Douglas Emmett (DEI) 8 Feb 232022 Q4 Earnings call transcript

Company Profile

Participants

Stuart McElhinney	Vice President of Investor Relations
Jordan Kaplan	President and CEO
Kevin Crummy	CIO
Peter Seymour	CFO
Blaine Heck	Wells Fargo
Michael Griffin	Citi
Alexander Goldfarb	Piper Sandler
Steve Sakwa	Evercore ISI
Nick Yulico	Scotiabank
John Kim	BMO
Dylan Burzinski	Green Street
Tayo Okusanya	Credit Suisse
Dave Rogers	Baird
Rich Anderson	SMBC Nikko

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. 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 will conference Stuart over Vice I Emmett.

Stuart McElhinney

Thank you.

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

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

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

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

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

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

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

I will Jordan. to now turn the call over

Jordan Kaplan

joining Good morning, Thank you us. everyone. for

dissipated, challenges. COVID Emmett, to over XXXX of rebounded markets, our In during and notable leased in accomplishments the office the square of impacts feet Douglas For three rates face was a real X year XX%. the utilization first quarters, million of we

in demand large new economic as concerns renewal tenants. quarter, we from grew, a fourth the slowdown saw During and

who feet slightly from markets quarter. activity our during dominate the our square was leased Fortunately, we and continue to good for absorption the Overall, year. the XXX,XXX negative small see tenants

is during our office it for Given to year. meaningful no in this believe prudent guidance occupancy recovery assume climate, we the macroeconomic

During commercial and leases XXXX, both of value increased. the our residential

an increased residential up average office X.X% rates rents straight and were line of Our our X.X%.

national two challenging The our all units CBDs. on urban oversupply, us, added additional and reduced our of addition, economy reliance some about concerns is development multifamily projects work, XXX to office seem for pose the obstacles for to the remote tenants large portfolio. In of state current appeal but

Fortunately, confidence smaller and have experience, markets. recent with public volume for our supported tenants, constraints, industry our operating This markets, reliance pandemic. in and our supply term long on commutes high during low strong prospects the short gives diversification relatively us the transit platform, and utilization leasing combined

With that, I'll Kevin. to turn the over call

Kevin Crummy

everyone. morning, good and Jordan, Thanks,

a forma. Landmark, projects April, to over pro Our the already residential leased of have delivered multifamily development Los we unit In high-rise exceed Brentwood, XX% continue Angeles, new in units. XXX and

of expect have end. complete In addition, year leased eventual substantially in XXX Honolulu, units Place to over our Bishop now by at and delivered and we conversion the we XXX

sales our opportunities. markets have Asset slow, for in we but remained search continue to

balance our Regarding sheet.

outstanding no unencumbered. almost have of debt our maturing XXXX, We until portfolio remains half and office of December

that, over With turn Stuart. the I'll to call

Stuart McElhinney

our this of and We markets. of primarily feet, tenants of renewal XXX,XXX square square by feet We driven Good small morning, did XXX,XXX support a leases. feet Kevin. XXX leases everyone. new covering the leasing that square amount Thanks, leases, of signed office substantial XXX,XXX quarter, consisting

feet recapturing fourth leases, signed to rate quarter our basis leases activity occupied and new covering X.X square XXXX, X.X during XX.X%, XX% declined space slowdown the points commercial during rate mostly by leased of renewals. XXXX, XX all tenants as declined nonpaying moratoriums from the For by and local our driven of expired. in we office and of million including feet XXX square square X.X feet, Nonetheless, million million

for were X.X% cash. for quarter fourth straight the during spreads line negative leasing positive Our X.X% and

rent expect this at quarters, been XX%. rate in cycle saying choppy near spreads our to until we point remain remain focused occupancy I've on in recent climbs and As lease the back

costs of year and well with recent per line REITs in below trends quarter average benchmark our Our foot this in per square our $X.XX group. leasing for other

full in average XX.X% rent portfolio rent somewhat We multifamily leased. saw at QX remains will XXXX. for over continued XXXX with assume extraordinary during strength X.X% We growth Our roll tenants during new essentially rents increase in that in multifamily X%. up moderate

