10-Q

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number: 001-33106

Douglas Emmett, Inc.

(Exact name of registrant as specified in its charter)

Maryland	20-3073047
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1299 Ocean Avenue, Suite 1000	,	Santa Monica	,	California	90401
(Address of principal executive offices)					(Zip Code)

(310) 255-7700

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value per share	DEI	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at	July 31, 2020
Common Stock, $0.01 par value per share	175,374,886	shares

1

DOUGLAS EMMETT, INC. FORM 10-Q
Table of Contents
		Page
	Glossary	3
	Forward Looking Statements	6
	PART I. FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	7
	Consolidated Balance Sheets	7
	Consolidated Statements of Operations	8
	Consolidated Statements of Comprehensive Income (Loss)	9
	Consolidated Statements of Equity	10
	Consolidated Statements of Cash Flows	12
	Notes to Consolidated Financial Statements	14
	Overview	14
	Summary of Significant Accounting Policies	15
	Investment in Real Estate	17
	Ground Lease	18
	Acquired Lease Intangibles	19
	Investments in Unconsolidated Funds	20
	Other Assets	21
	Secured Notes Payable and Revolving Credit Facility, Net	22
	Interest Payable, Accounts Payable and Deferred Revenue	24
	Derivative Contracts	24
	Equity	26
	EPS	29
	Fair Value of Financial Instruments	30
	Segment Reporting	32
	Future Minimum Lease Rental Receipts	33
	Commitments, Contingencies & Guarantees	33
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3	Quantitative and Qualitative Disclosures About Market Risk	52
Item 4	Controls and Procedures	52
	PART II. OTHER INFORMATION
Item 1	Legal Proceedings	53
Item 1A	Risk Factors	53
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	53
Item 3	Defaults Upon Senior Securities	53
Item 4	Mine Safety Disclosures	53
Item 5	Other Information	53
Item 6	Exhibits	53
	SIGNATURES	54

2

Glossary

Abbreviations used in this Report:

AOCI	Accumulated Other Comprehensive Income (Loss)
ASC	Accounting Standards Codification
ASU	Accounting Standards Update
ATM	At-the-Market
BOMA	Building Owners and Managers Association
CEO	Chief Executive Officer
CFO	Chief Financial Officer
Code	Internal Revenue Code of 1986, as amended
COVID-19	Coronavirus Disease 2019
DEI	Douglas Emmett, Inc.
EPS	Earnings Per Share
Exchange Act	Securities Exchange Act of 1934, as amended
FASB	Financial Accounting Standards Board
FDIC	Federal Deposit Insurance Corporation
FFO	Funds From Operations
Fund X	Douglas Emmett Fund X, LLC
Funds	Unconsolidated Institutional Real Estate Funds
GAAP	Generally Accepted Accounting Principles (United States)
JV	Joint Venture
LIBOR	London Interbank Offered Rate
LTIP Units	Long-Term Incentive Plan Units
NAREIT	National Association of Real Estate Investment Trusts
OCI	Other Comprehensive Income (Loss)
OP Units	Operating Partnership Units
Operating Partnership	Douglas Emmett Properties, LP
Opportunity Fund	Fund X Opportunity Fund, LLC
Partnership X	Douglas Emmett Partnership X, LP
PCAOB	Public Company Accounting Oversight Board (United States)
REIT	Real Estate Investment Trust
Report	Quarterly Report on Form 10-Q
SEC	Securities and Exchange Commission
Securities Act	Securities Act of 1933, as amended
TRS	Taxable REIT Subsidiary(ies)
US	United States
USD	United States Dollar
VIE	Variable Interest Entity(ies)

3

Glossary

Defined terms used in this Report:

Annualized Rent	Annualized cash base rent (excludes tenant reimbursements, parking and other revenue) before abatements under leases commenced as of the reporting date and expiring after the reporting date. Annualized Rent for our triple net office properties (in Honolulu and one single tenant building in Los Angeles) is calculated by adding expense reimbursements and estimates of normal building expenses paid by tenants to base rent. Annualized Rent does not include lost rent recovered from insurance and rent for building management use. Annualized Rent includes rent for a health club that we own and operate in Honolulu and for our corporate headquarters in Santa Monica. We report Annualized Rent because it is a widely reported measure of the performance of equity REITs, and is used by some investors as a means to determine tenant demand and to compare our performance and value with other REITs. We use Annualized Rent to manage and monitor the performance of our office and multifamily portfolios.
Consolidated Portfolio	Includes all of the properties included in our consolidated results, including our consolidated JVs.
Funds From Operations (FFO)	We calculate FFO in accordance with the standards established by NAREIT by excluding gains (or losses) on sales of investments in real estate, gains (or losses) from changes in control of investments in real estate, real estate depreciation and amortization (other than amortization of right-of-use assets for which we are the lessee and amortization of deferred loan costs), and impairment write-downs of real estate from our net income (including adjusting for the effect of such items attributable to consolidated JVs and unconsolidated Funds, but not for noncontrolling interests included in our Operating Partnership). FFO is a non-GAAP supplemental financial measure that we report because we believe it is useful to our investors. See Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Report for a discussion of FFO.
Leased Rate	The percentage leased as of the reporting date. Management space is considered leased. Space taken out of service during a repositioning or which is vacant as a result of a fire or other damage is excluded from both the numerator and denominator for calculating percentage leased. We report Leased Rate because it is a widely reported measure of the performance of equity REITs, and is also used by some investors as a means to determine tenant demand and to compare our performance with other REITs. We use Leased Rate to manage and monitor the performance of our office and multifamily portfolios.
Net Operating Income (NOI)	We calculate NOI as revenue less operating expenses attributable to the properties that we own and operate. NOI is calculated by excluding the following from our net income: general and administrative expense, depreciation and amortization expense, other income, other expenses, income from unconsolidated Funds, interest expense, gain from consolidation of JVs, gains (or losses) on sales of investments in real estate and net income attributable to noncontrolling interests. NOI is a non-GAAP supplemental financial measure that we report because we believe it is useful to our investors. See Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Report for a discussion of our Same Property NOI.
Occupancy Rate	We calculate the Occupancy Rate by excluding signed leases not yet commenced from the Leased Rate. Management space is considered occupied. Space taken out of service during a repositioning or which is vacant as a result of a fire or other damage is excluded from both the numerator and denominator for calculating Occupancy Rate. We report Occupancy Rate because it is a widely reported measure of the performance of equity REITs, and is also used by some investors as a means to determine tenant demand and to compare our performance with other REITs. We use Occupancy Rate to manage and monitor the performance of our office and multifamily portfolios.
Rental Rate	We present two forms of Rental Rates - Cash Rental Rates and Straight-Line Rental Rates. Cash Rental Rate is calculated by dividing the rent paid by the Rentable Square Feet. Straight-Line Rental Rate is calculated by dividing the average rent over the lease term by the Rentable Square Feet.

4

Glossary

Recurring Capital Expenditures	Building improvements required to maintain revenues once a property has been stabilized, and excludes capital expenditures for (i) acquired buildings being stabilized, (ii) newly developed space, (iii) upgrades to improve revenues or operating expenses or significantly change the use of the space, (iv) casualty damage and (v) bringing the property into compliance with governmental or lender requirements. We report Recurring Capital Expenditures because it is a widely reported measure of the performance of equity REITs, and is used by some investors as a means to determine our cash flow requirements and to compare our performance with other REITs. We use Recurring Capital Expenditures to manage and monitor the performance of our office and multifamily portfolios.
Rentable Square Feet	Based on the BOMA remeasurement and consists of leased square feet (including square feet with respect to signed leases not commenced as of the reporting date), available square feet, building management use square feet and square feet of the BOMA adjustment on leased space. We report Rentable Square Feet because it is a widely reported measure of the performance and value of equity REITs, and is also used by some investors to compare our performance and value with other REITs. We use Rentable Square Feet to manage and monitor the performance of our office portfolio.
Same Properties	Our consolidated properties that have been owned and operated by us in a consistent manner, and reported in our consolidated results during the entire span of both periods being compared. We exclude from our same property subset any properties (i) acquired during the comparative periods; (ii) sold, held for sale, contributed or otherwise removed from our consolidated financial statements during the comparative periods; or (iii) that underwent a major repositioning project or were impacted by development activity that we believed significantly affected the properties' results during the comparative periods.
Short-Term Leases	Represents leases that expired on or before the reporting date or had a term of less than one year, including hold over tenancies, month to month leases and other short-term occupancies.
Total Portfolio	Includes our Consolidated Portfolio plus the properties owned by our Fund.

5

Forward Looking Statements

This Report contains forward-looking statements within the meaning of the Section 27A of the Securities Act and Section 21E of the Exchange Act. You can find many (but not all) of these statements by looking for words such as “believe”, “expect”, “anticipate”, “estimate”, “approximate”, “intend”, “plan”, “would”, “could”, “may”, “future” or other similar expressions in this Report. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995. We caution investors that any forward-looking statements used in this Report, or those that we make orally or in writing from time to time, are based on our beliefs and assumptions, as well as information currently available to us. Actual outcomes will be affected by known and unknown risks, trends, uncertainties and factors beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. As a result, our future results can be expected to differ from our expectations, and those differences may be material. Accordingly, investors should use caution when relying on previously reported forward-looking statements, which were based on results and trends at the time they were made, to anticipate future results or trends. Some of the risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include the following:

•adverse developments related to the COVID-19 pandemic;

•adverse economic or real estate developments affecting Southern California or Honolulu, Hawaii;

•competition from other real estate investors in our markets;

•decreasing rental rates or increasing tenant incentive and vacancy rates;

•defaults on, early terminations of, or non-renewal of leases by tenants;

•increases in interest rates or operating costs;

•insufficient cash flows to service our outstanding debt or pay rent on ground leases;

•difficulties in raising capital;

•inability to liquidate real estate or other investments quickly;

•adverse changes to rent control laws and regulations;

•environmental uncertainties;

•natural disasters;

•insufficient insurance, or increases in insurance costs;

•inability to successfully expand into new markets and submarkets;

•difficulties in identifying properties to acquire and failure to complete acquisitions successfully;

•failure to successfully operate acquired properties;

•risks associated with property development;

•risks associated with JVs;

•conflicts of interest with our officers and reliance on key personnel; 

•changes in zoning and other land use laws;

•adverse results of litigation or governmental proceedings;

•failure to comply with laws, regulations and covenants that are applicable to our business;

•possible terrorist attacks or wars;

•possible cyber attacks or intrusions;

•adverse changes to accounting rules;

•weaknesses in our internal controls over financial reporting;

•failure to maintain our REIT status under federal tax laws; and

•adverse changes to tax laws, including those related to property taxes.

For further discussion of these and other risk factors see Item 1A. "Risk Factors” in our 2019 Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and Item 1A. "Risk Factors" in this Report. This Report and all subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances after the date of this Report.

6

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Douglas Emmett, Inc. Consolidated Balance Sheets (In thousands, except share data)
	June 30, 2020		December 31, 2019
	Unaudited
Assets
Investment in real estate:
Land	$	1,152,684	$	1,152,684
Buildings and improvements	9,329,652		9,308,481
Tenant improvements and lease intangibles	922,909		905,753
Property under development	158,949		111,715
Investment in real estate, gross	11,564,194		11,478,633
Less: accumulated depreciation and amortization	(2,679,255)		(2,518,415)
Investment in real estate, net	8,884,939		8,960,218
Ground lease right-of-use asset	7,475		7,479
Cash and cash equivalents	176,393		153,683
Tenant receivables	16,996		5,302
Deferred rent receivables	118,210		134,968
Acquired lease intangible assets, net	5,736		6,407
Interest rate contract assets	—		22,381
Investment in unconsolidated Fund	47,742		42,442
Other assets	13,886		16,421
Total Assets	$	9,271,377	$	9,349,301
Liabilities
Secured notes payable and revolving credit facility, net	$	4,666,603	$	4,619,058
Ground lease liability	10,877		10,882
Interest payable, accounts payable and deferred revenue	139,607		131,410
Security deposits	58,419		60,923
Acquired lease intangible liabilities, net	43,126		52,367
Interest rate contract liabilities	259,293		54,616
Dividends payable	49,113		49,111
Total liabilities	5,227,038		4,978,367
Equity
Douglas Emmett, Inc. stockholders' equity:
Common Stock, $0.01 par value, 750,000,000 authorized, 175,374,886 and 175,369,746 outstanding at June 30, 2020 and December 31, 2019, respectively	1,754		1,754
Additional paid-in capital	3,486,442		3,486,356
Accumulated other comprehensive loss	(179,471)		(17,462)
Accumulated deficit	(827,748)		(758,576)
Total Douglas Emmett, Inc. stockholders' equity	2,480,977		2,712,072
Noncontrolling interests	1,563,362		1,658,862
Total equity	4,044,339		4,370,934
Total Liabilities and Equity	$	9,271,377	$	9,349,301

See accompanying notes to the consolidated financial statements.

7

Douglas Emmett, Inc.

Consolidated Statements of Operations

(Unaudited; in thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Revenues
Office rental
Rental revenues and tenant recoveries	$	158,813	$	171,674	$	344,640	$	338,909
Parking and other income	18,176		30,515		52,238		60,570
Total office revenues	176,989		202,189		396,878		399,479
Multifamily rental
Rental revenues	25,872		26,308		54,958		51,201
Parking and other income	4,935		2,037		7,310		4,040
Total multifamily revenues	30,807		28,345		62,268		55,241
Total revenues	207,796		230,534		459,146		454,720
Operating Expenses
Office expenses	60,301		64,308		129,965		127,757
Multifamily expenses	8,856		7,712		18,212		15,267
General and administrative expenses	9,863		9,159		20,198		18,991
Depreciation and amortization	98,765		78,724		196,542		158,597
Total operating expenses	177,785		159,903		364,917		320,612
Operating income	30,011		70,631		94,229		134,108
Other income	325		2,892		2,314		5,790
Other expenses	(478)		(1,807)		(1,874)		(3,652)
(Loss) income from unconsolidated Funds	(140)		2,207		183		3,758
Interest expense	(35,190)		(34,063)		(70,610)		(67,356)
Net (loss) income	(5,472)		39,860		24,242		72,648
Less: Net loss (income) attributable to noncontrolling interests	7,502		(5,894)		4,711		(9,981)
Net income attributable to common stockholders	$	2,030	$	33,966	$	28,953	$	62,667
Net income per common share – basic and diluted	$	0.01	$	0.20	$	0.16	$	0.36

See accompanying notes to the consolidated financial statements.

8

Douglas Emmett, Inc.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited and in thousands)

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Net (loss) income	$	(5,472)	$	39,860	$	24,242	$	72,648
Other comprehensive loss: cash flow hedges	(20,795)		(81,613)		(228,254)		(114,921)
Comprehensive loss	(26,267)		(41,753)		(204,012)		(42,273)
Less: Comprehensive loss attributable to noncontrolling interests	14,698		18,923		70,956		25,143
Comprehensive loss attributable to common stockholders	$	(11,569)	$	(22,830)	$	(133,056)	$	(17,130)

See accompanying notes to the consolidated financial statements.

9

Douglas Emmett, Inc.

Consolidated Statements of Equity

(Unaudited; in thousands, except per share data)

		Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019
Shares of Common Stock	Beginning balance	175,375		170,237		175,370		170,215
	Exchange of OP Units for common stock	—		54		5		76
	Issuance of common stock	—		4,932		—		4,932
	Ending balance	175,375		175,223		175,375		175,223
Common Stock	Beginning balance	$	1,754	$	1,702	$	1,754	$	1,702
	Exchange of OP units for common stock	—		1		—		1
	Issuance of common stock	—		49		—		49
	Ending balance	$	1,754	$	1,752	$	1,754	$	1,752
Additional Paid-in Capital	Beginning balance	$	3,486,442	$	3,282,388	$	3,486,356	$	3,282,316
	Exchange of OP Units for common stock	—		859		90		1,222
	Repurchase of OP Units with cash	—		—		(4)		(291)
	Issuance of common stock, net	—		200,933		—		200,933
	Ending balance	$	3,486,442	$	3,484,180	$	3,486,442	$	3,484,180
AOCI	Beginning balance	$	(165,872)	$	30,943	$	(17,462)	$	53,944
	Cash flow hedge adjustments	(13,599)		(56,796)		(162,009)		(79,797)
	Ending balance	$	(179,471)	$	(25,853)	$	(179,471)	$	(25,853)
Accumulated Deficit	Beginning balance	$	(780,562)	$	(953,335)	$	(758,576)	$	(935,630)
	ASU 2016-02 adoption	—		—		—		(2,144)
	Net income attributable to common stockholders	2,030		33,966		28,953		62,667
	Dividends	(49,216)		(45,558)		(98,125)		(89,820)
	Ending balance	$	(827,748)	$	(964,927)	$	(827,748)	$	(964,927)
Noncontrolling Interests	Beginning balance	$	1,587,945	$	1,426,484	$	1,658,862	$	1,446,098
	ASU 2016-02 adoption	—		—		—		(355)
	Net (loss) income attributable to noncontrolling interests	(7,502)		5,894		(4,711)		9,981
	Cash flow hedge adjustments	(7,196)		(24,817)		(66,245)		(35,124)
	Contributions	—		176,000		—		176,000
	Distributions	(13,448)		(28,214)		(31,814)		(43,974)
	Exchange of OP Units for common stock	—		(860)		(90)		(1,223)
	Repurchase of OP Units with cash	—		—		(3)		(216)
	Stock-based compensation	3,563		2,721		7,363		6,021
	Ending balance	$	1,563,362	$	1,557,208	$	1,563,362	$	1,557,208

10

Douglas Emmett, Inc.

Consolidated Statements of Equity

(Unaudited; in thousands, except per share data)

		Three Months Ended June 30,				Six Months Ended June 30,
		2020		2019		2020		2019
Total Equity	Beginning balance	$	4,129,707	$	3,788,182	$	4,370,934	$	3,848,430
	ASU 2016-02 adoption	—		—		—		(2,499)
	Net (loss) income	(5,472)		39,860		24,242		72,648
	Cash flow hedge adjustments	(20,795)		(81,613)		(228,254)		(114,921)
	Issuance of common stock, net	—		200,982		—		200,982
	Repurchase of OP Units with cash	—		—		(7)		(507)
	Contributions	—		176,000		—		176,000
	Dividends	(49,216)		(45,558)		(98,125)		(89,820)
	Distributions	(13,448)		(28,214)		(31,814)		(43,974)
	Stock-based compensation	3,563		2,721		7,363		6,021
	Ending balance	$	4,044,339	$	4,052,360	$	4,044,339	$	4,052,360
	Dividends declared per common share	$	0.28	$	0.26	$	0.56	$	0.52

See accompanying notes to the consolidated financial statements.

11

Douglas Emmett, Inc.

Consolidated Statements of Cash Flows

(Unaudited and in thousands)

	Six Months Ended June 30,
	2020		2019
Operating Activities
Net income	$	24,242	$	72,648
Adjustments to reconcile net income to net cash provided by operating activities:
Income from unconsolidated Funds	(183)		(3,758)
Depreciation and amortization	196,542		158,597
Net accretion of acquired lease intangibles	(8,571)		(8,516)
Straight-line rent	16,758		(6,684)
Write-off of uncollectible amounts	15,992		9
Loan premium amortized and written off	(2,043)		(102)
Deferred loan costs amortized and written off	3,791		4,380
Derivative non-cash adjustments	—		(7)
Amortization of stock-based compensation	5,753		5,013
Operating distributions from unconsolidated Funds	394		3,756
Change in working capital components:
Tenant receivables	(27,686)		(837)
Interest payable, accounts payable and deferred revenue	9,811		(2,222)
Security deposits	(2,504)		501
Other assets	4,513		5,398
Net cash provided by operating activities	236,809		228,176
Investing Activities
Capital expenditures for improvements to real estate	(74,151)		(83,944)
Capital expenditures for developments	(53,780)		(30,327)
Insurance recoveries for damage to real estate	4,015		—
Property acquisition	—		(364,524)
Acquisition of additional interests in unconsolidated Fund	(6,591)		(7,518)
Capital distributions from unconsolidated Funds	548		3,869
Net cash used in investing activities	(129,959)		(482,444)
Financing Activities
Proceeds from borrowings	544,000		832,318
Repayment of borrowings	(494,372)		(657,673)
Loan cost payments	(3,824)		(6,625)
Contributions from noncontrolling interests in consolidated JVs	—		163,556
Distributions paid to noncontrolling interests	(31,814)		(31,530)
Dividends paid to common stockholders	(98,123)		(88,518)
Repurchase of OP Units	(7)		(507)
Proceeds from issuance of common stock, net	—		200,982
Net cash used in financing activities	(84,140)		412,003
Increase in cash and cash equivalents and restricted cash	22,710		157,735
Cash and cash equivalents and restricted cash - beginning balance	153,804		146,348
Cash and cash equivalents and restricted cash - ending balance	$	176,514	$	304,083

12

Douglas Emmett, Inc.

Consolidated Statements of Cash Flows

(Unaudited and in thousands)

Reconciliation of Ending Cash Balance
	Six Months Ended June 30,
	2020		2019
Cash and cash equivalents - ending balance	$	176,393	$	303,962
Restricted cash - ending balance	121		121
Cash and cash equivalents and restricted cash - ending balance	$	176,514	$	304,083

Supplemental Cash Flows Information

	Six Months Ended June 30,
	2020		2019
Operating Activities
Cash paid for interest, net of capitalized interest	$	68,837	$	62,985
Capitalized interest paid	$	1,992	$	1,897
Non-cash Investing Transactions
Accrual for real estate and development capital expenditures	$	31,400	$	16,687
Capitalized stock-based compensation for improvements to real estate and developments	$	1,610	$	1,008
Removal of fully depreciated and amortized tenant improvements and lease intangibles	$	32,305	$	30,586
Removal of fully amortized acquired lease intangible assets	$	175	$	1,859
Removal of fully accreted acquired lease intangible liabilities	$	3,604	$	4,212
Property acquisition accrual	$	—	$	1,361
Recognition of ground lease right-of-use asset - Adoption of ASU 2016-02	$	—	$	10,885
Above-market ground lease intangible liability offset against right-of-use asset - Adoption of ASU 2016-02	$	—	$	3,408
Recognition of ground lease liability - Adoption of ASU 2016-02	$	—	$	10,885
Non-cash Financing Transactions
Loss recorded in AOCI - consolidated derivatives	$	(241,189)	$	(89,483)
Loss recorded in AOCI - unconsolidated Funds' derivatives (our share)	$	(403)	$	(6,928)
Non-cash contributions from noncontrolling interests in consolidated JVs	$	—	$	12,444
Non-cash distributions to noncontrolling interests	$	—	$	12,444
Dividends declared	$	98,125	$	89,820
Exchange of OP Units for common stock	$	90	$	1,223

See accompanying notes to the consolidated financial statements.

13

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited)

1. Overview

Organization and Business Description

Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed REIT. We are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and Honolulu, Hawaii. Through our interest in our Operating Partnership and its subsidiaries, consolidated JVs and unconsolidated Fund, we focus on owning, acquiring, developing and managing a significant market share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities. The terms "us," "we" and "our" as used in the consolidated financial statements refer to Douglas Emmett, Inc. and its subsidiaries on a consolidated basis.

At June 30, 2020, our Consolidated Portfolio consisted of (i) a 17.9 million square foot office portfolio, (ii) 4,209 multifamily apartment units and (iii) fee interests in two parcels of land from which we receive rent under ground leases. We also manage and own an equity interest in an unconsolidated Fund which, at June 30, 2020, owned an additional 0.4 million square feet of office space. We manage our unconsolidated Fund alongside our Consolidated Portfolio, and we therefore present the statistics for our office portfolio on a Total Portfolio basis. As of June 30, 2020, our portfolio (not including two parcels of land from which we receive rent under ground leases), consisted of the following properties (including ancillary retail space):

	Consolidated Portfolio	Total Portfolio
Office
Wholly-owned properties	53	53
Consolidated JV properties	17	17
Unconsolidated Fund properties	—	2
	70	72
Multifamily
Wholly-owned properties	11	11
Consolidated JV properties	1	1
	12	12
Total	82	84

Basis of Presentation

The accompanying consolidated financial statements are the consolidated financial statements of Douglas Emmett, Inc. and its subsidiaries, including our Operating Partnership and our consolidated JVs.  All significant intercompany balances and transactions have been eliminated in our consolidated financial statements.

We consolidate entities in which we are considered to be the primary beneficiary of a VIE or have a majority of the voting interest of the entity. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of that VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We do not consolidate entities in which the other parties have substantive kick-out rights to remove our power to direct the activities, most significantly impacting the economic performance, of that VIE. In determining whether we are the primary beneficiary, we consider factors such as ownership interest, management representation, authority to control decisions, and contractual and substantive participating rights of each party.

We consolidate our Operating Partnership through which we conduct substantially all of our business, and own, directly and through subsidiaries, substantially all of our assets, and are obligated to repay substantially all of our liabilities, including $3.11 billion of consolidated debt. See Note 8. We also consolidate four JVs. As of June 30, 2020, these consolidated entities had aggregate total consolidated assets of $9.27 billion (of which $8.88 billion related to investment in real estate), aggregate total consolidated liabilities of $5.23 billion (of which $4.67 billion related to debt), and aggregate total consolidated equity of $4.04 billion (of which $1.56 billion related to noncontrolling interests).

14

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC in conformity with US GAAP as established by the FASB in the ASC. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in conformity with US GAAP may have been condensed or omitted pursuant to SEC rules and regulations, although we believe that the disclosures are adequate to make their presentation not misleading. The accompanying unaudited interim consolidated financial statements include, in our opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set forth therein. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in our 2019 Annual Report on Form 10-K and the notes thereto. Any references to the number or class of properties, square footage, per square footage amounts, apartment units and geography, are outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the PCAOB.

2. Summary of Significant Accounting Policies

We have not made any changes to our significant accounting policies disclosed in our 2019 Annual Report on Form 10-K.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make certain estimates that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Revenue Recognition

Rental revenues and tenant recoveries

We account for our rental revenues and tenant recoveries in accordance with Topic 842 "Leases". Rental revenues and tenant recoveries are included in: (i) Rental revenues and tenant recoveries under Office rental, and (ii) Rental revenues under Multifamily rental, in our consolidated statements of operations.

In accordance with Topic 842, we perform an assessment as to whether or not substantially all of the amounts due under a tenant’s lease agreement is deemed probable of collection. This assessment involves using a methodology that requires judgment and estimates about matters that are uncertain at the time the estimates are made, including tenant specific factors, specific industry conditions, and general economic trends and conditions.

For leases where we have concluded it is probable that we will collect substantially all the lease payments due under those leases, we continue to record lease income on a straight-line basis over the lease term. For leases where we have concluded that it is not probable that we will collect substantially all the lease payments due under those leases, we limit the lease income to the lesser of the income recognized on a straight-line basis or cash basis. If our conclusion of collectibility changes, we will record the difference between the lease income that would have been recognized on a straight-line basis and cash basis as a current-period adjustment to rental revenues and tenant recoveries. We write-off tenant receivables and deferred rent receivables as a charge against rental revenues and tenant recoveries in the period we conclude that substantially all of the lease payments are not probable of collection. If we subsequently collect amounts that were previously written off then the amounts collected are recorded as an increase to our rental revenues and tenant recoveries.

