable to common stockholders. Accordingly, any exchange would not have any effect on diluted EPS. The table below presents the OP Units and vested LTIP Units outstanding for the respective periods: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 OP Units 28,293 26,283 28,294 26,311 Vested LTIP Units 808 1,830 803 1,830 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020, 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 includes 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, 2020 December 31, 2019 Fair value $ 4,724,042 $ 4,678,623 Carrying value $ 4,707,591 $ 4,653,264 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, 2020 December 31, 2019 Fair value $ 14,284 $ 12,218 Carrying value $ 10,877 $ 10,882 Financial instruments measured at fair value Derivative instruments: See Note 10 for the details of our derivatives. We present our derivatives in our consolidated balance sheets 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 non-performance 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, 2020 December 31, 2019 Derivative Assets: Fair value - consolidated derivatives (1) $ — $ 22,381 Fair value - unconsolidated Fund's derivatives (2) $ — $ 889 Derivative Liabilities: Fair value - consolidated derivatives (1) $ 259,293 $ 54,616 Fair value - unconsolidated Fund's derivatives (2) $ 543 $ — ____________________________________________________ (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) The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives. Our pro-rata share of the amounts related to the unconsolidated Fund's derivatives is included in our Investment in unconsolidated Funds in our consolidated balance sheets. See "Guarantees" in Note 16 regarding our unconsolidated Fund's debt and derivatives. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 2019 2020 2019 Office Segment Total office revenues $ 176,989 $ 202,189 $ 396,878 $ 399,479 Office expenses (60,301) (64,308) (129,965) (127,757) Office segment profit 116,688 137,881 266,913 271,722 Multifamily Segment Total multifamily revenues 30,807 28,345 62,268 55,241 Multifamily expenses (8,856) (7,712) (18,212) (15,267) Multifamily segment profit 21,951 20,633 44,056 39,974 Total profit from all segments $ 138,639 $ 158,514 $ 310,969 $ 311,696 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, 2020 2019 2020 2019 Total profit from all segments $ 138,639 $ 158,514 $ 310,969 $ 311,696 General and administrative expenses (9,863) (9,159) (20,198) (18,991) Depreciation and amortization (98,765) (78,724) (196,542) (158,597) Other income 325 2,892 2,314 5,790 Other expenses (478) (1,807) (1,874) (3,652) Income from unconsolidated Funds (140) 2,207 183 3,758 Interest expense (35,190) (34,063) (70,610) (67,356) Net (loss) income (5,472) 39,860 24,242 72,648 Less: Net loss (income) attributable to noncontrolling interests 7,502 (5,894) 4,711 (9,981) Net income attributable to common stockholders $ 2,030 $ 33,966 $ 28,953 $ 62,667 |
Future Minimum Lease Rental Rec
Future Minimum Lease Rental Receipts | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020: Twelve months ending June 30: (In thousands) 2021 $ 653,406 2022 567,690 2023 475,211 2024 372,942 2025 281,142 Thereafter 659,833 Total future minimum base rentals (1) $ 3,010,224 ___________________________________ (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, 2020 | |
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, 2020 and 2019, no tenant accounted for more than 10% of our total revenues. All of our properties, including the properties of our consolidated JVs and unconsolidated Fund, 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. Our swap contracts do not provide for right of offset between derivative contracts. 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 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 thirty-two buildings in our Consolidated Portfolio 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, 2020, the obligations to remove the asbestos from properties which are currently undergoing major renovations, or that we plan to renovate in the future, are not material to our consolidated financial statements. As of June 30, 2020, the obligations to remove the asbestos from our other properties have indeterminable settlement dates, and we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligations. 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 apartments in phases over a number of years as the office space is vacated. As of June 30, 2020, we had an aggregate remaining contractual commitment for these and other development projects of approximately $201.8 million. As of June 30, 2020, we had an aggregate remaining contractual commitment for repositionings, capital expenditure projects and tenant improvements of approximately $11.4 million. Guarantees We have made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve- outs for our unconsolidated Fund's debt. We have also guaranteed the related swap. Our Fund has agreed to indemnify us for any amounts that we would be required to pay under these agreements. As of June 30, 2020, 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 Fund's debt as of June 30, 2020. The amounts reflect 100%, not our pro-rata share, of the amounts related to our Fund: Fund (1) Loan Maturity Date Principal Balance Variable Interest Rate Swap Fixed Interest Rate Swap Maturity Date Partnership X (2)(3) 3/1/2023 $ 110.0 LIBOR + 1.40% 2.30% 3/1/2021 ___________________________________________________ (1) See Note 6 for more information regarding our unconsolidated Fund. (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, 2020, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $0.7 million. (3) Loan agreement includes a zero-percent LIBOR floor. The corresponding swap does not include such a floor. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated 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. We consolidate entities in which we are considered to be the primary beneficiary of a VIE or have a majority of the voting interest of the entity. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of that VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We do not consolidate entities in which the other parties have substantive kick-out rights to remove our power to direct the activities, most significantly impacting the economic performance, of that VIE. In determining whether we are the primary beneficiary, we consider factors such as ownership interest, management representation, authority to control decisions, and contractual and substantive participating rights of each party. We consolidate our Operating Partnership through which we conduct substantially all of our business, and own, directly and through subsidiaries, substantially all of our assets, and are obligated to repay substantially all of our liabilities, including $3.11 billion of consolidated debt. See Note 8. We also consolidate four JVs. As of June 30, 2020, these consolidated entities had aggregate total consolidated assets of $9.27 billion (of which $8.88 billion related to investment in real estate), aggregate total consolidated liabilities of $5.23 billion (of which $4.67 billion related to debt), and aggregate total consolidated equity of $4.04 billion (of which $1.56 billion related to noncontrolling interests). |
