Q1 2025 Douglas Emmett Inc Earnings Call Transcript
Key Points
- Douglas Emmett Inc (DEI) achieved positive absorption across its total office portfolio, signing over 300,000 square feet of new leases.
- The Class A office portfolio maintained stable in-place and asking rental rates despite a higher vacancy market.
- The multifamily portfolio enjoys very full occupancy and robust revenue growth, reflecting the appeal of high-end residential communities.
- The redevelopment of Barrington Plaza and conversion of Studio Plaza to multi-tenant use are progressing well, with leasing surpassing expectations.
- A new residential building development in Westwood is underway, with a total investment expected between $150 million to $200 million over three to four years.
- Higher interest rates are expected to increase the cost of debt by 100 to 200 basis points, impacting income.
- FFO decreased to $0.40 per share, and AFFO decreased to $62.3 million compared to the previous year.
- Same-property cash NOI was essentially flat, indicating challenges in achieving growth.
- Cash spreads on new leases were down 12.6%, influenced by larger tenants skewing averages.
- Economic uncertainties and potential recession risks could pose challenges to office leasing and overall market conditions.
Ladies and gentlemen, thank you for standing by. Welcome to Douglas Emmett's quarterly earnings call. Today's call is being recorded. (Operator Instructions) I will now turn the conference over to Stuart McElhinney, Vice President of Investor Relations for Douglas Emmett. Please go ahead.
Thank you. Joining us today on the call are Jordan Kaplan, our President and CEO; Kevin Crummy, our CIO; and Peter Seymour, our CFO. This call is being webcast live from our website and will be available for replay during the next 90 days. You can also find our earnings package at the Investor Relations section of our website. You can find reconciliations of non-GAAP financial measures discussed during today's call in the earnings package.
During the course of this call, we will make forward-looking statements. These forward-looking statements are based on the beliefs of, assumptions made by and information currently available to us. Our actual results will be affected by known and unknown risks,
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