Charges for uncollectible amounts, related to tenant receivables and deferred rent receivables, which for the three and six months ended June 30, 2020 were primarily due to the impact of the COVID-19 pandemic, reduced our rental revenues and tenant recoveries by $29.8 million and $1.0 million for the three months ended June 30, 2020 and 2019, and $35.0 million and $3.4 million for the six months ended June 30, 2020 and 2019, respectively.

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Office parking revenues

We account for our office parking revenues in accordance with ASC 606 "Revenue from Contracts with Customers". Office parking revenues are included in Parking and other income under Office rental in our consolidated statements of operations. Our lease contracts generally make a specified number of parking spaces available to the tenant, and we bill and recognize parking revenues on a monthly basis in accordance with the lease agreements, generally using the monthly parking rates in effect at the time of billing. Office parking revenues were $14.7 million and $26.9 million for the three months ended June 30, 2020 and 2019, and $44.9 million and $53.3 million for the six months ended June 30, 2020 and 2019, respectively. Office parking receivables were $0.4 million and $1.3 million as of June 30, 2020 and December 31, 2019, respectively, and are included in Tenant receivables in our consolidated balance sheets.

Income Taxes

We have elected to be taxed as a REIT under the Code. Provided that we qualify for taxation as a REIT, we are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. We are subject to corporate-level tax on the earnings that we derive through our TRS.

New Accounting Pronouncements

Changes to US GAAP are implemented by the FASB in the form of ASUs.  We consider the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not issued any other ASUs that we expect to be applicable and have a material impact on our consolidated financial statements.

ASUs Adopted

ASU 2016-13 (Topic 326 - "Financial Instruments-Credit Losses")

In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments", which amends "Financial Instruments-Credit Losses" (Topic 326). The ASU provides guidance for measuring credit losses on financial instruments. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, which for us was the first quarter of 2020. The amendments in the ASU should be applied on a modified-retrospective basis. The ASU impacts our measurement of credit losses for our Office parking receivables, which were $0.4 million and $1.3 million as of June 30, 2020 and December 31, 2019, respectively, and are included in Tenant receivables in our consolidated balance sheets. We adopted the ASU in the first quarter of 2020 and it did not have a material impact on our consolidated financial statements.

ASU 2020-04 (Topic 848 - "Reference Rate Reform")

In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform", which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The practical expedients are optional and may be elected over time as reference rate reform activities occur. We elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the ASU and may apply other elections, as applicable, as additional changes in the market occur. Our election to apply the hedge accounting expedients in the first quarter of 2020 did not have a material impact on our consolidated financial statements.

16

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Other Pronouncements

FASB COVID-19 Lease Modification Accounting Relief

In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under the existing lease accounting guidance, we would be required to determine on a lease-by-lease basis if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows us, if certain criteria are met, to bypass the lease-by-lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. We will avail ourselves of the election to avoid performing a lease-by-lease analysis. The Lease Modification Q&A did not have material impact on our consolidated financial statements; however, its impact on our future consolidated financial statements is dependent upon the extent of any lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by us at the time of entering into such concessions.

FASB COVID-19 Cash Flow Hedge Accounting Relief

In April 2020, the FASB staff issued a question and answer document (the “Cash Flow Hedge Accounting Q&A”) on the application of cash flow hedge accounting guidance to cash flow hedges impacted by the COVID-19 pandemic. The Cash Flow Hedge Accounting Q&A clarifies that: (i) when cash flow hedge accounting has been discontinued, the delays in the timing of the forecasted transactions related to the impact of the COVID-19 pandemic may be considered rare cases caused by extenuating circumstances outside the control or influence of an entity, thereby allowing amounts deferred in AOCI to remain in AOCI until the forecasted transaction affects earnings, and (ii) missed forecasts, related to the effects of the COVID-19 pandemic, do not need to be considered when determining whether the entity has exhibited a pattern of missing forecasts that would call into question the entity’s ability to accurately predict forecasted transactions and the propriety of using cash flow hedge accounting in the future for similar transactions. The Cash Flow Hedge Accounting Q&A did not have material impact on our consolidated financial statements; however, its impact on our future consolidated financial statements is dependent upon our cash flow hedge forecasted transactions being impacted by the COVID-19 pandemic in future periods.

17

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

3. Investment in Real Estate

We account for our property acquisitions as asset acquisitions. The acquired property's results of operations are included in our results of operations from the respective acquisition date.

Six Months Ended June 30, 2020

During six months ended June 30, 2020, we did not purchase any properties.

Six Months Ended June 30, 2019

On June 7, 2019, we acquired The Glendon, a residential community in Westwood, and on June 28, 2019, we contributed the property to a consolidated JV that we manage and in which we own a twenty percent capital interest. The table below summarizes the purchase price allocation for the acquisition. The contract and purchase prices differ due to prorations and similar adjustments:

(In thousands, except number of units)	The Glendon
Submarket	West Los Angeles
Acquisition date	June 7, 2019
Contract price	$	365,100
Number of multifamily units	350
Retail square footage	50
Investment in real estate:
Land	$	32,773
Buildings and improvements	333,624
Tenant improvements and lease intangibles	2,301
Acquired above- and below-market leases, net	(2,114)
Net assets and liabilities acquired	$	366,584

4. Ground Lease

We pay rent under a ground lease located in Honolulu, Hawaii, which expires on December 31, 2086. The rent is fixed at $733 thousand per year until February 28, 2029, after which it will reset to the greater of the existing ground rent or market. As of June 30, 2020, the right-of-use asset carrying value of this ground lease was $7.5 million and the ground lease liability was $10.9 million.

We incurred ground rent expense of $183 thousand for the three months ended June 30, 2020 and 2019, and $365 thousand and $363 thousand for the six months ended June 30, 2020 and 2019, respectively, which is included in Office expenses in our consolidated statements of operations. The table below, which assumes that the ground rent payments will continue to be $733 thousand per year after February 28, 2029, presents the future minimum ground lease payments as of June 30, 2020:

Twelve months ending June 30:	(In thousands)
2021	$	733
2022	733
2023	733
2024	733
2025	733
Thereafter	45,078
Total future minimum lease payments	$	48,743

18

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

5. Acquired Lease Intangibles

Summary of our Acquired Lease Intangibles

(In thousands)	June 30, 2020		December 31, 2019
Above-market tenant leases	$	7,045	$	7,220
Above-market tenant leases - accumulated amortization	(2,228)		(1,741)
Above-market ground lease where we are the lessor	1,152		1,152
Above-market ground lease - accumulated amortization	(233)		(224)
Acquired lease intangible assets, net	$	5,736	$	6,407
Below-market tenant leases	$	98,979	$	102,583
Below-market tenant leases - accumulated accretion	(55,853)		(50,216)
Acquired lease intangible liabilities, net	$	43,126	$	52,367

Impact on the Consolidated Statements of Operations

The table below summarizes the net amortization/accretion related to our above- and below-market leases:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Net accretion of above- and below-market tenant lease assets and liabilities(1)	$	4,320	$	4,400	$	8,579	$	8,524
Amortization of an above-market ground lease asset(2)	(5)		(4)		(8)		(8)
Total	$	4,315	$	4,396	$	8,571	$	8,516

______________________________________________

(1) Recorded as a net increase to office and multifamily rental revenues.

(2) Recorded as a decrease to office parking and other income.

19

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

6. Investments in Unconsolidated Funds

Description of our Funds

As of June 30, 2020, we manage and own an equity interest of 33.5% in an unconsolidated Fund, Partnership X, through which we and other investors in the Fund own two office properties totaling 0.4 million square feet. During the six months ended June 30, 2020 we purchased additional interests of 3.6% in Partnership X for $6.6 million.

On November 21, 2019, we restructured Fund X which resulted in Fund X being treated as a consolidated JV from November 21, 2019, and we closed the Opportunity Fund. See Note 6 in our 2019 Annual Report on Form 10-K for more information.

At June 30, 2019, we managed and held direct and indirect equity interests in three unconsolidated Funds, consisting of 6.2% of the Opportunity Fund, 72.7% of Fund X and 24.6% of Partnership X, through which we and investors in the Funds' owned eight office properties totaling 1.8 million square feet. We purchased an additional interest of 1.4% in Fund X during the six months ended June 30, 2019.

Our Funds pay us fees and reimburse us for certain expenses related to property management and other services we provide, which are included in Other income in our consolidated statements of operations. We also receive distributions based on invested capital and on any profits that exceed certain specified cash returns to the investors. The table below presents cash distributions we received from our Funds:

	Six Months Ended June 30,
(In thousands)	2020		2019
Operating distributions received(1)	$	394	$	3,756
Capital distributions received(1)	548		3,869
Total distributions received(1)	$	942	$	7,625

_________________________________________________

(1) The distributions are not directly comparable to the prior period; the distributions during the six months ended June 30, 2020 reflect distributions only from Partnership X, whereas the distributions during the six months ended June 30, 2019 reflect distributions from the Opportunity Fund, Fund X and Partnership X.

Summarized Financial Information for our Funds

The tables below present selected financial information for the Funds.  The amounts presented reflect 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value:

(In thousands)	June 30, 2020		December 31, 2019
Total assets(1)	$	134,245	$	136,479
Total liabilities(1)	$	113,592	$	113,330
Total equity(1)	$	20,653	$	23,149

______________________________________________

(1) The balances reflect the financial position of Partnership X.

	Six Months Ended June 30,
(In thousands)	2020		2019
Total revenues(1)	$	7,597	$	41,174
Operating income(1)	$	1,686	$	11,961
Net income(1)	$	372	$	3,815

______________________________________________

(1) The results of operations are not directly comparable to the prior period; the balances for the six months ended June 30, 2020 reflect only the operations of Partnership X, whereas the balances for the six months ended June 30, 2019 reflect the combined operations of the Opportunity Fund, Fund X and Partnership X.

20

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

7. Other Assets

(In thousands)	June 30, 2020		December 31, 2019
Restricted cash	$	121	$	121
Prepaid expenses	3,632		8,711
Other indefinite-lived intangibles	1,988		1,988
Furniture, fixtures and equipment, net	2,532		2,368
Other	5,613		3,233
Total other assets	$	13,886	$	16,421

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

8. Secured Notes Payable and Revolving Credit Facility, Net

Description	Maturity Date(1)	Principal Balance as of June 30, 2020		Principal Balance as of December 31, 2019		Variable Interest Rate	Fixed Interest Rate(2)	Swap Maturity Date
		(In thousands)
Consolidated Wholly Owned Subsidiaries
Term loan(3)	1/1/2024	$	300,000	$	300,000	LIBOR + 1.55%	3.46%	1/1/2022
Term loan(3)	3/3/2025	335,000		335,000		LIBOR + 1.30%	3.84%	3/1/2023
Fannie Mae loan(3)	4/1/2025	102,400		102,400		LIBOR + 1.25%	2.76%	3/1/2023
Term loan(3)	8/15/2026	415,000		415,000		LIBOR + 1.10%	3.07%	8/1/2025
Term loan(3)	9/19/2026	400,000		400,000		LIBOR + 1.15%	2.44%	9/1/2024
Term loan(3)(4)	9/26/2026	200,000		200,000		LIBOR + 1.20%	2.77%	10/1/2024
Term loan(3)(5)	11/1/2026	400,000		400,000		LIBOR + 1.15%	2.18%	10/1/2024
Fannie Mae loan(3)	6/1/2027	550,000		550,000		LIBOR + 1.37%	3.16%	6/1/2022
Fannie Mae loan(3)	6/1/2029	255,000		255,000		LIBOR + 0.98%	3.26%	6/1/2027
Fannie Mae loan(3)(6)	6/1/2029	125,000		125,000		LIBOR + 0.98%	2.55%	6/1/2027
Term loan(7)	6/1/2038	30,492		30,864		N/A	4.55%	N/A
Revolving credit facility(8)	8/21/2023	—		—		LIBOR + 1.15%	N/A	N/A
Total Wholly Owned Subsidiary Debt		3,112,892		3,113,264
Consolidated JVs
Term loan(9)	—	—		400,000		—	—	—
Term loan(3)	2/28/2023	580,000		580,000		LIBOR + 1.40%	2.37%	3/1/2021
Term loan(3)	12/19/2024	400,000		400,000		LIBOR + 1.30%	3.47%	1/1/2023
Term loan(3)(10)	5/15/2027	450,000		—		LIBOR + 1.35%	3.04%	4/1/2025
Term loan(3)	6/1/2029	160,000		160,000		LIBOR + 0.98%	3.25%	7/1/2027
Total Consolidated Debt(11)		4,702,892		4,653,264
Unamortized loan premium, net		4,699		6,741
Unamortized deferred loan costs, net		(40,988)		(40,947)
Total Consolidated Debt, net		$	4,666,603	$	4,619,058

_______________________________________________________________________

Except as noted below, our loans and revolving credit facility: (i) are non-recourse, (ii) are secured by separate collateral pools consisting of one or more properties, (iii) require interest-only monthly payments with the outstanding principal due upon maturity, and (iv) contain certain financial covenants which could require us to deposit excess cash flow with the lender under certain circumstances unless we (at our option) either provide a guarantee or additional collateral or pay down the loan within certain parameters set forth in the loan documents.  Certain loans with maturity date extensions require us to meet minimum financial thresholds in order to exercise those extensions.

(1)Maturity dates include the effect of extension options.

(2)Effective rate as of June 30, 2020. Includes the effect of interest rate swaps and excludes the effect of prepaid loan fees. See Note 10 for details of our interest rate swaps. See below for details of our loan costs.

(3)The loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor.

(4)Effective rate will decrease to 2.36% on July 1, 2020.

(5)Effective rate will increase to 2.31% on July 1, 2021.

(6)Effective rate will increase to 3.25% on December 1, 2020.

(7)Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule.

(8)$400 million revolving credit facility. Unused commitment fees range from 0.10% to 0.15%. The loan agreement includes a zero-percent LIBOR floor.

(9)We paid this loan off during the second quarter.

(10)We closed this loan during the second quarter. The effective rate will decrease to 2.26% on July 1, 2022

(11)The table does not include our unconsolidated Fund's loan - see Note 16. See Note 13 for our fair value disclosures.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Debt Statistics

The table below summarizes our consolidated fixed and floating rate debt:

(In thousands)	Principal Balance as of June 30, 2020		Principal Balance as of December 31, 2019
Aggregate swapped to fixed rate loans	$	4,672,400	$	4,622,400
Aggregate fixed rate loans	30,492		30,864
Total Debt	$	4,702,892	$	4,653,264

The table below summarizes certain consolidated debt statistics as of June 30, 2020:

Statistics for consolidated loans with interest fixed under the terms of the loan or a swap
Principal balance (in billions)	$4.70
Weighted average remaining life (including extension options)	5.9 years
Weighted average remaining fixed interest period	3.6 years
Weighted average annual interest rate	3.02%

Future Principal Payments

At June 30, 2020, the minimum future principal payments due on our consolidated secured notes payable and revolving credit facility were as follows:

Twelve months ending June 30:	Including Maturity Extension Options(1)
	(In thousands)
2021	$	769
2022	805
2023	580,842
2024	300,881
2025	838,322
Thereafter	2,981,273
Total future principal payments	$	4,702,892

____________________________________________

(1)  Some of our loan agreements require that we meet certain minimum financial thresholds to be able to extend the loan maturity.

23

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Loan Premium and Loan Costs

Loan premium is net of accumulated amortization of $0.9 million and $0.5 million at June 30, 2020 and December 31, 2019, respectively. Deferred loan costs are net of accumulated amortization of $34.4 million and $30.7 million at June 30, 2020 and December 31, 2019, respectively. The table below presents loan premium and loan costs, which are included in Interest expense in our consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Loan premium amortized and written off	$	(1,828)	$	(51)	$	(2,043)	$	(102)
Deferred loan costs amortized and written off	1,915		1,887		3,791		3,804
Loan costs expensed	965		576		965		576
Total	$	1,052	$	2,412	$	2,713	$	4,278

9. Interest Payable, Accounts Payable and Deferred Revenue

(In thousands)	June 30, 2020		December 31, 2019
Interest payable	$	11,732	$	11,707
Accounts payable and accrued liabilities	79,731		66,437
Deferred revenue	48,144		53,266
Total interest payable, accounts payable and deferred revenue	$	139,607	$	131,410

10. Derivative Contracts

We make use of interest rate swap contracts to manage the risk associated with changes in interest rates on our floating-rate debt. When we enter into a floating-rate term loan, we generally enter into an interest rate swap agreement for the equivalent principal amount, for a period covering the majority of the loan term, which effectively converts our floating-rate debt to a fixed-rate basis during that time. We do not speculate in derivatives and we do not make use of any other derivative instruments. See Note 8 regarding our debt and our consolidated JVs' debt that is hedged. See Note 16 regarding our unconsolidated Fund's debt that is hedged.

Derivative Summary

As of June 30, 2020, our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Fund, were designated as cash flow hedges:

	Number of Interest Rate Swaps	Notional (In thousands)
Consolidated derivatives(1)(2)(4)(5)	45	$	5,517,400
Unconsolidated Fund's derivatives(3)(4)(5)	1	$	110,000

___________________________________________________

(1)The notional amount reflects 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2)The notional amount includes: (a) swaps with a total initial notional amount of $120.0 million, that will increase to $1.18 billion in the future to replace existing swaps as they expire, and (b) forward swaps (swaps effective after June 30, 2020) with a total initial notional of $845.0 million, that will increase to $1.03 billion in the future to replace existing swaps as they expire.

(3)The notional amount reflects 100%, not our pro-rata share, of our unconsolidated Fund's derivatives.

(4)Our derivative contracts do not provide for right of offset between derivative contracts.

(5)See Note 13 for our derivative fair value disclosures.

24

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Credit-risk-related Contingent Features

Our swaps include credit-risk related contingent features. For example, we have agreements with certain of our interest rate swap counterparties that contain a provision under which we could be declared in default on our derivative obligations if repayment of the underlying indebtedness that we are hedging is accelerated by the lender due to our default on the indebtedness. As of June 30, 2020, there have been no events of default with respect to our interest rate swaps, our consolidated JVs' or our unconsolidated Fund's interest rate swaps. We do not post collateral for our interest rate swap contract liabilities. The fair value of our interest rate swap contract liabilities, including accrued interest and excluding credit risk adjustments, was as follows:

(In thousands)	June 30, 2020		December 31, 2019
Consolidated derivatives(1)	$	271,726	$	56,896
Unconsolidated Fund's derivatives(2)	$	613	$	—

___________________________________________________

(1)The amounts reflect 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2)The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives.

Counterparty Credit Risk

We are subject to credit risk from the counterparties on our interest rate swap contract assets because we do not receive collateral. We seek to minimize that risk by entering into agreements with a variety of counterparties with investment grade ratings. The fair value of our interest rate swap contract assets, including accrued interest and excluding credit risk adjustments, was as follows:

(In thousands)	June 30, 2020		December 31, 2019
Consolidated derivatives(1)	$	—	$	23,275
Unconsolidated Fund's derivatives(2)	$	—	$	963

___________________________________________________

(1)The amounts reflect 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2)The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives.

Impact of Hedges on AOCI and the Consolidated Statements of Operations

The table below presents the effect of our derivatives on our AOCI and the consolidated statements of operations:

(In thousands)	Six Months Ended June 30,
	2020		2019
Derivatives Designated as Cash Flow Hedges:
Consolidated derivatives:
Loss recorded in AOCI before reclassifications(1)	$	(241,189)	$	(89,483)
Loss (gain) reclassified from AOCI to Interest Expense(1)	$	13,373	$	(17,284)
Interest Expense presented in the consolidated statements of operations	$	(70,610)	$	(67,356)
Unconsolidated Funds' derivatives (our share)(2):
Loss recorded in AOCI before reclassifications(1)	$	(403)	$	(6,928)
Gain reclassified from AOCI to Income from unconsolidated Funds(1)	$	(35)	$	(1,226)
Income from unconsolidated Funds presented in the consolidated statements of operations	$	183	$	3,758

___________________________________________________

(1)See Note 11 for our AOCI reconciliation.

(2)We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

25

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Future Reclassifications from AOCI

At June 30, 2020, our estimate of the AOCI related to derivatives designated as cash flow hedges that will be reclassified to earnings during the next twelve months as interest rate swap payments are made is as follows:

	(In thousands)
Consolidated derivatives:
Losses to be reclassified from AOCI to Interest Expense	$	(71,439)
Unconsolidated Fund's derivative (our share)(1):
Losses to be reclassified from AOCI to Income (loss) from unconsolidated Funds	$	(182)

_________________________________________

(1) We calculate our share by multiplying the total amount for the Fund by our equity interest in the Fund.

11.  Equity

Transactions

Six Months Ended June 30, 2020

During the six months ended June 30, 2020, (i) we acquired 5 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units, and (ii) we acquired 150 OP Units for $7 thousand in cash.

Six Months Ended June 30, 2019

During the six months ended June 30, 2019, (i) we acquired 75 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units, and (ii) we acquired 13 thousand OP Units for $507 thousand in cash, and (iii) we issued 4.9 million shares of our common stock under our ATM program for net proceeds of $201.2 million.

We also purchased a property on June 7, 2019 for a contract price of $365.1 million, which we subsequently contributed to one of our consolidated JVs on June 28, 2019. We manage and own a twenty percent capital interest in the JV. To partially fund the acquisition of the property, we closed a secured, non-recourse $160.0 million interest-only loan scheduled to mature in June 2029, and the loan was assumed by the consolidated JV to which we contributed the property. Noncontrolling interests in the JV contributed $176.0 million to the JV for the acquisition of the property. See Note 3 for more information regarding the property acquisition and Note 8 for more information regarding the loan.

Noncontrolling Interests

Our noncontrolling interests consist of interests in our Operating Partnership and consolidated JVs which are not owned by us. Noncontrolling interests in our Operating Partnership owned 29.1 million OP Units and fully-vested LTIP Units, and represented approximately 14% of our Operating Partnership's total outstanding interests as of June 30, 2020 when we owned 175.4 millions OP Units (to match our 175.4 million shares of outstanding common stock).

A share of our common stock, an OP Unit and an LTIP Unit (once vested and booked up) have essentially the same economic characteristics, sharing equally in the distributions from our Operating Partnership.  Investors who own OP Units have the right to cause our Operating Partnership to acquire their OP Units for an amount of cash per unit equal to the market value of one share of our common stock at the date of acquisition, or, at our election, exchange their OP Units for shares of our common stock on a one-for-one basis. LTIP Units have been granted to our employees and non-employee directors as part of their compensation. These awards generally vest over a service period and once vested can generally be converted to OP Units provided our stock price increases by more than a specified hurdle.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Changes in our Ownership Interest in our Operating Partnership

The table below presents the effect on our equity from net income attributable to common stockholders and changes in our ownership interest in our Operating Partnership:

	Six Months Ended June 30,
(In thousands)	2020		2019
Net income attributable to common stockholders	$	28,953	$	62,667
Transfers from noncontrolling interests:
Exchange of OP Units with noncontrolling interests	90		1,223
Repurchase of OP Units from noncontrolling interests	(4)		(291)
Net transfers from noncontrolling interests	86		932
Change from net income attributable to common stockholders and transfers from noncontrolling interests	$	29,039	$	63,599

AOCI Reconciliation⁽¹⁾

The table below presents a reconciliation of our AOCI, which consists solely of adjustments related to derivatives designated as cash flow hedges:

	Six Months Ended June 30,
(In thousands)	2020		2019
Beginning balance	$	(17,462)	$	53,944
Consolidated derivatives:
Other comprehensive loss before reclassifications	(241,189)		(89,483)
Reclassification of loss (gain) from AOCI to Interest Expense	13,373		(17,284)
Unconsolidated Funds' derivatives (our share)(2):
Other comprehensive loss before reclassifications	(403)		(6,928)
Reclassification of gain from AOCI to Income (loss) from unconsolidated Funds	(35)		(1,226)
Net current period OCI	(228,254)		(114,921)
OCI attributable to noncontrolling interests	66,245		35,124
OCI attributable to common stockholders	(162,009)		(79,797)
Ending balance	$	(179,471)	$	(25,853)

___________________________________________________

(1)See Note 10 for the details of our derivatives and Note 13 for our derivative fair value disclosures.

(2)We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

27

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Equity Compensation

On June 2, 2016, the Douglas Emmett 2016 Omnibus Stock Incentive Plan, as amended (the "2016 Plan"), became effective after receiving stockholder approval, superseding our prior plan, the Douglas Emmett 2006 Omnibus Stock Incentive Plan (the "2006 Plan"), both of which allow for awards to our directors, officers, employees and consultants. The key terms of the two plans are substantially identical, except for the date of expiration, the number of shares authorized for grants and various technical provisions. Grants after June 2, 2016 were awarded under the 2016 Plan, while grants prior to that date were awarded under the 2006 Plan (grants under the 2006 Plan remain outstanding according to their terms). Both plans are administered by the compensation committee of our board of directors. On May 28, 2020, our stockholders approved an amendment to the 2016 Plan to, among other things, increase the number of common shares for future awards by 9.5 million. The table below presents our stock-based compensation expense:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Stock-based compensation expense, net	$	2,812	$	2,383	$	5,753	$	5,013
Capitalized stock-based compensation	$	751	$	338	$	1,610	$	1,008

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

12. EPS

We calculate basic EPS by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. We calculate diluted EPS by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method. We account for unvested LTIP awards that contain non-forfeitable rights to dividends as participating securities and include these securities in the computation of basic and diluted EPS using the two-class method. The table below presents the calculation of basic and diluted EPS:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Numerator (In thousands):
Net income attributable to common stockholders	$	2,030	$	33,966	$	28,953	$	62,667
Allocation to participating securities: Unvested LTIP Units	(206)		(139)		(413)		(265)
Net income attributable to common stockholders - basic and diluted	$	1,824	$	33,827	$	28,540	$	62,402
Denominator (In thousands):
Weighted average shares of common stock outstanding - basic and diluted(2)	175,375		172,498		175,374		171,366
Net income per common share - basic and diluted	$	0.01	$	0.20	$	0.16	$	0.36

____________________________________________________

(1) Outstanding OP Units and vested LTIP Units are not included in the denominator in calculating diluted EPS, even though they may be exchanged under certain conditions for common stock on a one-for-one basis, because their associated net income (equal on a per unit basis to the Net income per common share - diluted) was already deducted in calculating Net income attributable to common stockholders. Accordingly, any exchange would not have any effect on diluted EPS. The table below presents the OP Units and vested LTIP Units outstanding for the respective periods:

	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands)	2020	2019	2020	2019
OP Units	28,293	26,283	28,294	26,311
Vested LTIP Units	808	1,830	803	1,830

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

13. Fair Value of Financial Instruments

Our estimates of the fair value of financial instruments were determined using available market information and widely used valuation methods.  Considerable judgment is necessary to interpret market data and determine an estimated fair value.  The use of different market assumptions or valuation methods may have a material effect on the estimated fair values. The FASB fair value framework hierarchy distinguishes between assumptions based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market-based inputs.  The hierarchy is as follows:

Level 1 - inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities.  

Level 2 - inputs are observable either directly or indirectly for similar assets and liabilities in active markets.  

Level 3 - inputs are unobservable assumptions generated by the reporting entity

As of June 30, 2020, we did not have any fair value estimates of financial instruments using Level 3 inputs.