Use of Estimates | Use of Estimates The preparation of consolidated 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 Rental revenues and tenant recoveries We account for our rental revenues and tenant recoveries in accordance with Topic 842 "Leases". Rental revenues and tenant recoveries are included in: (i) Rental revenues and tenant recoveries under Office rental, and (ii) Rental revenues under Multifamily rental, in our consolidated statements of operations. In accordance with Topic 842, we perform an assessment as to whether or not substantially all of the amounts due under a tenant’s lease agreement is deemed probable of collection. This assessment involves using a methodology that requires judgment and estimates about matters that are uncertain at the time the estimates are made, including tenant specific factors, specific industry conditions, and general economic trends and conditions. For leases where we have concluded it is probable that we will collect substantially all the lease payments due under those leases, we continue to record lease income on a straight-line basis over the lease term. For leases where we have concluded that it is not probable that we will collect substantially all the lease payments due under those leases, we limit the lease income to the lesser of the income recognized on a straight-line basis or cash basis. If our conclusion of collectibility changes, we will record the difference between the lease income that would have been recognized on a straight-line basis and cash basis as a current-period adjustment to rental revenues and tenant recoveries. We write-off tenant receivables and deferred rent receivables as a charge against rental revenues and tenant recoveries in the period we conclude that substantially all of the lease payments are not probable of collection. If we subsequently collect amounts that were previously written off then the amounts collected are recorded as an increase to our rental revenues and tenant recoveries. Charges for uncollectible amounts, related to tenant receivables and deferred rent receivables, which for the three and six months ended June 30, 2020 were primarily due to the impact of the COVID-19 pandemic, reduced our rental revenues and tenant recoveries by $29.8 million and $1.0 million for the three months ended June 30, 2020 and 2019, and $35.0 million and $3.4 million for the six months ended June 30, 2020 and 2019, respectively. Office parking revenues We account for our office parking revenues in accordance with ASC 606 "Revenue from Contracts with Customers". Office parking revenues are included in Parking and other income under Office rental in our consolidated statements of operations. 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 |
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 consolidated financial statements. ASUs Adopted ASU 2016-13 (Topic 326 - "Financial Instruments-Credit Losses") In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments", which amends "Financial Instruments-Credit Losses" (Topic 326). The ASU provides guidance for measuring credit losses on financial instruments. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, which for us was the first quarter of 2020. The amendments in the ASU should be applied on a modified-retrospective basis. The ASU impacts our measurement of credit losses for our Office parking receivables, which were $0.4 million and $1.3 million as of June 30, 2020 and December 31, 2019, respectively, and are included in Tenant receivables in our consolidated balance sheets. We adopted the ASU in the first quarter of 2020 and it did not have a material impact on our consolidated financial statements. ASU 2020-04 (Topic 848 - "Reference Rate Reform") In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform", which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The practical expedients are optional and may be elected over time as reference rate reform activities occur. We elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the ASU and may apply other elections, as applicable, as additional changes in the market occur. Our election to apply the hedge accounting expedients in the first quarter of 2020 did not have a material impact on our consolidated financial statements. Other Pronouncements FASB COVID-19 Lease Modification Accounting Relief In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under the existing lease accounting guidance, we would be required to determine on a lease-by-lease basis if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows us, if certain criteria are met, to bypass the lease-by-lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. We will avail ourselves of the election to avoid performing a lease-by-lease analysis. The Lease Modification Q&A did not have material impact on our consolidated financial statements; however, its impact on our future consolidated financial statements is dependent upon the extent of any lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by us at the time of entering into such concessions. FASB COVID-19 Cash Flow Hedge Accounting Relief In April 2020, the FASB staff issued a question and answer document (the “Cash Flow Hedge Accounting Q&A”) on the application of cash flow hedge accounting guidance to cash flow hedges impacted by the COVID-19 pandemic. The Cash Flow Hedge Accounting Q&A clarifies that: (i) when cash flow hedge accounting has been discontinued, the delays in the timing of the forecasted transactions related to the impact of the COVID-19 pandemic may be considered rare cases caused by extenuating circumstances outside the control or influence of an entity, thereby allowing amounts deferred in AOCI to remain in AOCI until the forecasted transaction affects earnings, and (ii) missed forecasts, related to the effects of the COVID-19 pandemic, do not need to be considered when determining whether the entity has exhibited a pattern of missing forecasts that would call into question the entity’s ability to accurately predict forecasted transactions and the propriety of using cash flow hedge accounting in the future for similar transactions. The Cash Flow Hedge Accounting Q&A did not have material impact on our consolidated financial statements; however, its impact on our future consolidated financial statements is dependent upon our cash flow hedge forecasted transactions being impacted by the COVID-19 pandemic in future periods. |
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. |
Overview (Tables)
Overview (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Real Estate Properties | As of June 30, 2020, our portfolio (not including two parcels of land from which we receive rent under ground leases), consisted of the following properties (including ancillary retail space): Consolidated Portfolio Total Office Wholly-owned properties 53 53 Consolidated JV properties 17 17 Unconsolidated Fund properties — 2 70 72 Multifamily Wholly-owned properties 11 11 Consolidated JV properties 1 1 12 12 Total 82 84 |
Investment in Real Estate (Tabl
Investment in Real Estate (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Asset Acquisition [Abstract] | |
Schedule of Purchase Price Allocation for Acquisition | 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, 2019 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, 2020 | |
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, 2020: Twelve months ending June 30: (In thousands) 2021 $ 733 2022 733 2023 733 2024 733 2025 733 Thereafter 45,078 Total future minimum lease payments $ 48,743 |
Acquired Lease Intangibles (Tab
Acquired Lease Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Acquired Lease Intangibles | Summary of our Acquired Lease Intangibles (In thousands) June 30, 2020 December 31, 2019 Above-market tenant leases $ 7,045 $ 7,220 Above-market tenant leases - accumulated amortization (2,228) (1,741) Above-market ground lease where we are the lessor 1,152 1,152 Above-market ground lease - accumulated amortization (233) (224) Acquired lease intangible assets, net $ 5,736 $ 6,407 Below-market tenant leases $ 98,979 $ 102,583 Below-market tenant leases - accumulated accretion (55,853) (50,216) Acquired lease intangible liabilities, net $ 43,126 $ 52,367 |
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) 2020 2019 2020 2019 Net accretion of above- and below-market tenant lease assets and liabilities (1) $ 4,320 $ 4,400 $ 8,579 $ 8,524 Amortization of an above-market ground lease asset (2) (5) (4) (8) (8) Total $ 4,315 $ 4,396 $ 8,571 $ 8,516 ______________________________________________ (1) Recorded as a net increase to office and multifamily rental revenues. (2) Recorded as a decrease to office parking and other income. |
Investments in Unconsolidated_2
Investments in Unconsolidated Funds (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Real Estate Investments, Net [Abstract] | |