markets rent moratoriums been for that of pleased into are residential XXXX extended payback We although ending, the periods our are residential in have our tenants. some the

discuss over results. call the turn I'll to to our that, With Peter

Peter Seymour

Stuart. everyone. morning, Good Thanks,

AFFO to our the to improvement a results. of reflecting XX.X% quarter Turning by increased per primarily tenant result as and occupancy. to XXXX, X.X%, impacts by NOI share. parking, decreased rental cash higher leasing by expenses QX $XX.X our partly to million, And in as increased $X.XX X.X% QX. fourth Compared more a FFO by revenues X.X%, expenditures and property offset increased inflationary office and robust of of on revenue lower result same

year. For X.X% by all of FFO previous XXXX, over the increased

only remains benchmark of revenues. at very G&A relative X.X% to our low group Our

Turning to guidance.

As office on float loan Jordan on that occupancy not related January in to rate may Xst. interest allow We guidance start XXXX. our the interest to growth said, assumes when one elected swap expired

between the also do approximately higher million million. with the XXXX. we $XXX share to expect same in FFO to new Overall, expense share residential XXXX than expense we $X.XX in more per expect will when Due interest March. assumes two $X.XX additional be interest expiring NOI and increasing of expire rates, per offset in $XXX and guidance interest acquisition $X.XX swaps be other Our we swaps to and between by loan,

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

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

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

Operator

first is Blaine from Our Fargo. Heck [Operator Wells with question Instructions]

Blaine Heck

guys you the rent leases provide possible? and if can retention for on guidance, year, with starting XXXX the during Just in assumptions executed spreads

Stuart McElhinney

those never on we particular Blaine, have items. given guidance

retention in retention, a in kind stayed think of tight historically rates for XXs. I have pretty mid our band

ever it's trying be before most nothing probably past been we We've provided And the at ourselves, year that we've were not impossible. them this predicting in guidance we'll tried years that spreads, So you on. like it. think very and good I rent predict could assume it's to

we're occupancy. said, occupancy As focused I on and retaining growing

think you to for they've out. they're I should to predictions play hard us on kind So going spreads make to be been, how of it's but quarter-to-quarter how expect

Blaine Heck

I Second pretty you've think team Is anything identified that talk getting Bishop that capital increase question, this at with make on focused move project to can you Landmark the projects? development and or less is done cost any projects the you And initiatives, forward on of your new in likely Jordan, now of about next been does side have some point? you there projects your on wrapping up. development is working

Jordan Kaplan

the a on thing at a years going Barrington we've is So Plaza, to the we had I next with we're lot big city, some through to gone ago, fire, think trying get be worked. where focused it construction

with and able lot and We on work have gone we companies through with we're all do to that to there including the insurance city and start do, city need going through and insurance to fire sprinklers. -- in the positioned work be the with have a get putting to

there. big probably And next the step so that's

sites, a right sites. have good it month made not waiting we more we -- I changes entitlements. their of whether of but some Although, this -- waiting in we changes get hear of impact. our get really Wilshire July, next then consuming guidance come very going we of that. have But or sort any fixed may for to June much be this, how time it sites us cost going out going many in do made of on actually going of but say, be were actually law time pretty I like effective, -- weren't We're this waiting terms the isn't it less guidance that Beverly to version there's exact to stuff. it's heard make sure Wilshire, understand to we until we terms of in were to Valley, some in positive for the to thought or executed, guidance just But state no some those Hills easier mean we to to lot and in those will

Operator

The is Citi. Michael Griffin next from question with

Michael Griffin

'XX wanted on Warner ask leases here Bros I 'XX. to in and over expiring the Discovery

expires space. provide the would share or there Just of that's toward first 'XX on the you that know curious Is weighted the a can for that be half sense demand second that color lion's you're the I XXXX. in other that? tracking helpful. any And

