Douglas Emmett (DEI) 11 Feb 212020 Q4 Earnings call transcript

Company Profile

Participants

Stuart McElhinney	VP, IR
Jordan Kaplan	President & CEO
Kevin Crummy	CIO
Peter Seymour	CFO
Josh Baron	Scotiabank
Alexander Goldfarb	Piper Sandler
Frank Lee	BMO
Steve Sakwa	Evercore ISI
Emmanuel Korchman	Citi
Jamie Feldman	Bank of America
Rich Anderson	SMB
Blaine Heck	Wells Fargo
Craig Mailman	KeyBanc Capital Markets
Bill Crow	Raymond James
Daniel Ismael	Green Street Advisors

Call transcript

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Douglas Emmett’s Quarterly Earnings Call. Today’s call is being recorded. And 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. I would now like to 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 our the Relations package can also section Investor at find of our website.

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

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

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

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

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

Jordan Kaplan

our the have headwinds Thank continued Good already see rent from agreements and deferred and exempt started of we the moratorium that default our months, due to we enforcement protections their tenant collect begun wrote we forgiven have still the under amounts, to not recent small Except leasing I'm rate deferred and and for rent we the kept on you These prior commitment morning, companies despite who business pleased about with for of to owners’ reached moratoriums. from them. under and a pandemic everyone. payment deals low. all oriented majority we downturns, collection are outstanding In of In fourth the personal activity movement immaterial pandemic. To-date, tenants for collecting have large expect amounts. XX% plans us. balances. joining past rent have to impact rent lease quarter the guarantees report have extremely improved tenant during

also have collections cash improved. Our

leasing collected XX% As today, XX% rent rent. the of affected our retail have including we an our above rent, confident our three future. XX.X% with XX% recover from demand tenants driven see our of office was to of signed their leases quarter beginning by also impressive the economy of and stronger rent and about increasingly by average. last small primarily retention of We pandemic residential saw We tenants. We XXX quarters the

back should As tenants shift to engage, more absorption. we positive

this to the half further Of course, first the confident remains stage. some longer over term. lagging And this of indicator, because a see challenging early is pace the occupancy we of recovery expect Overall, during decline year. predicting at remain we

As I that I've return office. said will throughout pandemic, to the believe companies the

with parking, there share in a material office no barriers before have generally We no best vertical In the well-capitalized Brentwood segment to buildings best is L.A., mass the don't of threat and tenants meantime re-occupancy. they debt the or transit, own significant short new Our and markets of future. the transportation and dominant remains face commutes near supply maturities in XXXX.

working continues will Kevin. to to the call that, day. is platform built turn Our withstand and With to every get operating I better recessions, integrated our team over

Kevin Crummy

morning, good And Jordan. Thanks, everyone.

Bishop, units Our robust. at The demand projects two XXXX for continue in new residential impressive development make conversion project to remains office to downtown our headway. multifamily Honolulu

high-rise on remains topped $XX out already million. Construction second units XXXX for and our for foot in our nearly first the at the has property the by year-end, we phase. I leased XX mentioned, previously early units units phase joint As have of Brentwood office venture XX had schedule the first leased XX fully square an In delivery Honolulu sold apartment off XX,XXX one and of December, of of

and Property the club watch interest users current a targeting sellers training as from use vocational result afterschool remain now turn the I mode the transactions decision of in Our in buyer many of owner call triggered the given for markets number pandemic space of to a close our as Stuart. are uncertainties. that a wait The space. club for to youth health will will programs. potential slow over type and

Stuart McElhinney

XXX,XXX Good feet of Thanks, In including and square square leases QX XXX,XXX new Kevin. morning, XXX,XXX everyone. square XXX covering of feet, leases, feet leases. office signed we renewal

recovery the our last demand our smaller tenants. said, was Jordan from by quarter tenants As in led

initial size the the X,XXX portfolio the the prior declining leases expiring X.X% of rents rent This quarter the The space to we as overall annual to compared the X,uXXX fourth As a the square our feet, the of leases over result provide was signed large during than feet. of in average last signed almost although term rent lower same for XX% quarter we average of cash XX.X%. bumps result, a leases. office percentage were resulted will lease leases our more

LA our On the turn the Peter side, to results. both over lease XX.X% discuss our and to to XX.X% Hawaii. from I'll with improved gains call multifamily rate West in now

