Douglas Emmett (DEI) 13 Feb 192018 Q4 Earnings call transcript

Company Profile

Participants

Stuart McElhinney	Vice President of Investor Relations
Jordan Kaplan	President & Chief Executive Officer
Kevin Crummy	Chief Investment Officer
Mona Gisler	Chief Financial Officer
Alexander Goldfarb	Sandler O'Neill
Dave Rodgers	Robert W. Baird
Nick Yulico	Scotiabank
Jamie Feldman	Bank of America
John Guinee	Stifel
Blaine Heck	Wells Fargo
Manny Korchman	Citi
Craig Mailman	KeyBanc Capital Markets.
Daniel Ismail	Green Street Advisors
Jason Green	Evercore

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by. Welcome to Douglas Emmett's Quarterly Earnings Call. Today's call is being recorded. At this time, all participants are in a listen-only mode. After management’s prepared remarks’ you will receive instructions for participating in the question-and-answer session. the Relations to for turn President McElhinney, now Investor of Douglas would conference Stuart over Vice I Emmett.

Stuart McElhinney

Thank you.

Joining Crummy, Mona today and call for us are Jordan be and live XX days. replay webcast Kaplan, call on from available our is our being CEO; our our Gisler, Kevin and CIO; CFO. This during will next the website President the

Relations find section earnings the of website. also package our can Investor You our at

call today's the non-GAAP financial measures You earnings can find during package. reconciliations of discussed in

the course call, by us. this of, on of statements. to These we made forward-looking During the will forward-looking and assumptions based available make information currently statements are beliefs

Our uncertainties predict. ability actual unknown to affected that and control known risks, and or results trends, will are be by factors beyond our

that expected they our Although, our differ future to our guarantees of will reasonable, be and Therefore, expectations, be those incorrect. may assumptions can not to are performance, results be are some material. prove differences from and future we actual believe

a Investor others, For which one on in the of of found portion, please yourself risks, limit follow-up. our be can SEC the potential the to question-and-answer some our over question turn to section When refer and call we filings, of consideration website. will reach detailed to one I please Relations more description now Jordan.

Jordan Kaplan

a Good morning, everyone. successful XXXX very excited following Douglas Thank us. at XXXX, joining you for about Emmett. I'm

for FFO. AFFO and at in greater This making During matured XX% apartment signed almost to X.X% which our meaningful now units. XXXX, platform we prior we XXXX the same additions straight-line leases point the XXXX, has office construction our raised space. the where And by of Moanalua X,XXX during our have than community, our completed development XX.X% by by it's Already to leases value FFO and dividend X%. grew was our

Hawaii. and and our to I'm With workforce new housing existing the is in construction Brentwood. in residential modern project is swing most buildings XX-story communities desirable one in report full of that our new the this to also amenities upgrades at now happy

complete soon opportunities accelerated revenue our which rent office of XXXX high our to more significant, will return capital. repositioning projects and our very are invested will from We group provide efforts. beyond, growth and and our We already pursue we during first plan seeing growth repositioning a on incremental

square-foot support plan Finally, new will approximately city's downtown address we the moment rent to workforce severe project I by pleased and in to This for the our of community. Honolulu Honolulu transform into that efforts to a the downtown to XXX,XXX I'd am XXX announce rental like talking office XX-hour housing FFO. in to housing. shortage apartments converting a a about add tower XX-story quality spend

the our are our in the of growth non-cash Because revenue as of As at know, midpoint of Indeed translates from flow. to focus typical fact and only we many peers, only straight-line. cash for of you And one-third our of on items. disproportionately such little FFO comes our flow. FAS non-cash these to that higher is our our proud compared FFO for very X.X% FFO this what to of XXXX guidance is cash peers, love comes from XXX

I'll call Kevin. the Now, to turn over

Kevin Crummy

Thanks, everyone. good Jordan, morning, and

uncertainties the million, this nature although vacancy compounded the all enough and to have of not phased as development phases select housing. do building accommodate multi-year the million In vacated. the of to towers plan workforce As to Jordan will our years needed our conversion much between number them. are said, we office $XX currently we although will We of of cost by will buildings, estimate The over we convert relocate in a space of conversion. Honolulu in inherent construction office office other to tenants be one cases, and occur is $XXX

Assuming we the to in be delivered timely first approvals, expect apartments XXXX.