Jordan Kaplan

lease I -- I leases everybody course, going I I you’re of mean, not will what that expires do know will I all original same which mean gone. way half think building, Drive. you you the only we're group the they reading, keeping they building, the on in good with, they and so I'm about two where I thinks do a do, which I to And even a I mean, do. to So But estate -- think mean two they'll we get made they're there's one just at today -- to don't the expectation we them that, as years or whole have I'm to but cutting have economy and have know the second optimistic I that Riverside 'XX. of of they of more point. tell considering the an expenses, I know be know even not of do, any is don't two they're are what options. years. -- stuff and what's I know building XXX,XXX I'm is XXXX I'll is And and talk anxious in don't want from going what the I know what want deals to them think they're did to to now, us the know with don't don't about economy reading when this going real mean, the

Michael Griffin

right to see think quarter. to being share program I mean stick to dividend, if you on Obviously, came your acquisitive announced of the potentially you just it's about, reduction allocation the 'XX. pragmatic wanted the potential end in do to could with at more either or be office Then turn for I last share we for opportunities capital multifamily thoughts reauthorization they or more buybacks?

Jordan Kaplan

Well, buybacks, I a points to general are time just as all acquire. answer being And acquisitive, because a share good acquiring. think I multifamily it's guess,

Certainly, well acquire. gave to dividend do we're firepower to that. even the think cut more organized I us

of extreme and list it to we not pass to advantage have whole any things. one out that's mean the of a And We have do buildings, it, cash. allow us is goal particularly want particular my taking recession, opportunities I unleveraged to in I this that.

Operator

The is Alexander with Goldfarb Piper from question Sandler. next

Alexander Goldfarb

questions. two So

or year, back it project -- timing, to Is any FFO. so something based that for you fire, that the I next not the just on the impacts of I FFO Barrington that you but year? how this the call, First, laid would last really guidance out project. discussed this just and going probably have on just it's Jordan, until impact understand in

Jordan Kaplan

next on buildings. some hard impact suspect in equipment there's terms and of this says a in want, everyone, do it's start much can open, impact and have with depending be which before out the much things year. whatever groundwork No, insurance, not But in like work if largest impacting lot will installing it for FFO go I the we do the core at may you pace do you Even with of that this units year. it's everyone as we everyone the guidance to how impact city and year, the know to will hard

Alexander Goldfarb

the is really that's it's it? So guidance, impact XXXX a the in the to event, but of way bulk understand

Jordan Kaplan

make on yes, we what move people of with Yes. we outside. that, And also deal people all course, giant that's I deals pace and we an make at right? of be you which never speed out, guys like revenue, the relies that true. thing, and a like even impact the vis-a-vis and then, should at numbers, But one this have we mean kind the that are maybe seen which insurance those of insurance move

guessing now, So 'XX. if yes, I'm

Alexander Goldfarb

question, for passed cause Second Always obviously, landlords. changes eviction the things to LA appreciate your good hear But level. good positive from the state their comments on recently.

recent make change little it it it your of in LA Monica, between groundwork your the and regulation potential state see you change. mostly you is as negative the Santa -- apartment versus gave which So advantage that I pipeline LA's think for from of sort the one when the make better you tougher, a way policy is little wash does those the two a changes? other, figure it underwriting Overall, any a or does it or net-net,

Jordan Kaplan

someone unit, any on telling or is with, I money don't less if or rest cause mean, of runs mean I of the you're quite been keep I'm any -- on stuff, to someone don't -- to -- habits. your mean and And our we and frankly, it. that's collect raising foul I I I’m long month I to their a I figure XX%. in the of like smart of any rent XX% a buy think anyway. more anybody link the growth, trying But than going anybody don't time, than out don't ready limits to me something. think business that's eviction not the apartment I we enough rent certainly mean to rent good a or more forma for do than pro institutional, it's of I'm getting that

the frankly. I have at what I not giant passed. impact you the a level, city like think it's or it's impact, a the impact I us quite So mentioned don't don't can big on state stuff mean, like I yes, to going on. because -- But I'm sure any

from years this crazy we to -- anything title it's at if it's I'm thing think passed. surprised that go mean, change. even guys in I of you kind it I I potentially, our goes could right just telling it's own a get pace. to went

Alexander Goldfarb

they know a you that gift. Maybe guys gave they don't

Jordan Kaplan

Well, have love no they done. if there's passed because that, for developers but Sacramento, had it known in wouldn't they that's

Operator

Sakwa Steve from is question next Evercore The with ISI.

