Douglas Emmett (DEI) 8 Nov 192019 Q3 Earnings call transcript

Company Profile

Participants

Stuart McElhinney	Vice President-Investor Relations
Jordan Kaplan	President and Chief Executive Officer
Kevin Crummy	Chief Investment Officer
Peter Seymour	Chief Financial Officer
Jason Green	Evercore
Jamie Feldman	Bank of America
Alexander Goldfarb	Sandler O’Neill
Nick Yulico	Scotia Bank
Rich Anderson	SMBC
Tayo Okusanya	Mizuho
John Kim	BMO Capital Markets
Michael Bilerman	Citi
Craig Mailman	KeyBanc Capital Markets
Dave Rodgers	Baird

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to Douglas Emmett’s Quarterly Earnings Call. Today’s call is being recorded. [Operator Instructions] After management’s prepared remarks, you will receive instructions for participating in the question-and-answer session.

I will now turn the conference over to Stuart McElhinney, Vice President of Investor Relations for Douglas Emmett. ahead. go Please

Stuart McElhinney

Thank you.

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

earnings you earnings during of reconciliations non-GAAP measures discussed You our the Relations find package can also section can Investor call package. in the today’s at find of our website, financial

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

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

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

refer potential For a Investor of website. more please in our found can Relations detailed SEC some section the description risks, which be filings to of our

question-and-answer in reach now the up. the will limit to and one portion, one we consideration follow I please of turn over call yourself When to Jordan. others question

Jordan Kaplan

feet for square you of joining Thank a during new feet everyone. leased morning, Good X square XXX,XXX buildings us. leases. our Tenant for is demand office million We including robust. the record quarter,

leased increased XX.X%. success by point drove and in a our rate Our full a basis point XX almost occupancy percentage to increase

demand by wide and economic up property NOI. increase trends. same industries gains and cash supported healthy drove rent our a tenant a our leasing continued X.X% of regional roll Our strong range Overall, in is

any side, markets. we construction don’t On new our meaningful the supply face in

XX since to points to five $X you its successfully Last that while interest its advantage strategy pleased reduce we tight adding reducing about rates to spreads nearly lending of almost rate have years low billion, quarter current term to refinanced X.XX%. take extend say and approximately long-term May, I’m now basis interest rates and maturities. we to by average told our

financing activities FFO will reduce our of our an equity As and from due grew expected, fourth for The to reduction per reduced costs from penny, share. the as recent by our well in quarter total impact, loan to FFO quarter Even these by FFO per this by additional most strategic cost balance the share, XXXX one-time as non-cash with dilution. quarter sheet cash $X.XX $X.XX bringing FFO this activities we X.X%. loan third

X%. we FFO over Excluding this impact, by grew

XX% revenue turnover recurring well we was Our stronger, as cash quarter our conversion our costs compared both operating AFFO from resulting growth AFFO model. to third of grew unique of as our even as non-cash This by to XXXX. the reflects low

slightly cost spaces our average benchmark a few While turnover only still of our NOI, costs, represented have group large of those leasing up XX% our elevated significantly below XX%.

call With to turn will that I Kevin. the over

Kevin Crummy

Jordan good Thanks, morning and everyone.

are program. Jordan the strategic history. results have very pleased sheet our strongest in the we with mentioned, We debt of As balance our now

only at stands XX%. debt value net Our enterprise to

continue properties refinancing for more future debt XXXX and activity the XXXX for spreads constitutes don’t We further unencumbered portfolio. in we financings, have to will no pool anticipate this maturing opportunities. our of of although before year, our any XX% and now monitor We office rates available

apartment construction office our In to plan our XXX to Brentwood, XXXX expect Turning to units of at to apartment first Eventually, development. there. In deliver Honolulu, new have units residential of well. we conversion project. in unit progressing the high-rise tower XXX almost batch we is still

residential number of been we’ve office potential pipeline is acquisitions. deal looking Our and a and picking up at

closing deals gives deals. in sheet the units optionality in and balance the available for our lots we of our OP underwriting, While of tax-advantaged disciplined of remain strength us

turn I Stuart. call that, to will With the now over

Stuart McElhinney

rent Thanks, new XXX,XXX of high covering a square square Kevin. feet, feet straight for total including quarter record office roll everyone. and up rate we the XX.X% morning, XXX,XXX Lease for line by XX.X%. leases Leasing In a our roll basis XX.X% for QX, up. spreads quarter. leases, cash office portfolio XXX for new signed XX to were Good for increased leasing points in