Summary of Statement of Operations for Investments in Unconsolidated Funds and Cash Received from Funds | The table below presents cash distributions we received from our Funds: Six Months Ended June 30, (In thousands) 2020 2019 Operating distributions received (1) $ 394 $ 3,756 Capital distributions received (1) 548 3,869 Total distributions received (1) $ 942 $ 7,625 _________________________________________________ (1) The distributions are not directly comparable to the prior period; the distributions during the six months ended June 30, 2020 reflect distributions only from Partnership X, whereas the distributions during the six months ended June 30, 2019 reflect distributions from the Opportunity Fund, Fund X and Partnership X. The tables below present selected financial information for the Funds. 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, 2020 December 31, 2019 Total assets (1) $ 134,245 $ 136,479 Total liabilities (1) $ 113,592 $ 113,330 Total equity (1) $ 20,653 $ 23,149 ______________________________________________ (1) The balances reflect the financial position of Partnership X. Six Months Ended June 30, (In thousands) 2020 2019 Total revenues (1) $ 7,597 $ 41,174 Operating income (1) $ 1,686 $ 11,961 Net income (1) $ 372 $ 3,815 ______________________________________________ (1) The results of operations are not directly comparable to the prior period; the balances for the six months ended June 30, 2020 reflect only the operations of Partnership X, whereas the balances for the six months ended June 30, 2019 reflect the combined operations of the Opportunity Fund, Fund X and Partnership X. |
Other Assets (Tables)
Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Assets [Abstract] | |
Schedule of Other Assets | (In thousands) June 30, 2020 December 31, 2019 Restricted cash $ 121 $ 121 Prepaid expenses 3,632 8,711 Other indefinite-lived intangibles 1,988 1,988 Furniture, fixtures and equipment, net 2,532 2,368 Other 5,613 3,233 Total other assets $ 13,886 $ 16,421 |
Secured Notes Payable and Rev_2
Secured Notes Payable and Revolving Credit Facility, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Secured Notes Payable and Revolving Credit Facility | Description Maturity Date (1) Principal Balance as of June 30, 2020 Principal Balance as of December 31, 2019 Variable Interest Rate Fixed Interest Rate (2) Swap Maturity Date (In thousands) Consolidated Wholly Owned Subsidiaries Term loan (3) 1/1/2024 $ 300,000 $ 300,000 LIBOR + 1.55% 3.46% 1/1/2022 Term loan (3) 3/3/2025 335,000 335,000 LIBOR + 1.30% 3.84% 3/1/2023 Fannie Mae loan (3) 4/1/2025 102,400 102,400 LIBOR + 1.25% 2.76% 3/1/2023 Term loan (3) 8/15/2026 415,000 415,000 LIBOR + 1.10% 3.07% 8/1/2025 Term loan (3) 9/19/2026 400,000 400,000 LIBOR + 1.15% 2.44% 9/1/2024 Term loan (3)(4) 9/26/2026 200,000 200,000 LIBOR + 1.20% 2.77% 10/1/2024 Term loan (3)(5) 11/1/2026 400,000 400,000 LIBOR + 1.15% 2.18% 10/1/2024 Fannie Mae loan (3) 6/1/2027 550,000 550,000 LIBOR + 1.37% 3.16% 6/1/2022 Fannie Mae loan (3) 6/1/2029 255,000 255,000 LIBOR + 0.98% 3.26% 6/1/2027 Fannie Mae loan (3)(6) 6/1/2029 125,000 125,000 LIBOR + 0.98% 2.55% 6/1/2027 Term loan (7) 6/1/2038 30,492 30,864 N/A 4.55% N/A Revolving credit facility (8) 8/21/2023 — — LIBOR + 1.15% N/A N/A Total Wholly Owned Subsidiary Debt 3,112,892 3,113,264 Consolidated JVs Term loan (9) — — 400,000 — — — Term loan (3) 2/28/2023 580,000 580,000 LIBOR + 1.40% 2.37% 3/1/2021 Term loan (3) 12/19/2024 400,000 400,000 LIBOR + 1.30% 3.47% 1/1/2023 Term loan (3)(10) 5/15/2027 450,000 — LIBOR + 1.35% 3.04% 4/1/2025 Term loan (3) 6/1/2029 160,000 160,000 LIBOR + 0.98% 3.25% 7/1/2027 Total Consolidated Debt (11) 4,702,892 4,653,264 Unamortized loan premium, net 4,699 6,741 Unamortized deferred loan costs, net (40,988) (40,947) Total Consolidated Debt, net $ 4,666,603 $ 4,619,058 _______________________________________________________________________ Except as noted below, our loans and revolving credit facility: (i) are non-recourse, (ii) are secured by separate collateral pools consisting of one or more properties, (iii) require interest-only monthly payments with the outstanding principal due upon maturity, and (iv) contain certain financial covenants which could require us to deposit excess cash flow with the lender under certain circumstances unless we (at our option) either provide a guarantee or additional collateral or pay down the loan within certain parameters set forth in the loan documents. Certain loans with maturity date extensions require us to meet minimum financial thresholds in order to exercise those extensions. (1) Maturity dates include the effect of extension options. (2) Effective rate as of June 30, 2020. 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) The loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor. (4) Effective rate will decrease to 2.36% on July 1, 2020. (5) Effective rate will increase to 2.31% on July 1, 2021. (6) Effective rate will increase to 3.25% on December 1, 2020. (7) Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule. (8) $400 million revolving credit facility. Unused commitment fees range from 0.10% to 0.15%. The loan agreement includes a zero-percent LIBOR floor. (9) We paid this loan off during the second quarter. (10) We closed this loan during the second quarter. The effective rate will decrease to 2.26% on July 1, 2022 (11) The table does not include our unconsolidated Fund's loan - see Note 16. See Note 13 for our fair value disclosures. Debt Statistics The table below summarizes our consolidated fixed and floating rate debt: (In thousands) Principal Balance as of June 30, 2020 Principal Balance as of December 31, 2019 Aggregate swapped to fixed rate loans $ 4,672,400 $ 4,622,400 Aggregate fixed rate loans 30,492 30,864 Total Debt $ 4,702,892 $ 4,653,264 The table below summarizes certain consolidated debt statistics as of June 30, 2020: Statistics for consolidated loans with interest fixed under the terms of the loan or a swap Principal balance (in billions) $4.70 Weighted average remaining life (including extension options) 5.9 years Weighted average remaining fixed interest period 3.6 years Weighted average annual interest rate 3.02% |
Schedule of Future Minimum Principal Payments Due on Secured Notes Payable and Revolving Credit Facility | At June 30, 2020, the minimum future principal payments due on our consolidated secured notes payable and revolving credit facility were as follows: Twelve months ending June 30: Including Maturity Extension Options (1) (In thousands) 2021 $ 769 2022 805 2023 580,842 2024 300,881 2025 838,322 Thereafter 2,981,273 Total future principal payments $ 4,702,892 ____________________________________________ (1) Some of our loan agreements 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 premium and 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) 2020 2019 2020 2019 Loan premium amortized and written off $ (1,828) $ (51) $ (2,043) $ (102) Deferred loan costs amortized and written off 1,915 1,887 3,791 3,804 Loan costs expensed 965 576 965 576 Total $ 1,052 $ 2,412 $ 2,713 $ 4,278 |
Interest Payable, Accounts Pa_2
Interest Payable, Accounts Payable and Deferred Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of Interest Payable, Accounts Payable and Deferred Revenue | (In thousands) June 30, 2020 December 31, 2019 Interest payable $ 11,732 $ 11,707 Accounts payable and accrued liabilities 79,731 66,437 Deferred revenue 48,144 53,266 Total interest payable, accounts payable and deferred revenue $ 139,607 $ 131,410 |
Derivative Contracts (Tables)