Steve Sakwa

the know quarter us on guys that for sort within volume the guiding a just quarterly could of probably that I about to leasing But was new little give in know I range average you fourth of were in years. on office lowest Jordan, to occupancy. volumes XX what leasing two you new XX, you expect maybe 'XX? color

the the pipeline on today? of thoughts any you're that just leasing pace So new and seeing

Jordan Kaplan

side I so think towards kind I going really what the surprised went people, in the leasing leasing attitudes shifted. that looks into I roll and really outlook. you in the and towards of and been is you as obviously mean, we've Well, went And shifted for into whipsawed quickly changes of recession by things sort a people's going quarter fourth attitudes lot that a was go quarter economic one the we're of quickly how every -- of saw to that and give we roll absorption like.

and on to so I what the mean be. drop we has side a that's I other off is point and people's the feeling I sensitive mean, And negative, so The year of economy. been I'm turns three to kind XX%. wild, all mean quarters little of next view incredible sudden about burn. of going news right? guessing a

and going So we didn't try regain the and decide -- we didn't also us think where kind try going and again. confidence say to of year. economy we're people The ourselves, be. for idea, up we're probably an to kind leases where going we're changes example to be we said are quarter will are the pick in of or And I be but fourth going to given there has an of next

you're there quarter, still there's a talking fourth -- quite still still -- XXX,XXX I was activity, mean rough so number And of feet. something because about is it to very out, that put even a lot hard over frankly, where

Steve Sakwa

one Stuart, in have one And debts think swaps interest couple of guided but burning not are soon, fee, the relatively broadly in and rate you April. off to coming sort expense. up, a you swaps March I the I of and relatively burning I that they're low at off are know know due,

on So kind a would today? sense where is the of do debt given reprice market you have that today where

Stuart McElhinney

Well, is swaps off. repricing, debt the not the burning only

Kevin Crummy

coming that at And things So that we when down. to not are start forward excited the going you super about environment. the Steve, no, in current look swapping we're think curves

right runway have the specifically where and where loan. swap. up refinance that opportunity set And we're figure we'll entering to we're And asset. when we this months year monitoring for day two XX these and out find debt we We a our market replace got we've the every so an with to the

Peter Seymour

that's those float included to loans Just -- that assuming though, be we and our guidance. in are clear

Jordan Kaplan

rate, loan, just forward just put we just in -- and do, you on the so model. just which we're same look you it's our doing repricing, could standing not at but curve floating that The is it's

Steve Sakwa

just I to clarify. wanted

them You're go just just to their being, for spread. time plus so SOFR and curve going the let float the they'll to

Jordan Kaplan

Yes, rates going. there's I insecurity lot not right around mean it's -- now of where a are

margin terms there's big kind in paid just And so of too of to be to cover people's a conservativeness. swapping of

watch And so the another is though it's thing, bit for think I to think unswapped, at to even bit painful least expensive be time. of this I and a little little for right

Operator

The next Deville] of question with America. is from [Camille Bank

Unidentified Analyst

from your angle. have by supported really up is another year, partially you of a Following which the off, coming not outlook amount this your implying guidance commenced. expiries Relative due yet of I that to isn't drop have the steep on occupancy the occupancy leases assume midpoint

curious, that what doesn't here on trend comfort the side just So below seeing are like you demand gives you these that levels? occupancy

Jordan Kaplan

driven the a this we're -- mean, quarterly I about think demand the in individual I I change of pipeline leases, never flow into a than So we're seeing quarter, nothing. issue tracks I to our you we the a that we not bit we do I there's with everything real is deal. -- individual lot always -- of fourth leasing. company going in said, we're do that leasing with the while but warned guessing hey, And as little think activity, side terms always a has more an during mean guys do it's to around as demand. But it's call, by

and we you slow moderated is XX%, us. to that flow down, the And noticeable saw saw, so about as as

to the that's seem the giving level guidance. we Now looking we're at at we're going, at looking and this in information and we're we're activity and you moment be at okay, that well, the that

Unidentified Analyst

Warner update thank you there? any lease due able Are for coming you renew on Bros. and comment the on And more the UCLA likelihood or indication their to to provide that's specifically,