Financial instruments disclosed at fair value

Short term financial instruments: The carrying amounts for cash and cash equivalents, tenant receivables, revolving credit line, interest payable, accounts payable, security deposits and dividends payable approximate fair value because of the short-term nature of these instruments.

Secured notes payable: See Note 8 for the details of our secured notes payable. We estimate the fair value of our consolidated secured notes payable by calculating the credit-adjusted present value of the principal and interest payments for each secured note payable. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs, assumes that the loans will be outstanding through maturity, and includes any maturity extension options. The table below presents the estimated fair value and carrying value of our secured notes payable (excluding our revolving credit facility), the carrying value includes unamortized loan premium and excludes unamortized deferred loan fees:

(In thousands)	June 30, 2020		December 31, 2019
Fair value	$	4,724,042	$	4,678,623
Carrying value	$	4,707,591	$	4,653,264

Ground lease liability: See Note 4 for the details of our ground lease. We estimate the fair value of our ground lease liability by calculating the present value of the future lease payments disclosed in Note 4 using our incremental borrowing rate. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs. The table below presents the estimated fair value and carrying value of our ground lease liability:

(In thousands)	June 30, 2020		December 31, 2019
Fair value	$	14,284	$	12,218
Carrying value	$	10,877	$	10,882

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Financial instruments measured at fair value

Derivative instruments: See Note 10 for the details of our derivatives. We present our derivatives in our consolidated balance sheets at fair value, on a gross basis, excluding accrued interest.  We estimate the fair value of our derivative instruments by calculating the credit-adjusted present value of the expected future cash flows of each derivative.  The calculation incorporates the contractual terms of the derivatives, observable market interest rates which we consider to be Level 2 inputs, and credit risk adjustments to reflect the counterparty's as well as our own non-performance risk. Our derivatives are not subject to master netting arrangements.  The table below presents the estimated fair value of our derivatives:

(In thousands)	June 30, 2020		December 31, 2019
Derivative Assets:
Fair value - consolidated derivatives(1)	$	—	$	22,381
Fair value - unconsolidated Fund's derivatives(2)	$	—	$	889
Derivative Liabilities:
Fair value - consolidated derivatives(1)	$	259,293	$	54,616
Fair value - unconsolidated Fund's derivatives(2)	$	543	$	—

____________________________________________________

(1) Consolidated derivatives, which include 100%, not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts in our consolidated balance sheets. The fair values exclude accrued interest which is included in interest payable in the consolidated balance sheets.

(2) The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives. Our pro-rata share of the amounts related to the unconsolidated Fund's derivatives is included in our Investment in unconsolidated Funds in our consolidated balance sheets. See "Guarantees" in Note 16 regarding our unconsolidated Fund's debt and derivatives.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

14. Segment Reporting

Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes.  We operate in two business segments: (i) the acquisition, development, ownership and management of office real estate and (ii) the acquisition, development, ownership and management of multifamily real estate.  The services for our office segment primarily include rental of office space and other tenant services, including parking and storage space rental.  The services for our multifamily segment include rental of apartments and other tenant services, including parking and storage space rental. Asset information by segment is not reported because we do not use this measure to assess performance or make decisions to allocate resources.  Therefore, depreciation and amortization expense is not allocated among segments.  General and administrative expenses and interest expense are not included in segment profit as our internal reporting addresses these items on a corporate level. The table below presents the operating activity of our reportable segments:

(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Office Segment
Total office revenues	$	176,989	$	202,189	$	396,878	$	399,479
Office expenses	(60,301)		(64,308)		(129,965)		(127,757)
Office segment profit	116,688		137,881		266,913		271,722
Multifamily Segment
Total multifamily revenues	30,807		28,345		62,268		55,241
Multifamily expenses	(8,856)		(7,712)		(18,212)		(15,267)
Multifamily segment profit	21,951		20,633		44,056		39,974
Total profit from all segments	$	138,639	$	158,514	$	310,969	$	311,696

The table below presents a reconciliation of the total profit from all segments to net income attributable to common stockholders:

(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Total profit from all segments	$	138,639	$	158,514	$	310,969	$	311,696
General and administrative expenses	(9,863)		(9,159)		(20,198)		(18,991)
Depreciation and amortization	(98,765)		(78,724)		(196,542)		(158,597)
Other income	325		2,892		2,314		5,790
Other expenses	(478)		(1,807)		(1,874)		(3,652)
Income from unconsolidated Funds	(140)		2,207		183		3,758
Interest expense	(35,190)		(34,063)		(70,610)		(67,356)
Net (loss) income	(5,472)		39,860		24,242		72,648
Less: Net loss (income) attributable to noncontrolling interests	7,502		(5,894)		4,711		(9,981)
Net income attributable to common stockholders	$	2,030	$	33,966	$	28,953	$	62,667

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

15. Future Minimum Lease Rental Receipts

We lease space to tenants primarily under non-cancelable operating leases that generally contain provisions for a base rent plus reimbursement of certain operating expenses, and we own fee interests in two parcels of land from which we receive rent under ground leases. The table below presents the future minimum base rentals on our non-cancelable office tenant and ground leases at June 30, 2020:

Twelve months ending June 30:	(In thousands)
2021	$	653,406
2022	567,690
2023	475,211
2024	372,942
2025	281,142
Thereafter	659,833
Total future minimum base rentals(1)	$	3,010,224

___________________________________

(1) Does not include (i) residential leases, which typically have a term of one year or less, (ii) holdover rent, (iii) other types of rent such as storage and antenna rent, (iv) tenant reimbursements, (v) straight- line rent, (vi) amortization/accretion of acquired above/below-market lease intangibles and (vii) percentage rents.  The amounts assume that early termination options held by tenants are not exercised.

16. Commitments, Contingencies and Guarantees

Legal Proceedings

From time to time, we are party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business.  Excluding ordinary, routine litigation incidental to our business, we are not currently a party to any legal proceedings that we believe would reasonably be expected to have a materially adverse effect on our business, financial condition or results of operations.

Concentration of Risk

We are subject to credit risk with respect to our tenant receivables and deferred rent receivables related to our tenant leases. Our tenants' ability to honor the terms of their respective leases remains dependent upon economic, regulatory and social factors. We seek to minimize our credit risk from our tenant leases by (i) targeting smaller, more affluent tenants, from a diverse mix of industries, (ii) performing credit evaluations of prospective tenants and (iii) obtaining security deposits or letters of credit from our tenants.  For the six months ended June 30, 2020 and 2019, no tenant accounted for more than 10% of our total revenues.  

All of our properties, including the properties of our consolidated JVs and unconsolidated Fund, are located in Los Angeles County, California and Honolulu, Hawaii, and we are therefore susceptible to adverse economic and regulatory developments, as well as natural disasters, in those markets.

We are subject to credit risk with respect to our interest rate swap counterparties that we use to manage the risk associated with our floating rate debt. We do not post or receive collateral with respect to our swap transactions. Our swap contracts do not provide for right of offset between derivative contracts. See Note 10 for the details of our interest rate contracts. We seek to minimize our credit risk by entering into agreements with a variety of counterparties with investment grade ratings.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

We have significant cash balances invested in a variety of short-term money market funds that are intended to preserve principal value and maintain a high degree of liquidity while providing current income. These investments are not insured against loss of principal and there is no guarantee that our investments in these funds will be redeemable at par value. We also have significant cash balances in bank accounts with high quality financial institutions with investment grade ratings.  Interest bearing bank accounts at each U.S. banking institution are insured by the FDIC up to $250 thousand.

Asset Retirement Obligations

Conditional asset retirement obligations represent a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement is conditional on a future event that may or may not be within our control.  A liability for a conditional asset retirement obligation must be recorded if the fair value of the obligation can be reasonably estimated.  Environmental site assessments have identified thirty-two buildings in our Consolidated Portfolio which contain asbestos, and would have to be removed in compliance with applicable environmental regulations if these properties are demolished or undergo major renovations.

As of June 30, 2020, the obligations to remove the asbestos from properties which are currently undergoing major renovations, or that we plan to renovate in the future, are not material to our consolidated financial statements. As of June 30, 2020, the obligations to remove the asbestos from our other properties have indeterminable settlement dates, and we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligations.

Development and Other Contracts

In West Los Angeles, we are building a high-rise apartment building with 376 apartments. In downtown Honolulu, we are converting a 25 story, 490,000 square foot office tower into approximately 500 apartments in phases over a number of years as the office space is vacated.

As of June 30, 2020, we had an aggregate remaining contractual commitment for these and other development projects of approximately $201.8 million. As of June 30, 2020, we had an aggregate remaining contractual commitment for repositionings, capital expenditure projects and tenant improvements of approximately $11.4 million.

Guarantees

We have made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve- outs for our unconsolidated Fund's debt. We have also guaranteed the related swap. Our Fund has agreed to indemnify us for any amounts that we would be required to pay under these agreements. As of June 30, 2020, all of the obligations under the related debt and swap agreements have been performed in accordance with the terms of those agreements. The table below summarizes our Fund's debt as of June 30, 2020. The amounts reflect 100%, not our pro-rata share, of the amounts related to our Fund:

Fund(1)	Loan Maturity Date	Principal Balance (In Millions)		Variable Interest Rate	Swap Fixed Interest Rate	Swap Maturity Date
Partnership X(2)(3)	3/1/2023	$	110.0	LIBOR + 1.40%	2.30%	3/1/2021

___________________________________________________

(1)See Note 6 for more information regarding our unconsolidated Fund.

(2)Floating rate term loan, swapped to fixed, which is secured by two properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of June 30, 2020, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $0.7 million.

(3)Loan agreement includes a zero-percent LIBOR floor. The corresponding swap does not include such a floor.

34

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our Forward Looking Statements disclaimer, and our consolidated financial statements and related notes in Part I, Item 1 of this Report. Our results of operations were affected by transactions during the respective period - see Financings, Developments and Repositionings further below.

Business Description

Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed REIT. Through our interest in our Operating Partnership and its subsidiaries, our consolidated JVs and our unconsolidated Fund, we are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and in Honolulu, Hawaii. We focus on owning, acquiring, developing and managing a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities. As of June 30, 2020, our portfolio consisted of the following (including ancillary retail space):

	Consolidated Portfolio(1)	Total Portfolio(2)
Office
Class A Properties	70	72
Rentable Square Feet (in thousands)(3)	17,939	18,324
Leased rate	91.0%	90.9%
Occupancy rate	89.3%	89.3%
Multifamily
Properties	12	12
Units	4,209	4,209
Leased rate	98.7%	98.7%
Occupied rate	92.1%	92.1%

______________________________________________________________________

(1) Our Consolidated Portfolio includes the properties in our consolidated results. Through our subsidiaries, we own 100% of these properties, except for seventeen office properties totaling 4.3 million square feet and one residential property with 350 apartments, which we own through four consolidated JVs. Our Consolidated Portfolio also includes two land parcels from which we receive ground rent from ground leases to the owners of a Class A office building and a hotel.

(2) Our Total Portfolio includes our Consolidated Portfolio as well as two properties totaling 0.4 million square feet owned by our unconsolidated Fund. See Note 6 to our consolidated financial statements in Item 1 of this Report for more information about our unconsolidated Fund.

(3) As of June 30, 2020, we removed approximately 226,000 Rentable Square Feet of vacant space at an office building that we are converting to residential apartments.

Revenues by Segment and Location

During the six months ended June 30, 2020, revenues from our Consolidated Portfolio were derived as follows:

____

35

Impacts of the COVID-19 Pandemic on our Business

Our buildings have remained open and available to our tenants throughout the pandemic. Our rent collections continue to be negatively impacted by the pandemic and our markets' very tenant-oriented lease enforcement moratoriums, which are considerably out of sync with other gateway markets. The cities where we primarily operate, Los Angeles, Beverly Hills and Santa Monica, have passed unusually punitive ordinances prohibiting evictions and allowing rent deferral for residential, retail, and office tenants, regardless of financial distress. The ordinances cover our residential, retail and office tenants (with some carveouts for large tenants) and generally prohibit landlords not only from evicting tenants but also from imposing any late fees or interest and allow tenants to pay back the deferred rent over a certain period.

At the end of the second quarter, we wrote off certain tenant receivables and deferred rent receivables. For the three and six months ended June 30, 2020, charges for uncollectible amounts related to tenant receivables and deferred rent receivables, which were primarily due to the COVID-19 pandemic, reduced our rental revenues and tenant recoveries by $29.8 million and $35.0 million, respectively. If we subsequently collect amounts that were previously written off, then the amounts collected will be recorded as an increase to our rental revenues and tenant recoveries. See "Revenue Recognition" in Note 2 to our consolidated financial statements in Item 1 of this Report. We don’t know how the COVID-19 pandemic will impact future collections.

Our tenant retention was in-line with our pre-COVID expectations. Although the decline in our office occupancy during the quarter was expected, leasing volume would have to improve significantly to recover that occupancy this year. During this time, we had savings from variable expenses which partly offset the write-offs and the decrease in our parking revenues.

Other considerations that could impact our future leasing, rent collections, and revenue include:

•How long the pandemic continues.

•Whether the local governments that have authorized rent deferrals in our markets modify or extend the deferral terms, or alternatively allow them to expire as written.

•Whether more tenants stop paying rent if the impact to their business grows.

•How attendance in our buildings changes and drives parking revenue or rent collection.

•How leasing activity and occupancy will evolve.

On the capital front, construction is continuing on our two large multifamily development projects, although the projects may take a little longer under current conditions. We have temporarily suspended work on new office repositioning projects.

Overall, we expect the COVID-19 pandemic to continue to adversely impact many parts of our business, and those impacts have been, and will continue, to be material. For more information of the risks to our business, please see Item 1A "Risk Factors" below and in our quarterly report on Form 10-Q for the quarter ended March 31, 2020, that we filed with the SEC on May 8, 2020.

36

Financings, Developments and Repositionings

Financings

During the first quarter of 2020:

◦We entered into forward interest rate swaps to hedge future term-loan refinancings. The forward swaps have an initial notional amount of $495.0 million, with effective dates ranging from June 2020 to March 2021, and maturity dates ranging from April 2025 to June 2025, fixing the one-month LIBOR interest rate in a range of 0.74% to 0.91%.

During the second quarter of 2020:

◦On May 15, 2020, we refinanced a loan for one of our consolidated JVs. We closed a secured, non-recourse $450.0 million interest-only loan, which is scheduled to mature in May 2027. The loan bears interest at LIBOR + 1.35%, which was effectively fixed at 2.26% following the expiration of the current swaps, for an average fixed interest rate of 2.6% per annum through April 2025. We used part of the proceeds to pay off a $400.0 million loan, secured by the same properties, that was scheduled to mature in July 2024.

See Notes 8 and 10 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt and derivatives, respectively.

Developments

•Residential High-Rise Tower, Brentwood, California

In West Los Angeles, we are building a 34 story high-rise apartment building with 376 apartments. The tower is being built on a site that is directly adjacent to an existing office building and a 712 unit residential property, both of which we own. We expect the cost of the development to be approximately $180 million to $200 million, which does not include the cost of the land which we have owned since 1997. As part of the project, we are investing additional capital to build a one acre park on Wilshire Boulevard that will be available to the public and provide a valuable amenity to our surrounding properties and community. Construction continues on the project, although we may face some delays as a result of the impact of the COVID-19 pandemic on permitting and other logistics. We currently expect the first units to be delivered in 2022.

•1132 Bishop Street, Honolulu, Hawaii

In downtown Honolulu, we are converting a 25 story, 490 thousand square foot office tower into approximately 500 apartments. This project will help address the severe shortage of rental housing in Honolulu and revitalize the central business district. The conversion is occurring in phases over a number of years as the office space is vacated. We currently estimate the construction costs to be approximately $80 million to $100 million, although the inherent uncertainties of development are compounded by the multi-year and phased nature of the conversion and potential impacts from the COVID-19 pandemic. We began leasing the new units during the second quarter of 2020.

Repositionings

We often strategically purchase properties with large vacancies or expected near-term lease roll-over and use our knowledge of the property and submarket to reposition the property for the optimal use and tenant mix. In addition, we may reposition properties already in our portfolio. The work we undertake to reposition a building typically takes months or even years, and could involve a range of improvements from a complete structural renovation to a targeted remodeling of selected spaces. During the repositioning, the affected property may display depressed rental revenue and occupancy levels that impact our results and, therefore, comparisons of our performance from period to period. We have temporarily suspended work on new office repositioning projects due to the COVID-19 pandemic.

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Rental Rate Trends - Total Portfolio

Office Rental Rates

The table below presents the average annual rental rate per leased square foot and the annualized lease transaction costs per leased square foot for leases executed in our total office portfolio during the respective periods:

	Six Months Ended	Year Ended December 31,
	June 30, 2020	2019	2018	2017	2016
Average straight-line rental rate(1)(2)	$43.61	$49.65	$48.77	$44.48	$43.21
Annualized lease transaction costs(3)	$5.26	$6.02	$5.80	$5.68	$5.74

___________________________________________________

(1)These average rental rates are not directly comparable from year to year because the averages are significantly affected from period to period by factors such as the buildings, submarkets, and types of space and terms involved in the leases executed during the respective reporting period. Because straight-line rent takes into account the full economic value of each lease, including rent concessions and escalations, we believe that it may provide a better comparison than ending cash rents, which include the impact of the annual escalations over the entire term of the lease.

(2)Reflects the weighted average straight-line Annualized Rent.

(3)Reflects the weighted average leasing commissions and tenant improvement allowances divided by the weighted average number of years for the leases. Excludes leases substantially negotiated by the seller in the case of acquired properties and leases for tenants relocated from space at landlord's request.

Office Rent Roll

The table below presents the rent roll for new and renewed leases per leased square foot executed in our total office portfolio:

	Six Months Ended June 30, 2020
Rent Roll(1)(2)	Expiring Rate(2)	New/Renewal Rate(2)	Percentage Change
Cash Rent	$39.85	$43.10	8.2%
Straight-line Rent	$35.92	$43.61	21.4%

___________________________________________________

(1)Represents the average annual initial stabilized cash and straight-line rents per square foot on new and renewed leases signed during the quarter compared to the prior leases for the same space. Excludes Short-Term Leases, leases where the prior lease was terminated more than a year before signing of the new lease, leases for tenants relocated from space at landlord's request, and leases in acquired buildings where we believe the information about the prior agreement is incomplete or where we believe base rent reflects other off-market inducements to the tenant.

(2)Our office rent roll can fluctuate from period to period as a result of changes in our submarkets, buildings and term of the expiring leases, making these metrics difficult to predict.

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Multifamily Rental Rates

The table below presents the average annual rental rate per leased unit for new tenants:

	Six Months Ended	Year Ended December 31,
	June 30, 2020	2019	2018	2017	2016
Average annual rental rate - new tenants(1)	$28,064	$28,350	$27,542	$28,501	$28,435

_____________________________________________________

(1) These average rental rates are not directly comparable from year to year because of changes in the properties and units included. For example: (i) the average for 2018 decreased from 2017 because we added a significant number of units at our Moanalua Hillside Apartments development in Honolulu, where the rental rates are lower than the average in our portfolio, and (ii) the average for 2019 increased from 2018 because we acquired The Glendon where higher rental rates offset the effect of adding additional units at our Moanalua Hillside Apartments development.

Multifamily Rent Roll

The rent on leases subject to rent change during the six months ended June 30, 2020 (new tenants and existing tenants undergoing annual rent review) was 0.1% lower than the prior rent on the same unit.

Occupancy Rates - Total Portfolio

The tables below present the occupancy rates for our total office portfolio and multifamily portfolio:

		December 31,
Occupancy Rates(1) as of:	June 30, 2020	2019	2018	2017	2016
Office portfolio	89.3%	91.4%	90.3%	89.8%	90.4%
Multifamily portfolio(2)	92.1%	95.2%	97.0%	96.4%	97.9%

	Six Months Ended	Year Ended December 31,
Average Occupancy Rates(1)(3):	June 30, 2020	2019	2018	2017	2016
Office portfolio	90.5%	90.7%	89.4%	89.5%	90.6%
Multifamily portfolio(2)	94.5%	96.5%	96.6%	97.2%	97.6%

___________________________________________________

(1)Occupancy rates include the impact of property acquisitions, most of whose occupancy rates at the time of acquisition were below that of our existing portfolio.

(2)The Occupancy Rate for our multifamily portfolio was impacted by a large number of leases signed in June 2020 that took occupancy after quarter end, an acquisition in 2019, and new units at our Moanalua Hillside Apartments development in Honolulu in 2019 and 2018.

(3)Average occupancy rates are calculated by averaging the occupancy rates at the end of each of the quarters in the period and at the end of the quarter immediately prior to the start of the period.

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Office Lease Expirations

As of June 30, 2020, assuming non-exercise of renewal options and early termination rights, we expect to see expiring square footage in our total office portfolio as follows:

____________________________________________________

(1) Average of the percentage of leases at June 30, 2017, 2018, and 2019 with the same remaining duration as the leases for the labeled year had at June 30, 2020. Acquisitions are included in the prior year average commencing in the quarter after the acquisition.

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Results of Operations

Comparison of three months ended June 30, 2020 to three months ended June 30, 2019

	Three Months Ended June 30,				Favorable
	2020		2019		(Unfavorable)		%		Commentary
	(In thousands)
Revenues
Office rental revenue and tenant recoveries	$	158,813	$	171,674	$	(12,861)	(7.5)	%	The decrease was primarily due to a decrease of $26.6 million of rental revenues and tenant recoveries from properties that we owned throughout both periods, which was primarily due to the write-off of uncollectible tenant receivables and the associated deferred rent receivables as a result of the COVID-19 pandemic, partly offset by an increase of $13.1 million of rental revenue and tenant recoveries from a JV we consolidated in November 2019.
Office parking and other income	$	18,176	$	30,515	$	(12,339)	(40.4)	%	The decrease was due to a decrease of $13.7 million in parking and other income from properties we owned throughout both periods, which was primarily due to a decrease in parking activity as a result of the COVID-19 pandemic, partly offset by an increase of $1.3 million of parking and other income from a JV we consolidated in November 2019.
Multifamily revenue	$	30,807	$	28,345	$	2,462	8.7	%	The increase was due to an increase of $2.3 million in revenues from a property that we purchased in the second quarter of 2019 (see note 3 to our consolidated financial statements in item 1 of this Report), and an increase of $0.8 million in revenues from our new units at our Moanalua Hillside apartments development, partly offset by a decrease of $0.7 million in revenues from properties we owned throughout both periods. The decrease of $0.7 from properties we owned throughout both periods was primarily due to write-offs of uncollectible tenant receivables and lower rental revenues at a property where units are temporarily unoccupied as a result of a fire, partly offset by $2.6 million of insurance proceeds for lost rental revenue at the respective property.
Operating expenses
Office rental expenses	$	60,301	$	64,308	$	4,007	6.2	%	The decrease was due to a decrease of $8.5 million in rental expenses from properties that we owned throughout both periods, partly offset by an increase of $4.2 million in rental expenses from a JV we consolidated in November 2019. The decrease in rental expenses from properties that we owned throughout both periods was primarily due to a decrease in scheduled services expenses and utility expenses, as a result of lower utilization caused by the COVID-19 pandemic.

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	Three Months Ended June 30,				Favorable
	2020		2019		(Unfavorable)		%		Commentary
	(In thousands)
Multifamily rental expenses	$	8,856	$	7,712	$	(1,144)	(14.8)	%	The increase was due to an increase of $1.1 million in rental expenses from a property that we purchased in the second quarter of 2019.
General and administrative expenses	$	9,863	$	9,159	$	(704)	(7.7)	%	The increase was primarily due to an increase in personnel expenses.
Depreciation and amortization	$	98,765	$	78,724	$	(20,041)	(25.5)	%	The increase was due to (i) an increase of $9.1 million of depreciation and amortization from an office building we are converting to a residential building in Hawaii, due to accelerated depreciation of the building, (ii) $8.7 million of depreciation and amortization from a JV we consolidated in November 2019, and (iii) an increase of $1.4 million in depreciation and amortization from a property we purchased in the second quarter of 2019.
Non-Operating Income and Expenses
Other income	$	325	$	2,892	$	(2,567)	(88.8)	%	The decrease was due to (i) a decrease of $1.4 million in revenues from a health club in Honolulu that we own and operate, caused by the COVID-19 pandemic, (ii) a decrease of $0.6 million in interest income due to lower money market balances and interest rates, and (iii) a decrease of $0.5 million in revenues related to our Fund that was consolidated as a JV in November 2019. Other income includes a $1.2 million asset write-down for the estimated property damage to a building impacted by fire offset by the associated $1.2 million of insurance proceeds received for property damage.
Other expenses	$	(478)	$	(1,807)	$	1,329	73.5	%	The decrease was primarily due to a decrease of $1.1 million in expenses for the health club in Honolulu, due to lower utilization caused by the COVID-19 pandemic, and a decrease of $0.3 million in expenses related to our Fund that was consolidated as a JV in November 2019.
(Loss) income from unconsolidated Funds	$	(140)	$	2,207	$	(2,347)	(106.3)	%	The decrease was primarily due to a net loss in 2020 for our remaining unconsolidated Fund compared to net income for our Funds in 2019 (one of our Funds was consolidated as a JV in November 2019). The net loss in 2020 for our remaining Fund was primarily due to (i) the write-off of uncollectible tenant receivables and the associated deferred rent receivables, and (ii) a decrease in parking income, both as a result of the COVID-19 pandemic.
Interest expense	$	(35,190)	$	(34,063)	$	(1,127)	(3.3)	%	The increase was primarily due to higher debt balances from a JV that was consolidated in November 2019 and a property that we purchased in the second quarter of 2019.

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Comparison of six months ended June 30, 2020 to six months ended June 30, 2019

	Six Months Ended June 30,				Favorable
	2020		2019		(Unfavorable)		%		Commentary
	(In thousands)
Revenues
Office rental revenue and tenant recoveries	$	344,640	$	338,909	$	5,731	1.7	%	The increase was primarily due to rental revenue and tenant recoveries of $28.3 million from a JV we consolidated in November 2019, partly offset by a decrease of $24.3 million in rental revenue and tenant recoveries from properties that we owned throughout both periods. The decrease from properties that we owned throughout both periods was primarily due to the write-off of uncollectible tenant receivables and the associated deferred rent receivables as a result of the COVID-19 pandemic.
Office parking and other income	$	52,238	$	60,570	$	(8,332)	(13.8)	%	The decrease was due to a decrease of $12.9 million in parking and other income from properties we owned throughout both periods, primarily due to a decrease in parking activity as a result of the COVID-19 pandemic, partly offset by an increase of $4.2 million of parking and other income from a JV we consolidated in November 2019.
Multifamily revenue	$	62,268	$	55,241	$	7,027	12.7	%	The increase was due to an increase of (i) $6.6 million in revenue from a property that we purchased in the second quarter of 2019, and (ii) an increase of $1.9 million in revenues from the new apartments at our Moanalua Hillside Apartments development, partly offset by (a) a decrease of $1.5 million in revenues from properties we owned throughout both periods. The decrease of $1.5 from properties we owned throughout both periods was primarily due to write-offs of uncollectible tenant receivables and lower rental revenues at a property where units are temporarily unoccupied as a result of a fire, partly offset by $2.6 million of insurance proceeds for lost rental revenue at the respective property.
Operating expenses
Office rental expenses	$	129,965	$	127,757	$	(2,208)	(1.7)	%	The increase was due to an increase of $9.5 million in rental expenses from a JV we consolidated in November 2019, and an increase of $0.7 million in rental expenses from a property we purchased in the second quarter of 2019, partly offset by a decrease of $8.0 million in rental expenses from properties that we owned throughout both periods. The decrease in rental expenses from properties that we owned throughout both periods was due to a decrease in scheduled services expenses, utility expenses, and repairs and maintenance expenses, as a result of lower utilization caused by the COVID-19 pandemic.