Our overall XX.X%. basis portfolio points occupancy increased to by XX

as XXX a in particularly value Los basis region for by points Our increased our assets to Angeles we that had good rate lease XX.X%. quarter,

of four less next quarters but portfolio. historical remaining expirations our lease typical Our XX% below Well our total over averages, the only than recent expirations.

hopeful into fundamentals. even that leasing better continued translate will We’re strong

remained portfolio report side, end. pleased are quarter our now Moanalua at I’m at new On leased. apartment the essentially units fully to leased multifamily our that fully

continuing units existing are to our upgrade the there. successful We program

now I’ll Peter to discuss results. over to our the turn call

Peter Seymour

good Stuart, morning Thanks everyone.

We We ago, XXXX are per QX FFO Compared results. to with increased of by the X.X%. increased a in to quarter revenues our pleased year we $XXX.X $X.XX million third share. or X.X%

result cash quarter per a activity. balance X.X%. $XX.X our third our our to by property as increased NOI by XX.X% $X.XX reduced was As sheet FFO We increased share same of AFFO strategic We Jordan million. mentioned,

for of our revenues, less group. below G&A well the quarter benchmark that Our was than of X%

guidance. Now turning to

We are increasing property guidance our between NOI X.X% and same X.X%. range to growth for

offset largely Our program. and underlying balance strong $X.XX operations strategic leasing impact the sheet our has from

per are full-year between we per narrowing the range FFO result, $X.XX midpoint to maintaining $X.XX and share our a guidance, share. for the As while

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

assumptions schedule underlying to in For please earnings the refer on guidance, our package. the the more information

the turn we can the now will so I take operator, over to questions. your call

Operator

go [Operator comes question Instructions] First with Please from Green Jason Evercore. ahead.

Jason Green

for your pricing previously the market. the deal you your guys I given pricing given know at about comment changed has doing should expect development? Good pipeline, on assets view morning. And versus market guess, the more on in more development, acquisitions talked all? have I we

Jordan Kaplan

have want what why you that. on you about control just Well hopefully and – are slower we less they talk now is I process to away working acquisition. about Acquisitions we – don’t think we years start we development don’t fruition a and come over, because entitlements doing to

Kevin Crummy

Sure. The the time is surprisingly year. deep looking of pipeline actually given the

got opportunities, chop a We’re lot at of wood to looking a of still done. get number off to things we’ve those but market

so they they we’re where sometimes relative with amount be, pleased activity. expect to And the But sometimes don’t. to it of hit, we

Jason Green

Okay. just itself? And around market side, that’s the come last to multifamily NOI guess, cash start the same-store two in on then in we higher I rent X% that expect should positive to when turn the given the quarters.

Peter Seymour

in That the sure you few an can number on quarters has of quarter-to-quarter – indicator that I’m even been up. rely last what’s coming that as not

that market you ends say play all like it feel and turn, is, still few course, are opposed where aberrations we – all like actually us but we a out you the Of need see those as of is I quarters up. to when telling more where to

Jason Green

Okay, thank you.

Operator

question with Bank Jamie next Please is The of go America. from ahead. Feldman

Jamie Feldman

you take – kind assets to Great, the you a thank what it’s see. size. give little leverage color you you. the can like, higher returns bring I deals you to of more you’d done? willing higher think to rates as guess sticking then how what in the look Would much like and financing, that in be much acquisition a bit also apartments whether about would how get the about with partner What pipeline, just are cap are pipeline, in or office

Jordan Kaplan

entire That’s like an and capital acquisitions stack.

take would L.A to kind the of – pressing more I most a things looking little structure the current with for to West of office, of So generally bit the in part deals there type us of valley. – number than our is say position. OP advantage unit that our of management, most or are some usual of become

of that is deals financing want thing. and of the I just In always structure, of terms all, platform. to and terms have have. of think us number and of control strong us where of it’s the because sovereign first surprising take would broaden that that they a JV and of in, in partners JV – keep to for but stay our say and number I kind first partners going the choice we to that important use

substantially levels I many these don’t that, would that Beyond deals leverage for know change us. of

cash flow. positive of lot a have We

ways lot we significantly a it to don’t do have I our impact that value. of We loan to would think