Stuart McElhinney

like leases or a all the manner. university, with us. XX They're UCLA coordinated So XX different act I think departments in at has functions, they different don't

give and a have where they’ll sign literally us space. we'll then back quarters lease So with other new some

a We it not large any have on of doesn't So they're those like act don't them, specific -- leases. tenant. are bunch a of smaller but guidance

Operator

question next Yulico Scotiabank. from Nick The with is

Nick Yulico

considering that's just in moving more tenant hear very just let's say, to the a others impact a any maybe or area. that First about office or Beverly everything of realizing if back law we of and question various wondering seeing is portfolio, you're being reports, larger your Century out seeing that? LA you're but looking downtown market of from demand leasing guess any to, I firms I'm terms City, issue, to firms Hills, move standpoint benefit from weak

Jordan Kaplan

Well, mean, York. for issue know well in incredibly you Nick, New a guy the I

or yes, they're So to moving moving finishing and seem out be larger kind of moving people tenants it's out finishing of out, they're downtown.

primary the I But beneficiary Westwood profile been catered high institutional up those the that beneficiary been bit like the date might portfolio be could think also tenants. accommodate hope can't could and some the some of has know Century of There been Century But have larger -- move. in Hills. Century be space to I in of two that recently. have press would I that I in I type overwhelmingly the we even City. of don't moves that mean, that that in little an mean, -- activity -- that have don't those that Beverly been we of pick have happy more has City, move markets we a City to

Nick Yulico

thinking you're guidance done I that that? doesn't buyback, anything to I funds think put going maybe a some you Board how so sale look you question the just place. that about towards unless cheap And you I'm the find really deploying far of go back was buyback? that? that about JV bit just missing assumed thinking source little in it then the the a how mean, there's in waiting buyback presumably, Are because something. But anything stock is is guess about or would a like to talk And or is second the Jordan,

would So that any be thoughts helpful. on

Jordan Kaplan

buyback of of all the Well, options. capital. some capital, number of is access type to a They you one use have

issue. much that look So on the not that's probably things just a an it's of list. have at of we But variety and really to

valuable. some with the I we lean think mean, we're I piece list. where deals to a company would hard at. great that buy, is on estate compelling, of I real -- is the sticks ignore everything great so mean, while real obviously forever, that it's very But estate it's that's making because the stock which rather adds towards always

Operator

John The next with BMO. question Kim is from

John Kim

incentives wanted use pursue or economically on resi to I to are maybe your If make there change it get you assets building? markets contemplating updated offering any of opportunities. more views the some the would viable conversion that for of

Jordan Kaplan

resi It's office single the way funny not to basically extraordinarily. rents of residential well, between markets looking matter conversion we're a down suffering. spread would are are you then building. up of But they're because resi and And suffering at and rents and you as is where particular rents office can in a get say,

but this should it's done, were fill. there is of a do and into everything that when could had going nuanced building. more walk that. be the very little it's more construction, the and job -- the we both not did a Hawaii the this obvious, a to as maybe something back it's That in way It's lease than you looking just say, Bishop pat it's experience we not where XXXX we can that But up the of we on and be and obvious, one great market was the So team, that. much of great something

it's around But building’s the simple be right convince right, are deal. not the Hawaii economics need to yourself of the that lot that you convinced a or confidence So like that gives us area. and

John Kim

at… you've market it like more thinking which was like for market a Center, noncore you, I in was the Warner today perhaps sits a mentioned and past

Jordan Kaplan

I mean, not has the rents although destroyed. -- are And been market -- Warner Yes. Center there the

put so another buildings my much new out matter show in of I round is on are to there a pulled good of -- As probably right of development area. whole other Remember, practice site off of promise. fact, an being of that bought market not starting list that billing, there's the a a just had one mix. guy that's for or right? selling right? I reasons, going building that So fields, that's the he's be now out for great mean [Rams] $XXX,XXX to of

built, I you where before mix. think there's project are that, economy, of some might the be frankly, a any was that LNR XX% was one suffering. was markets there the LA. to And until that going best up size was market normal buildings It market at which end of out the the started to added in market only in that that's it back LNR of to XX%, the