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	Six Months Ended June 30,				Favorable
	2020		2019		(Unfavorable)		%		Commentary
	(In thousands)
Multifamily rental expenses	$	18,212	$	15,267	$	(2,945)	(19.3)	%	The increase was due to an increase of $2.6 million in rental expenses from the property we purchased in the second quarter of 2019, and an increase of $0.3 million in rental expenses from the new apartments at our Moanalua Hillside Apartments development.
General and administrative expenses	$	20,198	$	18,991	$	(1,207)	(6.4)	%	The increase was primarily due to an increase in personnel expenses.
Depreciation and amortization	$	196,542	$	158,597	$	(37,945)	(23.9)	%	The increase was due to (i) depreciation and amortization of $17.6 million from a JV we consolidated in November 2019, (ii) an increase of $17.1 million in depreciation and amortization from an office building we are converting to a residential building in Hawaii, due to accelerated depreciation of the building, and (iii) an increase of $3.7 million in depreciation and amortization from the property we purchased in the second quarter of 2019.
Non-Operating Income and Expenses
Other income	$	2,314	$	5,790	$	(3,476)	(60.0)	%	The decrease was due to (i) a decrease of $1.6 million in revenue from a health club in Honolulu that we own and operate, caused by the COVID-19 pandemic, (ii) a decrease of $1.0 million in revenue related to our Fund that was consolidated as a JV in November 2019, and (iii) a decrease of $0.9 million in interest income due to lower money market balances and interest rates. Other income includes a $4.0 million asset write-down for the estimated property damage to a building impacted by fire offset by the associated $4.0 million of insurance proceeds received for property damage.
Other expenses	$	(1,874)	$	(3,652)	$	1,778	48.7	%	The decrease was primarily due to a decrease of $1.2 million in expenses for the health club in Honolulu, due to lower utilization caused by the COVID-19 pandemic, and a decrease in expenses of $0.6 million related to our Fund that was consolidated as a JV in November 2019.
Income from unconsolidated Funds	$	183	$	3,758	$	(3,575)	(95.1)	%	The decrease was primarily due to the consolidation of one of our Funds as a JV in November 2019.
Interest expense	$	(70,610)	$	(67,356)	$	(3,254)	(4.8)	%	The increase was primarily due to higher debt balances related to a JV we consolidated in November 2019 and a property that we purchased in the second quarter of 2019.

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Non-GAAP Supplemental Financial Measure: FFO

Usefulness to Investors

We report FFO because it is a widely reported measure of the performance of equity REITs, and is also used by some investors to identify the impact of trends in occupancy rates, rental rates and operating costs from year to year, excluding impacts from changes in the value of our real estate, and to compare our performance with other REITs. FFO is a non-GAAP financial measure for which we believe that net income is the most directly comparable GAAP financial measure. FFO has limitations as a measure of our performance because it excludes depreciation and amortization of real estate, and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures, tenant improvements and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations. FFO should be considered only as a supplement to net income as a measure of our performance and should not be used as a measure of our liquidity or cash flow, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends. Other REITs may not calculate FFO in accordance with the NAREIT definition and, accordingly, our FFO may not be comparable to the FFO of other REITs. See "Results of Operations" above for a discussion of the items that impacted our net income.

Comparison of three months ended June 30, 2020 to three months ended June 30, 2019

For the three months ended June 30, 2020, FFO decreased by $23.4 million, or 21.7%, to $84.4 million, compared to $107.8 million for the three months ended June 30, 2019. The decrease was primarily due to a decrease in the operating income from our office portfolio (office revenues less office rental expenses), partly offset by an increase in the operating income from our multifamily portfolio (multifamily revenues less multifamily rental expenses). The decrease in operating income from our office portfolio was primarily due to (i) the write-off of uncollectible tenant receivables and the associated deferred rent receivables, and (ii) a decrease in parking income, partly offset by office rental expense savings, all as a result of the COVID-19 pandemic. The increase in operating income from our multifamily portfolio was primarily due to a multifamily property we purchased in June 2019 and the new apartments from our Moanalua Hillside Apartments development.

Comparison of six months ended June 30, 2020 to six months ended June 30, 2019

For the six months ended June 30, 2020, FFO decreased by $14.6 million, or 6.9%, to $196.3 million, compared to $210.9 million for the six months ended June 30, 2019. The decrease was primarily due to the same reasons listed above.

Reconciliation to GAAP

The table below reconciles our FFO (the FFO attributable to our common stockholders and noncontrolling interests in our Operating Partnership - which includes our share of our consolidated JVs and our unconsolidated Funds FFO) to net income attributable to common stockholders computed in accordance with GAAP:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Net income attributable to common stockholders	$	2,030	$	33,966	$	28,953	$	62,667
Depreciation and amortization of real estate assets(1)	98,765		78,724		196,542		158,597
Net (loss) income attributable to noncontrolling interests(1)	(7,502)		5,894		(4,711)		9,981
Adjustments attributable to unconsolidated Funds(1)(2)	696		4,336		1,350		8,850
Adjustments attributable to consolidated JVs(1)(3)	(9,581)		(15,119)		(25,844)		(29,196)
FFO	$	84,408	$	107,801	$	196,290	$	210,899

_______________________________________________

(1)We restructured one of our unconsolidated Funds in November 2019 after which it was consolidated as a JV. The various adjustments in the reconciliation of FFO are therefore not directly comparable to the comparable period. See Note 6 to our consolidated financial statements in our 2019 Annual Report on Form 10-K for more information.

(2)Adjusts for our share of our unconsolidated Funds' depreciation and amortization of real estate assets.

(3)Adjusts for the net income (loss) and depreciation and amortization of real estate assets that is attributable to the noncontrolling interests in our consolidated JVs.

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Non-GAAP Supplemental Financial Measure: Same Property NOI

Usefulness to Investors

We report Same Property NOI to facilitate a comparison of our operations between reported periods. Many investors use Same Property NOI to evaluate our operating performance and to compare our operating performance with other REITs, because it can reduce the impact of investing transactions on operating trends. Same Property NOI is a non-GAAP financial measure for which we believe that net income is the most directly comparable GAAP financial measure.  We report Same Property NOI because it is a widely recognized measure of the performance of equity REITs, and is used by some investors to identify trends in occupancy rates, rental rates and operating costs and to compare our operating performance with that of other REITs.  Same Property NOI has limitations as a measure of our performance because it excludes depreciation and amortization expense, and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures, tenant improvements and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations. Other REITs may not calculate Same Property NOI in the same manner. As a result, our Same Property NOI may not be comparable to the Same Property NOI of other REITs. Same Property NOI should be considered only as a supplement to net income as a measure of our performance and should not be used as a measure of our liquidity or cash flow, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends.

Comparison of three months ended June 30, 2020 to three months ended June 30, 2019

Our Same Properties for 2020 included 60 office properties, aggregating 16.1 million Rentable Square Feet, and 8 multifamily properties with an aggregate 1,928 units. The amounts presented include 100% (not our pro-rata share). Our Same Property results of operations for the three months ended June 30, 2020 were primarily impacted by the COVID-19 pandemic.

	Three Months Ended June 30,				Favorable
	2020		2019		(Unfavorable)		%		Commentary
	(In thousands)
Office revenues	$	158,516	$	197,353	$	(38,837)	(19.7)	%	The decrease was primarily due to (i) a decrease in rental revenues due to the write-off of uncollectible tenant receivables and the associated deferred rent receivables, (ii) a decrease in tenant recoveries due to a decrease in recoverable operating costs and the write-off of uncollectible tenant receivables, and (iii) a decrease in parking income.
Office expenses	(53,762)		(61,690)		7,928		12.9	%	The decrease was primarily due to a decrease in parking expenses, utility expenses, and janitorial expenses.
Office NOI	104,754		135,663		(30,909)		(22.8)	%
Multifamily revenues	14,597		15,674		(1,077)		(6.9)	%	The decrease was primarily due to a decrease in rental revenues due to the write-off of uncollectible tenant receivables and a decrease in occupancy.
Multifamily expenses	(3,925)		(3,948)		23		0.6	%	The decrease was primarily due to a decrease in repairs and maintenance expenses and utility expenses, partly offset by an increase in personnel expenses, scheduled services expenses and property taxes.
Multifamily NOI	10,672		11,726		(1,054)		(9.0)	%
Total NOI	$	115,426	$	147,389	$	(31,963)	(21.7)	%

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Reconciliation to GAAP

The table below presents a reconciliation of our Same Property NOI to net income attributable to common stockholders:

	Three Months Ended June 30,
(In thousands)	2020		2019
Same Property NOI	$	115,426	$	147,389
Non-comparable office revenues	18,473		4,836
Non-comparable office expenses	(6,539)		(2,618)
Non-comparable multifamily revenues	16,210		12,671
Non-comparable multifamily expenses	(4,931)		(3,764)
NOI	138,639		158,514
General and administrative expenses	(9,863)		(9,159)
Depreciation and amortization	(98,765)		(78,724)
Operating income	30,011		70,631
Other income	325		2,892
Other expenses	(478)		(1,807)
Income from unconsolidated Funds	(140)		2,207
Interest expense	(35,190)		(34,063)
Net (loss) income	(5,472)		39,860
Less: Net loss (income) attributable to noncontrolling interests	7,502		(5,894)
Net income attributable to common stockholders	$	2,030	$	33,966

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Comparison of six months ended June 30, 2020 to six months ended June 30, 2019

Our Same Properties for 2020 included 60 office properties, aggregating 16.1 million Rentable Square Feet, and 8 multifamily properties with an aggregate 1,928 units. The amounts presented include 100% (not our pro-rata share). Our Same Property results of operations for the six months ended June 30, 2020 were primarily impacted by the COVID-19 pandemic.

	Six Months Ended June 30,				Favorable
	2020		2019		(Unfavorable)		%	Commentary
	(In thousands)
Office revenues	$	355,576	$	390,138	$	(34,562)	(8.9)%	The decrease was primarily due to (i) a decrease in rental revenues due to the write-off of uncollectible tenant receivables and the associated deferred rent receivables, (ii) a decrease in tenant recoveries due to a decrease in recoverable operating costs and the write-off of uncollectible tenant receivables, and (iii) a decrease in parking income.
Office expenses	(115,710)		(122,566)		6,856		5.6%	The decrease was primarily due to a decrease in parking expenses, utility expenses, and janitorial expenses.
Office NOI	239,866		267,572		(27,706)		(10.4)%
Multifamily revenues	30,254		31,507		(1,253)		(4.0)%	The decrease was primarily due to a decrease in rental revenues due to the write-off of uncollectible tenant receivables and a decrease in occupancy.
Multifamily expenses	(8,083)		(7,969)		(114)		(1.4)%	The increase was primarily due to an increase in scheduled services expenses, personnel expenses and property taxes, partly offset by a decrease in repairs and maintenance expenses.
Multifamily NOI	22,171		23,538		(1,367)		(5.8)%
Total NOI	$	262,037	$	291,110	$	(29,073)	(10.0)%

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Reconciliation to GAAP

The table below presents a reconciliation of our Same Property NOI to net income attributable to common stockholders:

	Six Months Ended June 30,
(In thousands)	2020		2019
Same Property NOI	$	262,037	$	291,110
Non-comparable office revenues	41,302		9,341
Non-comparable office expenses	(14,255)		(5,191)
Non-comparable multifamily revenues	32,014		23,734
Non-comparable multifamily expenses	(10,129)		(7,298)
NOI	310,969		311,696
General and administrative expenses	(20,198)		(18,991)
Depreciation and amortization	(196,542)		(158,597)
Operating income	94,229		134,108
Other income	2,314		5,790
Other expenses	(1,874)		(3,652)
Income from unconsolidated Funds	183		3,758
Interest expense	(70,610)		(67,356)
Net income	24,242		72,648
Less: Net loss (income) attributable to noncontrolling interests	4,711		(9,981)
Net income attributable to common stockholders	$	28,953	$	62,667

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Liquidity and Capital Resources

Short-term liquidity

During the six months ended June 30, 2020, we generated cash from operations of $236.8 million. As of June 30, 2020, we had $176.4 million of cash and cash equivalents, and we had a zero balance on our $400.0 million revolving credit facility. Our earliest debt maturity is February 28, 2023. Excluding acquisitions, development projects and debt refinancings, we expect to meet our short-term liquidity requirements through cash on hand, cash generated by operations and our revolving credit facility. See Note 8 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt.

Long-term liquidity

Our long-term liquidity needs consist primarily of funds necessary to pay for acquisitions, development projects and debt refinancings. We do not expect to have sufficient funds on hand to cover these long-term cash requirements due to the requirement to distribute a substantial majority of our income on an annual basis imposed by REIT federal tax rules. We plan to meet our long-term liquidity needs through long-term secured non-recourse indebtedness, the issuance of equity securities, including common stock and OP Units, as well as property dispositions and JV transactions.

We only use property level, non-recourse debt. As of June 30, 2020, approximately 41% of our total office portfolio is totally unencumbered. To mitigate the impact of changing interest rates on our cash flows from operations, we generally enter into interest rate swap agreements with respect to our loans with floating interest rates.  These swap agreements generally expire between one to two years before the maturity date of the related loan, during which time we can refinance the loan without any interest penalty. See Notes 8 and 10 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt and derivative contracts, respectively.  

Contractual Obligations

See the following notes to our consolidated financial statements in Item 1 of this Report for information regarding our contractual commitments:

•Note 4 - minimum future ground lease payments;

•Note 8 - minimum future principal payments for our secured notes payable and revolving credit facility, and the interest rates that determine our future periodic interest payments; and

•Note 16 - developments, capital expenditure projects and repositionings.

Off-Balance Sheet Arrangements

Unconsolidated Fund's Debt

Our Fund has its own secured non-recourse debt, and we have made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve-outs related to that loan. We have also guaranteed the related swap. Our Fund has agreed to indemnify us for any amounts that we would be required to pay under these agreements. As of June 30, 2020, all of the obligations under the respective loan and swap agreements have been performed in accordance with the terms of those agreements. See Note 16 to our consolidated financial statements in Item 1 of this Report for more information about our Fund's debt.

50

Cash Flows

Comparison of six months ended June 30, 2020 to six months ended June 30, 2019

	Six Months Ended June 30,				Increase
	2020		2019		(Decrease)		%
	(In thousands)
Net cash provided by operating activities(1)	$	236,809	$	228,176	$	8,633	3.8	%
Net cash used in investing activities(2)	$	(129,959)	$	(482,444)	$	(352,485)	(73.1)	%
Net cash (used in) provided by financing activities(3)	$	(84,140)	$	412,003	$	(496,143)	(120.4)	%

________________________________________________________________________

(1) Our cash flows from operating activities are primarily dependent upon the occupancy and rental rates of our portfolio, the collectibility of rent and recoveries from our tenants, and the level of our operating expenses and general and administrative expenses, and interest expense.  The increase in cash provided by operating activities was primarily due to: (i) an increase in cash operating income from our office portfolio (office cash revenues less office cash rental expenses) primarily due to an increase in our ownership interest in a JV we consolidated in November 2019, and (ii) an increase in cash operating income from our multifamily portfolio (multifamily cash revenues less multifamily cash rental expenses) primarily due to our acquisition in June 2019 of The Glendon residential community, and the leasing of new units at our Moanalua Hillside Apartments development.

(2) Our cash flows from investing activities is generally used to fund property acquisitions, developments and redevelopment projects, and Recurring and non-Recurring Capital Expenditures. The decrease in cash used in investing activities was primarily due to: (i) $364.5 million paid for a property that we purchased in June 2019, (ii) a decrease of $9.8 million in capital expenditures for improvements to real estate, partly offset by (iii) an increase of $23.5 million in capital expenditures for developments.

(3) Our cash flows from financing activities are generally impacted by our borrowings and capital activities, as well as dividends and distributions paid to common stockholders and noncontrolling interests, respectively.  The difference in cash used in financing activities during the six months ended June 30, 2020, compared to the cash provided by financing activities during the six months ended June 30, 2019, was primarily due to: (i) $201.0 million of net proceeds from the issuance of common stock in 2019, (ii) $163.6 million of contributions from noncontrolling interests in consolidated JVs in 2019, (iii) a decrease of $125.0 million in net borrowings, and (iv) an increase of $9.6 million in dividends paid to our common stock holders.

Critical Accounting Policies

We did not adopt any new ASUs during the second quarter of 2020. We adopted ASUs during the first quarter of 2020 - see Note 2 to our consolidated financial statements in Item 1 of this Report for a discussion of the ASUs. The adoption of the ASUs did not have a material impact on our financial statements. We have not made any other changes to our critical accounting policies disclosed in our 2019 Annual Report on Form 10-K.

Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with US GAAP, and which requires us to make estimates of certain items, which affect the reported amounts of our assets, liabilities, revenues and expenses. While we believe that our estimates are based upon reasonable assumptions and judgments at the time that they are made, some of our estimates could prove to be incorrect, and those differences could be material. Some of our estimates are subject to adjustment as we believe appropriate, based on revised estimates, and reconciliation to actual results when available.

51

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

We use derivative instruments to hedge interest rate risk related to our floating rate borrowings. However, our use of these instruments exposes us to credit risk from the potential inability of our counterparties to perform under the terms of those agreements. We attempt to minimize this credit risk by contracting with a variety of high-quality financial counterparties. See Notes 8 and 10 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt and derivatives. As of June 30, 2020, we have no outstanding floating rate debt that is unhedged.

In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee ("ARRC"), which identified the Secured Overnight Financing Rate ("SOFR") as its preferred alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry-wide and company-specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR.

Our floating rate borrowings and derivative instruments are indexed to USD-LIBOR and we are monitoring this activity and evaluating the related risks - which include interest on loans and amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to a new alternative rate. The value of loans or derivative instruments tied to LIBOR could also be impacted if LIBOR is limited or discontinued. While we expect LIBOR to be available in substantially its current form until the end of 2021, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and potentially magnified.

Item 4.  Controls and Procedures

As of June 30, 2020, the end of the period covered by this Report, we carried out an evaluation, under the supervision and with the participation of management, including our CEO and CFO, regarding the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at the end of the period covered by this Report. Based on the foregoing, our CEO and CFO concluded, as of that time, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our CEO and our CFO, as appropriate, to allow for timely decisions regarding required disclosure.

There have not been any changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

52

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business. Excluding ordinary routine litigation incidental to our business, we are not currently a party to any legal proceedings that we believe would reasonably be expected to have a materially adverse effect on our business, financial condition or results of operations.

Item 1A.  Risk Factors

Except for the risk factor related to the COVID-19 pandemic in our quarterly report on Form 10-Q for the quarter ended March 31, 2020, we are not aware of any other material changes to the risk factors disclosed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

Item 6.  Exhibits

Exhibit Number	Description
31.1	Certificate of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certificate of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certificate of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certificate of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document - the instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document.
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

________________________________________________

* In accordance with SEC Release No. 33-8212, these exhibits are being furnished, and are not being filed as part of this Report on Form 10-Q or as a separate disclosure document, and are not being incorporated by reference into any Securities Act registration statement.

53

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		DOUGLAS EMMETT, INC.
Date:	August 7, 2020	By:	/s/ JORDAN L. KAPLAN
			Jordan L. Kaplan
			President and CEO
Date:	August 7, 2020	By:	/s/ PETER D. SEYMOUR
			Peter D. Seymour
			CFO

54

EX-31.1

EXHIBIT 31.1

CEO Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jordan L. Kaplan, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Douglas Emmett, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a

material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 

3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 7, 2020	By:	/s/ JORDAN L. KAPLAN
			Jordan L. Kaplan
			President and CEO

EX-31.2

EXHIBIT 31.2

CFO Certification

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Peter D. Seymour, certify that: 

1.I have reviewed this Quarterly Report on Form 10-Q of Douglas Emmett, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 7, 2020	By:	/s/ PETER D. SEYMOUR
			Peter D. Seymour
			CFO

EX-32.1

EXHIBIT 32.1

OFFICERS’ CERTIFICATIONS

CEO Certification

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Douglas Emmett, Inc. (the “Company”), hereby certifies, to such officer’s knowledge, that:

(i)the accompanying quarterly report on Form 10-Q of the Company for the period ended June 30, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 7, 2020	By:	/s/ JORDAN L. KAPLAN
			Jordan L. Kaplan
			President and CEO

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EX-32.2

EXHIBIT 32.2

OFFICERS’ CERTIFICATIONS

CFO Certification

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Douglas Emmett, Inc. (the “Company”), hereby certifies, to such officer’s knowledge, that:

(i)the accompanying quarterly report on Form 10-Q of the Company for the period ended June 30, 2020 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 7, 2020	By:	/s/ PETER D. SEYMOUR
			Peter D. Seymour
			CFO

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2020	Jul. 31, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-33106
Entity Registrant Name	Douglas Emmett, Inc.
Entity Central Index Key	0001364250
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	20-3073047
Entity Address, Address Line One	1299 Ocean Avenue, Suite 1000
Entity Address, City or Town	Santa Monica
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	90401
City Area Code	310
Local Phone Number	255-7700
Title of 12(b) Security	Common Stock, $0.01 par value per share
Trading Symbol	DEI
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		175,374,886

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Investment in real estate:
Land	$ 1,152,684	$ 1,152,684
Buildings and improvements	9,329,652	9,308,481
Tenant improvements and lease intangibles	922,909	905,753
Property under development	158,949	111,715
Investment in real estate, gross	11,564,194	11,478,633
Less: accumulated depreciation and amortization	(2,679,255)	(2,518,415)
Investment in real estate, net	8,884,939	8,960,218
Ground lease right-of-use asset	7,475	7,479
Cash and cash equivalents	176,393	153,683
Tenant receivables	16,996	5,302
Deferred rent receivables	118,210	134,968
Acquired lease intangible assets, net	5,736	6,407
Interest rate contract assets	0	22,381
Investment in unconsolidated Fund	47,742	42,442
Other assets	13,886	16,421
Total Assets	9,271,377	9,349,301
Liabilities
Secured notes payable and revolving credit facility, net	4,666,603	4,619,058
Ground lease liability	10,877	10,882
Interest payable, accounts payable and deferred revenue	139,607	131,410
Security deposits	58,419	60,923
Acquired lease intangible liabilities, net	43,126	52,367
Interest rate contract liabilities	259,293	54,616
Dividends payable	49,113	49,111
Total liabilities	5,227,038	4,978,367
Douglas Emmett, Inc. stockholders' equity:
Common Stock, $0.01 par value, 750,000,000 authorized, 175,374,886 and 175,369,746 outstanding at June 30, 2020 and December 31, 2019, respectively	1,754	1,754
Additional paid-in capital	3,486,442	3,486,356
Accumulated other comprehensive loss	(179,471)	(17,462)
Accumulated deficit	(827,748)	(758,576)
Total Douglas Emmett, Inc. stockholders' equity	2,480,977	2,712,072
Noncontrolling interests	1,563,362	1,658,862
Total equity	4,044,339	4,370,934
Total Liabilities and Equity	$ 9,271,377	$ 9,349,301

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common Stock, par value (usd per share)	$ 0.01	$ 0.01
Common Stock, authorized (in shares)	750,000,000	750,000,000
Common Stock, outstanding (in shares)	175,374,886	175,369,746

XML

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues
Revenues	$ 207,796	$ 230,534	$ 459,146	$ 454,720
Operating Expenses
General and administrative expenses	9,863	9,159	20,198	18,991
Depreciation and amortization	98,765	78,724	196,542	158,597
Total operating expenses	177,785	159,903	364,917	320,612
Operating income	30,011	70,631	94,229	134,108
Other income	325	2,892	2,314	5,790
Other expenses	(478)	(1,807)	(1,874)	(3,652)
(Loss) income from unconsolidated Funds	(140)	2,207	183	3,758
Interest expense	(35,190)	(34,063)	(70,610)	(67,356)
Net (loss) income	(5,472)	39,860	24,242	72,648
Less: Net loss (income) attributable to noncontrolling interests	7,502	(5,894)	4,711	(9,981)
Net income attributable to common stockholders	$ 2,030	$ 33,966	$ 28,953	$ 62,667
Net income per common share – basic and diluted (usd per share)	$ 0.01	$ 0.20	$ 0.16	$ 0.36
Office rental
Revenues
Revenues	$ 176,989	$ 202,189	$ 396,878	$ 399,479
Operating Expenses
Expenses	60,301	64,308	129,965	127,757
Office rental | Rental revenues and tenant recoveries
Revenues
Revenues	158,813	171,674	344,640	338,909
Office rental | Parking and other income
Revenues
Revenues	18,176	30,515	52,238	60,570
Multifamily rental
Revenues
Revenues	30,807	28,345	62,268	55,241
Operating Expenses
Expenses	8,856	7,712	18,212	15,267
Multifamily rental | Rental revenues
Revenues
Revenues	25,872	26,308	54,958	51,201
Multifamily rental | Parking and other income
Revenues
Revenues	$ 4,935	$ 2,037	$ 7,310	$ 4,040

XML

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (5,472)	$ 39,860	$ 24,242	$ 72,648
Other comprehensive loss: cash flow hedges	(20,795)	(81,613)	(228,254)	(114,921)
Comprehensive loss	(26,267)	(41,753)	(204,012)	(42,273)
Less: Comprehensive loss attributable to noncontrolling interests	14,698	18,923	70,956	25,143
Comprehensive loss attributable to common stockholders	$ (11,569)	$ (22,830)	$ (133,056)	$ (17,130)