other two well. progressing also projects development are multifamily Our

As we schedule one Moanalua units for above of to just our XXX-unit the project of apartment L.A. Brentwood, construction exceptional the our opportunities rent on and pro high-rise on continue year-end after we the completed of current tower, residential and West in remain Jordan most track mentioned, all forma. In

our We same that residential expect community. X-acre million tower to XX-story we're square-foot would and the cost still with time, XXX-unit in adjacent a benefit complete At million. between our late park office neighborhood at on and tower $XXX entire XXXX estimated $XXX working apartment including XXX,XXX the

our providing is in development in more growth, significant we submarkets. XXXX acquisition opportunities While also expect

flows Moanalua development our Stewart. before that, the is payout no to Other properties balance AFFO loans for have unencumbered of we I'll ratio Our cash flexibility With have and to XXXX. a under provide sheet we large future XX%. And turn project, remain our call with healthy number over our financings. strong than now maturing

Stuart McElhinney

industries. Good The Kevin. everyone. diverse of market solid morning, Thanks, with across our fundamentals set remains robust demand in

portfolio excellent leasing rent is occupancy have office supply. increased XX.X% signed with office nonexistent. up. The increased XX.X% construction to meaningful submarkets new both Honolulu in spreads had for roll QX XX feet cash in covering roll existing we construction Lease only of rate leases new Center. square almost XXX,XXX XXX,XXX represents points our straight-line Warner for including As for XX.X% total of to discussed, QX, feet XX.X% basis and we our often We pipeline up XXX In leases. and entire additions office and square

XX.X% cash XXXX, of rent roll we straight-line up XX.X%. of achieved roll and all up of rent For

of Over the certified we is on ENERGY numbers. On the most reduced space STAR our consecutive of consumption. square electrical office usage eligible front, based foot X%, recent over our sustainability XX% by year XXth per our lower

we On remained leased units Santa a end. units of fully at quarter annualized In rents. about in the On recaptured our of represents side, pre-XXXX Monica, average, total these XX of multifamily portfolio each additional $XX,XXX XXXX.

multifamily from units I'll newly now Moanalua our our over to past the turn results. by call increased strong from Mona to total the higher annualized our multifamily developed Over at revenues portfolio we've year, demand rent of discuss our rest reflecting X.X% portfolio. and for the the

Mona Gisler

of year in ago the $XX.X Compared Stuart. our We with per FFO to We million. fourth $X.XX pleased share. to cash increased increased Thanks, NOI X.X%. increased QX a everyone. by Good quarter or XXXX, morning, revenues increased X.X% AFFO our We're We same-property million, X.X%. $XXX.X X.X% we to by results.

property revenues million. revenues, For $X.XX group. $XXX.X We increased increased all we remains fourth that AFFO increased million, of by cash share. quarter XXXX, X.X% our FFO by well of NOI or At X.X% increased We to below for our X.X%. only X.X%. XX.X% to G&A the $XXX.X benchmark of We same our per

Finally, guidance. turning to

are two significant in XXXX. we quarter, last headwinds indicated facing we As

First, per by non-cash the FFO $X.XX mark-to-market guidance the reduction reflects revenue. our caused and share lower straight-line

represent non-cash As well only and of revenue revenues. a This in is XXXX X.X% mark-to-market straight-line we the convert will our peers. below X% average total to of cash, our

to Last these We headwinds per structure. a applied impact Second, the only share $X.XX accounting leasing our standard our that share us The XXXX. to we requiring $X.XX share impact expense to FFO non-cash a by be now compensation as expect that cost. FFO. would internal reduction of $X.XX combined lease new per result leasing formalizing in approximately had in two this internal FFO is said new of XXXX standard quarter, per it reflects guidance have reduced

growth expect same in to we more than to property Fortunately, offset cash be that by X% NOI. X%

share. to to result, increase expect $X.XX between $X.XX XXXX we and FFO a As per

does the acquisitions, guidance of financing. usual, future As assume our not or impact dispositions

in For underlying over to please guidance, schedule package. to turn the refer the on more now information operator. assumptions I'll our earnings the the call the

we take your can questions. So

Operator

ahead. Instructions] Our [Operator session. question-and-answer the the begin with Goldfarb Alexander first Please now go will O'Neill. We comes from question Sandler

Alexander Goldfarb

there. morning, Good out

Jordan Kaplan

morning. Good

Alexander Goldfarb

So two morning, questions Jordan. good –

So going multi-year out FFO can be seems the floors of in to next questions slowly year, guys empty to you the office but first and what this through then are two impact be? won't it walk will Bishop presumably You on process. residents a transaction, move just the the

is included whether And sure So from earnings how neutral think we negative about it's some or then perspective? for thinking XXXX do an XXXX as as far perspective an FFO but about guidance? this as we're not in looking what

Jordan Kaplan

accurate. Well, it you so way the is described

formally actually been there quarter some too, stopped a and for We're leasing we've it about press or Hawaii. discussing So was it in already obviously now.

can it we some in the working And that vacancy building on. so, had already start

on will not We're that. or we're out. floors by just manner do we floor to vacating as it become trying not asking start We're space. in tenants converting disruptive floor way to move by And so And least vacant. the

side in then won't we're So, sure the that whole stabilized we better side. the a more the project. gone it office sort empty there certainly, to floor until sides system FFO it brand build to apartments as it, it been as would okay, residential little in noise not have the both was floor us it. out and do of will say, But as costing that kind I with the think shock by it bad will to we're like it. direction. next net, emptying we of then redoing by handling extreme be would if be off be am years and more building, of some But over I this, few we it of new where how sort then opposed the It's probably had a

see won't of you an hope I much So impact.