Jamie Feldman

in Okay. the And you said then Valley.

you you occupancy are would of you comfort either or that buying what can in fundamentals, maybe terms rents what a more So some change Valley you are talk like give about in seeing there? –

Kevin Crummy

in Hills market. you the strength and of seen publishing have been numbers Well, continues to strong, in that’s general strong we’d the be like looking guys Valley been be And – Oaks a Encino/Sherman so in if improving that there lot the kind been that you at is to to on. the look at of happens seen it’s stuff in degree to to Encino/Sherman everybody, fact, we’ve we’ve Woodland do we’re coming Oaks of left deals out

Jamie Feldman

thanks. Okay,

Operator

The Goldfarb Please next ahead. question is from Sandler O’Neill. with Alexander go

Alexander Goldfarb

good there. out morning Hi,

are spoke about comments balance you spreads now you guys unencumbered XX% possibly at rates in sheet First and into on XXXX. looking the side, and and the heading you release had

just prepay we So perspective, meaning debt are unencumbered out toward it stuff that for ’XX a pay free where swap would penalty stuff you leverage, reduced increase would And guys that’s you coming about option then guys balance be be you. and beyond, you cash should refinancing naturally a it’s on, free more a think – presumably would going if cost sheet off from continuing to you not more flow. this a would

how far pushed your out understand profile? to given Just trying maturity your you thinking

Jordan Kaplan

you get you is what down just right. deal, looking tenant there basically your two just cost so be – is what we your good then that if we’re something positive of bring a generally one there wouldn’t when is of So have because if cost that can are we swap, there a you I that those. can say a things, refinancing and sorts prepayment a is bringing don’t lot assuming say And is stops from swap, benefits it I’ll refinance of out at a those net down. have you

say to you’re So correct that.

a That of could out tail a to doing the will period can to that a us make the add yield we good place be can fixed not have we’re What’s the continue we that swap long making in curve that swap very next a like. for loan continue to a next the time, goal. it’s doing have swap you What’s we environment longer place and and interest what fixed because that and such to just time fruitful a on there tail is of end in very good expensive, flat swap. a swap good is that of this our very can then is so there which sure to giving need loan swap add we’re Now, the that making rates. period

of None the the prepayment there could opportunities. still well and is us our assuming the rates further next penalties has swap extend indexes spreads the and stuff some debt. still, to year on cost for And reduce be there low, stay stay maturities so more our

typically, because release move to able when few you’re that and And the we’re of a values, buildings. doing

had that you when good, say don’t a at even the so a be if going financing let’s unleveraged us buildings cheaper giving that’s in loan tend flexibility cheaper that get loan you release six and environment same this is the great at future building that shifts you that’s our a and price So loan we buildings. another had why in probably will more the – could for is pool. even it’s to for same more leverage Since

Alexander Goldfarb

just how The that’s out is some Bishop tenants how you tower you’re with on you give Maybe office to in Okay, Because we how de-officing, On for the your impacting it. of should out Honolulu. you basis there guys? assets, Bishop are the okay. the out a out helpful and about points. update an occupancy think if explains that of it’s property? occupancy that’s who overall to And converting? the word, going sure the dropped moving got the existing you’re XX then think other reallocating while places And trying same-store I��m bouncing market? find tenants move around of Then

Jordan Kaplan

writing the that settled Bishop market downtown has conversion some reasons in area have tight. the that XXXX the had move so relatively tenants, There’s for may large be than other extremely on become be there. seeing themselves firmly wall now to wanted Yes, that more and

move. So top that’s rolling of our out, that’s on

we XXXX. out plus think have we in our XXX,XXX of XXX,XXX buildings about need we move I available feet to feet – and

So tight situation. that’s a create

our area is quite I conversion think big in residential. this along in occupied workforce of And we’re daily well with that’s buildings really moving important is buildings. improvement game that to and because I’m on downtown get other more built and converts you stuff that that to they’re if the will, that than what area tag seeing on of other literally to near areas, looking residential people,

be that housing the strategy downtown. Most couldn’t with to pleased creating I and more importantly that impact that having. so it’s And workforce

they you’re pretty whole a If we movements of seeing move don’t are I tight not I meaningful. The occupancy, – quite have and frankly. tenants think space in into, don’t little lot to is market enough

Alexander Goldfarb

you. thank Okay,

Jordan Kaplan

All right.