Derivative Contracts (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Swap Derivatives | As of June 30, 2020, our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Fund, were designated as cash flow hedges: Number of Interest Rate Swaps Notional Consolidated derivatives (1)(2)(4)(5) 45 $ 5,517,400 Unconsolidated Fund's derivatives (3)(4)(5) 1 $ 110,000 ___________________________________________________ (1) The notional amount reflects 100%, not our pro-rata share, of our consolidated JVs' derivatives. (2) The notional amount includes: (a) swaps with a total initial notional amount of $120.0 million, that will increase to $1.18 billion in the future to replace existing swaps as they expire, and (b) forward swaps (swaps effective after June 30, 2020) with a total initial notional of $845.0 million, that will increase to $1.03 billion in the future to replace existing swaps as they expire. (3) The notional amount reflects 100%, not our pro-rata share, of our unconsolidated Fund's derivatives. (4) Our derivative contracts do not provide for right of offset between derivative contracts. (5) 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, was as follows: (In thousands) June 30, 2020 December 31, 2019 Consolidated derivatives (1) $ 271,726 $ 56,896 Unconsolidated Fund's derivatives (2) $ 613 $ — ___________________________________________________ (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 Fund's 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, was as follows: (In thousands) June 30, 2020 December 31, 2019 Consolidated derivatives (1) $ — $ 23,275 Unconsolidated Fund's derivatives (2) $ — $ 963 ___________________________________________________ (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 Fund's 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, 2020 2019 Derivatives Designated as Cash Flow Hedges: Consolidated derivatives: Loss recorded in AOCI before reclassifications (1) $ (241,189) $ (89,483) Loss (gain) reclassified from AOCI to Interest Expense (1) $ 13,373 $ (17,284) Interest Expense presented in the consolidated statements of operations $ (70,610) $ (67,356) Unconsolidated Funds' derivatives (our share) (2) : Loss recorded in AOCI before reclassifications (1) $ (403) $ (6,928) Gain reclassified from AOCI to Income from unconsolidated Funds (1) $ (35) $ (1,226) Income from unconsolidated Funds presented in the consolidated statements of operations $ 183 $ 3,758 ___________________________________________________ (1) See Note 11 for our AOCI reconciliation. (2) We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund. |
Schedule of Future Reclassifications from AOCI | At June 30, 2020, 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: Losses to be reclassified from AOCI to Interest Expense $ (71,439) Unconsolidated Fund's derivative (our share) (1) : Losses to be reclassified from AOCI to Income (loss) from unconsolidated Funds $ (182) _________________________________________ |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of 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) 2020 2019 Net income attributable to common stockholders $ 28,953 $ 62,667 Transfers from noncontrolling interests: Exchange of OP Units with noncontrolling interests 90 1,223 Repurchase of OP Units from noncontrolling interests (4) (291) Net transfers from noncontrolling interests 86 932 Change from net income attributable to common stockholders and transfers from noncontrolling interests $ 29,039 $ 63,599 |
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) 2020 2019 Beginning balance $ (17,462) $ 53,944 Consolidated derivatives: Other comprehensive loss before reclassifications (241,189) (89,483) Reclassification of loss (gain) from AOCI to Interest Expense 13,373 (17,284) Unconsolidated Funds' derivatives (our share) (2) : Other comprehensive loss before reclassifications (403) (6,928) Reclassification of gain from AOCI to Income (loss) from unconsolidated Funds (35) (1,226) Net current period OCI (228,254) (114,921) OCI attributable to noncontrolling interests 66,245 35,124 OCI attributable to common stockholders (162,009) (79,797) Ending balance $ (179,471) $ (25,853) ___________________________________________________ (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. |
Schedule of Stock-based Compensation Expense | The table below presents our stock-based compensation expense: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 Stock-based compensation expense, net $ 2,812 $ 2,383 $ 5,753 $ 5,013 Capitalized stock-based compensation $ 751 $ 338 $ 1,610 $ 1,008 |
EPS (Tables)
EPS (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 2019 2020 2019 Numerator (In thousands): Net income attributable to common stockholders $ 2,030 $ 33,966 $ 28,953 $ 62,667 Allocation to participating securities: Unvested LTIP Units (206) (139) (413) (265) Net income attributable to common stockholders - basic and diluted $ 1,824 $ 33,827 $ 28,540 $ 62,402 Denominator (In thousands): Weighted average shares of common stock outstanding - basic and diluted (2) 175,375 172,498 175,374 171,366 Net income per common share - basic and diluted $ 0.01 $ 0.20 $ 0.16 $ 0.36 ____________________________________________________ (1) Outstanding OP Units and vested LTIP Units are not included in the denominator in calculating diluted EPS, even though they may be exchanged under certain conditions for common stock on a one-for-one basis, because their associated net income (equal on a per unit basis to the Net income per common share - diluted) was already deducted in calculating Net income attributable to common stockholders. Accordingly, any exchange would not have any effect on diluted EPS. The table below presents the OP Units and vested LTIP Units outstanding for the respective periods: Three Months Ended June 30, Six Months Ended June 30, (In thousands) 2020 2019 2020 2019 OP Units 28,293 26,283 28,294 26,311 Vested LTIP Units 808 1,830 803 1,830 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 December 31, 2019 Fair value $ 4,724,042 $ 4,678,623 Carrying value $ 4,707,591 $ 4,653,264 (In thousands) June 30, 2020 December 31, 2019 Fair value $ 14,284 $ 12,218 Carrying value $ 10,877 $ 10,882 |
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, 2020 December 31, 2019 Derivative Assets: Fair value - consolidated derivatives (1) $ — $ 22,381 Fair value - unconsolidated Fund's derivatives (2) $ — $ 889 Derivative Liabilities: Fair value - consolidated derivatives (1) $ 259,293 $ 54,616 Fair value - unconsolidated Fund's derivatives (2) $ 543 $ — ____________________________________________________ (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) The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives. Our pro-rata share of the amounts related to the unconsolidated Fund's derivatives is included in our Investment in unconsolidated Funds in our consolidated balance sheets. See "Guarantees" in Note 16 regarding our unconsolidated Fund's debt and derivatives. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020 2019 2020 2019 Office Segment Total office revenues $ 176,989 $ 202,189 $ 396,878 $ 399,479 Office expenses (60,301) (64,308) (129,965) (127,757) Office segment profit 116,688 137,881 266,913 271,722 Multifamily Segment Total multifamily revenues 30,807 28,345 62,268 55,241 Multifamily expenses (8,856) (7,712) (18,212) (15,267) Multifamily segment profit 21,951 20,633 44,056 39,974 Total profit from all segments $ 138,639 $ 158,514 $ 310,969 $ 311,696 |
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, 2020 2019 2020 2019 Total profit from all segments $ 138,639 $ 158,514 $ 310,969 $ 311,696 General and administrative expenses (9,863) (9,159) (20,198) (18,991) Depreciation and amortization (98,765) (78,724) (196,542) (158,597) Other income 325 2,892 2,314 5,790 Other expenses (478) (1,807) (1,874) (3,652) Income from unconsolidated Funds (140) 2,207 183 3,758 Interest expense (35,190) (34,063) (70,610) (67,356) Net (loss) income (5,472) 39,860 24,242 72,648 Less: Net loss (income) attributable to noncontrolling interests 7,502 (5,894) 4,711 (9,981) Net income attributable to common stockholders $ 2,030 $ 33,966 $ 28,953 $ 62,667 |
Future Minimum Lease Rental R_2
Future Minimum Lease Rental Receipts (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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, 2020: Twelve months ending June 30: (In thousands) 2021 $ 653,406 2022 567,690 2023 475,211 2024 372,942 2025 281,142 Thereafter 659,833 Total future minimum base rentals (1) $ 3,010,224 ___________________________________ (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, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Debt Related to Unconsolidated Funds | The table below summarizes our Fund's debt as of June 30, 2020. The amounts reflect 100%, not our pro-rata share, of the amounts related to our Fund: Fund (1) Loan Maturity Date Principal Balance Variable Interest Rate Swap Fixed Interest Rate Swap Maturity Date Partnership X (2)(3) 3/1/2023 $ 110.0 LIBOR + 1.40% 2.30% 3/1/2021 ___________________________________________________ (1) See Note 6 for more information regarding our unconsolidated Fund. (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, 2020, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $0.7 million. (3) Loan agreement includes a zero-percent LIBOR floor. The corresponding swap does not include such a floor. |