Alexander Goldfarb

have market or Google the next leases footprint size, given lease of X% to the you garnered cash lot a X% same-store have other X% that been X% Westside then tenant And a your the to there clearly, Okay. of spoke your and question But attention. the Pavilion lot is, in NOI. like about

your X%. like think embedded are rent I bumps

of are So occurring leases in allowing do is trying to those drive that’s portfolio a you to or bigger to that your these an are not? the signed outside like there feel between leasing tenants? are impact Just leases elsewhere there Or portfolio? how being spillover that that get you from the is transition your growth headlines see these reaction sense is you big guys or doing for some the and much better a of

Jordan Kaplan

to do want that? answer Kevin,

Kevin Crummy

Yes.

is I tech and think, this they're of media production. companies content on Alex, business focused a but it's very lot their

companies did in look billion as far of the production we should at was tell, informal that -- you third budget as like an could Netflix. about so, $XX it the And as and quarter half study we bigger brought

So dollars the companies. to our people like small directly of just production are And production Apple, the the lawyers, they're base, getting flowing Facebook, accountants entertainment those game. in agencies, the tenant Google, so

the on ecosystem. a they all with we're and tenant around just size. that's swashing not the big tech that's bringing system money more these great the that, piece are budgets, for large leases of big big the so, production And And media

Alexander Goldfarb

Okay. Thank you.

Jordan Kaplan

Thanks Alex.

Operator

Our next ahead. Rodgers Dave from go with Baird. question Please comes

Dave Rodgers

there. ready here about of and starting compete the deliver morning the office I Jordan, the to to comments wanted up prepared getting to you your that made near-term. Good follow out in on Yes. comments one repositionings in

little a project dive you the of the deeper used you bit ROI. Can think you of confidence have I with high more? completing that forward go some now into term and some kind that, to

Jordan Kaplan

Yes.

as conclusion. have where projects what's obviously, XXXX of in you begun going I they're watched were certainly could headed. on. enough people have projects to construction, So And list said, a and see conclusion that coming that And the we it's

asked finished, you doing. see rents. aren't something have cetera. even what's we’re better It's aggravation going they happening, of with me, still once we do some would would product they And tenants. you up, just of jump we're where barriers like you then, reskinning have clear see guys thing have a building, at. to are movement see well, and in could when happen. the But a say, lot said ago, happening, on If to done, though if And will a et though the what and pictures a disruption then even stock tenants projects what's real we at to I'd but ought is and year you buildings the

with could it. where see you're You headed

because We up -- disproportionately building it's to how what this much up, are are are those Canary already you're so kind because generally in of rents credit move-up. going moving thing in seeing doing with you rents move are hard that

us. like Century on over feel we right a our door project Canary a has project where in direct we City So comp next have the to been

We redoing over the whole And the a redoing that and that’s $X. were was the even building spread step seeing building, the two the lobby, next what's all around the beyond a redoing rent reskinning to take We’re amenity a us. landscaping, package in deals to it certainly trying those thing.

doing some you the could seeing closing And on we start the thought in rents have the impact if we Santa of barriers, West. that constructions, feel results we're way feel midpoint. well working down the might more so to and past over calculate half we're gap. And closed degree similar Monica already still And we'll a in what what than can in spread, by it wherever for it, that we other little we're Well, go, of similar of buildings is. that we've

they hopefully, we expected So, we people the quicker impact expectation because have the wow little on I the why a now. are certainly more we'll confident work not completion, of said that, waiting is work of completion. -- we're am this was to because saying even expected would impact going to are was I it's and than and that's I for And have moving going confident

Dave Rodgers

I is, larger success put do the, you color. can accelerate did follow-up you're May given one work appreciate on the that like it, front be more the just get that quickly? you program more having, that feel

Jordan Kaplan

doing but that could up didn't sites. We're where in we're we you so we doing polished groundwork off just have things, he at doing the of know construction if the Hawaii; we're couple a program, Well, doing we're other many ground also I so MHA. only not as conversion guess,

doing So of course -- and we're Brentwood.

have seven additional So sites and currently and adding repositioning we repositioning during that XXXX. sites

we're all getting job. of So, and the same that's it A have want a robust take be the his we in now. on this just done we group out our a a want. right enough of we've good good at Ken on getting impact going to on ton building but and And turned to we're this to are job. getting time, system, budget, don't company done, we -- it done has we overload construction

So, great. that's all

we -- push cliff. like want right to I it want don't the don't over So,

work a we Certainly, have very impactful. that's lot So, valuable going it's on.