XML

Consolidated Statements of Equity - USD ($) $ in Thousands	Total	ASU 2016-02 adoption	Common Stock	Additional Paid-in Capital	AOCI	Accumulated Deficit	Accumulated Deficit ASU 2016-02 adoption	Noncontrolling Interests	Noncontrolling Interests ASU 2016-02 adoption
Beginning balance (in shares) at Dec. 31, 2018			170,215,000
Stockholders' Equity [Roll Forward]
Exchange of OP Units for common stock (in shares)	75,000		76,000
Issuance of common stock (in shares)	4,900,000		4,932,000
Ending balance (in shares) at Jun. 30, 2019			175,223,000
Beginning balance at Dec. 31, 2018	$ 3,848,430	$ (2,499)	$ 1,702	$ 3,282,316	$ 53,944	$ (935,630)	$ (2,144)	$ 1,446,098	$ (355)
Stockholders' Equity [Roll Forward]
Exchange of OP Units for common stock			1	1,222				(1,223)
Issuance of common stock, net	200,982		49	200,933
Repurchase of OP Units with cash	(507)			(291)				(216)
Cash flow hedge adjustments	(114,921)				(79,797)			(35,124)
Net income attributable to common stockholders	72,648					62,667		9,981
Dividends	(89,820)					(89,820)
Contributions	176,000							176,000
Distributions	(43,974)							(43,974)
Stock-based compensation	6,021							6,021
Ending balance at Jun. 30, 2019	$ 4,052,360		$ 1,752	3,484,180	(25,853)	(964,927)		1,557,208
Stockholders' Equity [Roll Forward]
Accounting standards update	us-gaap:AccountingStandardsUpdate201602Member
Dividends declared per common share (in usd per share)	$ 0.52
Beginning balance (in shares) at Mar. 31, 2019			170,237,000
Stockholders' Equity [Roll Forward]
Exchange of OP Units for common stock (in shares)			54,000
Issuance of common stock (in shares)			4,932,000
Ending balance (in shares) at Jun. 30, 2019			175,223,000
Beginning balance at Mar. 31, 2019	$ 3,788,182	0	$ 1,702	3,282,388	30,943	(953,335)	0	1,426,484	0
Stockholders' Equity [Roll Forward]
Exchange of OP Units for common stock			1	859				(860)
Issuance of common stock, net	200,982		49	200,933
Repurchase of OP Units with cash	0			0				0
Cash flow hedge adjustments	(81,613)				(56,796)			(24,817)
Net income attributable to common stockholders	39,860					33,966		5,894
Dividends	(45,558)					(45,558)
Contributions	176,000							176,000
Distributions	(28,214)							(28,214)
Stock-based compensation	2,721							2,721
Ending balance at Jun. 30, 2019	$ 4,052,360		$ 1,752	3,484,180	(25,853)	(964,927)		1,557,208
Stockholders' Equity [Roll Forward]
Dividends declared per common share (in usd per share)	$ 0.26
Beginning balance (in shares) at Dec. 31, 2019	175,369,746		175,370,000
Stockholders' Equity [Roll Forward]
Exchange of OP Units for common stock (in shares)	5,000		5,000
Issuance of common stock (in shares)			0
Ending balance (in shares) at Jun. 30, 2020	175,374,886		175,375,000
Beginning balance at Dec. 31, 2019	$ 4,370,934	0	$ 1,754	3,486,356	(17,462)	(758,576)	0	1,658,862	0
Stockholders' Equity [Roll Forward]
Exchange of OP Units for common stock			0	90				(90)
Issuance of common stock, net	0		0	0
Repurchase of OP Units with cash	(7)			(4)				(3)
Cash flow hedge adjustments	(228,254)				(162,009)			(66,245)
Net income attributable to common stockholders	24,242					28,953		(4,711)
Dividends	(98,125)					(98,125)
Contributions	0							0
Distributions	(31,814)							(31,814)
Stock-based compensation	7,363							7,363
Ending balance at Jun. 30, 2020	$ 4,044,339		$ 1,754	3,486,442	(179,471)	(827,748)		1,563,362
Stockholders' Equity [Roll Forward]
Dividends declared per common share (in usd per share)	$ 0.56
Beginning balance (in shares) at Mar. 31, 2020			175,375,000
Stockholders' Equity [Roll Forward]
Exchange of OP Units for common stock (in shares)			0
Issuance of common stock (in shares)			0
Ending balance (in shares) at Jun. 30, 2020	175,374,886		175,375,000
Beginning balance at Mar. 31, 2020	$ 4,129,707	$ 0	$ 1,754	3,486,442	(165,872)	(780,562)	$ 0	1,587,945	$ 0
Stockholders' Equity [Roll Forward]
Exchange of OP Units for common stock			0	0				0
Issuance of common stock, net	0		0	0
Repurchase of OP Units with cash	0			0				0
Cash flow hedge adjustments	(20,795)				(13,599)			(7,196)
Net income attributable to common stockholders	(5,472)					2,030		(7,502)
Dividends	(49,216)					(49,216)
Contributions	0							0
Distributions	(13,448)							(13,448)
Stock-based compensation	3,563							3,563
Ending balance at Jun. 30, 2020	$ 4,044,339		$ 1,754	$ 3,486,442	$ (179,471)	$ (827,748)		$ 1,563,362
Stockholders' Equity [Roll Forward]
Dividends declared per common share (in usd per share)	$ 0.28

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating Activities
Net (loss) income	$ 24,242	$ 72,648
Adjustments to reconcile net income to net cash provided by operating activities:
Income from unconsolidated Funds	(183)	(3,758)
Depreciation and amortization	196,542	158,597
Net accretion of acquired lease intangibles	(8,571)	(8,516)
Straight-line rent	16,758	(6,684)
Write-off of uncollectible amounts	15,992	9
Loan premium amortized and written off	(2,043)	(102)
Deferred loan costs amortized and written off	3,791	4,380
Derivative non-cash adjustments	0	(7)
Amortization of stock-based compensation	5,753	5,013
Operating distributions from unconsolidated Funds	394	3,756
Change in working capital components:
Tenant receivables	(27,686)	(837)
Interest payable, accounts payable and deferred revenue	9,811	(2,222)
Security deposits	(2,504)	501
Other assets	4,513	5,398
Net cash provided by operating activities	236,809	228,176
Investing Activities
Capital expenditures for improvements to real estate	(74,151)	(83,944)
Capital expenditures for developments	(53,780)	(30,327)
Insurance recoveries for damage to real estate	4,015	0
Property acquisition	0	(364,524)
Acquisition of additional interests in unconsolidated Fund	(6,591)	(7,518)
Capital distributions from unconsolidated Funds	548	3,869
Net cash used in investing activities	(129,959)	(482,444)
Financing Activities
Proceeds from borrowings	544,000	832,318
Repayment of borrowings	(494,372)	(657,673)
Loan cost payments	(3,824)	(6,625)
Contributions from noncontrolling interests in consolidated JVs	0	163,556
Distributions paid to noncontrolling interests	(31,814)	(31,530)
Dividends paid to common stockholders	(98,123)	(88,518)
Repurchase of OP Units	(7)	(507)
Proceeds from issuance of common stock, net	0	200,982
Net cash used in financing activities	(84,140)	412,003
Increase in cash and cash equivalents and restricted cash	22,710	157,735
Cash and cash equivalents and restricted cash - beginning balance	153,804	146,348
Cash and cash equivalents and restricted cash - ending balance	176,514	304,083
Reconciliation of Ending Cash Balance
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Total	176,514	304,083
Operating Activities
Cash paid for interest, net of capitalized interest	68,837	62,985
Capitalized interest paid	1,992	1,897
Non-cash Investing Transactions
Accrual for real estate and development capital expenditures	31,400	16,687
Capitalized stock-based compensation for improvements to real estate and developments	1,610	1,008
Removal of fully depreciated and amortized tenant improvements and lease intangibles	32,305	30,586
Removal of fully amortized acquired lease intangible assets	175	1,859
Removal of fully accreted acquired lease intangible liabilities	3,604	4,212
Property acquisition accrual	0	1,361
Recognition of ground lease right-of-use asset - Adoption of ASU 2016-02	0	10,885
Above-market ground lease intangible liability offset against right-of-use asset - Adoption of ASU 2016-02	0	3,408
Recognition of ground lease liability - Adoption of ASU 2016-02	0	10,885
Non-cash Financing Transactions
Loss recorded in AOCI - derivatives	(241,189)	(89,483)
Non-cash contributions from noncontrolling interests in consolidated JVs	0	12,444
Non-cash distributions to noncontrolling interests	0	12,444
Dividends declared	98,125	89,820
Exchange of OP Units for common stock	90	1,223
Unconsolidated Funds
Non-cash Financing Transactions
Loss recorded in AOCI - derivatives	$ (403)	$ (6,928)

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Overview

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Overview

Overview

Organization and Business Description

Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed REIT. We are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and Honolulu, Hawaii. Through our interest in our Operating Partnership and its subsidiaries, consolidated JVs and unconsolidated Fund, we focus on owning, acquiring, developing and managing a significant market share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities. The terms "us," "we" and "our" as used in the consolidated financial statements refer to Douglas Emmett, Inc. and its subsidiaries on a consolidated basis.

At June 30, 2020, our Consolidated Portfolio consisted of (i) a 17.9 million square foot office portfolio, (ii) 4,209 multifamily apartment units and (iii) fee interests in two parcels of land from which we receive rent under ground leases. We also manage and own an equity interest in an unconsolidated Fund which, at June 30, 2020, owned an additional 0.4 million square feet of office space. We manage our unconsolidated Fund alongside our Consolidated Portfolio, and we therefore present the statistics for our office portfolio on a Total Portfolio basis. As of June 30, 2020, our portfolio (not including two parcels of land from which we receive rent under ground leases), consisted of the following properties (including ancillary retail space):

	Consolidated Portfolio	Total Portfolio
Office
Wholly-owned properties	53	53
Consolidated JV properties	17	17
Unconsolidated Fund properties	—	2
	70	72
Multifamily
Wholly-owned properties	11	11
Consolidated JV properties	1	1
	12	12
Total	82	84

Basis of Presentation

The accompanying consolidated financial statements are the consolidated financial statements of Douglas Emmett, Inc. and its subsidiaries, including our Operating Partnership and our consolidated JVs.  All significant intercompany balances and transactions have been eliminated in our consolidated financial statements.

We consolidate entities in which we are considered to be the primary beneficiary of a VIE or have a majority of the voting interest of the entity. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of that VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We do not consolidate entities in which the other parties have substantive kick-out rights to remove our power to direct the activities, most significantly impacting the economic performance, of that VIE. In determining whether we are the primary beneficiary, we consider factors such as ownership interest, management representation, authority to control decisions, and contractual and substantive participating rights of each party.

We consolidate our Operating Partnership through which we conduct substantially all of our business, and own, directly and through subsidiaries, substantially all of our assets, and are obligated to repay substantially all of our liabilities, including $3.11 billion of consolidated debt. See Note 8. We also consolidate four JVs. As of June 30, 2020, these consolidated entities had aggregate total consolidated assets of $9.27 billion (of which $8.88 billion related to investment in real estate), aggregate total consolidated liabilities of $5.23 billion (of which $4.67 billion related to debt), and aggregate total consolidated equity of $4.04 billion (of which $1.56 billion related to noncontrolling interests).

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC in conformity with US GAAP as established by the FASB in the ASC. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in conformity with US GAAP may have been condensed or omitted pursuant to SEC rules and regulations, although we believe that the disclosures are adequate to make their presentation not misleading. The accompanying unaudited interim consolidated financial statements include, in our opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set forth therein. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in our 2019 Annual Report on Form 10-K and the notes thereto. Any references to the number or class of properties, square footage, per square footage amounts, apartment units and geography, are outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the PCAOB.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

We have not made any changes to our significant accounting policies disclosed in our 2019 Annual Report on Form 10-K.

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make certain estimates that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Revenue Recognition

Rental revenues and tenant recoveries

We account for our rental revenues and tenant recoveries in accordance with Topic 842 "Leases". Rental revenues and tenant recoveries are included in: (i) Rental revenues and tenant recoveries under Office rental, and (ii) Rental revenues under Multifamily rental, in our consolidated statements of operations.

In accordance with Topic 842, we perform an assessment as to whether or not substantially all of the amounts due under a tenant’s lease agreement is deemed probable of collection. This assessment involves using a methodology that requires judgment and estimates about matters that are uncertain at the time the estimates are made, including tenant specific factors, specific industry conditions, and general economic trends and conditions.

For leases where we have concluded it is probable that we will collect substantially all the lease payments due under those leases, we continue to record lease income on a straight-line basis over the lease term. For leases where we have concluded that it is not probable that we will collect substantially all the lease payments due under those leases, we limit the lease income to the lesser of the income recognized on a straight-line basis or cash basis. If our conclusion of collectibility changes, we will record the difference between the lease income that would have been recognized on a straight-line basis and cash basis as a current-period adjustment to rental revenues and tenant recoveries. We write-off tenant receivables and deferred rent receivables as a charge against rental revenues and tenant recoveries in the period we conclude that substantially all of the lease payments are not probable of collection. If we subsequently collect amounts that were previously written off then the amounts collected are recorded as an increase to our rental revenues and tenant recoveries.

Charges for uncollectible amounts, related to tenant receivables and deferred rent receivables, which for the three and six months ended June 30, 2020 were primarily due to the impact of the COVID-19 pandemic, reduced our rental revenues and tenant recoveries by $29.8 million and $1.0 million for the three months ended June 30, 2020 and 2019, and $35.0 million and $3.4 million for the six months ended June 30, 2020 and 2019, respectively.

Office parking revenues

We account for our office parking revenues in accordance with ASC 606 "Revenue from Contracts with Customers". Office parking revenues are included in Parking and other income under Office rental in our consolidated statements of operations. Our lease contracts generally make a specified number of parking spaces available to the tenant, and we bill and recognize parking revenues on a monthly basis in accordance with the lease agreements, generally using the monthly parking rates in effect at the time of billing. Office parking revenues were $14.7 million and $26.9 million for the three months ended June 30, 2020 and 2019, and $44.9 million and $53.3 million for the six months ended June 30, 2020 and 2019, respectively. Office parking receivables were $0.4 million and $1.3 million as of June 30, 2020 and December 31, 2019, respectively, and are included in Tenant receivables in our consolidated balance sheets.

Income Taxes

We have elected to be taxed as a REIT under the Code. Provided that we qualify for taxation as a REIT, we are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. We are subject to corporate-level tax on the earnings that we derive through our TRS.

New Accounting Pronouncements

Changes to US GAAP are implemented by the FASB in the form of ASUs.  We consider the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not issued any other ASUs that we expect to be applicable and have a material impact on our consolidated financial statements.

ASUs Adopted

ASU 2016-13 (Topic 326 - "Financial Instruments-Credit Losses")

In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments", which amends "Financial Instruments-Credit Losses" (Topic 326). The ASU provides guidance for measuring credit losses on financial instruments. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, which for us was the first quarter of 2020. The amendments in the ASU should be applied on a modified-retrospective basis. The ASU impacts our measurement of credit losses for our Office parking receivables, which were $0.4 million and $1.3 million as of June 30, 2020 and December 31, 2019, respectively, and are included in Tenant receivables in our consolidated balance sheets. We adopted the ASU in the first quarter of 2020 and it did not have a material impact on our consolidated financial statements.

ASU 2020-04 (Topic 848 - "Reference Rate Reform")

In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform", which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The practical expedients are optional and may be elected over time as reference rate reform activities occur. We elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the ASU and may apply other elections, as applicable, as additional changes in the market occur. Our election to apply the hedge accounting expedients in the first quarter of 2020 did not have a material impact on our consolidated financial statements.

Other Pronouncements

FASB COVID-19 Lease Modification Accounting Relief

In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under the existing lease accounting guidance, we would be required to determine on a lease-by-lease basis if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows us, if certain criteria are met, to bypass the lease-by-lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. We will avail ourselves of the election to avoid performing a lease-by-lease analysis. The Lease Modification Q&A did not have material impact on our consolidated financial statements; however, its impact on our future consolidated financial statements is dependent upon the extent of any lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by us at the time of entering into such concessions.

FASB COVID-19 Cash Flow Hedge Accounting Relief

In April 2020, the FASB staff issued a question and answer document (the “Cash Flow Hedge Accounting Q&A”) on the application of cash flow hedge accounting guidance to cash flow hedges impacted by the COVID-19 pandemic. The Cash Flow Hedge Accounting Q&A clarifies that: (i) when cash flow hedge accounting has been discontinued, the delays in the timing of the forecasted transactions related to the impact of the COVID-19 pandemic may be considered rare cases caused by extenuating circumstances outside the control or influence of an entity, thereby allowing amounts deferred in AOCI to remain in AOCI until the forecasted transaction affects earnings, and (ii) missed forecasts, related to the effects of the COVID-19 pandemic, do not need to be considered when determining whether the entity has exhibited a pattern of missing forecasts that would call into question the entity’s ability to accurately predict forecasted transactions and the propriety of using cash flow hedge accounting in the future for similar transactions. The Cash Flow Hedge Accounting Q&A did not have material impact on our consolidated financial statements; however, its impact on our future consolidated financial statements is dependent upon our cash flow hedge forecasted transactions being impacted by the COVID-19 pandemic in future periods.

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Investment in Real Estate

6 Months Ended

Jun. 30, 2020

Asset Acquisition [Abstract]

Investment in Real Estate

Investment in Real Estate

We account for our property acquisitions as asset acquisitions. The acquired property's results of operations are included in our results of operations from the respective acquisition date.

Six Months Ended June 30, 2020

During six months ended June 30, 2020, we did not purchase any properties.

Six Months Ended June 30, 2019

On June 7, 2019, we acquired The Glendon, a residential community in Westwood, and on June 28, 2019, we contributed the property to a consolidated JV that we manage and in which we own a twenty percent capital interest. The table below summarizes the purchase price allocation for the acquisition. The contract and purchase prices differ due to prorations and similar adjustments:

(In thousands, except number of units)	The Glendon
Submarket	West Los Angeles
Acquisition date	June 7, 2019
Contract price	$	365,100
Number of multifamily units	350
Retail square footage	50
Investment in real estate:
Land	$	32,773
Buildings and improvements	333,624
Tenant improvements and lease intangibles	2,301
Acquired above- and below-market leases, net	(2,114)
Net assets and liabilities acquired	$	366,584

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Ground Lease

6 Months Ended

Jun. 30, 2020

Lessee Disclosure [Abstract]

Ground Lease

Ground Lease

We pay rent under a ground lease located in Honolulu, Hawaii, which expires on December 31, 2086. The rent is fixed at $733 thousand per year until February 28, 2029, after which it will reset to the greater of the existing ground rent or market. As of June 30, 2020, the right-of-use asset carrying value of this ground lease was $7.5 million and the ground lease liability was $10.9 million.

We incurred ground rent expense of $183 thousand for the three months ended June 30, 2020 and 2019, and $365 thousand and $363 thousand for the six months ended June 30, 2020 and 2019, respectively, which is included in Office expenses in our consolidated statements of operations. The table below, which assumes that the ground rent payments will continue to be $733 thousand per year after February 28, 2029, presents the future minimum ground lease payments as of June 30, 2020:

Twelve months ending June 30:	(In thousands)
2021	$	733
2022	733
2023	733
2024	733
2025	733
Thereafter	45,078
Total future minimum lease payments	$	48,743

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Acquired Lease Intangibles

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Acquired Lease Intangibles

Acquired Lease Intangibles

Summary of our Acquired Lease Intangibles

(In thousands)	June 30, 2020		December 31, 2019
Above-market tenant leases	$	7,045	$	7,220
Above-market tenant leases - accumulated amortization	(2,228)		(1,741)
Above-market ground lease where we are the lessor	1,152		1,152
Above-market ground lease - accumulated amortization	(233)		(224)
Acquired lease intangible assets, net	$	5,736	$	6,407
Below-market tenant leases	$	98,979	$	102,583
Below-market tenant leases - accumulated accretion	(55,853)		(50,216)
Acquired lease intangible liabilities, net	$	43,126	$	52,367

Impact on the Consolidated Statements of Operations

The table below summarizes the net amortization/accretion related to our above- and below-market leases:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Net accretion of above- and below-market tenant lease assets and liabilities(1)	$	4,320	$	4,400	$	8,579	$	8,524
Amortization of an above-market ground lease asset(2)	(5)		(4)		(8)		(8)
Total	$	4,315	$	4,396	$	8,571	$	8,516

______________________________________________

(1) Recorded as a net increase to office and multifamily rental revenues.

(2) Recorded as a decrease to office parking and other income.

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Investments in Unconsolidated Funds

6 Months Ended

Jun. 30, 2020

Real Estate Investments, Net [Abstract]

Investments In Unconsolidated Funds

Investments in Unconsolidated Funds

Description of our Funds

As of June 30, 2020, we manage and own an equity interest of 33.5% in an unconsolidated Fund, Partnership X, through which we and other investors in the Fund own two office properties totaling 0.4 million square feet. During the six months ended June 30, 2020 we purchased additional interests of 3.6% in Partnership X for $6.6 million.

On November 21, 2019, we restructured Fund X which resulted in Fund X being treated as a consolidated JV from November 21, 2019, and we closed the Opportunity Fund. See Note 6 in our 2019 Annual Report on Form 10-K for more information.

At June 30, 2019, we managed and held direct and indirect equity interests in three unconsolidated Funds, consisting of 6.2% of the Opportunity Fund, 72.7% of Fund X and 24.6% of Partnership X, through which we and investors in the Funds' owned eight office properties totaling 1.8 million square feet. We purchased an additional interest of 1.4% in Fund X during the six months ended June 30, 2019.

Our Funds pay us fees and reimburse us for certain expenses related to property management and other services we provide, which are included in Other income in our consolidated statements of operations. We also receive distributions based on invested capital and on any profits that exceed certain specified cash returns to the investors. The table below presents cash distributions we received from our Funds:

	Six Months Ended June 30,
(In thousands)	2020		2019
Operating distributions received(1)	$	394	$	3,756
Capital distributions received(1)	548		3,869
Total distributions received(1)	$	942	$	7,625

_________________________________________________

(1) The distributions are not directly comparable to the prior period; the distributions during the six months ended June 30, 2020 reflect distributions only from Partnership X, whereas the distributions during the six months ended June 30, 2019 reflect distributions from the Opportunity Fund, Fund X and Partnership X.

Summarized Financial Information for our Funds

The tables below present selected financial information for the Funds.  The amounts presented reflect 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value:

(In thousands)	June 30, 2020		December 31, 2019
Total assets(1)	$	134,245	$	136,479
Total liabilities(1)	$	113,592	$	113,330
Total equity(1)	$	20,653	$	23,149

______________________________________________

(1) The balances reflect the financial position of Partnership X.

	Six Months Ended June 30,
(In thousands)	2020		2019
Total revenues(1)	$	7,597	$	41,174
Operating income(1)	$	1,686	$	11,961
Net income(1)	$	372	$	3,815

______________________________________________

(1) The results of operations are not directly comparable to the prior period; the balances for the six months ended June 30, 2020 reflect only the operations of Partnership X, whereas the balances for the six months ended June 30, 2019 reflect the combined operations of the Opportunity Fund, Fund X and Partnership X.

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Other Assets

6 Months Ended

Jun. 30, 2020

Other Assets [Abstract]

Other Assets

Other Assets

(In thousands)	June 30, 2020		December 31, 2019
Restricted cash	$	121	$	121
Prepaid expenses	3,632		8,711
Other indefinite-lived intangibles	1,988		1,988
Furniture, fixtures and equipment, net	2,532		2,368
Other	5,613		3,233
Total other assets	$	13,886	$	16,421

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Secured Notes Payable and Revolving Credit Facility, Net

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Secured Notes Payable and Revolving Credit Facility, Net

Secured Notes Payable and Revolving Credit Facility, Net

Description	Maturity Date(1)	Principal Balance as of June 30, 2020		Principal Balance as of December 31, 2019		Variable Interest Rate	Fixed Interest Rate(2)	Swap Maturity Date
		(In thousands)
Consolidated Wholly Owned Subsidiaries
Term loan(3)	1/1/2024	$	300,000	$	300,000	LIBOR + 1.55%	3.46%	1/1/2022
Term loan(3)	3/3/2025	335,000		335,000		LIBOR + 1.30%	3.84%	3/1/2023
Fannie Mae loan(3)	4/1/2025	102,400		102,400		LIBOR + 1.25%	2.76%	3/1/2023
Term loan(3)	8/15/2026	415,000		415,000		LIBOR + 1.10%	3.07%	8/1/2025
Term loan(3)	9/19/2026	400,000		400,000		LIBOR + 1.15%	2.44%	9/1/2024
Term loan(3)(4)	9/26/2026	200,000		200,000		LIBOR + 1.20%	2.77%	10/1/2024
Term loan(3)(5)	11/1/2026	400,000		400,000		LIBOR + 1.15%	2.18%	10/1/2024
Fannie Mae loan(3)	6/1/2027	550,000		550,000		LIBOR + 1.37%	3.16%	6/1/2022
Fannie Mae loan(3)	6/1/2029	255,000		255,000		LIBOR + 0.98%	3.26%	6/1/2027
Fannie Mae loan(3)(6)	6/1/2029	125,000		125,000		LIBOR + 0.98%	2.55%	6/1/2027
Term loan(7)	6/1/2038	30,492		30,864		N/A	4.55%	N/A
Revolving credit facility(8)	8/21/2023	—		—		LIBOR + 1.15%	N/A	N/A
Total Wholly Owned Subsidiary Debt		3,112,892		3,113,264
Consolidated JVs
Term loan(9)	—	—		400,000		—	—	—
Term loan(3)	2/28/2023	580,000		580,000		LIBOR + 1.40%	2.37%	3/1/2021
Term loan(3)	12/19/2024	400,000		400,000		LIBOR + 1.30%	3.47%	1/1/2023
Term loan(3)(10)	5/15/2027	450,000		—		LIBOR + 1.35%	3.04%	4/1/2025
Term loan(3)	6/1/2029	160,000		160,000		LIBOR + 0.98%	3.25%	7/1/2027
Total Consolidated Debt(11)		4,702,892		4,653,264
Unamortized loan premium, net		4,699		6,741
Unamortized deferred loan costs, net		(40,988)		(40,947)
Total Consolidated Debt, net		$	4,666,603	$	4,619,058

_______________________________________________________________________

Except as noted below, our loans and revolving credit facility: (i) are non-recourse, (ii) are secured by separate collateral pools consisting of one or more properties, (iii) require interest-only monthly payments with the outstanding principal due upon maturity, and (iv) contain certain financial covenants which could require us to deposit excess cash flow with the lender under certain circumstances unless we (at our option) either provide a guarantee or additional collateral or pay down the loan within certain parameters set forth in the loan documents.  Certain loans with maturity date extensions require us to meet minimum financial thresholds in order to exercise those extensions.

(1)Maturity dates include the effect of extension options.

(2)Effective rate as of June 30, 2020. Includes the effect of interest rate swaps and excludes the effect of prepaid loan fees. See Note 10 for details of our interest rate swaps. See below for details of our loan costs.

(3)The loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor.

(4)Effective rate will decrease to 2.36% on July 1, 2020.

(5)Effective rate will increase to 2.31% on July 1, 2021.

(6)Effective rate will increase to 3.25% on December 1, 2020.

(7)Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule.

(8)$400 million revolving credit facility. Unused commitment fees range from 0.10% to 0.15%. The loan agreement includes a zero-percent LIBOR floor.

(9)We paid this loan off during the second quarter.

(10)We closed this loan during the second quarter. The effective rate will decrease to 2.26% on July 1, 2022

(11)The table does not include our unconsolidated Fund's loan - see Note 16. See Note 13 for our fair value disclosures.

Debt Statistics

The table below summarizes our consolidated fixed and floating rate debt:

(In thousands)	Principal Balance as of June 30, 2020		Principal Balance as of December 31, 2019
Aggregate swapped to fixed rate loans	$	4,672,400	$	4,622,400
Aggregate fixed rate loans	30,492		30,864
Total Debt	$	4,702,892	$	4,653,264

The table below summarizes certain consolidated debt statistics as of June 30, 2020:

Statistics for consolidated loans with interest fixed under the terms of the loan or a swap
Principal balance (in billions)	$4.70
Weighted average remaining life (including extension options)	5.9 years
Weighted average remaining fixed interest period	3.6 years
Weighted average annual interest rate	3.02%

Future Principal Payments

At June 30, 2020, the minimum future principal payments due on our consolidated secured notes payable and revolving credit facility were as follows:

Twelve months ending June 30:	Including Maturity Extension Options(1)
	(In thousands)
2021	$	769
2022	805
2023	580,842
2024	300,881
2025	838,322
Thereafter	2,981,273
Total future principal payments	$	4,702,892

____________________________________________

(1)  Some of our loan agreements require that we meet certain minimum financial thresholds to be able to extend the loan maturity.