Overview - Narrative (Details)
Overview - Narrative (Details) $ in Thousands, ft² in Millions | Jun. 30, 2020USD ($)ft²land_parceljoint_ventureunit | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019USD ($)ft² | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Real Estate Properties [Line Items] | ||||||
Consolidated debt | $ 4,702,892 | $ 4,653,264 | ||||
Number of joint ventures consolidated | joint_venture | 4 | |||||
Consolidated assets | $ 9,271,377 | 9,349,301 | ||||
Consolidated investment in real estate | 8,884,939 | 8,960,218 | ||||
Consolidated liabilities | 5,227,038 | 4,978,367 | ||||
Consolidated liabilities related to debt | 4,666,603 | 4,619,058 | ||||
Consolidated equity | 4,044,339 | $ 4,129,707 | 4,370,934 | $ 4,052,360 | $ 3,788,182 | $ 3,848,430 |
Consolidated equity related to noncontrolling interest | $ 1,563,362 | 1,658,862 | ||||
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 | 17.9 | |||||
Wholly owned and Consolidated properties | Multifamily | ||||||
Real Estate Properties [Line Items] | ||||||
Number of multifamily apartment units | unit | 4,209 | |||||
Unconsolidated Fund properties | Office | ||||||
Real Estate Properties [Line Items] | ||||||
Area of real estate portfolio (sq ft) | ft² | 0.4 | 1.8 | ||||
Subsidiaries | ||||||
Real Estate Properties [Line Items] | ||||||
Consolidated debt | $ 3,112,892 | $ 3,113,264 | ||||
Consolidated entities | ||||||
Real Estate Properties [Line Items] | ||||||
Consolidated assets | 9,270,000 | |||||
Consolidated investment in real estate | 8,880,000 | |||||
Consolidated liabilities | 5,230,000 | |||||
Consolidated liabilities related to debt | 4,670,000 | |||||
Consolidated equity | 4,040,000 | |||||
Consolidated equity related to noncontrolling interest | $ 1,560,000 |
Overview - Schedule of Properti
Overview - Schedule of Properties Portfolio (Details) - property | Jun. 30, 2020 | Jun. 30, 2019 |
Real Estate Properties [Line Items] | ||
Number of properties | 84 | |
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 | 17 | |
Office | Unconsolidated Fund properties | ||
Real Estate Properties [Line Items] | ||
Number of properties | 2 | 8 |
Multifamily | ||
Real Estate Properties [Line Items] | ||
Number of properties | 12 | |
Multifamily | Wholly-owned properties | ||
Real Estate Properties [Line Items] | ||
Number of properties | 11 | |
Multifamily | Consolidated JV properties | ||
Real Estate Properties [Line Items] | ||
Number of properties | 1 | |
Consolidated Portfolio | ||
Real Estate Properties [Line Items] | ||
Number of properties | 82 | |
Consolidated Portfolio | Office | ||
Real Estate Properties [Line Items] | ||
Number of properties | 70 | |
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 | 17 | |
Consolidated Portfolio | Office | Unconsolidated Fund properties | ||
Real Estate Properties [Line Items] | ||
Number of properties | 0 | |
Consolidated Portfolio | Multifamily | ||
Real Estate Properties [Line Items] | ||
Number of properties | 12 | |
Consolidated Portfolio | Multifamily | Wholly-owned properties | ||
Real Estate Properties [Line Items] | ||
Number of properties | 11 | |
Consolidated Portfolio | Multifamily | Consolidated JV properties | ||
Real Estate Properties [Line Items] | ||
Number of properties | 1 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||||
Charge for uncollectible amounts | $ 29.8 | $ 1 | $ 35 | $ 3.4 | |
Office parking revenue | 14.7 | $ 26.9 | 44.9 | $ 53.3 | |
Office parking receivables | $ 0.4 | $ 0.4 | $ 1.3 | ||
Revenue type | us-gaap:ParkingMember | us-gaap:ParkingMember | us-gaap:ParkingMember | us-gaap:ParkingMember |
Investment in Real Estate - Pur
Investment in Real Estate - Purchase Price Allocation for Acquisitions (Details) ft² in Thousands, $ in Thousands | Jun. 28, 2019 | Jun. 07, 2019USD ($)ft²unit |
Schedule Of Asset Acquisitions [Line Items] | ||
Contract price | $ 365,100 | |
The Glendon | ||
Schedule Of Asset Acquisitions [Line Items] | ||
Contract price | $ 365,100 | |
Number of multifamily units | unit | 350 | |
Square footage (sq ft) | ft² | 50 | |
Investment in real estate: | ||
Tenant improvements and lease intangibles | $ 2,301 | |
Acquired above- and below-market leases, net | (2,114) | |
Net assets and liabilities acquired | 366,584 | |
The Glendon | Land | ||
Investment in real estate: | ||
Land, Buildings and improvements | 32,773 | |
The Glendon | Buildings and improvements | ||
Investment in real estate: | ||
Land, Buildings and improvements | $ 333,624 | |
Consolidated JV | ||
Schedule Of Asset Acquisitions [Line Items] | ||
Capital interest in consolidated JV (percent) | 20.00% | |
Consolidated JV | The Glendon | ||
Schedule Of Asset Acquisitions [Line Items] | ||
Capital interest in consolidated JV (percent) | 20.00% |
Ground Lease - Narrative (Detai
Ground Lease - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Lessee Disclosure [Abstract] | |||||
Fixed rent payments due per year on ground lease | $ 733 | $ 733 | |||
Ground lease right-of-use asset | 7,475 | 7,475 | $ 7,479 | ||
Ground lease liability | 10,877 | 10,877 | $ 10,882 | ||
Ground rent expense | $ 183 | $ 183 | $ 365 | $ 363 |
Ground Lease - Future Minimum G
Ground Lease - Future Minimum Ground Lease Payments (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Future minimum ground lease payments for twelve months ending June 30: | |
2021 | $ 733 |
2022 | 733 |
2023 | 733 |
2024 | 733 |
2025 | 733 |
Thereafter | 45,078 |
Total future minimum lease payments | $ 48,743 |
Acquired Lease Intangibles - Su
Acquired Lease Intangibles - Summary of Acquired Lease Intangibles (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Acquired lease intangible assets, net | $ 5,736 | $ 6,407 |
Acquired lease intangible liabilities, net | 43,126 | 52,367 |
Above Market Tenant Leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Off-market lease, assets | 7,045 | 7,220 |
Accumulated amortization | (2,228) | (1,741) |
Above Market Ground Leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Off-market lease, assets | 1,152 | 1,152 |
Accumulated amortization | (233) | (224) |
Below Market Tenant Leases | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Below-market tenant leases | 98,979 | 102,583 |
Below-market tenant leases - accumulated accretion | $ (55,853) | $ (50,216) |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization/accretion of above/below-market leases | $ 4,315 | $ 4,396 | $ 8,571 | $ 8,516 |
Rental revenues | Tenant Lease | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization/accretion of above/below-market leases | 4,320 | 4,400 | 8,579 | 8,524 |
Office parking and other income | Above Market Ground Leases | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Amortization/accretion of above/below-market leases | $ (5) | $ (4) | $ (8) | $ (8) |
Investments in Unconsolidated_3
Investments in Unconsolidated Funds - Narrative (Details) $ in Thousands, ft² in Millions | 6 Months Ended | |
Jun. 30, 2020USD ($)ft²property | Jun. 30, 2019USD ($)ft²fundproperty | |
Schedule of Equity Method Investments [Line Items] | ||
Number of properties | 84 | |
Acquisition of additional interests in unconsolidated Fund | $ | $ 6,591 | $ 7,518 |
Percentage of amounts related to the Fund | 100.00% | |
Partnership X | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interest of the Fund (percent) | 33.50% | 24.60% |
Purchase of additional equity interest (percent) | 3.60% | |
Acquisition of additional interests in unconsolidated Fund | $ | $ 6,600 | |
Opportunity Fund | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interest of the Fund (percent) | 6.20% | |
Fund X | ||
Schedule of Equity Method Investments [Line Items] | ||
Equity interest of the Fund (percent) | 72.70% | |
Purchase of additional equity interest (percent) | 1.40% | |