So, the size of we're take right we to year. that larger But in the platform to and build number right to able terms even probably and we're point that trying going each keep be out of larger on more. now to at things do

Dave Rodgers

Thanks Jordan. right. All

Jordan Kaplan

Thanks.

Operator

with Please ahead. Yulico next go Nick Our question comes Scotiabank. from

Nick Yulico

Thanks.

forecasting a flat year It a in a not is year? guidance. somewhat higher looks Just more expenses like know negative there hoping to occupancy get this growth little info benefit on I'm and growth expense way so NOI impacted I if you're bit growth the same-store being same-store last sure since

Mona Gisler

the Yes, take of pieces Nick, take hi, so I'll that. -- both I'll of

NOI consistent I think range what I heard in with last is as impact well a same-store to question about going given the the is be as our that occupancy year. that

see acquisitions we about we're million years. just of Center thought good which on square still approach And have It we there. those Jordan occupancy there. a feet years the came through in new over that couple acquisitions. lower about to Honolulu, with And can side, for aware we're we upside talked then of occupancy few making takes it. too. the at we and our On obviously the X as is in filter And last of get And upside Warner what then, Westside, those just that kind us But stabilized. progress

non-cash revenue. impact bit our of On talked little the the a same-store side, I NOI about

historically particularly years our larger last the to our an driven We peers. with in well. revenue, our the always some we've we that's as of couple that have non-cash plus had revenue of up increase and compared yields seen had But over acquisitions non-cash fairly so amount low

those start converts XXXX. cash. means going we're mature, it opportunities to also reduction see As it to to in that But as

Nick Yulico

is what year have year issue that's growth? higher Is get that's NOI guess like you I just same-store? just that then why NOI And it following-up that. your to same-store impact the of one possible same-store drivers is to versus when it within embedded of growth expense did last feels just on growth this expense the Okay. same-store Because

Mona Gisler

at guidance expenses though. our generally typically operating don't the expenses. provide separately for We're just on looking -- We

X% we we’ve X%. to I a think of normalized always said look historically, rate to

expectations that think well. heading would I a be our into XXXX as

Jordan Kaplan

expense – think it's to Nick the coming I tell don't don't I have you. really I of out just side.

rolling rolling the come and range in I it's if And roll-up in that? lot we've non-cash look Westside – think rolling seeing, now range? that we're the been number you impact in the items. you how of and you churn changing every There's and away. same the not out still come occupancy right on even coming with the How back time it's remember same at that as you're the wow go quarter which at we're go telling a

kind Westside, So a taking that so have big the to to number. the of and create its Center XX%, And anchor, churn and Westside get our longer it little XX%, back was up on held the on Hawaii. Warner on we that again to then lift it's numbers now,

right, we're upside the us. even the been upside you outstripping Westside. side, Center the because think – real We in we there. Warner what in you the So market Hawaii been And get has know doing has got

not been would be I that churned the rents. we've to So stuff all having and it through the the we same-store is. Because where know surprised see we've roll-up in

Nick Yulico

Appreciate Okay. Thanks. it.

Operator

Our Bank next question Jamie from of comes America. Please go with ahead. Feldman

Jamie Feldman

Great. guess an Thank mentioned acquisitions then activity. acquisition I you just And also your to maybe the potential the uptick plan spend? just the wanted on for redevelopments What finance you year. plan and Kevin, you talk in How both also seeing about capital I you. to investment additional all side? for were

Kevin Crummy

Sure. that coming more this opportunities there's pretty couple XXXX, and of out, should are things to acquisition about. that looks of I are excited There Look good. towards the the be in think a we the be pipeline quarter going end

to acquisition mean, add fairly want in I'm So Jordan, on? I the platform. bullish on do XXXX

Jordan Kaplan

Yeah.

means acquisition almost compared the have times is I things. the not selling, to don't want on to like when whole not black So, just -- bullish bullish platform

of of kind crazy were So time. compared there's right, amount to those during that times, not flow -- other because those times, a

low in got pipeline them acquisition you to XXXX if bar very half. that's pipeline a in since acquisition Now XXXX, to want compare

that bullish perspective. So from we are

the of -- terms doing actually mean, plan, capital only -- not and job. good we're In have I a we

the lot We cash of have free a coming out of flow operations.