Operator

is go Please question from next ahead. Nick The with Bank. Yulico Scotia

Nick Yulico

Thanks. just supporting others I Mayor I ask couple some a next you, now just in split roll to joining of get state Los – just of wanted about out and came news year. Angeles,

remind I think roll mayor your What Angeles – where the And just you thoughts? past, us are now have taxes are you was in your didn’t mean, the latest you of versus split likely. that if during I supporting said could Los think you market? it.

Jordan Kaplan

split ever where don’t they’ll even the the of, It’s markets, in elections. poorly. that are keep market. know and being roll popular general there’ll the Prop has mean to market our that I believe extremely asked think don’t that but it’s split know even terms I It’s in there. and popular. don’t be I I until It and still a taxes a believe extremely is you’re I pulling thinking of get very ramifications And of roll. versus hard we’ll impacts XX question tons

we beyond the don’t greater my moment or I at loser. talking have The better about, I think any opinion information a where it’s complete polling is polling and can the is. keep

Nick Yulico

and surprised you Angeles see out were roll? the Los split But mayor to of come support

Jordan Kaplan

for good doing the right that plate they have moment say like at I know to thing time. something I’m lot that I is He don’t a a lot But his actually how believing time of mean on at can’t political is say he a manage it’s hard a any decide issues the of that and politicians is he I idea. surprised what got things. do thinks moment. them I in

Nick Yulico

some And companies complicated guys be a market. formula, assets sort come could about look have other still I an of like giving out, guess, idea really It’s older what’s it, seems mean, have impact and that it’s to taxes. their the reluctance? a what I lot at but warrant of you are to we when it – reassess

a can for so you’re guess, when just it, you’re that’s give you do the maybe you And math I where I to able saying on not But us mean, true. feel there that market? in a could think you’re Since in place taxes legislation your property be are that versus affecting be out is now, the year meaningfully coming from could taxes future?

Jordan Kaplan

No.

Nick Yulico

are to be continue taxes give on versus just So passes, could you’re to legislation, going no information this they where it occurs? when where potentially if

Jordan Kaplan

don’t think I That’s company, correct. I that good for the good to that’s issue. fruitful a think down. it’s don’t politics for the think road it’s I go surrounding don’t

Nick Yulico

thanks. All right,

Operator

Please is with question SMBC. ahead. Rich next Your from Anderson go

Rich Anderson

That’s SMBC, enough. but close

– you getting that’s I’m think you how going extra or I versus if in whatever the the – versus time it issues immediate think same-store much space? of do each year? together, was. a minimum a what numbers leading recall you today sort it in it you we’re which So is the first it’s time same-store last having year how lot a growth the just through you’re handling or curious were more handle quarter reacceleration my are lower. of wage is spent of last more fashion XXXX Do kind we evolution of growth improving, of on system natural your of because into seems, behind things to you question growth XXXX think same-store profile, some this same-store

Jordan Kaplan

and In said look we coming were is that getting remember gaining here, of rents from lot on gains gains we making redevelopment to our expedite but from general even the of Well things. obviously, and were continuing lobbies, lot programs, a platform stay have only operating and always said growth when I pending to were pent-up in though that’s from was further I online redevelopment buildings that always moving were comparison the that building meaningful we of redoing what gains compares I work it’s and though a back. it through we getting not you – to same-store, things retool it’s we’re redoing developments and up

we better have just it’s in we’re better the is kind positioned to said, market think rental a of I metrics and that we And lot strong of. advantage of more take

probably I think than that digesting year fact we moving minimum fast wage. kind is playing the bigger of a that role last were

more company. residential which that impacts that on that’s, the to was has than think outside, I the side whole more but impactful course of of that

Rich Anderson

Okay.

you guidance. at is of think are this stay get operating single So, be of a able – where XXXX to I mid-high a for of to mean you’ll a of But digit range? kind you in kind I not sort this mean sort place while,

Peter Seymour

are still we how were to predict get good a the our – can we be compared numbers the making be leasing are hard they they you year spotty. as still to fundamentals and because to thought with out going going currently talked very are gains last is I in quarter-to-quarter It’s coming when at we they as very the out income and clip. this come markets tell and What growing cruising the that there strong seem can when

even around amount doesn’t the can that things the, have that our we some coming industries economy kind side the speaking the very strength create those and turns national moment those on of in – the the top long-term we’ve we’re fear are mean seeing other the in for at happen the residential. supply doing that in I’ll the stuff or demand in all of been asked I on exogenous but of and lot residential, know everybody a about system, Now that question with on buildings good markets supply – same-store was create that the returns. but the to on say metrics of And conspiring our

those optimistic numbers just than showing better So even is and get this a will I’m aberration more that long-term trend. an