Loan Premium and Loan Costs

Loan premium is net of accumulated amortization of $0.9 million and $0.5 million at June 30, 2020 and December 31, 2019, respectively. Deferred loan costs are net of accumulated amortization of $34.4 million and $30.7 million at June 30, 2020 and December 31, 2019, respectively. The table below presents loan premium and loan costs, which are included in Interest expense in our consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Loan premium amortized and written off	$	(1,828)	$	(51)	$	(2,043)	$	(102)
Deferred loan costs amortized and written off	1,915		1,887		3,791		3,804
Loan costs expensed	965		576		965		576
Total	$	1,052	$	2,412	$	2,713	$	4,278

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Interest Payable, Accounts Payable and Deferred Revenue

6 Months Ended

Jun. 30, 2020

Accounts Payable and Accrued Liabilities [Abstract]

Interest Payable, Accounts Payable and Deferred Revenue

Interest Payable, Accounts Payable and Deferred Revenue

(In thousands)	June 30, 2020		December 31, 2019
Interest payable	$	11,732	$	11,707
Accounts payable and accrued liabilities	79,731		66,437
Deferred revenue	48,144		53,266
Total interest payable, accounts payable and deferred revenue	$	139,607	$	131,410

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Derivative Contracts

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Contracts

Derivative Contracts

We make use of interest rate swap contracts to manage the risk associated with changes in interest rates on our floating-rate debt. When we enter into a floating-rate term loan, we generally enter into an interest rate swap agreement for the equivalent principal amount, for a period covering the majority of the loan term, which effectively converts our floating-rate debt to a fixed-rate basis during that time. We do not speculate in derivatives and we do not make use of any other derivative instruments. See Note 8 regarding our debt and our consolidated JVs' debt that is hedged. See Note 16 regarding our unconsolidated Fund's debt that is hedged.

Derivative Summary

As of June 30, 2020, our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Fund, were designated as cash flow hedges:

	Number of Interest Rate Swaps	Notional (In thousands)
Consolidated derivatives(1)(2)(4)(5)	45	$	5,517,400
Unconsolidated Fund's derivatives(3)(4)(5)	1	$	110,000

___________________________________________________

(1)The notional amount reflects 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2)The notional amount includes: (a) swaps with a total initial notional amount of $120.0 million, that will increase to $1.18 billion in the future to replace existing swaps as they expire, and (b) forward swaps (swaps effective after June 30, 2020) with a total initial notional of $845.0 million, that will increase to $1.03 billion in the future to replace existing swaps as they expire.

(3)The notional amount reflects 100%, not our pro-rata share, of our unconsolidated Fund's derivatives.

(4)Our derivative contracts do not provide for right of offset between derivative contracts.

(5)See Note 13 for our derivative fair value disclosures.

Credit-risk-related Contingent Features

Our swaps include credit-risk related contingent features. For example, we have agreements with certain of our interest rate swap counterparties that contain a provision under which we could be declared in default on our derivative obligations if repayment of the underlying indebtedness that we are hedging is accelerated by the lender due to our default on the indebtedness. As of June 30, 2020, there have been no events of default with respect to our interest rate swaps, our consolidated JVs' or our unconsolidated Fund's interest rate swaps. We do not post collateral for our interest rate swap contract liabilities. The fair value of our interest rate swap contract liabilities, including accrued interest and excluding credit risk adjustments, was as follows:

(In thousands)	June 30, 2020		December 31, 2019
Consolidated derivatives(1)	$	271,726	$	56,896
Unconsolidated Fund's derivatives(2)	$	613	$	—

___________________________________________________

(1)The amounts reflect 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2)The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives.

Counterparty Credit Risk

We are subject to credit risk from the counterparties on our interest rate swap contract assets because we do not receive collateral. We seek to minimize that risk by entering into agreements with a variety of counterparties with investment grade ratings. The fair value of our interest rate swap contract assets, including accrued interest and excluding credit risk adjustments, was as follows:

(In thousands)	June 30, 2020		December 31, 2019
Consolidated derivatives(1)	$	—	$	23,275
Unconsolidated Fund's derivatives(2)	$	—	$	963

___________________________________________________

(1)The amounts reflect 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2)The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives.

Impact of Hedges on AOCI and the Consolidated Statements of Operations

The table below presents the effect of our derivatives on our AOCI and the consolidated statements of operations:

(In thousands)	Six Months Ended June 30,
	2020		2019
Derivatives Designated as Cash Flow Hedges:
Consolidated derivatives:
Loss recorded in AOCI before reclassifications(1)	$	(241,189)	$	(89,483)
Loss (gain) reclassified from AOCI to Interest Expense(1)	$	13,373	$	(17,284)
Interest Expense presented in the consolidated statements of operations	$	(70,610)	$	(67,356)
Unconsolidated Funds' derivatives (our share)(2):
Loss recorded in AOCI before reclassifications(1)	$	(403)	$	(6,928)
Gain reclassified from AOCI to Income from unconsolidated Funds(1)	$	(35)	$	(1,226)
Income from unconsolidated Funds presented in the consolidated statements of operations	$	183	$	3,758

___________________________________________________

(1)See Note 11 for our AOCI reconciliation.

(2)We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

Future Reclassifications from AOCI

At June 30, 2020, our estimate of the AOCI related to derivatives designated as cash flow hedges that will be reclassified to earnings during the next twelve months as interest rate swap payments are made is as follows:

	(In thousands)
Consolidated derivatives:
Losses to be reclassified from AOCI to Interest Expense	$	(71,439)
Unconsolidated Fund's derivative (our share)(1):
Losses to be reclassified from AOCI to Income (loss) from unconsolidated Funds	$	(182)

_________________________________________

(1) We calculate our share by multiplying the total amount for the Fund by our equity interest in the Fund.

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Equity

6 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

Equity

Equity

Transactions

Six Months Ended June 30, 2020

During the six months ended June 30, 2020, (i) we acquired 5 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units, and (ii) we acquired 150 OP Units for $7 thousand in cash.

Six Months Ended June 30, 2019

During the six months ended June 30, 2019, (i) we acquired 75 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units, and (ii) we acquired 13 thousand OP Units for $507 thousand in cash, and (iii) we issued 4.9 million shares of our common stock under our ATM program for net proceeds of $201.2 million.

We also purchased a property on June 7, 2019 for a contract price of $365.1 million, which we subsequently contributed to one of our consolidated JVs on June 28, 2019. We manage and own a twenty percent capital interest in the JV. To partially fund the acquisition of the property, we closed a secured, non-recourse $160.0 million interest-only loan scheduled to mature in June 2029, and the loan was assumed by the consolidated JV to which we contributed the property. Noncontrolling interests in the JV contributed $176.0 million to the JV for the acquisition of the property. See Note 3 for more information regarding the property acquisition and Note 8 for more information regarding the loan.

Noncontrolling Interests

Our noncontrolling interests consist of interests in our Operating Partnership and consolidated JVs which are not owned by us. Noncontrolling interests in our Operating Partnership owned 29.1 million OP Units and fully-vested LTIP Units, and represented approximately 14% of our Operating Partnership's total outstanding interests as of June 30, 2020 when we owned 175.4 millions OP Units (to match our 175.4 million shares of outstanding common stock).

A share of our common stock, an OP Unit and an LTIP Unit (once vested and booked up) have essentially the same economic characteristics, sharing equally in the distributions from our Operating Partnership.  Investors who own OP Units have the right to cause our Operating Partnership to acquire their OP Units for an amount of cash per unit equal to the market value of one share of our common stock at the date of acquisition, or, at our election, exchange their OP Units for shares of our common stock on a one-for-one basis. LTIP Units have been granted to our employees and non-employee directors as part of their compensation. These awards generally vest over a service period and once vested can generally be converted to OP Units provided our stock price increases by more than a specified hurdle.

Changes in our Ownership Interest in our Operating Partnership

The table below presents the effect on our equity from net income attributable to common stockholders and changes in our ownership interest in our Operating Partnership:

	Six Months Ended June 30,
(In thousands)	2020		2019
Net income attributable to common stockholders	$	28,953	$	62,667
Transfers from noncontrolling interests:
Exchange of OP Units with noncontrolling interests	90		1,223
Repurchase of OP Units from noncontrolling interests	(4)		(291)
Net transfers from noncontrolling interests	86		932
Change from net income attributable to common stockholders and transfers from noncontrolling interests	$	29,039	$	63,599

AOCI Reconciliation⁽¹⁾

The table below presents a reconciliation of our AOCI, which consists solely of adjustments related to derivatives designated as cash flow hedges:

	Six Months Ended June 30,
(In thousands)	2020		2019
Beginning balance	$	(17,462)	$	53,944
Consolidated derivatives:
Other comprehensive loss before reclassifications	(241,189)		(89,483)
Reclassification of loss (gain) from AOCI to Interest Expense	13,373		(17,284)
Unconsolidated Funds' derivatives (our share)(2):
Other comprehensive loss before reclassifications	(403)		(6,928)
Reclassification of gain from AOCI to Income (loss) from unconsolidated Funds	(35)		(1,226)
Net current period OCI	(228,254)		(114,921)
OCI attributable to noncontrolling interests	66,245		35,124
OCI attributable to common stockholders	(162,009)		(79,797)
Ending balance	$	(179,471)	$	(25,853)

___________________________________________________

(1)See Note 10 for the details of our derivatives and Note 13 for our derivative fair value disclosures.

(2)We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

Equity Compensation

On June 2, 2016, the Douglas Emmett 2016 Omnibus Stock Incentive Plan, as amended (the "2016 Plan"), became effective after receiving stockholder approval, superseding our prior plan, the Douglas Emmett 2006 Omnibus Stock Incentive Plan (the "2006 Plan"), both of which allow for awards to our directors, officers, employees and consultants. The key terms of the two plans are substantially identical, except for the date of expiration, the number of shares authorized for grants and various technical provisions. Grants after June 2, 2016 were awarded under the 2016 Plan, while grants prior to that date were awarded under the 2006 Plan (grants under the 2006 Plan remain outstanding according to their terms). Both plans are administered by the compensation committee of our board of directors. On May 28, 2020, our stockholders approved an amendment to the 2016 Plan to, among other things, increase the number of common shares for future awards by 9.5 million. The table below presents our stock-based compensation expense:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Stock-based compensation expense, net	$	2,812	$	2,383	$	5,753	$	5,013
Capitalized stock-based compensation	$	751	$	338	$	1,610	$	1,008

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EPS

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

EPS

EPS

We calculate basic EPS by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. We calculate diluted EPS by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method. We account for unvested LTIP awards that contain non-forfeitable rights to dividends as participating securities and include these securities in the computation of basic and diluted EPS using the two-class method. The table below presents the calculation of basic and diluted EPS:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Numerator (In thousands):
Net income attributable to common stockholders	$	2,030	$	33,966	$	28,953	$	62,667
Allocation to participating securities: Unvested LTIP Units	(206)		(139)		(413)		(265)
Net income attributable to common stockholders - basic and diluted	$	1,824	$	33,827	$	28,540	$	62,402
Denominator (In thousands):
Weighted average shares of common stock outstanding - basic and diluted(2)	175,375		172,498		175,374		171,366
Net income per common share - basic and diluted	$	0.01	$	0.20	$	0.16	$	0.36

____________________________________________________

(1) Outstanding OP Units and vested LTIP Units are not included in the denominator in calculating diluted EPS, even though they may be exchanged under certain conditions for common stock on a one-for-one basis, because their associated net income (equal on a per unit basis to the Net income per common share - diluted) was already deducted in calculating Net income attributable to common stockholders. Accordingly, any exchange would not have any effect on diluted EPS. The table below presents the OP Units and vested LTIP Units outstanding for the respective periods:

	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands)	2020	2019	2020	2019
OP Units	28,293	26,283	28,294	26,311
Vested LTIP Units	808	1,830	803	1,830

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Our estimates of the fair value of financial instruments were determined using available market information and widely used valuation methods.  Considerable judgment is necessary to interpret market data and determine an estimated fair value.  The use of different market assumptions or valuation methods may have a material effect on the estimated fair values. The FASB fair value framework hierarchy distinguishes between assumptions based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market-based inputs.  The hierarchy is as follows:

Level 1 - inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities.  

Level 2 - inputs are observable either directly or indirectly for similar assets and liabilities in active markets.  

Level 3 - inputs are unobservable assumptions generated by the reporting entity

As of June 30, 2020, we did not have any fair value estimates of financial instruments using Level 3 inputs.

Financial instruments disclosed at fair value

Short term financial instruments: The carrying amounts for cash and cash equivalents, tenant receivables, revolving credit line, interest payable, accounts payable, security deposits and dividends payable approximate fair value because of the short-term nature of these instruments.

Secured notes payable: See Note 8 for the details of our secured notes payable. We estimate the fair value of our consolidated secured notes payable by calculating the credit-adjusted present value of the principal and interest payments for each secured note payable. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs, assumes that the loans will be outstanding through maturity, and includes any maturity extension options. The table below presents the estimated fair value and carrying value of our secured notes payable (excluding our revolving credit facility), the carrying value includes unamortized loan premium and excludes unamortized deferred loan fees:

(In thousands)	June 30, 2020		December 31, 2019
Fair value	$	4,724,042	$	4,678,623
Carrying value	$	4,707,591	$	4,653,264

Ground lease liability: See Note 4 for the details of our ground lease. We estimate the fair value of our ground lease liability by calculating the present value of the future lease payments disclosed in Note 4 using our incremental borrowing rate. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs. The table below presents the estimated fair value and carrying value of our ground lease liability:

(In thousands)	June 30, 2020		December 31, 2019
Fair value	$	14,284	$	12,218
Carrying value	$	10,877	$	10,882

Financial instruments measured at fair value

Derivative instruments: See Note 10 for the details of our derivatives. We present our derivatives in our consolidated balance sheets at fair value, on a gross basis, excluding accrued interest.  We estimate the fair value of our derivative instruments by calculating the credit-adjusted present value of the expected future cash flows of each derivative.  The calculation incorporates the contractual terms of the derivatives, observable market interest rates which we consider to be Level 2 inputs, and credit risk adjustments to reflect the counterparty's as well as our own non-performance risk. Our derivatives are not subject to master netting arrangements.  The table below presents the estimated fair value of our derivatives:

(In thousands)	June 30, 2020		December 31, 2019
Derivative Assets:
Fair value - consolidated derivatives(1)	$	—	$	22,381
Fair value - unconsolidated Fund's derivatives(2)	$	—	$	889
Derivative Liabilities:
Fair value - consolidated derivatives(1)	$	259,293	$	54,616
Fair value - unconsolidated Fund's derivatives(2)	$	543	$	—

____________________________________________________

(1) Consolidated derivatives, which include 100%, not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts in our consolidated balance sheets. The fair values exclude accrued interest which is included in interest payable in the consolidated balance sheets.

(2) The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives. Our pro-rata share of the amounts related to the unconsolidated Fund's derivatives is included in our Investment in unconsolidated Funds in our consolidated balance sheets. See "Guarantees" in Note 16 regarding our unconsolidated Fund's debt and derivatives.

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Segment Reporting

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes.  We operate in two business segments: (i) the acquisition, development, ownership and management of office real estate and (ii) the acquisition, development, ownership and management of multifamily real estate.  The services for our office segment primarily include rental of office space and other tenant services, including parking and storage space rental.  The services for our multifamily segment include rental of apartments and other tenant services, including parking and storage space rental. Asset information by segment is not reported because we do not use this measure to assess performance or make decisions to allocate resources.  Therefore, depreciation and amortization expense is not allocated among segments.  General and administrative expenses and interest expense are not included in segment profit as our internal reporting addresses these items on a corporate level. The table below presents the operating activity of our reportable segments:

(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Office Segment
Total office revenues	$	176,989	$	202,189	$	396,878	$	399,479
Office expenses	(60,301)		(64,308)		(129,965)		(127,757)
Office segment profit	116,688		137,881		266,913		271,722
Multifamily Segment
Total multifamily revenues	30,807		28,345		62,268		55,241
Multifamily expenses	(8,856)		(7,712)		(18,212)		(15,267)
Multifamily segment profit	21,951		20,633		44,056		39,974
Total profit from all segments	$	138,639	$	158,514	$	310,969	$	311,696

The table below presents a reconciliation of the total profit from all segments to net income attributable to common stockholders:

(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Total profit from all segments	$	138,639	$	158,514	$	310,969	$	311,696
General and administrative expenses	(9,863)		(9,159)		(20,198)		(18,991)
Depreciation and amortization	(98,765)		(78,724)		(196,542)		(158,597)
Other income	325		2,892		2,314		5,790
Other expenses	(478)		(1,807)		(1,874)		(3,652)
Income from unconsolidated Funds	(140)		2,207		183		3,758
Interest expense	(35,190)		(34,063)		(70,610)		(67,356)
Net (loss) income	(5,472)		39,860		24,242		72,648
Less: Net loss (income) attributable to noncontrolling interests	7,502		(5,894)		4,711		(9,981)
Net income attributable to common stockholders	$	2,030	$	33,966	$	28,953	$	62,667

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Future Minimum Lease Rental Receipts

6 Months Ended

Jun. 30, 2020

Lessor Disclosure [Abstract]

Future Minimum Lease Rental Receipts

Future Minimum Lease Rental Receipts

We lease space to tenants primarily under non-cancelable operating leases that generally contain provisions for a base rent plus reimbursement of certain operating expenses, and we own fee interests in two parcels of land from which we receive rent under ground leases. The table below presents the future minimum base rentals on our non-cancelable office tenant and ground leases at June 30, 2020:

Twelve months ending June 30:	(In thousands)
2021	$	653,406
2022	567,690
2023	475,211
2024	372,942
2025	281,142
Thereafter	659,833
Total future minimum base rentals(1)	$	3,010,224

___________________________________

(1) Does not include (i) residential leases, which typically have a term of one year or less, (ii) holdover rent, (iii) other types of rent such as storage and antenna rent, (iv) tenant reimbursements, (v) straight- line rent, (vi) amortization/accretion of acquired above/below-market lease intangibles and (vii) percentage rents.  The amounts assume that early termination options held by tenants are not exercised.

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Commitments, Contingencies and Guarantees

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingencies and Guarantees

Commitments, Contingencies and Guarantees

Legal Proceedings

From time to time, we are party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our business.  Excluding ordinary, routine litigation incidental to our business, we are not currently a party to any legal proceedings that we believe would reasonably be expected to have a materially adverse effect on our business, financial condition or results of operations.

Concentration of Risk

We are subject to credit risk with respect to our tenant receivables and deferred rent receivables related to our tenant leases. Our tenants' ability to honor the terms of their respective leases remains dependent upon economic, regulatory and social factors. We seek to minimize our credit risk from our tenant leases by (i) targeting smaller, more affluent tenants, from a diverse mix of industries, (ii) performing credit evaluations of prospective tenants and (iii) obtaining security deposits or letters of credit from our tenants.  For the six months ended June 30, 2020 and 2019, no tenant accounted for more than 10% of our total revenues.  

All of our properties, including the properties of our consolidated JVs and unconsolidated Fund, are located in Los Angeles County, California and Honolulu, Hawaii, and we are therefore susceptible to adverse economic and regulatory developments, as well as natural disasters, in those markets.

We are subject to credit risk with respect to our interest rate swap counterparties that we use to manage the risk associated with our floating rate debt. We do not post or receive collateral with respect to our swap transactions. Our swap contracts do not provide for right of offset between derivative contracts. See Note 10 for the details of our interest rate contracts. We seek to minimize our credit risk by entering into agreements with a variety of counterparties with investment grade ratings.

We have significant cash balances invested in a variety of short-term money market funds that are intended to preserve principal value and maintain a high degree of liquidity while providing current income. These investments are not insured against loss of principal and there is no guarantee that our investments in these funds will be redeemable at par value. We also have significant cash balances in bank accounts with high quality financial institutions with investment grade ratings.  Interest bearing bank accounts at each U.S. banking institution are insured by the FDIC up to $250 thousand.

Asset Retirement Obligations

Conditional asset retirement obligations represent a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement is conditional on a future event that may or may not be within our control.  A liability for a conditional asset retirement obligation must be recorded if the fair value of the obligation can be reasonably estimated.  Environmental site assessments have identified thirty-two buildings in our Consolidated Portfolio which contain asbestos, and would have to be removed in compliance with applicable environmental regulations if these properties are demolished or undergo major renovations.

As of June 30, 2020, the obligations to remove the asbestos from properties which are currently undergoing major renovations, or that we plan to renovate in the future, are not material to our consolidated financial statements. As of June 30, 2020, the obligations to remove the asbestos from our other properties have indeterminable settlement dates, and we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligations.

Development and Other Contracts

In West Los Angeles, we are building a high-rise apartment building with 376 apartments. In downtown Honolulu, we are converting a 25 story, 490,000 square foot office tower into approximately 500 apartments in phases over a number of years as the office space is vacated.

As of June 30, 2020, we had an aggregate remaining contractual commitment for these and other development projects of approximately $201.8 million. As of June 30, 2020, we had an aggregate remaining contractual commitment for repositionings, capital expenditure projects and tenant improvements of approximately $11.4 million.

Guarantees

We have made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve- outs for our unconsolidated Fund's debt. We have also guaranteed the related swap. Our Fund has agreed to indemnify us for any amounts that we would be required to pay under these agreements. As of June 30, 2020, all of the obligations under the related debt and swap agreements have been performed in accordance with the terms of those agreements. The table below summarizes our Fund's debt as of June 30, 2020. The amounts reflect 100%, not our pro-rata share, of the amounts related to our Fund:

Fund(1)	Loan Maturity Date	Principal Balance (In Millions)		Variable Interest Rate	Swap Fixed Interest Rate	Swap Maturity Date
Partnership X(2)(3)	3/1/2023	$	110.0	LIBOR + 1.40%	2.30%	3/1/2021

___________________________________________________

(1)See Note 6 for more information regarding our unconsolidated Fund.

(2)Floating rate term loan, swapped to fixed, which is secured by two properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of June 30, 2020, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $0.7 million.

(3)Loan agreement includes a zero-percent LIBOR floor. The corresponding swap does not include such a floor.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements are the consolidated financial statements of Douglas Emmett, Inc. and its subsidiaries, including our Operating Partnership and our consolidated JVs.  All significant intercompany balances and transactions have been eliminated in our consolidated financial statements.

We consolidate entities in which we are considered to be the primary beneficiary of a VIE or have a majority of the voting interest of the entity. We are deemed to be the primary beneficiary of a VIE when we have (i) the power to direct the activities of that VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. We do not consolidate entities in which the other parties have substantive kick-out rights to remove our power to direct the activities, most significantly impacting the economic performance, of that VIE. In determining whether we are the primary beneficiary, we consider factors such as ownership interest, management representation, authority to control decisions, and contractual and substantive participating rights of each party.

We consolidate our Operating Partnership through which we conduct substantially all of our business, and own, directly and through subsidiaries, substantially all of our assets, and are obligated to repay substantially all of our liabilities, including $3.11 billion of consolidated debt. See Note 8. We also consolidate four JVs. As of June 30, 2020, these consolidated entities had aggregate total consolidated assets of $9.27 billion (of which $8.88 billion related to investment in real estate), aggregate total consolidated liabilities of $5.23 billion (of which $4.67 billion related to debt), and aggregate total consolidated equity of $4.04 billion (of which $1.56 billion related to noncontrolling interests).

The accompanying unaudited interim consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC in conformity with US GAAP as established by the FASB in the ASC. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in conformity with US GAAP may have been condensed or omitted pursuant to SEC rules and regulations, although we believe that the disclosures are adequate to make their presentation not misleading. The accompanying unaudited interim consolidated financial statements include, in our opinion, all adjustments, consisting of normal recurring adjustments, necessary to present fairly the financial information set forth therein. The results of operations for the interim periods are not necessarily indicative of the results that may be expected for the year ending December 31, 2020. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements in our 2019 Annual Report on Form 10-K and the notes thereto. Any references to the number or class of properties, square footage, per square footage amounts, apartment units and geography, are outside the scope of our independent registered public accounting firm’s review of our consolidated financial statements in accordance with the standards of the PCAOB.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make certain estimates that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Revenue Recognition

Revenue Recognition

Rental revenues and tenant recoveries

We account for our rental revenues and tenant recoveries in accordance with Topic 842 "Leases". Rental revenues and tenant recoveries are included in: (i) Rental revenues and tenant recoveries under Office rental, and (ii) Rental revenues under Multifamily rental, in our consolidated statements of operations.

In accordance with Topic 842, we perform an assessment as to whether or not substantially all of the amounts due under a tenant’s lease agreement is deemed probable of collection. This assessment involves using a methodology that requires judgment and estimates about matters that are uncertain at the time the estimates are made, including tenant specific factors, specific industry conditions, and general economic trends and conditions.

For leases where we have concluded it is probable that we will collect substantially all the lease payments due under those leases, we continue to record lease income on a straight-line basis over the lease term. For leases where we have concluded that it is not probable that we will collect substantially all the lease payments due under those leases, we limit the lease income to the lesser of the income recognized on a straight-line basis or cash basis. If our conclusion of collectibility changes, we will record the difference between the lease income that would have been recognized on a straight-line basis and cash basis as a current-period adjustment to rental revenues and tenant recoveries. We write-off tenant receivables and deferred rent receivables as a charge against rental revenues and tenant recoveries in the period we conclude that substantially all of the lease payments are not probable of collection. If we subsequently collect amounts that were previously written off then the amounts collected are recorded as an increase to our rental revenues and tenant recoveries.

Charges for uncollectible amounts, related to tenant receivables and deferred rent receivables, which for the three and six months ended June 30, 2020 were primarily due to the impact of the COVID-19 pandemic, reduced our rental revenues and tenant recoveries by $29.8 million and $1.0 million for the three months ended June 30, 2020 and 2019, and $35.0 million and $3.4 million for the six months ended June 30, 2020 and 2019, respectively.

Office parking revenues

We account for our office parking revenues in accordance with ASC 606 "Revenue from Contracts with Customers". Office parking revenues are included in Parking and other income under Office rental in our consolidated statements of operations. Our lease contracts generally make a specified number of parking spaces available to the tenant, and we bill and recognize parking revenues on a monthly basis in accordance with the lease agreements, generally using the monthly parking rates in effect at the time of billing. Office parking revenues were $14.7 million and $26.9 million for the three months ended June 30, 2020 and 2019, and $44.9 million and $53.3 million for the six months ended June 30, 2020 and 2019, respectively. Office parking receivables were $0.4 million and $1.3 million as of June 30, 2020 and December 31, 2019, respectively, and are included in Tenant receivables in our consolidated balance sheets.

Income Taxes

Income Taxes

We have elected to be taxed as a REIT under the Code. Provided that we qualify for taxation as a REIT, we are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. We are subject to corporate-level tax on the earnings that we derive through our TRS.