Peter Seymour

the $X.XX NOI partly QX quarter, fourth for expenses increases $X.XX insurance Stuart. FFO offset Compared expenses. per election. everyone. same-property to proceeds fire $X.XX cash by third declined pandemic. continuing the and Thanks, declined quarter from November collections advocacy better million, the increased $X.XX and issue reflected from Those AFFO XX%. was lower of $XX by Good XXXX. were and to the from XX% FFO XX% impacts The by down share, morning, from

increased below the At fourth group. net by of a per share As for a FFO benchmark revenues, QX. remains to of result, X.X% compared our our well that quarter G&A $X.XX only

continuing the guidance. government ordinances, pandemic providing we not around uncertainties Given the local and are

on observations currently we what some However, general I based do want to share see.

due local These will improvements loosened. revenue in and further of expect be economy up parking and first the at are that end. we amounts gradual suggests a large opens prior history past in We collections but moratoriums collect majority the will as

We expect of decline a of to course that it lagging least year. occupancy first the will the indicator, recover year. is through Because half over at we the the expect leasing

minimal line expect in largely a as basis to rent straight in tenants on We cash be XXXX a put result are XXXX. of who

market We expect below and revenue from above normal decline. its to leases resume

assume will the the we of observations turn can I acquisitions, As dispositions, financings. take to usual, or impact operators these do questions. call now the over your not future so

Operator

Please Yulico question-and-answer our And session. ahead. We Instructions] will come with today question go the Scotiabank. first [Operator will now from begin Nick

Josh Baron

Josh Hey Nick. with This Baron is there.

your levels? could then I the a what volumes on pre-COVID XXXX then hoping into provide of new you provide such dig So, guidance? could And kind occupancy office drove as deeper some expirations versus to rates leasing of was decision you and and retention lease little assumptions maybe upcoming not

Jordan Kaplan

There's a the guidance of to to lot is in is see role kind off, markets And when in that them just have of we and stay plays withdraw all. a moratoriums because home the going recover. a going provide think economy all I'll in are it, our to the get questions, more the and so We we're but change. the way didn't don't at pandemic because confidence we big huge even going

lot are on we what We way here. last confidence gives that do we the the look the the our plays to what our XXX we're good us quarters role a remarks know deals third; are You people and deals trajectory that feel we're confident in end going quarters, impacted new more leasing. prepared when leasing. you happy strong saw numbers or you XXX it But orders when give out, don't feeling the we're very said second that good is at the with in That's a in of of new out. the saw about question year off, seeing and such the as the up that a and we Because going you market guidance roll market XXX confident huge going information up, the three being the in in that can quarter, now or we when loosens we fourth way have lease, happens stay-at-home to a quarter. the when it

we So, give that's didn't guidance. why

In on was same what that last Well, of depends it the your terms issues. set leasing, question? of

Josh Baron

Yes.

Just leasing you new your level thoughts for on need retention rates what and then improve? to of on level the actually occupancy --

Jordan Kaplan

XXs Well, say high I would that runs retention the up to in very usually XX%.

we level, kind XXX,XXX running, even to when very get operating good history I the saw need X of XX%, you're XXX,XXX, we say I you up. things, leasing on our when When mean, the And So what and okay, of million go that, numbers we were up. do to XX-plus retention. square our slowly at to been with above feet. kinds you were those down And at has lease doing reverse still would running backward good sliding plus, even start we're rate XXX,XXX in now, retention. moving even you

reverse got poking So, I We home that got last it's back their -- the everybody reason all that head to, mean, sick. brutal, again. feel I was was sent range ones we quarter to say to about that things. somewhere need I'll get that right? again got feel The in is, -- up that good I

core our tenants I for it your it lot of lead or were that we've about wanting was was feet, did good feel tough that feels such so -- and where market one they to a and the much feet. very the Was of X,XXX are. our And recovery gives the typical too our and that I going --how is come X,XXX that But all back. you the vis-à-vis So answer pandemic. but did that was set it expectation still And we fact deals. to small supports understand questions? the And out strategy a

Operator

Sandler. And Alexander question ahead. our Please from come with go Piper next Goldfarb will

Alexander Goldfarb

your apologies I'm from morning Jordan, another uncollected to And month up Good if But, guys opening call, I you about not have of you people Hey. XX% million I just a recall that you voluntarily pay out in basically answered. rents. you. opting you so I mentioning $X the addressed hopped think said there's there. comments, that sorry

So the is are the… paying that not -- $X you XX% is who is or the around of addressed, voluntarily voluntary the million people

Jordan Kaplan

XX. XX XX. it's Alex, not

Alexander Goldfarb

why That's Okay. -- okay.