Unconsolidated Fund properties | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of unconsolidated Funds owned and managed | fund | 3 | |
Office Buildings | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of properties | 72 | |
Office Buildings | Unconsolidated Fund properties | ||
Schedule of Equity Method Investments [Line Items] | ||
Number of properties | 2 | 8 |
Area of real estate portfolio (sq ft) | ft² | 0.4 | 1.8 |
Investments in Unconsolidated_4
Investments in Unconsolidated Funds - Summary of Cash Distributions Received from Funds (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Real Estate Investments, Net [Abstract] | ||
Operating distributions received | $ 394 | $ 3,756 |
Capital distributions received | 548 | 3,869 |
Total distributions received | $ 942 | $ 7,625 |
Investments in Unconsolidated_5
Investments in Unconsolidated Funds - Selected Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Balance Sheet | |||||
Total assets | $ 9,271,377 | $ 9,271,377 | $ 9,349,301 | ||
Total liabilities | 5,227,038 | 5,227,038 | 4,978,367 | ||
Total equity | 2,480,977 | 2,480,977 | 2,712,072 | ||
Statement of Operations | |||||
Total revenues | 207,796 | $ 230,534 | 459,146 | $ 454,720 | |
Operating income | 30,011 | 70,631 | 94,229 | 134,108 | |
Net income | 2,030 | $ 33,966 | 28,953 | 62,667 | |
Unconsolidated Funds | |||||
Balance Sheet | |||||
Total assets | 134,245 | 134,245 | 136,479 | ||
Total liabilities | 113,592 | 113,592 | 113,330 | ||
Total equity | $ 20,653 | 20,653 | $ 23,149 | ||
Statement of Operations | |||||
Total revenues | 7,597 | 41,174 | |||
Operating income | 1,686 | 11,961 | |||
Net income | $ 372 | $ 3,815 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Other Assets [Abstract] | ||
Restricted cash | $ 121 | $ 121 |
Prepaid expenses | 3,632 | 8,711 |
Other indefinite-lived intangibles | 1,988 | 1,988 |
Furniture, fixtures and equipment, net | 2,532 | 2,368 |
Other | 5,613 | 3,233 |
Total other assets | $ 13,886 | $ 16,421 |
Secured Notes Payable and Rev_3
Secured Notes Payable and Revolving Credit Facility, Net - Schedule of Secured Notes Payable and Revolving Credit Facility (Details) $ in Thousands | 6 Months Ended | |||||
Jun. 30, 2020USD ($)property | Jul. 01, 2022 | Jul. 01, 2021 | Dec. 01, 2020 | Jul. 01, 2020 | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||||||
Principal balance | $ 4,702,892 | $ 4,653,264 | ||||
Unamortized loan premium, net | 4,699 | 6,741 | ||||
Unamortized deferred loan costs, net | (40,988) | (40,947) | ||||
Secured notes payable and revolving credit facility, net | $ 4,666,603 | 4,619,058 | ||||
Minimum number of separate collateral pools used to secure loans | property | 1 | |||||
Secured Debt | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Loan agreement LIBOR floor | 0.00% | |||||
Secured Debt | Term Loan at 4.55% Jun 01 2038 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amortization period (in years) | 30 years | |||||
Wholly Owned Subsidiaries | ||||||
Debt Instrument [Line Items] | ||||||
Principal balance | $ 3,112,892 | 3,113,264 | ||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.46% Jan 01 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Jan. 1, 2024 | |||||
Principal balance | $ 300,000 | 300,000 | ||||
Fixed interest rate | 3.46% | |||||
Swap Maturity Date | Jan. 1, 2022 | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.46% Jan 01 2024 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.55% | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.84% Mar 03 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Mar. 3, 2025 | |||||
Principal balance | $ 335,000 | 335,000 | ||||
Fixed interest rate | 3.84% | |||||
Swap Maturity Date | Mar. 1, 2023 | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.84% Mar 03 2025 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.30% | |||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 2.76% Apr 01 2025 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Apr. 1, 2025 | |||||
Principal balance | $ 102,400 | 102,400 | ||||
Fixed interest rate | 2.76% | |||||
Swap Maturity Date | Mar. 1, 2023 | |||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 2.76% Apr 01 2025 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.25% | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.07% Aug 15 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Aug. 15, 2026 | |||||
Principal balance | $ 415,000 | 415,000 | ||||
Fixed interest rate | 3.07% | |||||
Swap Maturity Date | Aug. 1, 2025 | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.07% Aug 15 2026 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.10% | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.44% Sep 19 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Sep. 19, 2026 | |||||
Principal balance | $ 400,000 | 400,000 | ||||
Fixed interest rate | 2.44% | |||||
Swap Maturity Date | Sep. 1, 2024 | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.44% Sep 19 2026 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.15% | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.77% Sep 26 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Sep. 26, 2026 | |||||
Principal balance | $ 200,000 | 200,000 | ||||
Fixed interest rate | 2.77% | |||||
Swap Maturity Date | Oct. 1, 2024 | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.77% Sep 26 2026 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.20% | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.18% Nov 01 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Nov. 1, 2026 | |||||
Principal balance | $ 400,000 | 400,000 | ||||
Fixed interest rate | 2.18% | |||||
Swap Maturity Date | Oct. 1, 2024 | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.18% Nov 01 2026 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.15% | |||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 3.16% Jun 01 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Jun. 1, 2027 | |||||
Principal balance | $ 550,000 | 550,000 | ||||
Fixed interest rate | 3.16% | |||||
Swap Maturity Date | Jun. 1, 2022 | |||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 3.16% Jun 01 2027 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.37% | |||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 3.26% Jun 01 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Jun. 1, 2029 | |||||
Principal balance | $ 255,000 | 255,000 | ||||
Fixed interest rate | 3.26% | |||||
Swap Maturity Date | Jun. 1, 2027 | |||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 3.26% Jun 01 2029 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 0.98% | |||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 2.55% Jun 01 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Jun. 1, 2029 | |||||
Principal balance | $ 125,000 | 125,000 | ||||
Fixed interest rate | 2.55% | |||||
Swap Maturity Date | Jun. 1, 2027 | |||||
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 2.55% Jun 01 2029 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 0.98% | |||||
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 4.55% Jun 01 2038 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Jun. 1, 2038 | |||||
Principal balance | $ 30,492 | 30,864 | ||||
Fixed interest rate | 4.55% | |||||
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility with Maturity Aug 21 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Aug. 21, 2023 | |||||
Principal balance | $ 0 | 0 | ||||
Loan agreement LIBOR floor | 0.00% | |||||
Maximum borrowing capacity | $ 400,000 | |||||
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility with Maturity Aug 21 2023 | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Unused commitment fees (as a percent) | 0.10% | |||||
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility with Maturity Aug 21 2023 | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Unused commitment fees (as a percent) | 0.15% | |||||
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility with Maturity Aug 21 2023 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.15% | |||||
Consolidated JV | Secured Debt | Term Loan at 3.44% July 01 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Principal balance | 400,000 | |||||