New Accounting Pronouncements

New Accounting Pronouncements

Changes to US GAAP are implemented by the FASB in the form of ASUs.  We consider the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not issued any other ASUs that we expect to be applicable and have a material impact on our consolidated financial statements.

ASUs Adopted

ASU 2016-13 (Topic 326 - "Financial Instruments-Credit Losses")

In June 2016, the FASB issued ASU No. 2016-13, "Measurement of Credit Losses on Financial Instruments", which amends "Financial Instruments-Credit Losses" (Topic 326). The ASU provides guidance for measuring credit losses on financial instruments. The ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those years, which for us was the first quarter of 2020. The amendments in the ASU should be applied on a modified-retrospective basis. The ASU impacts our measurement of credit losses for our Office parking receivables, which were $0.4 million and $1.3 million as of June 30, 2020 and December 31, 2019, respectively, and are included in Tenant receivables in our consolidated balance sheets. We adopted the ASU in the first quarter of 2020 and it did not have a material impact on our consolidated financial statements.

ASU 2020-04 (Topic 848 - "Reference Rate Reform")

In March 2020, the FASB issued ASU No. 2020-04, "Reference Rate Reform", which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The practical expedients are optional and may be elected over time as reference rate reform activities occur. We elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients maintains the presentation of derivatives consistent with past presentation. We will continue to evaluate the impact of the ASU and may apply other elections, as applicable, as additional changes in the market occur. Our election to apply the hedge accounting expedients in the first quarter of 2020 did not have a material impact on our consolidated financial statements.

Other Pronouncements

FASB COVID-19 Lease Modification Accounting Relief

In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under the existing lease accounting guidance, we would be required to determine on a lease-by-lease basis if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows us, if certain criteria are met, to bypass the lease-by-lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. We will avail ourselves of the election to avoid performing a lease-by-lease analysis. The Lease Modification Q&A did not have material impact on our consolidated financial statements; however, its impact on our future consolidated financial statements is dependent upon the extent of any lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by us at the time of entering into such concessions.

FASB COVID-19 Cash Flow Hedge Accounting Relief

In April 2020, the FASB staff issued a question and answer document (the “Cash Flow Hedge Accounting Q&A”) on the application of cash flow hedge accounting guidance to cash flow hedges impacted by the COVID-19 pandemic. The Cash Flow Hedge Accounting Q&A clarifies that: (i) when cash flow hedge accounting has been discontinued, the delays in the timing of the forecasted transactions related to the impact of the COVID-19 pandemic may be considered rare cases caused by extenuating circumstances outside the control or influence of an entity, thereby allowing amounts deferred in AOCI to remain in AOCI until the forecasted transaction affects earnings, and (ii) missed forecasts, related to the effects of the COVID-19 pandemic, do not need to be considered when determining whether the entity has exhibited a pattern of missing forecasts that would call into question the entity’s ability to accurately predict forecasted transactions and the propriety of using cash flow hedge accounting in the future for similar transactions. The Cash Flow Hedge Accounting Q&A did not have material impact on our consolidated financial statements; however, its impact on our future consolidated financial statements is dependent upon our cash flow hedge forecasted transactions being impacted by the COVID-19 pandemic in future periods.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Our estimates of the fair value of financial instruments were determined using available market information and widely used valuation methods.  Considerable judgment is necessary to interpret market data and determine an estimated fair value.  The use of different market assumptions or valuation methods may have a material effect on the estimated fair values. The FASB fair value framework hierarchy distinguishes between assumptions based on market data obtained from sources independent of the reporting entity, and the reporting entity’s own assumptions about market-based inputs.  The hierarchy is as follows:

Level 1 - inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities.  

Level 2 - inputs are observable either directly or indirectly for similar assets and liabilities in active markets.  

Level 3 - inputs are unobservable assumptions generated by the reporting entity

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Overview (Tables)

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Real Estate Properties

As of June 30, 2020, our portfolio (not including two parcels of land from which we receive rent under ground leases), consisted of the following properties (including ancillary retail space):

	Consolidated Portfolio	Total Portfolio
Office
Wholly-owned properties	53	53
Consolidated JV properties	17	17
Unconsolidated Fund properties	—	2
	70	72
Multifamily
Wholly-owned properties	11	11
Consolidated JV properties	1	1
	12	12
Total	82	84

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Investment in Real Estate (Tables)

6 Months Ended

Jun. 30, 2020

Asset Acquisition [Abstract]

Schedule of Purchase Price Allocation for Acquisition

The table below summarizes the purchase price allocation for the acquisition. The contract and purchase prices differ due to prorations and similar adjustments:

(In thousands, except number of units)	The Glendon
Submarket	West Los Angeles
Acquisition date	June 7, 2019
Contract price	$	365,100
Number of multifamily units	350
Retail square footage	50
Investment in real estate:
Land	$	32,773
Buildings and improvements	333,624
Tenant improvements and lease intangibles	2,301
Acquired above- and below-market leases, net	(2,114)
Net assets and liabilities acquired	$	366,584

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Ground Lease (Tables)

6 Months Ended

Jun. 30, 2020

Lessee Disclosure [Abstract]

Schedule of Future Minimum Ground Lease Payments

The table below, which assumes that the ground rent payments will continue to be $733 thousand per year after February 28, 2029, presents the future minimum ground lease payments as of June 30, 2020:

Twelve months ending June 30:	(In thousands)
2021	$	733
2022	733
2023	733
2024	733
2025	733
Thereafter	45,078
Total future minimum lease payments	$	48,743

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Acquired Lease Intangibles (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Acquired Lease Intangibles

Summary of our Acquired Lease Intangibles

(In thousands)	June 30, 2020		December 31, 2019
Above-market tenant leases	$	7,045	$	7,220
Above-market tenant leases - accumulated amortization	(2,228)		(1,741)
Above-market ground lease where we are the lessor	1,152		1,152
Above-market ground lease - accumulated amortization	(233)		(224)
Acquired lease intangible assets, net	$	5,736	$	6,407
Below-market tenant leases	$	98,979	$	102,583
Below-market tenant leases - accumulated accretion	(55,853)		(50,216)
Acquired lease intangible liabilities, net	$	43,126	$	52,367

Schedule of Net Amortization or Accretion of Above- and Below-Market Leases

The table below summarizes the net amortization/accretion related to our above- and below-market leases:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Net accretion of above- and below-market tenant lease assets and liabilities(1)	$	4,320	$	4,400	$	8,579	$	8,524
Amortization of an above-market ground lease asset(2)	(5)		(4)		(8)		(8)
Total	$	4,315	$	4,396	$	8,571	$	8,516

______________________________________________

(1) Recorded as a net increase to office and multifamily rental revenues.

(2) Recorded as a decrease to office parking and other income.

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Investments in Unconsolidated Funds (Tables)

6 Months Ended

Jun. 30, 2020

Real Estate Investments, Net [Abstract]

Summary of Statement of Operations for Investments in Unconsolidated Funds and Cash Received from Funds

The table below presents cash distributions we received from our Funds:

	Six Months Ended June 30,
(In thousands)	2020		2019
Operating distributions received(1)	$	394	$	3,756
Capital distributions received(1)	548		3,869
Total distributions received(1)	$	942	$	7,625

_________________________________________________

(1) The distributions are not directly comparable to the prior period; the distributions during the six months ended June 30, 2020 reflect distributions only from Partnership X, whereas the distributions during the six months ended June 30, 2019 reflect distributions from the Opportunity Fund, Fund X and Partnership X.

The tables below present selected financial information for the Funds.  The amounts presented reflect 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value:

(In thousands)	June 30, 2020		December 31, 2019
Total assets(1)	$	134,245	$	136,479
Total liabilities(1)	$	113,592	$	113,330
Total equity(1)	$	20,653	$	23,149

______________________________________________

(1) The balances reflect the financial position of Partnership X.

	Six Months Ended June 30,
(In thousands)	2020		2019
Total revenues(1)	$	7,597	$	41,174
Operating income(1)	$	1,686	$	11,961
Net income(1)	$	372	$	3,815

______________________________________________

(1) The results of operations are not directly comparable to the prior period; the balances for the six months ended June 30, 2020 reflect only the operations of Partnership X, whereas the balances for the six months ended June 30, 2019 reflect the combined operations of the Opportunity Fund, Fund X and Partnership X.

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Other Assets (Tables)

6 Months Ended

Jun. 30, 2020

Other Assets [Abstract]

Schedule of Other Assets

(In thousands)	June 30, 2020		December 31, 2019
Restricted cash	$	121	$	121
Prepaid expenses	3,632		8,711
Other indefinite-lived intangibles	1,988		1,988
Furniture, fixtures and equipment, net	2,532		2,368
Other	5,613		3,233
Total other assets	$	13,886	$	16,421

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Secured Notes Payable and Revolving Credit Facility, Net (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of Secured Notes Payable and Revolving Credit Facility

Description	Maturity Date(1)	Principal Balance as of June 30, 2020		Principal Balance as of December 31, 2019		Variable Interest Rate	Fixed Interest Rate(2)	Swap Maturity Date
		(In thousands)
Consolidated Wholly Owned Subsidiaries
Term loan(3)	1/1/2024	$	300,000	$	300,000	LIBOR + 1.55%	3.46%	1/1/2022
Term loan(3)	3/3/2025	335,000		335,000		LIBOR + 1.30%	3.84%	3/1/2023
Fannie Mae loan(3)	4/1/2025	102,400		102,400		LIBOR + 1.25%	2.76%	3/1/2023
Term loan(3)	8/15/2026	415,000		415,000		LIBOR + 1.10%	3.07%	8/1/2025
Term loan(3)	9/19/2026	400,000		400,000		LIBOR + 1.15%	2.44%	9/1/2024
Term loan(3)(4)	9/26/2026	200,000		200,000		LIBOR + 1.20%	2.77%	10/1/2024
Term loan(3)(5)	11/1/2026	400,000		400,000		LIBOR + 1.15%	2.18%	10/1/2024
Fannie Mae loan(3)	6/1/2027	550,000		550,000		LIBOR + 1.37%	3.16%	6/1/2022
Fannie Mae loan(3)	6/1/2029	255,000		255,000		LIBOR + 0.98%	3.26%	6/1/2027
Fannie Mae loan(3)(6)	6/1/2029	125,000		125,000		LIBOR + 0.98%	2.55%	6/1/2027
Term loan(7)	6/1/2038	30,492		30,864		N/A	4.55%	N/A
Revolving credit facility(8)	8/21/2023	—		—		LIBOR + 1.15%	N/A	N/A
Total Wholly Owned Subsidiary Debt		3,112,892		3,113,264
Consolidated JVs
Term loan(9)	—	—		400,000		—	—	—
Term loan(3)	2/28/2023	580,000		580,000		LIBOR + 1.40%	2.37%	3/1/2021
Term loan(3)	12/19/2024	400,000		400,000		LIBOR + 1.30%	3.47%	1/1/2023
Term loan(3)(10)	5/15/2027	450,000		—		LIBOR + 1.35%	3.04%	4/1/2025
Term loan(3)	6/1/2029	160,000		160,000		LIBOR + 0.98%	3.25%	7/1/2027
Total Consolidated Debt(11)		4,702,892		4,653,264
Unamortized loan premium, net		4,699		6,741
Unamortized deferred loan costs, net		(40,988)		(40,947)
Total Consolidated Debt, net		$	4,666,603	$	4,619,058

_______________________________________________________________________

Except as noted below, our loans and revolving credit facility: (i) are non-recourse, (ii) are secured by separate collateral pools consisting of one or more properties, (iii) require interest-only monthly payments with the outstanding principal due upon maturity, and (iv) contain certain financial covenants which could require us to deposit excess cash flow with the lender under certain circumstances unless we (at our option) either provide a guarantee or additional collateral or pay down the loan within certain parameters set forth in the loan documents.  Certain loans with maturity date extensions require us to meet minimum financial thresholds in order to exercise those extensions.

(1)Maturity dates include the effect of extension options.

(2)Effective rate as of June 30, 2020. Includes the effect of interest rate swaps and excludes the effect of prepaid loan fees. See Note 10 for details of our interest rate swaps. See below for details of our loan costs.

(3)The loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor.

(4)Effective rate will decrease to 2.36% on July 1, 2020.

(5)Effective rate will increase to 2.31% on July 1, 2021.

(6)Effective rate will increase to 3.25% on December 1, 2020.

(7)Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule.

(8)$400 million revolving credit facility. Unused commitment fees range from 0.10% to 0.15%. The loan agreement includes a zero-percent LIBOR floor.

(9)We paid this loan off during the second quarter.

(10)We closed this loan during the second quarter. The effective rate will decrease to 2.26% on July 1, 2022

(11)The table does not include our unconsolidated Fund's loan - see Note 16. See Note 13 for our fair value disclosures.

Debt Statistics

The table below summarizes our consolidated fixed and floating rate debt:

(In thousands)	Principal Balance as of June 30, 2020		Principal Balance as of December 31, 2019
Aggregate swapped to fixed rate loans	$	4,672,400	$	4,622,400
Aggregate fixed rate loans	30,492		30,864
Total Debt	$	4,702,892	$	4,653,264

The table below summarizes certain consolidated debt statistics as of June 30, 2020:

Statistics for consolidated loans with interest fixed under the terms of the loan or a swap
Principal balance (in billions)	$4.70
Weighted average remaining life (including extension options)	5.9 years
Weighted average remaining fixed interest period	3.6 years
Weighted average annual interest rate	3.02%

Schedule of Future Minimum Principal Payments Due on Secured Notes Payable and Revolving Credit Facility

At June 30, 2020, the minimum future principal payments due on our consolidated secured notes payable and revolving credit facility were as follows:

Twelve months ending June 30:	Including Maturity Extension Options(1)
	(In thousands)
2021	$	769
2022	805
2023	580,842
2024	300,881
2025	838,322
Thereafter	2,981,273
Total future principal payments	$	4,702,892

____________________________________________

(1)  Some of our loan agreements require that we meet certain minimum financial thresholds to be able to extend the loan maturity.

Schedule of Loan Costs and Amortization of Deferred Loan Costs

The table below presents loan premium and loan costs, which are included in Interest expense in our consolidated statements of operations:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Loan premium amortized and written off	$	(1,828)	$	(51)	$	(2,043)	$	(102)
Deferred loan costs amortized and written off	1,915		1,887		3,791		3,804
Loan costs expensed	965		576		965		576
Total	$	1,052	$	2,412	$	2,713	$	4,278

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Interest Payable, Accounts Payable and Deferred Revenue (Tables)

6 Months Ended

Jun. 30, 2020

Accounts Payable and Accrued Liabilities [Abstract]

Schedule of Interest Payable, Accounts Payable and Deferred Revenue

(In thousands)	June 30, 2020		December 31, 2019
Interest payable	$	11,732	$	11,707
Accounts payable and accrued liabilities	79,731		66,437
Deferred revenue	48,144		53,266
Total interest payable, accounts payable and deferred revenue	$	139,607	$	131,410

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Derivative Contracts (Tables)

6 Months Ended

Jun. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Swap Derivatives

As of June 30, 2020, our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Fund, were designated as cash flow hedges:

	Number of Interest Rate Swaps	Notional (In thousands)
Consolidated derivatives(1)(2)(4)(5)	45	$	5,517,400
Unconsolidated Fund's derivatives(3)(4)(5)	1	$	110,000

___________________________________________________

(1)The notional amount reflects 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2)The notional amount includes: (a) swaps with a total initial notional amount of $120.0 million, that will increase to $1.18 billion in the future to replace existing swaps as they expire, and (b) forward swaps (swaps effective after June 30, 2020) with a total initial notional of $845.0 million, that will increase to $1.03 billion in the future to replace existing swaps as they expire.

(3)The notional amount reflects 100%, not our pro-rata share, of our unconsolidated Fund's derivatives.

(4)Our derivative contracts do not provide for right of offset between derivative contracts.

(5)See Note 13 for our derivative fair value disclosures.

Schedule of Fair Value of Interest Rate Swap Contract Liabilities

The fair value of our interest rate swap contract liabilities, including accrued interest and excluding credit risk adjustments, was as follows:

(In thousands)	June 30, 2020		December 31, 2019
Consolidated derivatives(1)	$	271,726	$	56,896
Unconsolidated Fund's derivatives(2)	$	613	$	—

___________________________________________________

(1)The amounts reflect 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2)The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives.

Schedule of Fair Value of Interest Rate Swap Contract Assets

The fair value of our interest rate swap contract assets, including accrued interest and excluding credit risk adjustments, was as follows:

(In thousands)	June 30, 2020		December 31, 2019
Consolidated derivatives(1)	$	—	$	23,275
Unconsolidated Fund's derivatives(2)	$	—	$	963

___________________________________________________

(1)The amounts reflect 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2)The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives.

Effect of Derivative Instruments on Consolidated Statements of Operations

The table below presents the effect of our derivatives on our AOCI and the consolidated statements of operations:

(In thousands)	Six Months Ended June 30,
	2020		2019
Derivatives Designated as Cash Flow Hedges:
Consolidated derivatives:
Loss recorded in AOCI before reclassifications(1)	$	(241,189)	$	(89,483)
Loss (gain) reclassified from AOCI to Interest Expense(1)	$	13,373	$	(17,284)
Interest Expense presented in the consolidated statements of operations	$	(70,610)	$	(67,356)
Unconsolidated Funds' derivatives (our share)(2):
Loss recorded in AOCI before reclassifications(1)	$	(403)	$	(6,928)
Gain reclassified from AOCI to Income from unconsolidated Funds(1)	$	(35)	$	(1,226)
Income from unconsolidated Funds presented in the consolidated statements of operations	$	183	$	3,758

___________________________________________________

(1)See Note 11 for our AOCI reconciliation.

(2)We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

Schedule of Future Reclassifications from AOCI

At June 30, 2020, our estimate of the AOCI related to derivatives designated as cash flow hedges that will be reclassified to earnings during the next twelve months as interest rate swap payments are made is as follows:

	(In thousands)
Consolidated derivatives:
Losses to be reclassified from AOCI to Interest Expense	$	(71,439)
Unconsolidated Fund's derivative (our share)(1):
Losses to be reclassified from AOCI to Income (loss) from unconsolidated Funds	$	(182)

_________________________________________

(1) We calculate our share by multiplying the total amount for the Fund by our equity interest in the Fund

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Equity (Tables)

6 Months Ended

Jun. 30, 2020

Stockholders' Equity Note [Abstract]

Schedule of Net Income Attributable to Common Stockholders and Transfers (to) from Noncontrolling Interests

The table below presents the effect on our equity from net income attributable to common stockholders and changes in our ownership interest in our Operating Partnership:

	Six Months Ended June 30,
(In thousands)	2020		2019
Net income attributable to common stockholders	$	28,953	$	62,667
Transfers from noncontrolling interests:
Exchange of OP Units with noncontrolling interests	90		1,223
Repurchase of OP Units from noncontrolling interests	(4)		(291)
Net transfers from noncontrolling interests	86		932
Change from net income attributable to common stockholders and transfers from noncontrolling interests	$	29,039	$	63,599

Schedule of Accumulated Other Comprehensive Income (Loss)

The table below presents a reconciliation of our AOCI, which consists solely of adjustments related to derivatives designated as cash flow hedges:

	Six Months Ended June 30,
(In thousands)	2020		2019
Beginning balance	$	(17,462)	$	53,944
Consolidated derivatives:
Other comprehensive loss before reclassifications	(241,189)		(89,483)
Reclassification of loss (gain) from AOCI to Interest Expense	13,373		(17,284)
Unconsolidated Funds' derivatives (our share)(2):
Other comprehensive loss before reclassifications	(403)		(6,928)
Reclassification of gain from AOCI to Income (loss) from unconsolidated Funds	(35)		(1,226)
Net current period OCI	(228,254)		(114,921)
OCI attributable to noncontrolling interests	66,245		35,124
OCI attributable to common stockholders	(162,009)		(79,797)
Ending balance	$	(179,471)	$	(25,853)

___________________________________________________

(1)See Note 10 for the details of our derivatives and Note 13 for our derivative fair value disclosures.

(2)We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

Schedule of Stock-based Compensation Expense

The table below presents our stock-based compensation expense:

	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2020		2019		2020		2019
Stock-based compensation expense, net	$	2,812	$	2,383	$	5,753	$	5,013
Capitalized stock-based compensation	$	751	$	338	$	1,610	$	1,008

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EPS (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The table below presents the calculation of basic and diluted EPS:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Numerator (In thousands):
Net income attributable to common stockholders	$	2,030	$	33,966	$	28,953	$	62,667
Allocation to participating securities: Unvested LTIP Units	(206)		(139)		(413)		(265)
Net income attributable to common stockholders - basic and diluted	$	1,824	$	33,827	$	28,540	$	62,402
Denominator (In thousands):
Weighted average shares of common stock outstanding - basic and diluted(2)	175,375		172,498		175,374		171,366
Net income per common share - basic and diluted	$	0.01	$	0.20	$	0.16	$	0.36

____________________________________________________

(1) Outstanding OP Units and vested LTIP Units are not included in the denominator in calculating diluted EPS, even though they may be exchanged under certain conditions for common stock on a one-for-one basis, because their associated net income (equal on a per unit basis to the Net income per common share - diluted) was already deducted in calculating Net income attributable to common stockholders. Accordingly, any exchange would not have any effect on diluted EPS. The table below presents the OP Units and vested LTIP Units outstanding for the respective periods:

	Three Months Ended June 30,		Six Months Ended June 30,
(In thousands)	2020	2019	2020	2019
OP Units	28,293	26,283	28,294	26,311
Vested LTIP Units	808	1,830	803	1,830

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Estimated Fair Value and Carrying Value of Liabilities

The table below presents the estimated fair value and carrying value of our secured notes payable (excluding our revolving credit facility), the carrying value includes unamortized loan premium and excludes unamortized deferred loan fees:

(In thousands)	June 30, 2020		December 31, 2019
Fair value	$	4,724,042	$	4,678,623
Carrying value	$	4,707,591	$	4,653,264

The table below presents the estimated fair value and carrying value of our ground lease liability:

(In thousands)	June 30, 2020		December 31, 2019
Fair value	$	14,284	$	12,218
Carrying value	$	10,877	$	10,882

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The table below presents the estimated fair value of our derivatives:

(In thousands)	June 30, 2020		December 31, 2019
Derivative Assets:
Fair value - consolidated derivatives(1)	$	—	$	22,381
Fair value - unconsolidated Fund's derivatives(2)	$	—	$	889
Derivative Liabilities:
Fair value - consolidated derivatives(1)	$	259,293	$	54,616
Fair value - unconsolidated Fund's derivatives(2)	$	543	$	—

____________________________________________________

(1) Consolidated derivatives, which include 100%, not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts in our consolidated balance sheets. The fair values exclude accrued interest which is included in interest payable in the consolidated balance sheets.

(2) The amounts reflect 100%, not our pro-rata share, of our unconsolidated Fund's derivatives. Our pro-rata share of the amounts related to the unconsolidated Fund's derivatives is included in our Investment in unconsolidated Funds in our consolidated balance sheets. See "Guarantees" in Note 16 regarding our unconsolidated Fund's debt and derivatives.

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Summary of Operating Activity of Reportable Segments

The table below presents the operating activity of our reportable segments:

(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Office Segment
Total office revenues	$	176,989	$	202,189	$	396,878	$	399,479
Office expenses	(60,301)		(64,308)		(129,965)		(127,757)
Office segment profit	116,688		137,881		266,913		271,722
Multifamily Segment
Total multifamily revenues	30,807		28,345		62,268		55,241
Multifamily expenses	(8,856)		(7,712)		(18,212)		(15,267)
Multifamily segment profit	21,951		20,633		44,056		39,974
Total profit from all segments	$	138,639	$	158,514	$	310,969	$	311,696

Reconciliation of Segment Profit to Net Income Attributable to Common Stockholders

The table below presents a reconciliation of the total profit from all segments to net income attributable to common stockholders:

(In thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Total profit from all segments	$	138,639	$	158,514	$	310,969	$	311,696
General and administrative expenses	(9,863)		(9,159)		(20,198)		(18,991)
Depreciation and amortization	(98,765)		(78,724)		(196,542)		(158,597)
Other income	325		2,892		2,314		5,790
Other expenses	(478)		(1,807)		(1,874)		(3,652)
Income from unconsolidated Funds	(140)		2,207		183		3,758
Interest expense	(35,190)		(34,063)		(70,610)		(67,356)
Net (loss) income	(5,472)		39,860		24,242		72,648
Less: Net loss (income) attributable to noncontrolling interests	7,502		(5,894)		4,711		(9,981)
Net income attributable to common stockholders	$	2,030	$	33,966	$	28,953	$	62,667

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Future Minimum Lease Rental Receipts (Tables)

6 Months Ended

Jun. 30, 2020

Lessor Disclosure [Abstract]

Schedule of Future Minimum Base Rentals on Non-Cancelable Office and Ground Operating Leases

The table below presents the future minimum base rentals on our non-cancelable office tenant and ground leases at June 30, 2020:

Twelve months ending June 30:	(In thousands)
2021	$	653,406
2022	567,690
2023	475,211
2024	372,942
2025	281,142
Thereafter	659,833
Total future minimum base rentals(1)	$	3,010,224

___________________________________

(1) Does not include (i) residential leases, which typically have a term of one year or less, (ii) holdover rent, (iii) other types of rent such as storage and antenna rent, (iv) tenant reimbursements, (v) straight- line rent, (vi) amortization/accretion of acquired above/below-market lease intangibles and (vii) percentage rents.  The amounts assume that early termination options held by tenants are not exercised.

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Commitments, Contingencies and Guarantees (Tables)

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of Debt Related to Unconsolidated Funds

The table below summarizes our Fund's debt as of June 30, 2020. The amounts reflect 100%, not our pro-rata share, of the amounts related to our Fund:

Fund(1)	Loan Maturity Date	Principal Balance (In Millions)		Variable Interest Rate	Swap Fixed Interest Rate	Swap Maturity Date
Partnership X(2)(3)	3/1/2023	$	110.0	LIBOR + 1.40%	2.30%	3/1/2021

___________________________________________________

(1)See Note 6 for more information regarding our unconsolidated Fund.

(2)Floating rate term loan, swapped to fixed, which is secured by two properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of June 30, 2020, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $0.7 million.

(3)Loan agreement includes a zero-percent LIBOR floor. The corresponding swap does not include such a floor.