So…

Jordan Kaplan

is… thing funny The

Alexander Goldfarb

It's okay.

guys convincing. You are

Jordan Kaplan

or think script, Peter Okay. going said, will way. no happened. When or that -- actually Apparently, said they're someone Stuart, to think way good I it you XX. orator. practicing a I'm the such reading happen. No There's was that I

Alexander Goldfarb

whoever up But eviction of discussions $X monthly How addressed. I then million settle took increasing, up only moratoriums those over end? are that's going rest who did anticipate you've tenants Well, are you XX% hope and that on settle going that basically, was go Okay. the not you paying are the it or to that to do the the XX% that, the with them. those do when that and

Jordan Kaplan

-- it's know is process You to I going continue. think that

But you I have why their to look due really trying start was amounts. rapid pandemic. on kind able think will made to moratoriums work want And outstanding, over. but showing we trying rent. was amounts immaterial XX% up is that impacts on it if all making are and was settle that's we're it the It you about was any didn't all -- be what deals of more what the now. once people noteworthy those to think I really to I are tiny deals us, get much And deals. back to at thought up But we from are give to to of the we're rent basically

make you so, the well, they to now that ability to point because deal expected where pay whole that a thing. up, that is have just the I us, getting tell they're they're as have we they're now these to like, people the tells when to had And the pay. moratorium need And going

well, is level very say, area. of have dropping in moratorium are doing to of do I'll deal, and kind make our is out. a pay I'll they some while now because that The hospitalizations they come get So, it trajectory there, fast Vaccines and right?

they it's time the So, visibility their re-engage. against space. think And offset figured want to in to with I get back vaccines people that

Alexander Goldfarb

they second quarter. the the of appreciate spreads then in they rent is, question sort the And tenants. where in are on leasing activity were Okay. third to from comments on the Stuart, eroding smaller increase But your

normal, anticipated sort just market of the leasing the about As So, you residual, what the to should occupancy do about more we releases mentioned, of should sort over in how think the trajectory. we we will rents and how next and where view rents is forward? earnings upcoming that far prospective it’s you gets go think of see active, as going the your trajectory drop resumes sort quarters ultimately anticipate returns three of rent when a as guys

Jordan Kaplan

you explain it. let I’ll

Kevin Crummy

Number need to tell you one, absorption. can this. see I you positive

couple see you seeing absorption of think I quarters rent absorption start once off need take a positive positive you again. and you'll

relatively the good think are shape. full. markets I They're still pretty in

As to people's And number get leave in lockdowns to easy on moratoriums our the keep that of we my They in attitude pick reason tenants They not going once you'll doing that are space, positive see view they're for their and of don't again. space. in rates The came up I renewal months, see space hold as level a But It from small to think I I'll deals. long all tenants view their and I forward beyond is space rent already just my the think are want and may they want you is kind a that made guy of small space. future. saying to been in say be want high to that. coming want in I've the the lose space.

is to the feel that confident we rents see will to they were trajectory step then return quarters, absorption first start to levels but some their at need and I positive return before. So,

Alexander Goldfarb

Jordan. Thank Okay. you,

Operator

come will go question BMO. Lee next ahead. Our from with Frank Please

Frank Lee

Hi. Good morning, everyone.

on Just across green Are the comments shoots to to the bottom expectation decline slip could the occupancy occupancy each first continue a seeing up has where of is any half that pressed submarkets submarkets? through XXXX. your of follow Or you occupancy in to bit? expecting guys any on

Jordan Kaplan

Well, I shoots. like green

and actually me the recover is the were that too, way I strong, terms market where biggest said Okay. quarter just reminds that me, a been works on we've most that me these recession. That the the that the in and All I last very the to was with most right. done. because right, a that retooled we most so absolutely are told it And did we thing, telling in in stronger That ability love the me And operation. down, leasing important incredible. still conversations its shoots to is much To shut focused were our of is had that it was second I've of green healthy And deals is we new thing. backbone that now it think the which online. deals number

say market, Honolulu. to LA, So the plus a that's So you Beverly Hills, coming at market is one impacted that a another and Monica, differently group. level, than impact When it's city right? say you Santa would

other numbers East Santa Okay, Monica, Honolulu numbers Santa negative in Santa are better those downtown we're you doing you're Santa obviously And than that in Monica, know seeing some see Monica. the but I Monica. markets. guys

when I by definitely Hills quite Monica downtown has etcetera. then move is market I you markets. a the still of of So strong. all of LA, thing. City, But is the the lot Santa Santa know off on Monica backed It mean, to Beverly Westfield that They're also a would moratorium. one cover but doesn’t pretty to bit covers Century impacted which City the office. City same Hills Beverly apply