Rich Anderson

five you Okay. percentages, grow going next around REIT, longer a more in years a XX/XX multifamily you lot D&A sort multifamily total as people you a split? office could And of then or be an of that being discussion as over the years much primarily multifamily second and are think percentage with substantially your mind with and of think the the as back question of this just history. Do or part business, the given is the in as to types of comfortable with four excitement

Jordan Kaplan

housing three Well, we multifamily blocks as is a to as just that have faster to the ticking land because spend then has that own takes additional in and to whatever and we amount it go I little the position opportunity. than markets much do best a we would the off entire hard time, the like can. money and housing to own It’s them buy it say something that do class years we great we on – long takes lots to asset for approved going get it incredible someone we we years are in they’re it clocks because think time. a of these to that two of the approved for-rent already with someone think to making of land this

developing even focused and So projects. and repositioning on existing that very hard buying we’re

though know XX%. back you there your steps answer to to group is XX% very – it some take Kevin’s deals question, multifamily a and we to few right the does office goes forward on said, over even that With solid

we’re to the aspect hard because also up our larger just in those markets So are office ratio to opportunities be of there it’s working the and though coming seem to the deals. we even that and company grow like change hard

Rich Anderson

Yes, yes.

you. Okay, Thanks I very got much.

Operator

with from The Tayo Please question is Mizuho. go next ahead. Okusanya

Tayo Okusanya

afternoon, everyone. for doing to suites talk suites, you’re good of plan? Could your the Yes, of about of signature the how program relative standardization internal bit just rollouts the with and expectations your the on office you a little program kind side the

Jordan Kaplan

Yes.

many just and have leased the capital have every suites of it’s worked it terms a throughout a We it’s move try TIs, and we us much it moved, attractive. move we like, that furnish stock So portfolio of to higher hasn’t because maybe to if the little around that the not have and that’s into. even allows it cases some and furnish are go building, you’re And older the well. if in ready that we’re them if level show best you in spot in extremely what large even that control them to raise in attractive space building when then willing becomes and to entire ready the very some program you more in get in and it people the looks it becomes then more all

and It have do more it. time like, diminishing possible. even seen So and the are to are are and that’s very be working process we done and so doing more does of having as lot think more been – successful available suites able do I a say returns Because the even only and as of we a it’s getting fantastic us teams and to of fair designing we better would people’s to more not we for those that it to systems increasing many dedicating what not our returns we we

program us. process and Now takes focused on training and, It’s been all a that that. and time great that we’re hiring but pretty for

Tayo Okusanya

or specifically you in it out that others, and about XX talk attracted it? sub-markets per if tenants certain you’re your types target if month certain build received than better of of hitting Could to it’s are if

Jordan Kaplan

think X,XXX in tenants, tenant I our doesn’t feet group. because a real estate than have Well, particularly well especially less it that’s markets the works

can say, designers they blank one you to do move we they is So and hire of that’s even ready so a that’s have that it them much need thing all give for when than give have to well, one easier something stuff. and to you it’s them move-in to move-in ready like and slate and if feel them we

tenants. to tends market our because those have smaller So

planners it market probably better of than and have average also in larger. have as that to And size cater that feel leases of through another we and to their other that moves they the we lot change want a process. you very their faster that intent without tenant stuff just letter don’t make on where go I of and space way having operating just here of can much the attach aspects our might standardized platform on to this iPad think the terms

group We that already carpet and color emollient have pre-match the you and like have so whole design that to, don’t don’t has feel samples you designer. deal and you need to

done for feel a of to in make looking whatever easy and it to the brings a we’ve had make So efficient down capable, they confident, lot someone costs us. feeling and for was whatever process them just space paying – both that’s terms faster office to there not you’re like million turnover speeding decisions overwhelming and they just gets and for it rent that up, had leasing

Tayo Okusanya

Got you. Thank you.