field and about. everything I and sort this One to then and mall if dramatic center, -- well, And and that of the those kind mall that of of that full about evaluating held was amenity of do up reversal, there right, are the two seen more plus. going Rams pieces is run one I some we practice all else stuff. other terms extremely being built two be for got were with market -- office or It's he's just is leased projects two rents visitors been this conversions, big if pieces, sold of residential in well [Crocky] it sports size residential to sites as mall that most they've -- So think, broken for would been having that are building blocks just was you the up. talking as big other the has investment a there their base,

lot like once. at a a of there's of going So lot all in housing amenities,

it's a pretty good bet. So

John Kim

My cash second your retained dividend Michael's the proceeds. question cut on use follow-up of question is to and a flow from

but mention you… talked multifamily, as an And didn't buybacks office. was wondering You about the I you opportunity, if

Jordan Kaplan

think actually off not I it’d and -- I of -- office better, there's probably could -- than on opportunity up office, opportunities. mention be residential. all -- but whether And a office, I I definitely those almost. office, opportunity reasonable I held and chance residential remember, on in acquiring. I think maybe and be the are list stock didn't better put I mean, guess definitely just residential, that residential, definitely has everything as the

Operator

The next with question is Green Burzinski Street. from Dylan

Dylan Burzinski

with deploying guess you that sort When in it look partners, capital are discussions in at environment? of JV just in interested today's I on your they or piece. acquisition

Jordan Kaplan

Yes, with they all in of our and them contact positive and we pipeline the in on why been partners it's are. LA. response, consistently what's going our bullish explained And explained great. We've and a get situation on to we're leasing

interesting you opportunity, it to If find an please show us.

it, I had money think of like like if they to it, fact well, lot we put and we go, confidence a in you -- that deals, the basically. the they

Operator

with next The question is from Tayo Okusanya Credit Suisse.

Tayo Okusanya

Thank you for Bros. the earlier Warner comments about

XXXX some also initial in of kind like larger are starting and William into of 'XX, on those. leases other the thoughts UCLA expiring some larger Just curious -- for Morris,

Jordan Kaplan

about tenants. you I multiple really the Warner have William So Morris the we large it's act only in leases Bros. mentioned UCLA. is spoke that already and The portfolio, of then list that leases. rest two big like

they already Jordan left. entity think act thoughts kind bunch don't leases XX of gave with us. Morris of has prospects years on Warner Bros. as unit. or over it's I a single for you a They his that. have William But

a bunch them talk everything material, like tenants, a for leases. of So the super aren't And I then I while. smaller think with to it's the said, anything act about they list tenants on all like other don't there's else,

Tayo Okusanya

to little your for decisions. in a seeing of talk them in leasing again a type make that Can from of for, anything about just with also you're it terms you then taking changing And of what of perspective, longer tenants, kind terms just respect? kind is they're looking bit

Stuart McElhinney

I that notable given talked of results that think as surprising going active, It was we really activity already the lease economy. that we tenants kind about down. not on QX change smaller We size tenants that saw just up held with for was was not what's the larger published QX. the the our average in

a still on is tend last doing leases, average, in quarter. five to in year they economy feeling when well zero in feel happens than good prospects, they're longer. they're they're we're almost the the of when comfortable smaller don't because a and most down, nervous that. term. to the them And But generally we and what to personally they're little economy little five tend tend tenants then still saw Our their shorter year around what go a is about comfortable that always going guaranteeing little going cycle longer a they Usually, are that's and and lease a is zeroing

Tayo Okusanya

And I or building of prebuilt actually tenants, space are since more smaller your on using mean they're out they their own? product

Stuart McElhinney

to them. it. always it We're wwe at our space spec good suites, prebuilt a call We program. lot build prefer very for of do suite We

go make ready. in product. and a We've had suite with lot we'll of totally success move-in a that So