And so reverse be positive to occupancy to it's going absorption in the see us. city a lightens hard up until on or

Frank Lee

be to Thanks. It and floated have regarding any on office do it just thoughts Hawaii impact you moratoriums this initial on and on I'm versus the the commercial leases? that bill around California. the tenant-friendly what leasing even market seems the Okay. in in thoughts could the the passes think ordinances being And likelihood that's curious there. then more

Jordan Kaplan

on -- of the political we there's can't yet. more I at round, lot floats a it. -- that I to much I of finished stuff got -- into the beginning have just get around, you and don’t comment We're stuff I fun season just on can't the so last that for

Sorry.

Frank Lee

Okay. Thank you.

Operator

And our ahead. from Please Sakwa Steve with next will ISI. question come Evercore go

Steve Sakwa

negatively tenant been item Thanks. been Good parking. one Yeah. reimbursement. has mentioned that's line But Jordan, morning. you also impacted

function tenant pretty of on? or that had recovery big between down, assume think How of So occupancy else I Is we XXXX the reimbursement. of is do but largely a you function something and there going solely a a occupancy about going that's XXXX. drop

Jordan Kaplan

an -- Yeah. we're a Well, is have last buildings on I there even but item, thing that years, complicated really of extremely frankly, think the the going a tenant the to our -- base line running gone down relative years. that's primary in year, previous people's costs lot maybe

So, it's hard.

that’s line, hard to issue. what's bottom say the -- going different If it’s you happen a at

has think I looking come it's of less the there you expenses things not of are more then have expenses why we to smaller so than small is you smaller lower where there’s anything. bigger comps I function in. just see comps, I It's -- think But down, occupancy, say, then that are -- are. a they -- that keep when we're right? that relooking and and costs you a And see going of see impact better saying, at kind very at impact. way just which would And are we’ll lower

Steve Sakwa

Okay. if about at just of it’s you Well, down as look a a XXX, basis mean, expenses. -- percentage I It points. went we XXX reimbursements percentage

it expenses seemed may a coming So, dropped the just bit. I down, percentage quite like realized but be

of or going and the ended of sort that the what's an time the XXXX getting that be were timetable? units the indefinite by period online business kind guys of that back figure to Peter So, interruption, know Maybe with switching sort a just follow I we and insurance can offline. do How lumpy proceeds the that very up kind about to get. does of timing that's I fire you damaged think Is of sort of there?

Jordan Kaplan

fire the working that are some the project. fire-wide to city say you the it. very department, stabilization. yes, lot I'll safety changes is Emmett city, with tell fire on name three there's is department And towers across there's slower And the with get to than do if and in way to there's going we're a making in be of modifications all the -- is when stuff, able there But the this activities city. safety to we're you units the make those to like, getting to like that I work to subject moving and line, substantial with do. progress get Department we're Safety, to you. What's say of typical of put a back find There's I life to those we rent Every -- you the a would going Department on would of Douglas yes. said said, that because Housing lot I want it Building you the

So, don't many good what always headed. want. you like I you actually actually I'm where feel that's things, -- about just But get

speed You worth get out with up end what of But city. end getting not I get need. the we think you will we at that what will the something waiting I we think a for. But need And day. the of we're was

Operator

Emmanuel And Citi. our ahead. go Please Korchman next will come with from question

Emmanuel Korchman

everyone. afternoon. into Jordan small you those leases earlier, discussed tenant the Hi, can we Stuart, maybe can dig that Good we volume. or larger

coming Just tenants they that and moratorium the to off? leases broke give from, and are us just back where maybe earlier starts maybe these tenants where of they're some are as to flavor as wear the now types coming

Jordan Kaplan

know you the what's answer? Do

Kevin Crummy

across one type board We're typical. our seeing It's which demand of not area think tenants diverse of what or tenant. is set from is the one concentrated I industries. seen typical in we've it's

that was question? the was What good. second your part So of

Emmanuel Korchman

industry was is it an This Was industry Manny. there -- concern?