section activities in the on for amount our dividend money out, less You prepared of than of remarks, XX% which construction pretty the heard is substantial being doing. Kevin's we're actually leaves that AFFO a

so that something so, to at that is close wouldn't to it And look it beyond that. covering meaningful be

of optionality have JV of and we around that structuring. all the new all terms the acquisitions, In platform still

this two we'll story seems won't we growth like decade our to you has of it and the to are up capital, in we're all because of at. That sure whatever leaning in AFFO, the been make flow, deals, purchased. sure construction will cash feel like able I'm good over metric we years. problem sure for the the always come we'd deals do on I'm But some go which So kind great need of get we last side us to that us. them just to to maintain And some the important that doing. we year, seen side our growth happen our direction now of look we

Jamie Feldman

And by what your are Okay. thoughts year-end? leverage on

Jordan Kaplan

don't than thing loan because number between in do we there something crazy, have whole beginning to with I where cash to flow or you'll to and the The more do, of year EV, doubled doubled need leverage on is a flow. that units. mean, way, we'll the end. year in we that's we've did It's and we some MHA see which refi we building one on number. the XX% better it. XX% That's one, changes cash I equates know a of the probably double. XX% dramatic or and And going

the So there. original on just it's still loan

Jamie Feldman

your well, complexion base -- -- office just what activity. on kind this could of in Okay. just I how you could follow-up coming a does portfolio? you're the the see? if what's submarkets, versus said -- off low it to Just but the you see, And in the you residential? XXXX, acquisition know it's of you then existing of Is change

Jordan Kaplan

there's in. Same little markets. residential markets There's a office little bit and I a we're bit of mean, office. of same and

Jamie Feldman

right. Thank you. all Okay,

Operator

from Please next Stifel. with Guinee John question comes go Our ahead.

John Guinee

question, a more curiosity Great. two Thank very much. you of This is but questions.

such should for on people a incremental one floor question. the $XXX,XXX like These you're have office $XXX,XXX imagine second, looks you bank. going value incremental Brentwood of either unit. to And elevator high-rise How in square-foot spend the of Street it this involved? sharing affordable That's Honolulu. do think like users is things of as the How redevelopment. do master plates. can't then, the development? Looks And land Brentwood, to you are handle projects I these elevator per and an your same Bishop First cost housing banks? have XX,XXX unit about units do residential

Jordan Kaplan

Okay.

So it, to gave the for you has to residential the surface to study option academic you do their accidentally Brentwood, trying that supermarket I practically as to land. you're or -- a of mean, though up I try at -- park. tower Westside, the continue tell rate should building zero in looking how terms them. high-rise land reasonable some might can a building about on on We would cost have we're think get. you will cost a cost lost on at you kind of close as a if very a of had of their But impute option

footage an And so, big was which in a tower. lot we apartment terms now square residential not building entire and we're and of took parking surface a that,

close zero, incremental that go to we're already build four project, to value getting the of some three, So for a the the built is entire tower. to parking fact cheap it's of and not have we of land parking although cost is the out layers

is just the this And land way, the like doing still weren't us feel there doing costing be don't sitting I if the anything. by would we nothing. So land

of out And in terms asking there's I no, of -- you're units one. other MHA In right XXX. think -- terms about the controlled -- XX the Brentwood of -- housing of housing, affordable in the and project

housing that's downtown, XXXX that else, of down will to amenities is regardless that so and anything we're W, be XXX%, of nature asking what restaurants XX% after You're XX-hour with community goal I XXXX whether I'll call creating At housing, patterns, something mean, there, that. our capital change, that not other workforce to changing in commuting small on Bishop. build because about fit Bishop, it the that a

XX% hope fits that our rates. rental to that, the units and those within in of that XXX%, terms is So range, people that occupying entire building their

John Guinee

follow-up Let me little question. just one ask

you during banks how share conversion? So elevator do the

Jordan Kaplan

what, it's vertical this one the in know with to residential is be that to this keep the same for up it no was time, and what at in the and has provide, -- call this. buildable actually weren't really residential on -- that right it, other of not doable You there tricky the support the person the I'm allow that, assistance And know floors shafts and much subject. the doing so have the to I them this to the -- and -- a come confidence while they there would at office because put things floors reason probably to hit so -- we we that whether office disrupting out holding mean, utilities floors. chore floors same figuring of I was time not working is way for project was the primary and discussion that been announcing our But

announcing a -- us to I have for those do support played ago like things role this they city or two up needs to quarter on and as done. it office with in well get too, conversion a the have but this As maybe to and to appreciation a from mean, be done mayor's particularly what two held the us that allowing I

John Guinee

you. Great. Thank

Jordan Kaplan

Thanks.