Consolidated JV | Secured Debt | Term Loan at 2.37% Feb 28 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Feb. 28, 2023 | |||||
Principal balance | $ 580,000 | 580,000 | ||||
Fixed interest rate | 2.37% | |||||
Swap Maturity Date | Mar. 1, 2021 | |||||
Consolidated JV | Secured Debt | Term Loan at 2.37% Feb 28 2023 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.40% | |||||
Consolidated JV | Secured Debt | Term Loan at 3.47% Dec 19 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Dec. 19, 2024 | |||||
Principal balance | $ 400,000 | 400,000 | ||||
Fixed interest rate | 3.47% | |||||
Swap Maturity Date | Jan. 1, 2023 | |||||
Consolidated JV | Secured Debt | Term Loan at 3.47% Dec 19 2024 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.30% | |||||
Consolidated JV | Secured Debt | Term Loan at 3.04% May 15 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | May 15, 2027 | |||||
Principal balance | $ 450,000 | 0 | ||||
Fixed interest rate | 3.04% | |||||
Swap Maturity Date | Apr. 1, 2025 | |||||
Consolidated JV | Secured Debt | Term Loan at 3.04% May 15 2027 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 1.35% | |||||
Consolidated JV | Secured Debt | Term Loan at 3.25% Jun 01 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Maturity date | Jun. 1, 2029 | |||||
Principal balance | $ 160,000 | $ 160,000 | ||||
Fixed interest rate | 3.25% | |||||
Swap Maturity Date | Jul. 1, 2027 | |||||
Consolidated JV | Secured Debt | Term Loan at 3.25% Jun 01 2029 | LIBOR | ||||||
Debt Instrument [Line Items] | ||||||
Variable Interest Rate | 0.98% | |||||
Forecast | Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.77% Sep 26 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Fixed interest rate | 2.36% | |||||
Forecast | Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.18% Nov 01 2026 | ||||||
Debt Instrument [Line Items] | ||||||
Fixed interest rate | 2.31% | |||||
Forecast | Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 2.55% Jun 01 2029 | ||||||
Debt Instrument [Line Items] | ||||||
Fixed interest rate | 3.25% | |||||
Forecast | Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.04% May 15 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Fixed interest rate | 2.26% |
Secured Notes Payable and Rev_4
Secured Notes Payable and Revolving Credit Facility, Net - Debt Statistics (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||
Principal balance | $ 4,702,892 | $ 4,653,264 |
Principal balance of consolidated fixed rate debt | $ 4,700,000 | |
Weighted average remaining life (including extension options) of consolidated fixed rate debt (in years) | 5 years 10 months 24 days | |
Weighted average remaining fixed interest period of consolidated fixed rate debt (in years) | 3 years 7 months 6 days | |
Weighted average annual interest rate of consolidated fixed rate debt (as a percent) | 3.02% | |
Aggregate swapped to fixed rate loans | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 4,672,400 | 4,622,400 |
Aggregate fixed rate loans | ||
Debt Instrument [Line Items] | ||
Principal balance | $ 30,492 | $ 30,864 |
Secured Notes Payable and Rev_5
Secured Notes Payable and Revolving Credit Facility, Net - Future Principal Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Minimum Future Principal Payments Due | ||
2021 | $ 769 | |
2022 | 805 | |
2023 | 580,842 | |
2024 | 300,881 | |
2025 | 838,322 | |
Thereafter | 2,981,273 | |
Total future principal payments | $ 4,702,892 | $ 4,653,264 |
Secured Notes Payable and Rev_6
Secured Notes Payable and Revolving Credit Facility, Net - Loan Costs and Accumulated Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||||
Loan premium accumulated amortization | $ 900 | $ 900 | $ 500 | ||
Accumulated amortization on deferred loan costs | 34,400 | 34,400 | $ 30,700 | ||
Loan Costs Included In Interest Expense | |||||
Loan premium amortized and written off | (2,043) | $ (102) | |||
Deferred loan costs amortized and written off | 3,791 | 4,380 | |||
Interest Expense | |||||
Loan Costs Included In Interest Expense | |||||
Loan premium amortized and written off | (1,828) | $ (51) | (2,043) | (102) | |
Deferred loan costs amortized and written off | 1,915 | 1,887 | 3,791 | 3,804 | |
Loan costs expensed | 965 | 576 | 965 | 576 | |
Total | $ 1,052 | $ 2,412 | $ 2,713 | $ 4,278 |
Interest Payable, Accounts Pa_3
Interest Payable, Accounts Payable and Deferred Revenue (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Interest payable | $ 11,732 | $ 11,707 |
Accounts payable and accrued liabilities | 79,731 | 66,437 |
Deferred revenue | 48,144 | 53,266 |
Total interest payable, accounts payable and deferred revenue | $ 139,607 | $ 131,410 |
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, 2020USD ($)instrument |
Derivative [Line Items] | |
Number of Interest Rate Swaps | instrument | 45 |
Notional | $ 5,517,400 |
Percent of notional amount related to the Fund | 100.00% |
Unconsolidated Funds | |
Derivative [Line Items] | |
Number of Interest Rate Swaps | instrument | 1 |
Notional | $ 110,000 |
Percent of notional amount related to the Fund | 100.00% |
Swaps with increasing notional value | |
Derivative [Line Items] | |
Notional | $ 120,000 |
Future notional | 1,180,000 |
Forward swaps with increasing notional value | |
Derivative [Line Items] | |
Notional | 845,000 |
Future notional | $ 1,030,000 |
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, 2020 | Dec. 31, 2019 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value derivatives in net liability position | $ 271,726 | $ 56,896 |
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 | $ 613 | $ 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, 2020 | Dec. 31, 2019 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value of derivatives in an asset position | $ 0 | $ 22,381 |
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 | $ 0 | 23,275 |
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 | $ 0 | $ 963 |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Derivative [Line Items] | ||||
Gain (loss) recorded in AOCI before reclassifications | $ (241,189) | $ (89,483) | ||
Interest Expense presented in the consolidated statements of operations | $ (35,190) | $ (34,063) | (70,610) | (67,356) |
Income from unconsolidated Funds presented in the consolidated statements of operations | $ (140) | $ 2,207 | 183 | 3,758 |
Unconsolidated Funds | ||||
Derivative [Line Items] | ||||
Gain (loss) recorded in AOCI before reclassifications | (403) | (6,928) | ||
Cash Flow Hedging | Derivatives Designated as Cash Flow Hedges | ||||
Derivative [Line Items] | ||||
Gain (loss) recorded in AOCI before reclassifications | (241,189) | (89,483) | ||
Loss (gain) reclassified from AOCI | 13,373 | (17,284) | ||
Cash Flow Hedging | Derivatives Designated as Cash Flow Hedges | Unconsolidated Funds | ||||
Derivative [Line Items] | ||||
Gain (loss) recorded in AOCI before reclassifications | (403) | (6,928) | ||
Loss (gain) reclassified from AOCI | $ (35) | $ (1,226) |
Derivative Contracts - Future R
Derivative Contracts - Future Reclassifications from AOCI (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Derivative Instruments, Gain (Loss) [Line Items] | |
Losses to be reclassified from AOCI | $ (71,439) |
Unconsolidated Funds | |
Derivative Instruments, Gain (Loss) [Line Items] | |
Losses to be reclassified from AOCI | $ (182) |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ in Thousands | May 28, 2020 | Jun. 28, 2019 | Jun. 07, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | ||||||||
Number common shares issued in exchange for equal number of OP Units (in shares) | 5,000 | 75,000 | ||||||
Number of OP units and fully-vested LTIP Units redeemed (in shares) | 150 | 13,000 | ||||||
Cash paid for repurchase OP Units | $ 0 | $ 0 | $ 7 | $ 507 | ||||
Shares issued under ATM program (in shares) | 4,900,000 | |||||||
Net proceeds from the issuance of common stock | $ 201,200 | |||||||
Contract price | $ 365,100 | |||||||
Noncontrolling interests contribution to JV | 176,000 | |||||||
Number of OP units owned | 175,400,000 | 175,400,000 | ||||||
Outstanding common stock (in shares) | 175,374,886 | 175,374,886 | 175,369,746 | |||||
Number of shares of common stock issued upon redemption of one OP unit (in shares) | 1 | |||||||