Bilerman to now? Am starting sound I Sorry. like

Jordan Kaplan

Yeah.

guess. You've too with been for I long, him working

Kevin Crummy

him? question to rephrase me want the rephrase? to You You me want for

Emmanuel Korchman

any of leasing. details been people I leasing, around differences trying are the it's coming get just get before guess was where what of that shoots, just any is to all green the I'm doing I types from, trying from you'd to it. there into more

Jordan Kaplan

like was it's The it’s info, same and think the wasn't. industry-specific only deals. because on checked was a But don't one lion's spread think did share the was thing an got that of deals. of industry. it any I I Yeah. something, market that was kind of I and get it If a I saw It -- lot I --

it's not a Beyond that a that, X,XXX pandemic deal. of is be me, have I mean, with to deal. of -- for green this was I lot. only shoot really average happy the That's I flow lot a new lot is to if XXX I'm don't I normal the mean, deals would X,XXX, know time deals. of XXX deal feet normally wow, instead you and say, just

Emmanuel Korchman

back of expenses it I be turn buildings or much can that for as we to guys up is with lockstep buildings. if not those going in much people you you increase? whether guess then cut as the a sustainable to And in have could back is How to expenses operating Right. occupancies and the come or their minute. coming

Jordan Kaplan

year, If get looking savings at the will we energy and continue this will goals next get you say our that over few to we think I their next years year.

I think come they're not style just savings, necessarily come back. huge people as back those payroll

a costs again, of cut insurance the know will around And are not bit we little we've the dramatically. up. buildings is keep course, ton. You the a buildings When but full

So, and taxes XX. and that living thankfully only will are move higher Prop insurance we'll the at with under be move prescribed pace they property

think building job increase compared caused down. before -- the every to year, that don't that I a good you what this some of to a in Yeah, us year expenses say, something will we've I full that I know growth know would of -- way. don't be happened dramatic So, and I have down keeping done be. wow, will expenses controlling

we've gains that conservation. the Beyond made energy on

Emmanuel Korchman

Jordan. Thanks,

Operator

next Jamie ahead. America. question will come our Feldman go Please Bank from with And of

Jamie Feldman

we about the start the that? occupancy basis do fact quarter, XXX your and declines moratoriums points us to off, how burn that about be Great. think was we I you think on Can moratoriums start we the some or remind this the Thank guess, are the time from on until the moderate -- as impacting thinking burn they when just that as And, timing you thoughts down should about do leasing? think of off, you. on here you the to

Jordan Kaplan

answer. I that First of don't all, have

us don't start. I that just when think me Let two about question a but first, that to to to lease of back him I deals, answer. That’s that just not that keep things means space, -- different And lot the So, in and this our I that’s guy that we the the that a new have guy moved giving hate did only okay? is, door okay? feel the next coming you to community. paying ask a

to money The second XX% to deals is pay want thing that to up blah, us, they we you want showed we our and to on was have of make owed going door and to if said, we’re make and deals, blah. blah,

what I cities extended in a pressure good now on If such about end extend. Okay, is extended now, doing. they three all months, such, sign. the on that date get and moratoriums go. can a month; that okay, date and then and go, That's attitude. say kept This see they moratorium they another now go have they very these will political

Okay.

in are I coming deals, an the own coming be. and wow, is the moratoriums wanting they're decision may making those therefore, to community think end extensions about and now space, to make their lease case thinking, and whatever these they're

happen. don't or XX-degree logarithmic in hopeful starting So, way that a whether know angle it's to me next at will what year. for play out will obviously a And happen. that makes very in But I or

Jamie Feldman

matter even do get the it moratoriums? have extended. you saying because But can for always latest they Okay. dates doesn't these You're

Jordan Kaplan

you're all in gone negative I of councils stuff, front guy, head testified able right. to don't kinds such and their don't why. to -- don't lot be and be them. of but I it. I've too to pull get just of probably do they need they're and because and not you then this a you off complicated they want done to just in a But going, out you're know right. it's know seem Maybe We city

lot never commercial on -- doing people thing. ever seen lease. have thought the council were a this of city council never of them Many the a they have You be has of going type to city

sure I'm unwind. how it's So, not sure I'm going and it wound how not to

Jamie Feldman

your commute how submarkets And ranges guys about buildings. different then comment across the shows you've made you own. different or the that you're time commute it guys a I'm run curious, just just you short have the the that to different in? data buildings curious times by assets are you in I'm

Jordan Kaplan

the real So, say a we what's -- is have no. work, commute do if answer survey and your to you we done

feel If -- saying that for and communities And it's yes. what that that that the we chart put draw do for have we're a we you're we the together a buildings we is have… from in in, answer