Operator

Please with go Fargo. ahead. comes Blaine Heck next from Our Wells question

Blaine Heck

Thanks.

straight have for following cash general be free providing on NOI trying up on the burn-off triangulate just you for of a a versus same-store from would you or what guess in much I a XXXX? Just the guidance same-store Do tailwind GAAP to same-store range just GAAP guys basis? rent is how I'm maybe in same-store earlier. change line of expecting

Mona Gisler

Yes, provided we same-store. on guidance the GAAP haven't

Jordan Kaplan

we But provide non-cash. on frankly. of the off a burn guidance did Yes,

of our we your reverse portion mean our the amount X.X%. we you of is gave now you revenue way -- that then into some X.X% gave we two that on The non-cash so makes right. our of FFO can said revenue, up as out than and which of you So, they're the that, the kind of -- steps, less of but engineer And non side also I revenue.

So, plays know smaller other stuff playing mean-- you but role. in in each on a other, role there. a And closing as GAAP that’s smaller non-cash that and it's cash I there's

Blaine Heck

most of numbers. that -- the question the burn is in that off Is same-store right? guess I

Jordan Kaplan

-- did the shareholders. do you We on our side revenue the we we to consolidated been side sheet were you impact properties those floated for the from is to through would flow hard what figure have FFO the properties we number have giving to non-cash because and you for the it and consolidated balance our revenue and out

We the numbers. FFO also give you

don't mean we know you. I we -- So, that the did unwound that for I that is version did. we

Blaine Heck

cash you in the you the it flow a X.X% over figure Yes, secondly Jordan and guys at an remarks in slide out. last that certainly growth rate you showing that guys how about are few guys impressive. talked presentation of CAGR your follow-up. you from tight level can market you growth years? had AFFO over number? guess I think we can still that there I Do keep XX have added When is years look which any could see the next specific you risks is hitting that given the an you forward achievable

Jordan Kaplan

this. and and record, And operating and that has how make grow supported many earnings, broken the position our growth have we tell these growth ago predictable. markets through acquisitions of that all and want -- it's hope been you I opportunities stuff our like we've done have us literally reliable have. more else platform can nobody and said history there. a our we looked we I all our the -- to few achievable. primarily years will of obviously, in the the history but We external have leasing we and I The sound don't Well, because

is I And be so drive it if we sale growth all more hope feel years, it. you're we next control it right than you looking of control. say was actually developed frame ground-up predictable has out from years, I at reliable is started our it can kind we that will redevelopment seven if for years. look this platform And whatever I XX the is sale, don't we It because know now may for to lower that that. within our your hope time construction something before is is for feels more all right five get have that and I we been construction and last stuff that this six

Blaine Heck

That's helpful. Thanks.

Operator

Citi. Our next with question Korchman ahead. go Manny Please comes from

Jordan Kaplan

Manny. Hi

Manny Korchman

past, in Kevin, we’ve to have get building about is convert to the office the guys are space plan? what about about that overflow still going of or past talked you the for changed potentially either as that in on to tenants sort when talk that you Can relocated. Or in table? another the Hawaii buying talked

Kevin Crummy

was the that didn't have we in changed really What plan results Moanalua in out we when our development first yet. set

actually that we incremental first vacancy the hey, stand-alone most maybe And phase we within a the looked so And basis. the on control. it suitable figured that resi redevelopment as at office that make that in was need development And we we thinking Moanalua then rates we were we rental and when and we one that sure finished properties we saw for we that was looked this the space at the did said works and achieving, weren't downtown, out we one so deal the as were would and the we to returns be? what work that would

do buildings And came office and it look didn't just we because in That's so, the the hey, took development impact additional other not the available What's if to it we this we downtown the that what overall to need so be say make a a to do we'll decided that but potential And impacts of portfolio? said see return building market, basis? on our forward. wouldn't at the office would stand-alone this how we one go that cost? we work, to if what

Manny Korchman

actually accounting-driven it I is changes don’t in mentioned up on lease or cash just the impact changed $X.XX $X.XX the sort that? to Thanks. to of understand you compensation? following And from of Mona in any that Is maybe changes, accounting just going all what

Mona Gisler

let we able original bit our on the had leasing was had leasing on linkage and we've our being that of with did combination is ahead directly an be probably able based expensed. to that compensation. and we you was explain so our going actually we $X.XX. What been to equating Well we to a XXXX thought that assumption But of when to that looking given to And structure. me guidance we that, more always be little had cost will $X.XX the that most to the transaction, we've -- capitalize formalized and than that’s paying in and went by linking back initially compensation a

Jordan Kaplan

It’s we $X.XX there, think average really. I'm saying, by that what doing took don't $X.XX. past we have. based okay the the we the memo the can putting side and are capitalize I this That's it’s just in or just all already cash did the we we formally

Manny Korchman

Thanks.