Increase in number of common shares available for future awards (in shares) | 9,500,000 | |||||||
Secured Debt | Loan with maturity date Of Jun 01 2029 | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Non-recourse debt | $ 160,000 | |||||||
Operating Partnership | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Noncontrolling interests ownership in the Operating Partnership (in shares) | 29,100,000 | 29,100,000 | ||||||
Noncontrolling interests ownership in the Operating Partnership (percent) | 14.00% | 14.00% | ||||||
Consolidated JV | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Capital interest in consolidated JV (percent) | 20.00% |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | ||||
Net income attributable to common stockholders | $ 2,030 | $ 33,966 | $ 28,953 | $ 62,667 |
Transfers from noncontrolling interests: | ||||
Exchange of OP Units with noncontrolling interests | 90 | 1,223 | ||
Repurchase of OP Units from noncontrolling interests | (4) | (291) | ||
Net transfers from noncontrolling interests | 86 | 932 | ||
Change from net income attributable to common stockholders and transfers from noncontrolling interests | $ 29,039 | $ 63,599 |
Equity - AOCI Reconciliation (D
Equity - AOCI Reconciliation (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | $ 4,370,934 | $ 3,848,430 |
Other comprehensive loss before reclassifications | (241,189) | (89,483) |
Reclassification of gains from AOCI | 13,373 | (17,284) |
Net current period OCI | (228,254) | (114,921) |
OCI attributable to noncontrolling interests | 66,245 | 35,124 |
OCI attributable to common stockholders | (162,009) | (79,797) |
Ending balance | 4,044,339 | 4,052,360 |
Unconsolidated Funds | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Other comprehensive loss before reclassifications | (403) | (6,928) |
Reclassification of gains from AOCI | (35) | (1,226) |
AOCI | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning balance | (17,462) | 53,944 |
Ending balance | $ (179,471) | $ (25,853) |
Equity - Equity Compensation (D
Equity - Equity Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | ||||
Stock-based compensation expense, net | $ 2,812 | $ 2,383 | $ 5,753 | $ 5,013 |
Capitalized stock-based compensation | $ 751 | $ 338 | $ 1,610 | $ 1,008 |
EPS (Details)
EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to common stockholders | $ 2,030 | $ 33,966 | $ 28,953 | $ 62,667 |
Allocation to participating securities: Unvested LTIP Units | (206) | (139) | (413) | (265) |
Net income attributable to common stockholders - basic and diluted | $ 1,824 | $ 33,827 | $ 28,540 | $ 62,402 |
Weighted average shares of common stock outstanding - basic and diluted (in shares) | 175,375,000 | 172,498,000 | 175,374,000 | 171,366,000 |
Net income per common share – basic and diluted (usd per share) | $ 0.01 | $ 0.20 | $ 0.16 | $ 0.36 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of shares of common stock issued upon exchange of one OP unit or one vested LTIP unit (in shares) | 1 | 1 | ||
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) | 28,293,000 | 26,283,000 | 28,294,000 | 26,311,000 |
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) | 808,000 | 1,830,000 | 803,000 | 1,830,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Financial Instruments Disclosed at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Ground lease liability | $ 10,877 | $ 10,882 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Secured notes payable | 4,724,042 | 4,678,623 |
Ground lease liability | 14,284 | 12,218 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Secured notes payable | 4,707,591 | 4,653,264 |
Ground lease liability | $ 10,877 | $ 10,882 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Derivative Assets: | ||
Fair value - consolidated derivatives | $ 0 | $ 22,381 |
Derivative Liabilities: | ||
Fair value - consolidated derivatives | $ 259,293 | 54,616 |
Fund X | Interest Rate Swap | ||
Derivative Liabilities: | ||
Percent of notional amount related to the Fund | 100.00% | |
Level 2 | ||
Derivative Assets: | ||
Fair value - consolidated derivatives | $ 0 | 22,381 |
Derivative Liabilities: | ||
Fair value - consolidated derivatives | 259,293 | 54,616 |
Level 2 | Fund X | ||
Derivative Assets: | ||
Fair value - unconsolidated Funds' derivatives | 0 | 889 |
Derivative Liabilities: | ||
Fair value - unconsolidated Funds' derivatives | $ 543 | $ 0 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 207,796 | $ 230,534 | $ 459,146 | $ 454,720 |
Segment profit | 138,639 | 158,514 | 310,969 | 311,696 |
Office Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 176,989 | 202,189 | 396,878 | 399,479 |
Expenses | (60,301) | (64,308) | (129,965) | (127,757) |
Segment profit | 116,688 | 137,881 | 266,913 | 271,722 |
Multifamily Segment | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 30,807 | 28,345 | 62,268 | 55,241 |
Expenses | (8,856) | (7,712) | (18,212) | (15,267) |
Segment profit | $ 21,951 | $ 20,633 | $ 44,056 | $ 39,974 |
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, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting [Abstract] | ||||
Total profit from all segments | $ 138,639 | $ 158,514 | $ 310,969 | $ 311,696 |
General and administrative expenses | (9,863) | (9,159) | (20,198) | (18,991) |
Depreciation and amortization | (98,765) | (78,724) | (196,542) | (158,597) |
Other income | 325 | 2,892 | 2,314 | 5,790 |
Other expenses | (478) | (1,807) | (1,874) | (3,652) |
(Loss) income from unconsolidated Funds | (140) | 2,207 | 183 | 3,758 |
Interest expense | (35,190) | (34,063) | (70,610) | (67,356) |
Net (loss) income | (5,472) | 39,860 | 24,242 | 72,648 |
Less: Net loss (income) attributable to noncontrolling interests | 7,502 | (5,894) | 4,711 | (9,981) |
Net income attributable to common stockholders | $ 2,030 | $ 33,966 | $ 28,953 | $ 62,667 |
Future Minimum Lease Rental R_3
Future Minimum Lease Rental Receipts (Details) $ in Thousands | Jun. 30, 2020USD ($)land_parcel |
Future minimum base rentals to be received for twelve months ending June 30: | |
2021 | $ 653,406 |
2022 | 567,690 |
2023 | 475,211 |
2024 | 372,942 |
2025 | 281,142 |
Thereafter | 659,833 |
Total future minimum base rentals | $ 3,010,224 |
Wholly-owned properties | |
Lessor, Lease, Description [Line Items] | |
Number of land parcels subject to ground lease | land_parcel | 2 |
Commitments, Contingencies an_3
Commitments, Contingencies and Guarantees - Narrative (Details) ft² in Thousands, $ in Millions | 6 Months Ended |
Jun. 30, 2020USD ($)ft²apartmentbuilding | |
Other Commitments [Line Items] | |
Number of buildings containing asbestos | building | 32 |
Development Projects | |
Other Commitments [Line Items] | |
Aggregate remaining contractual commitment | $ | $ 201.8 |
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 (sq ft) | ft² | 490 |
Repositionings, Capital Expenditure Projects, and Tenant Improvements | |
Other Commitments [Line Items] | |
Aggregate remaining contractual commitment | $ | $ 11.4 |
Commitments, Contingencies an_4
Commitments, Contingencies and Guarantees - Debt Related to Unconsolidated Funds (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020USD ($)property | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | ||
Principal balance | $ 4,702,892 | $ 4,653,264 |
Partnership X | ||
Debt Instrument [Line Items] | ||
Maximum future payments under swap agreement | $ 700 | |
Partnership X | Interest rate swap | ||
Debt Instrument [Line Items] | ||
Swap Fixed Interest Rate | 2.30% | |
Swap Maturity Date | Mar. 1, 2021 | |
Partnership X | Floating rate term loan | ||
Debt Instrument [Line Items] | ||
Loan Maturity Date | Mar. 1, 2023 | |
Principal balance | $ 110,000 | |
Number of properties to secure loan | property | 2 | |
Loan agreement LIBOR floor | 0.00% | |
Partnership X | Floating rate term loan | LIBOR | ||
Debt Instrument [Line Items] | ||
Variable Interest Rate | 1.40% | |
Assumed LIBOR interest rate to assess maximum future payments under swap agreement | 0.00% |
Uncategorized Items - nysedei-2
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 121,000 |
Restricted Cash | us-gaap_RestrictedCash | $ 121,000 |