Kevin Crummy

minutes major down And to you're we're west sort investor up It's a of -- Bel from they've decision-maker, going or you're use likely we've Wilshire Basically, XX on the to downtown, those to or right is concentrated boulevards our done more the what saying side the overview deciding on in the presentation, the Beverly an Valley. those hour. to west if hill the on side Jamie. or Hills, signing got Palisades the and then the in XX, in Sherman Palisades Oaks the where can lease, street live where versus Air than office is from Brentwood or [ph]

for car day. the for two in total the You're hours

compared for decision we the there to chart that's closer and have we stay in illustrates that have of those those So, what's a that myth. that. sort driving decision-makers to And home to

Jordan Kaplan

going them the that they're decision that leasing they're renew where in at or our they're whatever the and showing for whether going engage to decision-maker space we That's may lives be. showing people when of them know factors we or space case making to the they're whether one And when about at. look because a look

Kevin Crummy

on west or XXX. City Westwood for same Santa Monica still a XXX pretty the Hills to to -- in the who big Well, barrier, XXX. And want the access Beverly be they'll want is in for lives in of Hills, for Beverly to Brentwood, typically. say the Beverly So a Central right? side west the want east stay or in guy the the I’ll They that and lives XXX to Hills of same that stay the

Jamie Feldman

extend years the that And the in commute not your would or necessarily? you average portfolio buildings for time say bought recent you

Jordan Kaplan

No. I what side… of west don't Most commute. the on it bought we've extends the think

Kevin Crummy

Is Yeah. shortened the commute.

Jordan Kaplan

Yeah.

I think short. it's

we have concentration Hills kind Hills, I Palisades, from Santa towards bear the which we down Monica Monica of then Santa market. think draws in Bel areas. a kind Beverly stuff of that Air, a in lot And concentration, Beverly a out bought the rolling of even draws these East Brentwood and

Jamie Feldman

All Okay. right. you. Thank

Operator

our next come ahead. Please SMB. question Anderson from And with Rich will go

Rich Anderson

folks. Hey. Good morning,

moratorium call of So about talked or would them maybe, I manipulators this you whatever XX% starting deals. non, make the to

year, quarterly this that will Assuming number the it just in impact recapture year? kind sort lumpy could you results that terms revenue of have earnings your some stream? Will in last this of like make a how of revenue your you booking weren't of profile

Jordan Kaplan

these most think pay of I and pay they they monthly deals kind during owe. and they what year goal Well, this of

are word but So, as made, might be deals monthly revenue it rental year, more each the right the additive is more each and the to rental not income exactly quarter.

Rich Anderson

Right.

not… were you So

Jordan Kaplan

Because we didn't include it last year.

Rich Anderson

Right. Right.

kind right you're getting that's but the doubling on word. the it's even maybe -- So, of number impact small though up

Jordan Kaplan

didn't Yeah. year if doubling I last it I'd know don't say get since we up but…

Rich Anderson

Well, that’s right.

Jordan Kaplan

last it this a will get to year. be we You're right. year didn't It since boost

Rich Anderson

average mentioned other leasing, I is the or The question have small users. you’ve

you GAAP that, and color are up the it? I rent course these you attributed the Can how the on big are over think to us rents but escalators you rent bigger XX% and X.X% much lease. give negotiate able how to the is starting down said that you are some that of bumps

Jordan Kaplan

rent is have what five-year X% Rich, bump, saying, is higher was. typical our the lease a -- you than we're if rent XX% that ending think I starting five-year

X%. overcome lease. So, overall that's the the better which -- for the on XX% But starting the a to are down to economics is ending the still number gap big new

of higher our So, you probably are contractual out than average that markets look just pointing that increases a lot at. other

the that point So, was there.

Rich Anderson

What are then typical say, areas rent other to, the escalators of country? relative

Jordan Kaplan

We I mean typically up X.X%. we're getting until…

Peter Seymour

to X% X%

Jordan Kaplan

in X%. to deals lot our recent the of Yeah, until X% Up majority on to X% is the deals, a X.X% of our recently years.