Operator

ahead. Markets. KeyBanc question Capital comes Our go Mailman with Please from Craig next

Craig Mailman

the with of on you basis kind kind office rest what stand-alone follow-up a the And down what guys of just guys on of pullback be you maybe to incremental spend May through the the do flow downtown stock? rent is portfolio you the guys. conversion, kind Hey the their? thinking uplift in return do of

Jordan Kaplan

would as residential originally that return Kevin the was development worried said, below Well, on I the be returns. side

the larger to the because returns. downtown. acceptable is low low development we're end we development goal have probably returns at now, which we But it's think at end achieve of to going be want I of

surprised out that's planting but we start just positive hope a today. MHA like to were get at when where we that, on we're as Now surprise we

of terms took impact going looking is tenant it then of I'm of that on. there'll that another market. There big sure downtown. we're some very rest market. moved the other consolidate market, There's things be There's And rest tenant and doing. there's a what a the to in on the large feet the In XXX,XXX the

of the there's So number a happening Rents positive in market. things moving. are

Downtown in Where is Honolulu say how's and things. I that goes double-digit in now. to a be fair think it of would there's all those function goes that rent movement

a be to going So -- take little of prediction put it's time going on little a real a it's it. to to bit

Craig Mailman

the but some for guess I just than just there and the years guidance. know couple at lower expiration next little out. XXXX, the on then, puts bit occupancy a I And looking it's schedule are takes, of

-- conservative? just Or that larger quarters, guys the seemingly mean you next You guys just do more be have absorption lower there'd – decent given couple year, a steady. the is may lease amount I would be hold? think of something coming over that's kind of net pretty of it the in a tenant there held new that’s out leasing I keeping later

Jordan Kaplan

and there whole a and churn, the churn Well, and thing. is renewal

that don't – I I until get we know. think well,

up to on a we in new That end of I estimate. churn we size, you ones dog. purchased gave in of Westside, the mean, range. absorption Center. a tail. the you'll a gave that's we -- other matter through And good think a too. But portfolio Honolulu. absorption higher amount good you you So are We're And likely right? know go Westside a reasonable you that's made a the we range, a that see some seeing I our of already on range. because pretty we XXs gating occupancy as the the we product is to will in got Warner the as of reasonable absorption, be frankly otherwise to that. And these more that estimate have just what, been think the X when of if in through It's of to the we our on our and churn strong aren't maybe And So would a and maybe held significant we up, portfolio little bought the those up the roll is. able don't kind rents I really tenants dragging how have right? and in, And that that's churn feet, -- you kind you others. kind do more Westside, until seeing rent of roll that's you're ready to have. plus up Westside for a in some as and have the up rock And of lot our then million you you roll that being see particular, something there settle

settled this Now of still maybe might get leftovers the but year, even there year. next some be we'll that

Craig Mailman

That’s helpful. Thanks. Yeah.

Operator

from Ismail Street Green comes go ahead. with Advisors. Daniel question Please next Our

Daniel Ismail

Great. guys. Thanks. Good morning,

roll up follow rent the up. on a Just

rent been years. good overall the two the betting in it's line low in the past consistent pretty teens, fairly roll portfolio? it, for still currently the So embedded up Is call that

Jordan Kaplan

predict. Hi, hard Daniel. We don't provide It's guidance to on spreads. rent very the

seen rents As you know, quarter-to-quarter, those good there. of We don't trends have choppy signs its we see softening. any very but

guidance. still to going any good not we're expect going forward, specific give but we rent So

Daniel Ismail

Okay. Fair enough.

back So earlier resi. to comments an on Santa Monica going just maybe

the recapture from I think you how And captured many of mentioned XX Can are annually? you of apartments pre-XXXX units apartments. left? sort the pace of those remind us still

Jordan Kaplan

back years, There's about XXX Santa year. XX of gotten couple left Monica. we've Last in Yes. each about

Daniel Ismail

for over expectations XXXX And no change place XXXX? or in

Mona Gisler

predict. Very hard to

Jordan Kaplan

right? for tenant Yes. predict. same to hard Very The time, space at an the But the has incredible time. we've long been deal, super in

So the is it'd the they life whether change, there, who live There getting to older. more opportunity are married whatever case many so for circumstances kids be or maybe.

not deal have In think program and more program the in. goes move out. the it in sense to goes, longer another have the better you they longer So they motivation the more the turned the one the sense,

our in it's two those predict. hard should to So favor eventually, but bounce

Daniel Ismail

Fair enough. guys. Thanks

Operator

go comes Please Our with from Green Evercore. ahead. next question Jason

Jason Green

year you to have decreases this morning. occupancy where they is in been may what same-store same-store If was the comparable question the XXXX? guys Good pool? there what Can talk about or fiscal changes increases