Operator

ahead. question, next John go Capital Kim Markets. BMO the with is Please excuse from question And me next the

John Kim

you. Thank

up that Do multi-year couple expectation lease expect hit XX%. occupancy And you really a of release you do next XX% just toward of have of years, Your creep rolling improving? of of the over high occupancy rate number? you kind to have any given

Jordan Kaplan

you points XXX it’s rate moves lease as closer about as Well, generally a they basis when and I seen have wide like and and XXX spread it they hard, as can tight basis tight as plus lease get occupied. as go they right, between together, as squeezed so therefore you leased ever a about know that’s widen about than bigger occupancy to occupied go lot can never of points a say the leased? have as leasing gets. would and up, and XXX That’s you’re I doing

of pretty because wave. seen the than tends we already lower off we very out lot little be a shape normal, that many out one those a catch role people. we’re our prepared with to constant we’ve kind a about might we in quarters tends couple a the haven’t that from up we question remarks is approaching two but we’re out, terms The we shape your of role because mentioned meaningful tenants, of like a from I because have way. higher our so coming out, – wave it year of relatively haven’t terms – little have In I renewed there, one becomes of in three long in, fairly steady know years change the have of itself that up, stay terms year to wave that will that – their that it in year low trails then I seen that to a year in in years

John Kim

or guess we will in year? guidance, early you’re levels maintained an you have then at at providing least and you if I’m just the wondering cycle I without if where are think demand, indication rate the higher these where potentially seeing be lease next

Jordan Kaplan

amount we do in Well, quarter. when of occupancy you say the then rate, what we have like a rate, lease and rate, leasing

would that the up meaningful think quarter into, a today are we ok, say, can down sure they for tenant that to opportunity I’m supply rate I to to flow. available haven’t say go don’t have leased I still against there’s spaces move large to them have going that levels in meaningful go a we really seen occupied still market terms demand The up. anything and number I at mean of that any do there’s is our new some all. we in me are when leasing fundamentals have more in more watch good. today. if of good vacancy we meaningful some amount high the to we’re pretty I’m not So glad because

John Kim

is this question that refinancing the second you My done quarter. on had debt

the a at year Your weighted I average that just interest get X.XX% as ago rate you’re that with refinancing is at did wondering, year you thought X.X X% quarter, maturity. maturity. benefit with have weighted of I –. average a would A is six-year this was full

Jordan Kaplan

it, it the that We’ll quarter. next of refinancing no, we year, benefit of because happened the – part just No, done during the full last year, this get got right. did we’ve we stuff this

midyear, We costs and etc. the have happens

generally non-cash some will on Next interest of it. of lower cash, the generally and benefit be but see continue you’ll doing non-cash, that, year, a associated with rate also will cost little bit but the there

John Kim

Okay, thank you.

Operator

with from question Citi. next ahead. is The Please Korchman go Manny

Michael Bilerman

Bilerman Yes, with Michael it’s actually Manny.

So you the rolling got we your as Jordan, XX% when portfolio lease you look about of and think at about XX% roll in XXXX, ’XX. other

your a yes are Your cash, think want $XX, average wager last market to of mark $XX, a straight-line about on in market where should up XXXX, growth XX% markets your it they’ll XX quarters in could be lease $XX average call in you if rent guess been should how about mark few but into I have we demand. XXXX years? current spreads think rents to basis running we The to talked expiration, How and reach to about basis. the in about accelerating a those XX% you and $XX, expiring on lot

Jordan Kaplan

You years a a at few by little surprised and held this, for our I’ve mark-to-market been now, steady XX%. know

I think – what?

Michael Bilerman

think the So would in be as the growth been your happening, you that that’s should with of you would right, accelerating. that rent we we. I in more see mean – rents

Jordan Kaplan

of each pace rent we’re staying function roll-up – needs up. somewhat well talk our of I And don’t mean sort Yes, relate other. a perfectly it’s guess caught to I a that at that’s and capturing mark-to-market

I have times have capturing it larger is would you not have up five-year obviously rental because markets As lease think would we’re number, the because of just persists, and or just are because I average when we’re next gains in been obviously general there all is coming and leases whatever, on one XX% would thought market strong to capturing lot been rate market just but a know it. that but we’re the it they quarter also very gains mark be would the there that a it

of situation getting market. any this are be what I XX% still up don’t know next have on – very this I I will we maintaining don’t a strong and interesting mark But now mark-to-market roll to as So call mean I’m the year. right literally

Michael Bilerman

space I rents that I if where market think mean you do is $XX, where are at today? the – expiring mean for the