Rich Anderson

got. That’s Thanks. all Good Okay. stuff. I

Operator

question And ahead. Blaine Heck Wells Fargo. go our from next Please will with come

Blaine Heck

so, to opportunities, But office you or sales side your or deal just of deal you of deals It's to comes on there. multifamily seeing guys you best seeing out kind Kevin the on that morning start or been normal talk can are you table? are Good And for flow. pretty about Thanks. shake Jordan, focused loose? more things? are relative recently any investment Maybe subdued just clearly across on if the what

Jordan Kaplan

Well, look is for been we've the yes. is frankly, industrial. it's hot Recently, than if underwriting you But, more looking We're hand nationally, deal. mean the I always slim multifamily answer the pickings. office. best been

the of in industrial so, very, And market a because office don't And strong high very it's lot market. been that's in anemic. leverage there's a have on side, of trades the our relatively lot We a players market.

market. so, we're pressure put hasn't the to starting huge see that for things on And And people green to there the shoots.

be get market, are about put the as and people people bullish assets the their a they're more more out about. happens more So, going that to positive to inclined market into

Blaine Heck

Okay. That's of the dovetails helpful and next kind question. into

you -- however rate, and lack on. high you calls, addressed in NAV but acquisitions to you get of active know for to leverage update, powder buybacks you've it for sense future? or dry low might here, opportunistic your about think an current any on does cap discount to keep do want I Jordan, implied just that make prior this that profile, And of the look bid it want deals at or to the come lack the your on share Given to

Jordan Kaplan

sheet for the because know, share look stock against an last decision investor. decision I'm for buybacks and you problem been from a right? was to for are But it's buyback pointed getting I And not very than that I'm buying investor, cash as company, know, buybacks if company I'm at because is I'm out I either different selling when myself assets an that I've I'm the The share guys buybacks me time, know say just level doing I it's share decisions has structure, not or that because not a And leverage of sort I I more and would company we balance those of I debt it when the trading drama I'm balance times investors. capital because I'm and for It -- share pounding the manage conservative. sheet to buybacks be the for And our lean raising company’s my a equity facts, for structure. of less caused double which capital very lean sided because to and that way so conservative compounding a -- effect.

Blaine Heck

Thanks. makes All right. It sense.

Operator

from Craig question will come next KeyBanc ahead. Go Mailman with Markets. our And Capital

Craig Mailman

guys. Hey,

a notice limited something Just on shorter that the the of going of going on visibility expiration Is kind I about there's square they talk there. just feet schedule and XX,XXX side that term about did maybe what or there? front, renewals kind tenant leasing question leases the you on else on short-term your want ticked up quarter-over-quarter. was Could just

Jordan Kaplan

Yeah.

is their future. us I tend it downturn. feel for right the a on go about think which term. you lease secure Tenants typical a less in shorter to little said They

the don't what home sign They So want see not period. their this shorter that term to -- going want want certain to saw. to tend sign more to elected what uncertainty, they which business we'd give don't want sign longer. forward, giving to their did wanted And expect, we feel during that we go then shorter-term They a but up. and all to work. up that's great just keep about they space, when their extensions little tenants a some sign they With and that's they're space. They is

what it's So seen through cycle. typical very this for we've

Kevin Crummy

so and keeping when they off right? that when is shorter with deals deals. noticed a people obviously it sign their is they rents are market when Fear up higher. longer fear, fear what of their rate But economy; And are to time longer for types their the is would of two of be then bad do. what sign the us normally those numbers. kind over terms opposite growth our but the all been of accelerated allowed I what market have sign FFO, it's AFFO, off, want to have that's deals of a for of the to you does say strengths our very coordinated high, then obviously everybody good long this path and income, in very I've the us company is and they rents there's that is because deals space, when would the which company And a shorter and good sign

Craig Mailman

there. confident had for and that I you feel to have the that encouraged you've at I restart then. turned what platform mean, leases by it clearly Okay. off you been guys to guys going guys here. you of point some with That's you're plans on, But kind you helpful program of know you what's signing -- been sounds pre-pandemic? see do of those the what need number the Then redevelopment to like

Jordan Kaplan

answer that can ways. two I

them If some you to projects, do see planning those planning already and we've we say it what need already seen we've start started to of again. We've seen already that.

therefore, actually it's If start again. and, them, up visibility on you to need economy this know some again stuff. are for But plan to starting more I coming opening we say of we that

Craig Mailman

it in seeing downs. Are change on know but I the rents guys on pencils still generally -- the all those of been what's impacted basis, at kind upticks, some from all? Does side on perspective? are math that Does least a there's cash your going the getting markets? place at GAAP economic at you of an with your are things in still underwriting roll

Jordan Kaplan

to tell And work hard rents doing going -- differently. market's where frankly, use in after be it these and to were let the enough not doing planning today that over. up do say such very right? therefore, this other to we going to at it's using is We If negative feel turmoil we're be? year repositionings I as -- do the happening mean, cause feel about spend can’t because be that'll me of we moment. it’d not much figure was are -- we hard about. than the hard where -- we're the we really I turn very now, out what's worth to think spending because going But the confident to right this markets end we still are that good analysis that money, something feel will things see absorption, that still start we to always do this we to us money. the But what's return we're seeing certainly Most that