Jordan Kaplan

Yeah. Sure.

we to as properties the whole as XXXX. many are What pool pool have represent properties do the in represent So really for that of make portfolio. for to the possible wanted the pool adding is for for the – we XXXX, portfolio

too of adding, we're really projects going out been repositioning of year. be last noise are in creating XXXX, acquisitions as JV some less vacating matured. have some the conservative a we the for consolidated So Also expected. recent to Those those than in taking

are So to the those those – coming some pool. of

is the and So overall XX.X million much from year it million pool XX.X about portfolio. to going our next feet-up better about feet represent

Jason Green

Got pool for what fiscal on able it. year XXXX? to are was say occupancy you And new that

Jordan Kaplan

And real year last was year, a brought don't we're and as in pool, getting which us. a ourselves I big that he in low up. representing we No. portfolio difference that growth markets. as let's in a very we No. the know all typically way that been felt be can. good that shift about on just working in that this in mean, growth our its the of putting right said, And and occupancy. two much so I terms services the did And into the occupancy, slowly that pool I I you pushy for just bought that's very we ago, know years stuff

Jason Green

in then on you And is XXXX just Bishop have repositioning the it. if of effect, vacancy in market but the not could the to talk on Got multi-family maybe office broadly, about the going Honolulu? market,

Jordan Kaplan

market itself the XX% the of about building Well, in the represents XXs. market. mid-to-low And is

draw market might the where many. in math more never – But building knows. one between, way. has market. have you out for People might sure, it market of and works that will tenants and Changed So historically say, and amenities the create, kind who balanced it had a the a move will people too in landlords the of

that's positive and the it's this another whole project, – that's for of good goal So but -- market.

Jason Green

much. very Thanks it. Got

Operator

America. from a of question with follow-up [Operator go Please Instructions] next Jamie Our Bank ahead. is Feldman

Jamie Feldman

at Loa? the Great. lease currently Thanks. What's Mauna percent

Stuart McElhinney

We about it's the think units. half

Jamie Feldman

rest? leasing then About the half. what it guidance up And occupied? in it half? do contributing Is for your Is you assume the

Stuart McElhinney

Correct, correct. occupied. Yeah,

what up provided for year, broken of up. clip, guidance We or good haven't we lease-up any on throughout haven't timing hope events but leasing and at the leasing any a that. that We're kind out we're continues

Jamie Feldman

rent portfolio, And right you market then the growth? what you are say what what this growth you are -- would rent thinking across now? And for average your rent -- year do Okay. bumps

Stuart McElhinney

on office side Average right? the rent you want bumps to know,

Jamie Feldman

Yeah.

Stuart McElhinney

I'd So the between and say. average somewhere X% in-place X.X%, is

deals getting getting we've as going are the been few lot a in Xs, years, at Sherman a lot the All last X%. on the down still over the of lot Honolulu For good rent Center a Westside are Oaks/Encino We're X.Xs. of well. very and Warner out of X% X.Xs range. bumps. It's

X.X%. think, that somewhere and in-place I balance all between we So X% is out,

market rent just comment on do growth? want rent to -- growth On the you

Jordan Kaplan

mean, next if -- is there's year. which that will the would not we only markets they the look be impacted I And growth few here, that that into would demand market, occupancy would the good coming being there are in sides there's on. to you just supply rent our and impacted supply, growing. are they They two generally -- know national. and that the don't think at here. are Well, I you look, to have across pretty not by the industries not side, thing continue I something And any anything mean, really by equation,

been to way they would that So the move rents add have and moving. continue pressure just

Jamie Feldman

the too Okay, all you'd leases, X.X% the on average And say rent on portfolio? X% across to bumps right. new

Stuart McElhinney

new we're On leases, doing better that. than

Jordan Kaplan

doing probably We're X%. to X.X% Yeah.

Stuart McElhinney

Yeah, in the and of Oaks/Encino Westside's as then a lot Sherman Xs. X.Xs doing Xs we're well. And

So on new…

Jordan Kaplan

So the weight end. the is upper to

Stuart McElhinney

upper is would the Yeah, the overall the probably be but on X.X%. end to in-place and new, weight between the X%

Jamie Feldman

Thank right. you. all Okay,

Stuart McElhinney

Thanks.

Operator

for turn remarks. concludes conference the back now This would any Jordan Kaplan I to our over like session. closing to question-and-answer

Jordan Kaplan

everyone, us, next forward you, Well, look quarter with we and joining thank for speaking again you to

Operator

The now conference today's presentation. may And for you disconnect. you Thank has now attending concluded.

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.