Jordan Kaplan

rents, the – rates as expiring lately the roll the of rents high, problem hottest there a rental they’re because on hasn’t lower, mean run expiring up the rents therefore Well, they rents those hottest it’s is in probably and some rollout, higher the something say the are what been much. and When you that higher flatter fastest. the depend expiring are that’s are when counterintuitive when markets are where rents I are expiring the going have little markets expiring our a the rents the up little markets in and in are is

that doesn’t it think would you gives the you that clue So you. give

Michael Bilerman

the back time. of years structuring. XX% Maybe maybe you issued it XX% I a couple now equity, over sounds balance then transactions, to talked share held more the you given a I deals and of some the a like you’ve little think which bunch sheet sacred the basis If turning increased last years, balance deals think IPO, following for many fund sheet, of perhaps about the

your the use now of stock consensus market Your think in in versus NAV forward? growth is to equity I about your is, view different your guess sure a at I’m discount a at of going XX%. should what you how And XX% currency have but NAV

Jordan Kaplan

to put we’re pressure even it’s JVs. to the terms maintain very we to more much of and don’t looked think In it, we’ve think that and XXth issuing public the this know us issued characterize where that��s think and stock. a dilutive our is huge from not bunch of that think allow so willing We thought I’m to at in others issuing continue to want year, is private on restrictive use in company grow public. just in just what and we’ve amount it control estate a which compared I fan be been to past important real the the the large money control time our spend don’t issue Well, dilute that’s I that roughly not of year, X% a that we similarly I that’s about our why went equity, the companies terms The done gains, is to and situated we platform general put together equity equity – of but our to I of in because in I to equity. get a I’d

been should for you going we’ve do reasons a agree that there’s back. know, whatever felt it, variety I So times do we we of when to had it or

the I beginning, but us very follow You don’t think much. it we’ve from done

Michael Bilerman

been hasn’t mean, think there lot say recently, I That’s Yes. a would right. helpful. I more be

long would didn’t last then I time said you of for a I have issue couple think years. equity

Jordan Kaplan

that that that Yes, in million couple in that but then And sometimes happens between dropped things. interest, apartment for of that the that two got equity a in dollars. issue yes, building end in JV, was was recent we that are one – was hundred we did when and we buying

Michael Bilerman

Okay, thanks.

Operator

with Markets. question ahead. Mailman go Capital from Next The KeyBanc is Craig Please

Craig Mailman

guys. Hi,

uplift of Just in all, have looking at to pretty two dynamics your Brentwood about year-to-date that those ability of hindered push kind your kind rate? Westwood. you markets in in truly guys the lease rate lease one little the talk but to a had markets, Could across in good you��ve

Kevin Crummy

Craig. Sure

Brentwood, I park sub-market. excited one think the thing building for for that is that in – about we’re really that we’re

So few that’s years. coming a in

building think XXX apartment benefit great the in be building next but not a feet a office million door there, we’re units of market. that couple I got that’ll for and of only we’ve

be will that for So neighborhood. that great

of point right little Westside no like great than sub-market, we a the have has it bit rest perform out Brentwood to shouldn’t just been Westside sub-markets. It’s our expected. otherwise You’re lower reason a that would

optimistic we’re market potential maybe about So that that the there. in in some repositionings future

but kind It bit. when on a Westwood typical work we of that to leases of back, little on our a us seen something. huge kind our get digesting years buy takes everybody around made through us credit. rent for And some the still gains, purchased we we we’ve that’s roll a then bounced few it’s chunk since few a years Westwood of We’ve

we do unusual after some and rate So market. the acquisitions not see in to noise occupancy

Craig Mailman

spreads any Have sub-markets kind the kept up or the Westside with have well? helpful. been as other there on That’s on side that the headwinds of

Kevin Crummy

spreads No, those seeing we’re markets. in still good

Craig Mailman

Thank you.