So that's something we don't up tenants, small But departments. estate are yes, on. they have continue these real to ramp

as we better them, help make So built turn with can much the for them out. as for and much space process, the a get them that's it easy

as we do the much and that it. So possible as appreciate tenants

Jordan Kaplan

also don't TI large demands. have they And

than into So our lease TI large you tenants. costs when lower are substantially

Operator

Dave from with [Operator Instructions] Rogers question is Baird. next The

Dave Rogers

Maybe one question me. for

so give an anticipating square extend the that of quarter, to that haven't kind through. XXX,XXX maybe where we much terms you tenants working you of tenants. evictions, occupancy the you and you end group so impact the last think about those still the of that by done can just handful, of in kind are of rate an year? know Just run where of last I the and most maybe on or blend us there? update you're Can tenants of for down been How were Just the were to paying. feet of

Jordan Kaplan

done, That in it's with. is numbers, group it's dealt the

people more us no and are weren't to pay the paying out they are people out that are money there's paying. work deals that still There's and that over we some So other owed time. people paying, by

Stuart McElhinney

to us [Multiple there's we're still pursuing by Speakers]… are out still And people that money some that owned

Jordan Kaplan

paying. this in weren't occupancy in But that you strange people impact terms have were but occupancy, of they on occupancy, of

that's and what resolved So they're you're resolved COVID of right, [Multiple Speakers] that to And end moratoriums it’ll the and the residential, was weird, be by they're did, March. paying. used that's in, if

Dave Rogers

number, occupancy okay? the In

Jordan Kaplan

Yes.

Operator

Blaine next Fargo. Heck is from follow-up question with Wells The a

Blaine Heck

think to too Jordan, lot areas guess, zoning trigger is additional market? change that in seen LA. early And announced as to a the going just projects in direct it supply opened the of residential in legislation that have of just any you is or circling a you up back I tell? legislation state do that result to certain

Jordan Kaplan

happens because of to to you cheaper, those that simply didn't went, to aware of a of going kind kind now of don't probably -- going it new I rule, just that happen lot hate be more that think in we’re it's value I of hurdles. they liked now a for about if expensive. develop think They a sort If we so to because don't land as developer without from that supply type can to residential need -- we lot rule. that own enhance many go it just I'm buy know I think I lot infill as a don't of be that right? you piece want make through land any areas. to I of that because to having product cheaper, our a open to land make going say perspective. They they the going I land

anything repeal areas mean, many think They it much production don't don't for to I someone property, boost other the own apartments. where didn't this say I happen don't in all least to did at sites. but do have this -- of like we it, I want the them them, to that I so than really So us to

Blaine Heck

there, then earlier was Regal year may the that last you. and the Cinema close any came have plans looking There think, earnings just you that that out Oaks Sherman from from were this reports for to some one that situation, And location I on impact Can comment me. you potential leasing space?

Jordan Kaplan

in whether the talk to tenants. I individual I we -- saw there to happens end that's about that what I Well, don't But mean, want want don't true, don't too. about not. don't talk individual know we And or tenants. I it's

Operator

is The Rich next with from question Anderson Nikko. SMBC

Rich Anderson

was more you office you right, in I there intrigued think more call here, was where comment opportunity, in I thought by residential. than heard in opportunity the I was there So Jordan, that your

correctly? comment that catch I did all, of First

Jordan Kaplan

Yes.

Rich Anderson

standpoint residential some more it your is whereas from where we're want -- cases, is office then residential is a the unique office based from making in the in quite have sort question on world the sight? different, so thing, situation, side a of very And a need that's you mean line of based hybrid like is an a platform. What answer to why? I but it's the when interesting investment not it

Jordan Kaplan

basically, the have a economy, mentioned you see you, it’d at I office so you in said, own buildings not markets Ted from remarks or Well, for work trying overwork whether real office reiterate give be just home to those and that a that urban my people commutes people They're just end be -- to you which remarks. people what the paragraph that I'm I'll right feel tell is gone paragraph paragraph, prepared spend just public being office for was I to transit, one the least which I'll things we you, of want it because estate, in that seem is for for or while said or But being And additional this here. into that it things markets, so prepared on why that not was obstacles across don't them positive which my much. had all more, here. get overlook some I at the in interested called our things we so the recessionary

leasing because and just not our a I'm we and total. leasing mean we have I when of ago, in But optimistic. some year quarters like our COVID were row lightened guy, because we extremely history, our and a of company's of you optimistic optimistic so in strongest new up in in them optimistic booming. I multiple full saw recovery, finally was And have