Craig Mailman

Thanks. Great,

Operator

James. our will come from ahead. with And go Please next Raymond Bill question Crow

Bill Crow

larger future you signed your are leases. confused lot how Jordan, Thanks. inside expansion of a demand have de-densification. it. tenants -- the tenants use short-term about didn't and Appreciate space? and I assume it of Yes. mean, the tenants there's I space of and difference a just the I'm if mind for take seeing? maybe that you're of the kind tenants just smaller us between

Jordan Kaplan

have is of some tall to that sending space coming they've making tons you sort built people or to that's adjustments numbers. renewals, tenants that add who home and think space just our already know any out to that's little -- More actually and I way. ask. our you or I lot That's contractions me saying, expansions talking people to in oh and let Do of I yeah, give not we're it give can so want a back -- some are a going I I'm other friends stay talked not anybody -- very portfolio this. are expansion. know out portfolios, something my both on their of just to figured to in?

Kevin Crummy

set kitchen. built per buildout building was way probably offices, say square I really to us. couple we the it our feet, XXX a That a -- about that small person, out the typical suite think foot a window a typical were change. our suite, was our That's conference X,XXX a would for you very workstations, Yeah. way if Jordan need line of room, doesn't pre-pandemic

lot our comfortable. be that's why haven't you're you've in of are distanced in going way a seen We a the than higher forward because their they feel already a change looking planning And the think massive some were markets that attendance seen I people way other space at. they

Bill Crow

to that tenants if you today? to six rate happened has back What ago months go

Jordan Kaplan

definitely beginning, very confused were and are we. I'd at they say Well, the so

And raised second you in low. that were would quarter. very the arguments be So

maybe tell look Now, buildings I our XX% of occupied. to of whatever that the would to type your work, talking for think evening we us four you trying on everyone, all the at some last be. of morning that case traffic is real were work, I about this figured come come just you the saw car, time XX% driving may to sure, about the tell can’t call, up. this, and the I'm in I

more read see don't my like sitting buildings and know more there's I guess in know Do on going full that I and now best four to road but the ago. the work that in was to know everybody home could I what's time because going garage -- building traffic. it the I I else's parking on even they’re and So, time is I’m and six traffic weeks way there more on going there's

Operator

come And Green Go Daniel Street from with will Advisors. our next Ismael ahead. question

Daniel Ismael

Class market? you are with to the to tenants, spaces, they Maybe perceiving Thank the Are you their flight of look how their are Great. sticking looking upgrade tenants B space. out any from just the up tenants quality noticing of to at looking mind trade or how their you. Class

Jordan Kaplan

question. a last recession. We had when out That's good rebalancing. I came of the we we -- of ton were out remember coming a of

came for they we And had of literally recession, gave them started leases it way. heard that, anyone this of out and more be confident shift they so to and say and long the that lot in they a would to let's would people typically then that around say there's and long in. to was as know I enough say space that then in a recession re-leasing that were that they letting haven’t shift properly kind And moving of much to has be. I that that move Now, space opportunities where businesses, happen. nicer don't of out a that we been

remember and sort I will that guys space big kind there in time in leases isn’t we for that were sign to them recession most shift that think XXXX, of us in don't that literally I people our the think XXXX, happened markets returning XXXX, see -- XXXX that some we're like, and we questions letting we're expensive and tenants do now, terms seen shift. you in saw normalcy, supermarkets -- have even to of So, back where XXXX think I of we'll because us yeah, this of that like right forth shift in leases I for we've don't people out asking be kind of but letting

this happen So, time. I doubt will that

Daniel Ismael

quarter quarters where sitting spread wide I about indicative the you about releasing of above to is cash line market. last markets. still portfolio decent use recent most res more relative then or a that Is And X% sit believe these mentioned to

Jordan Kaplan

still where things a for that's good Yes, are. estimate

Daniel Ismael

Okay. Great. That’s I had. all

Jordan Kaplan

Right.

Operator

And back this I'd Jordan turn Kaplan for will over to any conclude conference like the the question-and-answer to session. remarks. closing

Jordan Kaplan

you to with speaking and I thank next you forward quarter. Well, all joining for look us

Operator

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

may at You lines this now disconnect your time.

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