Operator

question is Rodgers next Dave ahead. Baird. Please from go with Your

Dave Rodgers

and just the lease on that of leases particular maybe point programs signed to new know anything that? you the guess that maybe to Jordan, at ability and of previous I occupancy I you’re mentioned that the about get that quarter in question larger the doing guys. quickly. driving And call, was the kind Wanted to office is the kind Hi the redevelopment you’ve of ask having an in you more is, on impact

Jordan Kaplan

it had, as as think just should clear I I I can. yes be Yes,

So think we up similar deal the we’re is, getting there completed building right calculate. than virtually going which and you some redoing general Rents been to very is Canary going have hard good told completed, of even was in are or situation in there was we completing more We a projects can and those comp had capital another we reposition building fact kind similar we a see the was, one to And the coal both where so question where had mix. one when mall, you next at, are mine access they’re to where I of the the are to just up, building are billings yet. that views, the not whole rents deal. the

closed one, it’s other can been that much dated close the gap. building say this redone do we what gap on a we we that measure to we could is that say we building. more lot. said gap and let’s between, I had we the had And and And the

to $X.XX that we gap the to was think a that a foot $X.XX picked I close up probably wide. a month

know that’s foot paid that’s get was And for XXX,XXX varies, to $XX I that that on building a million building. monthly rate therefore, so I going that the gave spent And that we you. a

going just on there and tight rental markets our the measured up. just lot it’s redevelopment of working out heights a can be rate, when repositioning to gap now So in general, some new harder that seeing those measure know other buildings and was hitting in we we’re because rents are

some the that work the they work pretty been just say seems helpful doing, are occupancy. done it but because instinctive fixed the so and has we’re are we’re amount attribute such to rental to getting not rate, buildings. to We’ve the looking like we’ve that doing worked to harder it’s in we So, we’re the for response work necessarily activity full. on great But very

a across that We of stuff. good pretty have lot occupancy

Dave Rodgers

helpful. Thank that’s Right, you.

Operator

a The next Feldman ahead. follow-up of is question go with America. Jamie Please from Bank

Jamie Feldman

we past. since I’m you. either players thank more market, the seen have curious, the they maybe IPO, did co-working just were of pulled change or smaller looking either in users this any the than are looking your at Great, you portfolio, number that in

noticeable change any in operating result? conditions Just as a

Jordan Kaplan

go we’re we but office general, space kind program. extremely continues reworks changing reworks the and to talking I We’ve been whole be happens the I time the to way think years we’ve thing that is know know leases the an for the up been for that You to giving us ready that successful it I saying and been insisting that time about about needed to discussions haven’t know office appeal thing to that reworks people that finally go. you was that coming whole an been down, of the had successful like longer just kind only our question leasing leases. know the were month trying reworks. month we’ve that space that doing of I want I for felt on for asked having been to ready anyway signature we’ve I on we’ve program as go extremely in. to people like about And years in program. earlier space, This move But that we’ve doing know is is suites ready to

Is environment coming move and going, will people I’m hearing going will people it, move regularly lease take in space to just people take I’m and take not at is, saying little become me, furniture and know office furniture always seeing to even comfortable it it successful more in, even work the for looking they’ve I the now that another more accepted to that in. retrained come a if maybe spec it it’s immediately only just space bit we’ll times end. with reuse at are people Maybe to be space now more a be see of can a of we saying we’ll furniture. but it, and and stories like suite lot the the

more the this from our multi-floor were a to program way then floor, or and designer to market to the that, planner already and space but expeditious complete are go going time. trained for that leaning certainly being adapted larger model. model sort that to So, Hard that been believe full the maybe moving they the successful tenants of to long in has are tenants away

Jamie Feldman

since a have that slowed Okay. in down Or.. space? demand seen has pickup rework I mean you for

Jordan Kaplan

hard impactful I reworks would that’s demand to hard was markets. any would say in strong mean our as I we mean reworks demand. to point I’d I it we world just good have would very the at today, be time just to be reworks I really that a think say say, have in split out. don’t –

Kevin Crummy

small. available very of We a presence our on a have Westside. at looked the in don’t markets They space. market lot hadn’t Jamie that, It’s because the, of deeply the very on don’t only we it’s markets, into these penetrated they huge have like X%

Jamie Feldman

to go? Okay. All out had you all filled you there right. back already move then, or guys And still more of have Century the City is

Kevin Crummy

number lease you for think a we just I saw Yes, posted XX% us.

tenant with referring of a – that’s the space you’re kind that did that small we of nature So the to. essentially full that backfill portfolio

Jamie Feldman

great, right, thanks. All Okay.

Jordan Kaplan

Thank you.

Operator

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

Jordan Kaplan

everybody quarter. we’ll again with a you speak in you Thank

Operator

is today’s now conference for attending Thank concluded. presentation. The you

You many disconnect. now

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