happening, go, a are I I items about That's there. markets So discussions these other time issues posted that number those are number our confidence. that one, as of are put a So okay? one, because when dealing though, that lot giant think don't you these certainly go with. you that's okay, that me gives

to period is Detroit, of tenant finance has of one here. we're gateway markets for tech, which you or base, lot just New right? number add about, just the have not that to that two, then industries demand really that, a I just it I the through talk cards drive the I is plus-plus around only in just in is been platform. we've we mean, really thing whatever probably our equal And like like And true whatever, mean, We're entertainment, no want operating operating big diversity an our York say or is market. to has that all then whole me understatement And pandemic market, and understatement. our this now that for and Ken, an our last and careers it's strengthening platform, mean our

the a of So they're those feel correct totally the diversity confident office I'm XXX% I of that that buying issues correct portfolio That tenants, performance issues okay? but these just I creating market, are am sure to I said. opportunity right the going our like markets, not the that's for larger be just now for fact our they're a term other living, long in that know platform, not for reasons I where even against backdrop probably

people that's there's to going as confidence maybe be but discounted not lot apartments, still So right why around now a a office. of confidence have they're less so which lot around apartments, much,

over have, in that with So I I paragraph opportunities. had me just the that said confidence my going go, where makes I speech, there's that's suppose which more is you rework probably I be to told

Rich Anderson

had this related were kind the where fourth of in or and and scenario kind quarter, lot the experience to did along and of quarters to a inform in nicely had three moving occupancy so on. about flat hiccup a so guidance you couple And XXXX and XXXX that, that things you then you

Fed a sensitive if right… sense back right? in So topic turn that the seems like that it quickly, really the on kind pretty it Like of could gets

Jordan Kaplan

off It tried and was what asked turned say quickly, about to when I occupancy our I that's guidance.

Rich Anderson

point. my That's

you're Fed what setting that so about have occupancy thinking as we of your in probably moves is kind said, on worst I'm long scenario macro office, it, the absolute but fact we a from really confidence as don't you Is see scenario probably that year like one you goes likely, more kind on. and as and so of quickly behind So a parodying maybe just way right the flat case very the it the so and I and is activity occupancy setting get guess economic lift disruptive floor? the direction,

Jordan Kaplan

designed -- doing. that's bought and Well, to is not so one word what that's I we've quarter-to-quarter. know thing judged estate into we're real be the

about. people that's more So what probably care

As the optimistic, hands market. said the going is that In wipe back and so -- and done going economy I off very term, be just to you're to Fed where quarter-to-quarter said the quick I'm if of long view is said, move we're in okay, and so the we're the like, to agreement. table. you that we off our both point just which so optimistic both the view your I'm so not about bringing

see and this guidance. lot our probably a to of out year have we how So plays

the industries. Fed term you Our we have what the going a on around to that's rates than our down bigger And give unless guidance tech. the Fed prospects probably you beating real lease it's Maybe actually good that numbers from estate harder. for beaten much some having ability impact be other is keep don't certainly our even tamping on also to think even keep we messaging or rest and is going them a what around doing think give strong is came going not me. of bunch of But so are and that's a our trying there, messaging and somebody us beat It's and more, giving the long -- hiring buildings. to confidence therefore, idea to the that's and up to is probably growing, down. to increasing on that in the market some the concerns how all out employment fact much to of means I

Rich Anderson

so competition than you're when before on, any get you can, So more moving ready sooner starts later before sort want and right? all of start entering happen recovery Like you rather to again. there that to to acquiring, is if

Jordan Kaplan

good more no do and mean, opportunity. Look, I mind. a people time building. in much call first do that's we with don’t to of everything a than presented it's public When something, on own my office it's secret the has secondly, need opportunity it all, -- line that I my not

If own I’m not you in you're going an activity. dead forever, West there LA, seeing ounce sitting you're because building

come to opportunity up. right the need we So

Operator

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

Jordan Kaplan

Thank from now. you quarter for joining to our a us. And we Bye-bye. forward look call

Operator

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

now disconnect. may You

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