Douglas Emmett, Inc. · NYSE:DEI
Douglas Emmett — Q2 2024 Earnings Presentation
21 slides from Douglas Emmett's earnings presentation, Aug 9, 2024
Slide 1: Douglas Emmett Profile, June 30, 2024
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Slide 2: Douglas Emmett (DEI) Overview
Douglas Emmett (DEI) Overview Sharpshooter Focus & Best-in-Class Operating Platform Submarket Strategy ✔ High barriers to entry reduce competitive pressures from new supply ✔ Proximity to premier housing markets attracts affluent tenants ✔ Small affluent tenants in diverse industries mitigate risk a
Slide 3: DEI Portfolio Snapshot
DEI Portfolio Snapshot Our Properties are located in premium Los Angeles and Honolulu markets Office Portfolio Multifamily Portfolio Combined Portfolio 18M SF / 80% of Total Annual Rent 4,483 Units / 20% of Total Annual Rent Total Annual Rent Honolulu L.A. Westside 1.2 M SF 1,996 Units 2 Properties
Slide 4: Douglas Emmett by the Numbers
Douglas Emmett by the Numbers Executive Tower ▪ Founded 53 years ago in 1971 Olympic Corridor ▪ Approximately 37% average market share of Class A office space in our submarkets ▪ Largest office landlord in Los Angeles and Honolulu ▪ Approximately 2,700 offices leases in our total portfolio, with a m
Slide 5: Irreplaceable Portfolio and Dominant Market Share
Irreplaceable Portfolio and Dominant Market Share Warner Center Encino Sherman Oaks Burbank Office Market Share Submarket Share Brentwood 60% Sherman Oaks / Encino 55% Westwood 44% Warner Center 37% West Hollywood Olympic Corridor 28% Beverly Hills 28% Beverly Hills Honolulu 22% Bel Air Santa Monica
Slide 6: Highest Barriers to Entry of any Gateway Market in the U.S.
Our Markets: Highest Barriers to Entry of any Gateway Market In the U.S. Lowest New Office Construction in Gateway Markets Historical Office Construction Total New Supply Added as % of Existing Stock Since 2009 29.8% 30% 28.7% 25% 20% 14.3% 15% 12.8% 10% 5% 3.0% 0% DEI San Francisco Midtown Boston D
Slide 7: High barriers to competition from nearby submarkets
Our Markets: High barriers to competition from nearby submarkets LA’s heavy traffic limits competition from other submarkets Hollywood Holmby $1.7M Bel Air Hills Beverly Hills $7.4M $19.4M $7.1M Brentwood $4.7M Wilshire Blvd Pacific Westwood Century City Downtown Palisades $675K $5.2M Santa Olympic
Slide 8: Higher Rent Growth and Lower Volatility: Rent Escalations
Our Markets: Higher Rent Growth and Lower Volatility High Annual Rent Escalations Lower Risks ✔ Almost all of our office leases contain contractual annual rent increases of 3% to 5%, which: ▪ Protects our cash flow during downturns ▪ Can accelerate cash flow growth during expansions ▪ Allows us to l
Slide 9: Consistent Rent Growth Over Three Cycles and 27 Years
Our Markets: Higher Rent Growth and Lower Volatility Consistent Rent Growth Over Three Cycles and 27 Years 2019 Peak 19% above 2007 peak Average "Class A" Asking Rent per Year in Douglas Emmett West L.A. Submarkets $70 2007 Peak 38% above 2000 peak 9 year $65 Growth +50% CAGR +5% $60 $55 3 year 2020
Slide 10: West Los Angeles Higher Long Term Growth and Less Volatility
Our Markets: Higher Rent Growth and Lower Volatility West Los Angeles has demonstrated higher long term growth and less volatility Better Rent Growth Lower Volatility Risk Cumulative Rent Growth Since 1998* Average Peak to Trough Decline Since 1998* 120% 120% 125% 100% 92% 100% 80% 75% 50% 60% 51% 2
Slide 11: Smaller affluent tenants in diverse industries
Our Markets: Higher Rent Growth and Lower Volatility Smaller affluent tenants in diverse industries limits exposure to one tenant or industry Diverse Tenant Industry Mix Small Tenant Size Educational Services 3,000 2.6% Other 2,561 Insurance Legal 3.1% 5.9% 2,500 18.5% 96% Tech Median tenant size 2,
Slide 12: High annual rent escalations and consistent annual roll lower risks
Our Markets: Higher Rent Growth and Lower Volatility High annual rent escalations and consistent annual roll lower risks Consistent Lease Expirations 50% At June 30, 2024 40% Comparable curve based on the average of prior three years (1) 30% 20% 10% 0% 2024 2025 2026 2027 2028 2029 2030 2031 2032 20
Slide 13: Our Efficient Integrated Operating Platform
Our Efficient Integrated Operating Platform Our business model enables us to provide the service demanded Our operating platform minimizes tenant improvements, capex and G&A by our high end tenants, while minimizing Tenant Improvements, Capex and G&A ✔ Our unsurpassed tenant service is a key advanta
Slide 14: Our Multifamily Portfolio
Our Multifamily Portfolio Our premium multifamily assets outperform in revenue and operating margins ✔We own 14 multifamily properties with 4,483 total units in high-barrier premium submarkets in West LA and Honolulu ✔Our apartment communities command premium rents and produce above average operatin
Slide 15: Disciplined Balance Sheet Management Strategy
Disciplined Balance Sheet Management Strategy Non Recourse Debt, Best Pricing from Lenders and Refinancing Flexibility Our Approach The Results ✔ We only use property level, non-recourse debt without corporate ✔ We were one of only a few REITs which was not forced to issue or rating agency covenants
Slide 16: Strong operating cash flows and excellent dividend coverage
Disciplined Balance Sheet Management Strategy Strong operating cash flows and excellent dividend coverage ✔By keeping our G&A, recurring capex and straight-line rent low, we convert a higher percentage of Funds from Operations (FFO) into Adjusted Funds from Operations (AFFO) and cash flow ✔Even afte
Slide 17: Commitment to Sustainability
Commitment to Sustainability Our long-term focus on energy savings has resulted in a very efficient portfolio. All of our buildings save energy through LED lighting, automated energy management systems and real time energy usage software. We continue to improve on this strong foundation. In addition
Slide 18: Commitment to Our People
Commitment to Our People Our human relationships are our most valuable assets We strive to create an environment which honors our employees, tenants and vendors: Every new employee is given a copy of the Douglas Emmett Promises, a set of 15 key Our Promises commitments that we strive to embody each
Slide 19: Diversity & Inclusion
Diversity & Inclusion Our team reflects a commitment to hiring the best regardless of race, ethnicity, or gender 100% Douglas Emmett Employees Local Labor Force* 75% 71% 71% 57% 54% 50% 46% 43% 38% 39% 29% 29% 25% 19% 12% 10% 7% 8% 3% 3% 0% 0% White (non Other Latino/Hispanic Asian Black or African
Slide 20: Highly Experienced Leadership Team
Highly Experienced Leadership Team Executive Management Officer Position Jordan L. Kaplan President & CEO Kenneth M. Panzer Chief Operating Officer Peter D. Seymour Chief Financial Officer Kevin A. Crummy Chief Investment Officer Michele L. Aronson EVP, General Counsel and Secretary Board of Directo
Slide 21: Additional Information
Additional Information: Please contact Stuart McElhinney, Vice President-Investor Relations at (310) 255-7751 or via email at smcelhinney@douglasemmett.com Updates, financial information and additional property information can be obtained at www.douglasemmett.com. This profile is not intended to be