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Overview - Narrative (Details) $ in Thousands, ft² in Millions	Jun. 30, 2020 USD ($) ft² land_parcel joint_venture unit	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($) ft²	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Real Estate Properties [Line Items]
Consolidated debt	$ 4,702,892		$ 4,653,264
Number of joint ventures consolidated | joint_venture	4
Consolidated assets	$ 9,271,377		9,349,301
Consolidated investment in real estate	8,884,939		8,960,218
Consolidated liabilities	5,227,038		4,978,367
Consolidated liabilities related to debt	4,666,603		4,619,058
Consolidated equity	4,044,339	$ 4,129,707	4,370,934	$ 4,052,360	$ 3,788,182	$ 3,848,430
Consolidated equity related to noncontrolling interest	$ 1,563,362		1,658,862
Wholly owned and Consolidated properties
Real Estate Properties [Line Items]
Number of land parcels subject to ground lease | land_parcel	2
Wholly owned and Consolidated properties | Office
Real Estate Properties [Line Items]
Area of real estate portfolio (sq ft) | ft²	17.9
Wholly owned and Consolidated properties | Multifamily
Real Estate Properties [Line Items]
Number of multifamily apartment units | unit	4,209
Unconsolidated Fund properties | Office
Real Estate Properties [Line Items]
Area of real estate portfolio (sq ft) | ft²	0.4			1.8
Subsidiaries
Real Estate Properties [Line Items]
Consolidated debt	$ 3,112,892		$ 3,113,264
Consolidated entities
Real Estate Properties [Line Items]
Consolidated assets	9,270,000
Consolidated investment in real estate	8,880,000
Consolidated liabilities	5,230,000
Consolidated liabilities related to debt	4,670,000
Consolidated equity	4,040,000
Consolidated equity related to noncontrolling interest	$ 1,560,000

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Overview - Schedule of Properties Portfolio (Details) - property	Jun. 30, 2020	Jun. 30, 2019
Real Estate Properties [Line Items]
Number of properties	84
Office
Real Estate Properties [Line Items]
Number of properties	72
Office | Wholly-owned properties
Real Estate Properties [Line Items]
Number of properties	53
Office | Consolidated JV properties
Real Estate Properties [Line Items]
Number of properties	17
Office | Unconsolidated Fund properties
Real Estate Properties [Line Items]
Number of properties	2	8
Multifamily
Real Estate Properties [Line Items]
Number of properties	12
Multifamily | Wholly-owned properties
Real Estate Properties [Line Items]
Number of properties	11
Multifamily | Consolidated JV properties
Real Estate Properties [Line Items]
Number of properties	1
Consolidated Portfolio
Real Estate Properties [Line Items]
Number of properties	82
Consolidated Portfolio | Office
Real Estate Properties [Line Items]
Number of properties	70
Consolidated Portfolio | Office | Wholly-owned properties
Real Estate Properties [Line Items]
Number of properties	53
Consolidated Portfolio | Office | Consolidated JV properties
Real Estate Properties [Line Items]
Number of properties	17
Consolidated Portfolio | Office | Unconsolidated Fund properties
Real Estate Properties [Line Items]
Number of properties	0
Consolidated Portfolio | Multifamily
Real Estate Properties [Line Items]
Number of properties	12
Consolidated Portfolio | Multifamily | Wholly-owned properties
Real Estate Properties [Line Items]
Number of properties	11
Consolidated Portfolio | Multifamily | Consolidated JV properties
Real Estate Properties [Line Items]
Number of properties	1

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Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Accounting Policies [Abstract]
Charge for uncollectible amounts	$ 29.8	$ 1.0	$ 35.0	$ 3.4
Office parking revenue	14.7	$ 26.9	44.9	$ 53.3
Office parking receivables	$ 0.4		$ 0.4		$ 1.3
Revenue type	us-gaap:ParkingMember	us-gaap:ParkingMember	us-gaap:ParkingMember	us-gaap:ParkingMember

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Investment in Real Estate - Purchase Price Allocation for Acquisitions (Details) ft² in Thousands, $ in Thousands	Jun. 28, 2019	Jun. 07, 2019 USD ($) ft² unit
Schedule Of Asset Acquisitions [Line Items]
Contract price		$ 365,100
The Glendon
Schedule Of Asset Acquisitions [Line Items]
Contract price		$ 365,100
Number of multifamily units | unit		350
Square footage (sq ft) | ft²		50
Investment in real estate:
Tenant improvements and lease intangibles		$ 2,301
Acquired above- and below-market leases, net		(2,114)
Net assets and liabilities acquired		366,584
The Glendon | Land
Investment in real estate:
Land, Buildings and improvements		32,773
The Glendon | Buildings and improvements
Investment in real estate:
Land, Buildings and improvements		$ 333,624
Consolidated JV
Schedule Of Asset Acquisitions [Line Items]
Capital interest in consolidated JV (percent)	20.00%
Consolidated JV | The Glendon
Schedule Of Asset Acquisitions [Line Items]
Capital interest in consolidated JV (percent)	20.00%

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Ground Lease - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Lessee Disclosure [Abstract]
Fixed rent payments due per year on ground lease	$ 733		$ 733
Ground lease right-of-use asset	7,475		7,475		$ 7,479
Ground lease liability	10,877		10,877		$ 10,882
Ground rent expense	$ 183	$ 183	$ 365	$ 363

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Ground Lease - Future Minimum Ground Lease Payments (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Future minimum ground lease payments for twelve months ending June 30:
2021	$ 733
2022	733
2023	733
2024	733
2025	733
Thereafter	45,078
Total future minimum lease payments	$ 48,743

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Acquired Lease Intangibles - Summary of Acquired Lease Intangibles (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired lease intangible assets, net	$ 5,736	$ 6,407
Acquired lease intangible liabilities, net	43,126	52,367
Above Market Tenant Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Off-market lease, assets	7,045	7,220
Accumulated amortization	(2,228)	(1,741)
Above Market Ground Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Off-market lease, assets	1,152	1,152
Accumulated amortization	(233)	(224)
Below Market Tenant Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Below-market tenant leases	98,979	102,583
Below-market tenant leases - accumulated accretion	$ (55,853)	$ (50,216)

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Acquired Lease Intangibles - Impact on Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization/accretion of above/below-market leases	$ 4,315	$ 4,396	$ 8,571	$ 8,516
Rental revenues | Tenant Lease
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization/accretion of above/below-market leases	4,320	4,400	8,579	8,524
Office parking and other income | Above Market Ground Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization/accretion of above/below-market leases	$ (5)	$ (4)	$ (8)	$ (8)

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Investments in Unconsolidated Funds - Narrative (Details) $ in Thousands, ft² in Millions	6 Months Ended
	Jun. 30, 2020 USD ($) ft² property	Jun. 30, 2019 USD ($) ft² fund property
Schedule of Equity Method Investments [Line Items]
Number of properties	84
Acquisition of additional interests in unconsolidated Fund | $	$ 6,591	$ 7,518
Percentage of amounts related to the Fund	100.00%
Partnership X
Schedule of Equity Method Investments [Line Items]
Equity interest of the Fund (percent)	33.50%	24.60%
Purchase of additional equity interest (percent)	3.60%
Acquisition of additional interests in unconsolidated Fund | $	$ 6,600
Opportunity Fund
Schedule of Equity Method Investments [Line Items]
Equity interest of the Fund (percent)		6.20%
Fund X
Schedule of Equity Method Investments [Line Items]
Equity interest of the Fund (percent)		72.70%
Purchase of additional equity interest (percent)		1.40%
Unconsolidated Fund properties
Schedule of Equity Method Investments [Line Items]
Number of unconsolidated Funds owned and managed | fund		3
Office Buildings
Schedule of Equity Method Investments [Line Items]
Number of properties	72
Office Buildings | Unconsolidated Fund properties
Schedule of Equity Method Investments [Line Items]
Number of properties	2	8
Area of real estate portfolio (sq ft) | ft²	0.4	1.8

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Investments in Unconsolidated Funds - Summary of Cash Distributions Received from Funds (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Real Estate Investments, Net [Abstract]
Operating distributions received	$ 394	$ 3,756
Capital distributions received	548	3,869
Total distributions received	$ 942	$ 7,625

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Investments in Unconsolidated Funds - Selected Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Balance Sheet
Total assets	$ 9,271,377		$ 9,271,377		$ 9,349,301
Total liabilities	5,227,038		5,227,038		4,978,367
Total equity	2,480,977		2,480,977		2,712,072
Statement of Operations
Total revenues	207,796	$ 230,534	459,146	$ 454,720
Operating income	30,011	70,631	94,229	134,108
Net income	2,030	$ 33,966	28,953	62,667
Unconsolidated Funds
Balance Sheet
Total assets	134,245		134,245		136,479
Total liabilities	113,592		113,592		113,330
Total equity	$ 20,653		20,653		$ 23,149
Statement of Operations
Total revenues			7,597	41,174
Operating income			1,686	11,961
Net income			$ 372	$ 3,815

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Other Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Other Assets [Abstract]
Restricted cash	$ 121	$ 121
Prepaid expenses	3,632	8,711
Other indefinite-lived intangibles	1,988	1,988
Furniture, fixtures and equipment, net	2,532	2,368
Other	5,613	3,233
Total other assets	$ 13,886	$ 16,421

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Secured Notes Payable and Revolving Credit Facility, Net - Schedule of Secured Notes Payable and Revolving Credit Facility (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($) property	Jul. 01, 2022	Jul. 01, 2021	Dec. 01, 2020	Jul. 01, 2020	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Principal balance	$ 4,702,892					$ 4,653,264
Unamortized loan premium, net	4,699					6,741
Unamortized deferred loan costs, net	(40,988)					(40,947)
Secured notes payable and revolving credit facility, net	$ 4,666,603					4,619,058
Minimum number of separate collateral pools used to secure loans | property	1
Secured Debt | LIBOR
Debt Instrument [Line Items]
Loan agreement LIBOR floor	0.00%
Secured Debt | Term Loan at 4.55% Jun 01 2038
Debt Instrument [Line Items]
Principal amortization period (in years)	30 years
Wholly Owned Subsidiaries
Debt Instrument [Line Items]
Principal balance	$ 3,112,892					3,113,264
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.46% Jan 01 2024
Debt Instrument [Line Items]
Maturity date	Jan. 01, 2024
Principal balance	$ 300,000					300,000
Fixed interest rate	3.46%
Swap Maturity Date	Jan. 01, 2022
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.46% Jan 01 2024 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.55%
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.84% Mar 03 2025
Debt Instrument [Line Items]
Maturity date	Mar. 03, 2025
Principal balance	$ 335,000					335,000
Fixed interest rate	3.84%
Swap Maturity Date	Mar. 01, 2023
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.84% Mar 03 2025 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.30%
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 2.76% Apr 01 2025
Debt Instrument [Line Items]
Maturity date	Apr. 01, 2025
Principal balance	$ 102,400					102,400
Fixed interest rate	2.76%
Swap Maturity Date	Mar. 01, 2023
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 2.76% Apr 01 2025 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.25%
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.07% Aug 15 2026
Debt Instrument [Line Items]
Maturity date	Aug. 15, 2026
Principal balance	$ 415,000					415,000
Fixed interest rate	3.07%
Swap Maturity Date	Aug. 01, 2025
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.07% Aug 15 2026 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.10%
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.44% Sep 19 2026
Debt Instrument [Line Items]
Maturity date	Sep. 19, 2026
Principal balance	$ 400,000					400,000
Fixed interest rate	2.44%
Swap Maturity Date	Sep. 01, 2024
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.44% Sep 19 2026 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.15%
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.77% Sep 26 2026
Debt Instrument [Line Items]
Maturity date	Sep. 26, 2026
Principal balance	$ 200,000					200,000
Fixed interest rate	2.77%
Swap Maturity Date	Oct. 01, 2024
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.77% Sep 26 2026 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.20%
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.18% Nov 01 2026
Debt Instrument [Line Items]
Maturity date	Nov. 01, 2026
Principal balance	$ 400,000					400,000
Fixed interest rate	2.18%
Swap Maturity Date	Oct. 01, 2024
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.18% Nov 01 2026 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.15%
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 3.16% Jun 01 2027
Debt Instrument [Line Items]
Maturity date	Jun. 01, 2027
Principal balance	$ 550,000					550,000
Fixed interest rate	3.16%
Swap Maturity Date	Jun. 01, 2022
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 3.16% Jun 01 2027 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.37%
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 3.26% Jun 01 2029
Debt Instrument [Line Items]
Maturity date	Jun. 01, 2029
Principal balance	$ 255,000					255,000
Fixed interest rate	3.26%
Swap Maturity Date	Jun. 01, 2027
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 3.26% Jun 01 2029 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	0.98%
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 2.55% Jun 01 2029
Debt Instrument [Line Items]
Maturity date	Jun. 01, 2029
Principal balance	$ 125,000					125,000
Fixed interest rate	2.55%
Swap Maturity Date	Jun. 01, 2027
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 2.55% Jun 01 2029 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	0.98%
Wholly Owned Subsidiaries | Secured Debt | Term Loan at 4.55% Jun 01 2038
Debt Instrument [Line Items]
Maturity date	Jun. 01, 2038
Principal balance	$ 30,492					30,864
Fixed interest rate	4.55%
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility with Maturity Aug 21 2023
Debt Instrument [Line Items]
Maturity date	Aug. 21, 2023
Principal balance	$ 0					0
Loan agreement LIBOR floor	0.00%
Maximum borrowing capacity	$ 400,000
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility with Maturity Aug 21 2023 | Minimum
Debt Instrument [Line Items]
Unused commitment fees (as a percent)	0.10%
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility with Maturity Aug 21 2023 | Maximum
Debt Instrument [Line Items]
Unused commitment fees (as a percent)	0.15%
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility with Maturity Aug 21 2023 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.15%
Consolidated JV | Secured Debt | Term Loan at 3.44% July 01 2024
Debt Instrument [Line Items]
Principal balance						400,000
Consolidated JV | Secured Debt | Term Loan at 2.37% Feb 28 2023
Debt Instrument [Line Items]
Maturity date	Feb. 28, 2023
Principal balance	$ 580,000					580,000
Fixed interest rate	2.37%
Swap Maturity Date	Mar. 01, 2021
Consolidated JV | Secured Debt | Term Loan at 2.37% Feb 28 2023 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.40%
Consolidated JV | Secured Debt | Term Loan at 3.47% Dec 19 2024
Debt Instrument [Line Items]
Maturity date	Dec. 19, 2024
Principal balance	$ 400,000					400,000
Fixed interest rate	3.47%
Swap Maturity Date	Jan. 01, 2023
Consolidated JV | Secured Debt | Term Loan at 3.47% Dec 19 2024 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.30%
Consolidated JV | Secured Debt | Term Loan at 3.04% May 15 2027
Debt Instrument [Line Items]
Maturity date	May 15, 2027
Principal balance	$ 450,000					0
Fixed interest rate	3.04%
Swap Maturity Date	Apr. 01, 2025
Consolidated JV | Secured Debt | Term Loan at 3.04% May 15 2027 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.35%
Consolidated JV | Secured Debt | Term Loan at 3.25% Jun 01 2029
Debt Instrument [Line Items]
Maturity date	Jun. 01, 2029
Principal balance	$ 160,000					$ 160,000
Fixed interest rate	3.25%
Swap Maturity Date	Jul. 01, 2027
Consolidated JV | Secured Debt | Term Loan at 3.25% Jun 01 2029 | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	0.98%
Forecast | Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.77% Sep 26 2026
Debt Instrument [Line Items]
Fixed interest rate					2.36%
Forecast | Wholly Owned Subsidiaries | Secured Debt | Term Loan at 2.18% Nov 01 2026
Debt Instrument [Line Items]
Fixed interest rate			2.31%
Forecast | Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan at 2.55% Jun 01 2029
Debt Instrument [Line Items]
Fixed interest rate				3.25%
Forecast | Wholly Owned Subsidiaries | Secured Debt | Term Loan at 3.04% May 15 2027
Debt Instrument [Line Items]
Fixed interest rate		2.26%

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Secured Notes Payable and Revolving Credit Facility, Net - Debt Statistics (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Principal balance	$ 4,702,892	$ 4,653,264
Principal balance of consolidated fixed rate debt	$ 4,700,000
Weighted average remaining life (including extension options) of consolidated fixed rate debt (in years)	5 years 10 months 24 days
Weighted average remaining fixed interest period of consolidated fixed rate debt (in years)	3 years 7 months 6 days
Weighted average annual interest rate of consolidated fixed rate debt (as a percent)	3.02%
Aggregate swapped to fixed rate loans
Debt Instrument [Line Items]
Principal balance	$ 4,672,400	4,622,400
Aggregate fixed rate loans
Debt Instrument [Line Items]
Principal balance	$ 30,492	$ 30,864

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Secured Notes Payable and Revolving Credit Facility, Net - Future Principal Payments (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Minimum Future Principal Payments Due
2021	$ 769
2022	805
2023	580,842
2024	300,881
2025	838,322
Thereafter	2,981,273
Total future principal payments	$ 4,702,892	$ 4,653,264

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Secured Notes Payable and Revolving Credit Facility, Net - Loan Costs and Accumulated Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Debt Disclosure [Abstract]
Loan premium accumulated amortization	$ 900		$ 900		$ 500
Accumulated amortization on deferred loan costs	34,400		34,400		$ 30,700
Loan Costs Included In Interest Expense
Loan premium amortized and written off			(2,043)	$ (102)
Deferred loan costs amortized and written off			3,791	4,380
Interest Expense
Loan Costs Included In Interest Expense
Loan premium amortized and written off	(1,828)	$ (51)	(2,043)	(102)
Deferred loan costs amortized and written off	1,915	1,887	3,791	3,804
Loan costs expensed	965	576	965	576
Total	$ 1,052	$ 2,412	$ 2,713	$ 4,278

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Interest Payable, Accounts Payable and Deferred Revenue (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Accounts Payable and Accrued Liabilities [Abstract]
Interest payable	$ 11,732	$ 11,707
Accounts payable and accrued liabilities	79,731	66,437
Deferred revenue	48,144	53,266
Total interest payable, accounts payable and deferred revenue	$ 139,607	$ 131,410

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Derivative Contracts - Summary of Derivatives (Details) - Interest Rate Swap - Derivatives Designated as Cash Flow Hedges - Cash Flow Hedging $ in Thousands	Jun. 30, 2020 USD ($) instrument
Derivative [Line Items]
Number of Interest Rate Swaps | instrument	45
Notional	$ 5,517,400
Percent of notional amount related to the Fund	100.00%
Unconsolidated Funds
Derivative [Line Items]
Number of Interest Rate Swaps | instrument	1
Notional	$ 110,000
Percent of notional amount related to the Fund	100.00%
Swaps with increasing notional value
Derivative [Line Items]
Notional	$ 120,000
Future notional	1,180,000
Forward swaps with increasing notional value
Derivative [Line Items]
Notional	845,000
Future notional	$ 1,030,000

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Derivative Contracts - Credit-risk related Contingent Features (Details) - Interest Rate Swap - Derivatives Designated as Cash Flow Hedges - Cash Flow Hedging - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Fair value derivatives in net liability position	$ 271,726	$ 56,896
Percent of notional amount related to the Fund	100.00%
Unconsolidated Funds
Derivative Instruments, Gain (Loss) [Line Items]
Fair value derivatives in net liability position	$ 613	$ 0
Percent of notional amount related to the Fund	100.00%

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Derivative Contracts - Counterparty Credit Risk (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Derivative Instruments, Gain (Loss) [Line Items]
Fair value of derivatives in an asset position	$ 0	$ 22,381
Interest Rate Swap | Derivatives Designated as Cash Flow Hedges | Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Fair value of derivatives in an asset position	$ 0	23,275
Percent of notional amount related to the Fund	100.00%
Interest Rate Swap | Derivatives Designated as Cash Flow Hedges | Cash Flow Hedging | Unconsolidated Funds
Derivative Instruments, Gain (Loss) [Line Items]
Fair value of derivatives in an asset position	$ 0	$ 963
Percent of notional amount related to the Fund	100.00%

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Derivative Contracts - Impact of Hedges on AOCI and Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative [Line Items]
Gain (loss) recorded in AOCI before reclassifications			$ (241,189)	$ (89,483)
Interest Expense presented in the consolidated statements of operations	$ (35,190)	$ (34,063)	(70,610)	(67,356)
Income from unconsolidated Funds presented in the consolidated statements of operations	$ (140)	$ 2,207	183	3,758
Unconsolidated Funds
Derivative [Line Items]
Gain (loss) recorded in AOCI before reclassifications			(403)	(6,928)
Cash Flow Hedging | Derivatives Designated as Cash Flow Hedges
Derivative [Line Items]
Gain (loss) recorded in AOCI before reclassifications			(241,189)	(89,483)
Loss (gain) reclassified from AOCI			13,373	(17,284)
Cash Flow Hedging | Derivatives Designated as Cash Flow Hedges | Unconsolidated Funds
Derivative [Line Items]
Gain (loss) recorded in AOCI before reclassifications			(403)	(6,928)
Loss (gain) reclassified from AOCI			$ (35)	$ (1,226)

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Derivative Contracts - Future Reclassifications from AOCI (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
Losses to be reclassified from AOCI	$ (71,439)
Unconsolidated Funds
Derivative Instruments, Gain (Loss) [Line Items]
Losses to be reclassified from AOCI	$ (182)

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Equity - Narrative (Details) - USD ($) $ in Thousands				3 Months Ended		6 Months Ended
	May 28, 2020	Jun. 28, 2019	Jun. 07, 2019	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]
Number common shares issued in exchange for equal number of OP Units (in shares)						5,000	75,000
Number of OP units and fully-vested LTIP Units redeemed (in shares)						150	13,000
Cash paid for repurchase OP Units				$ 0	$ 0	$ 7	$ 507
Shares issued under ATM program (in shares)							4,900,000
Net proceeds from the issuance of common stock							$ 201,200
Contract price			$ 365,100
Noncontrolling interests contribution to JV			176,000
Number of OP units owned				175,400,000		175,400,000
Outstanding common stock (in shares)				175,374,886		175,374,886		175,369,746
Number of shares of common stock issued upon redemption of one OP unit (in shares)						1
Increase in number of common shares available for future awards (in shares)	9,500,000
Secured Debt | Loan with maturity date Of Jun 01 2029
Schedule of Equity Method Investments [Line Items]
Non-recourse debt			$ 160,000
Operating Partnership
Schedule of Equity Method Investments [Line Items]
Noncontrolling interests ownership in the Operating Partnership (in shares)				29,100,000		29,100,000
Noncontrolling interests ownership in the Operating Partnership (percent)				14.00%		14.00%
Consolidated JV
Schedule of Equity Method Investments [Line Items]
Capital interest in consolidated JV (percent)		20.00%

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Equity - Changes in Ownership Interest in Operating Partnership (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stockholders' Equity Note [Abstract]
Net income attributable to common stockholders	$ 2,030	$ 33,966	$ 28,953	$ 62,667
Transfers from noncontrolling interests:
Exchange of OP Units with noncontrolling interests			90	1,223
Repurchase of OP Units from noncontrolling interests			(4)	(291)
Net transfers from noncontrolling interests			86	932
Change from net income attributable to common stockholders and transfers from noncontrolling interests			$ 29,039	$ 63,599

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Equity - AOCI Reconciliation (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	$ 4,370,934	$ 3,848,430
Other comprehensive loss before reclassifications	(241,189)	(89,483)
Reclassification of gains from AOCI	13,373	(17,284)
Net current period OCI	(228,254)	(114,921)
OCI attributable to noncontrolling interests	66,245	35,124
OCI attributable to common stockholders	(162,009)	(79,797)
Ending balance	4,044,339	4,052,360
Unconsolidated Funds
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Other comprehensive loss before reclassifications	(403)	(6,928)
Reclassification of gains from AOCI	(35)	(1,226)
AOCI
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	(17,462)	53,944
Ending balance	$ (179,471)	$ (25,853)

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Equity - Equity Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stockholders' Equity Note [Abstract]
Stock-based compensation expense, net	$ 2,812	$ 2,383	$ 5,753	$ 5,013
Capitalized stock-based compensation	$ 751	$ 338	$ 1,610	$ 1,008

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EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Net income attributable to common stockholders	$ 2,030	$ 33,966	$ 28,953	$ 62,667
Allocation to participating securities: Unvested LTIP Units	(206)	(139)	(413)	(265)
Net income attributable to common stockholders - basic and diluted	$ 1,824	$ 33,827	$ 28,540	$ 62,402
Weighted average shares of common stock outstanding - basic and diluted (in shares)	175,375,000	172,498,000	175,374,000	171,366,000
Net income per common share – basic and diluted (usd per share)	$ 0.01	$ 0.20	$ 0.16	$ 0.36
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Number of shares of common stock issued upon exchange of one OP unit or one vested LTIP unit (in shares)			1	1
OP Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from the computation of weighted average diluted shares (in shares)	28,293,000	26,283,000	28,294,000	26,311,000
Vested LTIP Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from the computation of weighted average diluted shares (in shares)	808,000	1,830,000	803,000	1,830,000

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Fair Value of Financial Instruments - Financial Instruments Disclosed at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ground lease liability	$ 10,877	$ 10,882
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Secured notes payable	4,724,042	4,678,623
Ground lease liability	14,284	12,218
Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Secured notes payable	4,707,591	4,653,264
Ground lease liability	$ 10,877	$ 10,882

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Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Derivative Assets:
Fair value - consolidated derivatives	$ 0	$ 22,381
Derivative Liabilities:
Fair value - consolidated derivatives	$ 259,293	54,616
Fund X | Interest Rate Swap
Derivative Liabilities:
Percent of notional amount related to the Fund	100.00%
Level 2
Derivative Assets:
Fair value - consolidated derivatives	$ 0	22,381
Derivative Liabilities:
Fair value - consolidated derivatives	259,293	54,616
Level 2 | Fund X
Derivative Assets:
Fair value - unconsolidated Funds' derivatives	0	889
Derivative Liabilities:
Fair value - unconsolidated Funds' derivatives	$ 543	$ 0

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Segment Reporting - Narrative (Details)	6 Months Ended
	Jun. 30, 2020 segment
Segment Reporting [Abstract]
Number of reportable business segments	2

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Segment Reporting - Operating Activity Within Reportable Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting Information [Line Items]
Total revenues	$ 207,796	$ 230,534	$ 459,146	$ 454,720
Segment profit	138,639	158,514	310,969	311,696
Office Segment
Segment Reporting Information [Line Items]
Total revenues	176,989	202,189	396,878	399,479
Expenses	(60,301)	(64,308)	(129,965)	(127,757)
Segment profit	116,688	137,881	266,913	271,722
Multifamily Segment
Segment Reporting Information [Line Items]
Total revenues	30,807	28,345	62,268	55,241
Expenses	(8,856)	(7,712)	(18,212)	(15,267)
Segment profit	$ 21,951	$ 20,633	$ 44,056	$ 39,974

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Segment Reporting - Reconciliation of Segment Profit to Net Income Attributable to Common Stockholders (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Segment Reporting [Abstract]
Total profit from all segments	$ 138,639	$ 158,514	$ 310,969	$ 311,696
General and administrative expenses	(9,863)	(9,159)	(20,198)	(18,991)
Depreciation and amortization	(98,765)	(78,724)	(196,542)	(158,597)
Other income	325	2,892	2,314	5,790
Other expenses	(478)	(1,807)	(1,874)	(3,652)
(Loss) income from unconsolidated Funds	(140)	2,207	183	3,758
Interest expense	(35,190)	(34,063)	(70,610)	(67,356)
Net (loss) income	(5,472)	39,860	24,242	72,648
Less: Net loss (income) attributable to noncontrolling interests	7,502	(5,894)	4,711	(9,981)
Net income attributable to common stockholders	$ 2,030	$ 33,966	$ 28,953	$ 62,667

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Future Minimum Lease Rental Receipts (Details) $ in Thousands	Jun. 30, 2020 USD ($) land_parcel
Future minimum base rentals to be received for twelve months ending June 30:
2021	$ 653,406
2022	567,690
2023	475,211
2024	372,942
2025	281,142
Thereafter	659,833
Total future minimum base rentals	$ 3,010,224
Wholly-owned properties
Lessor, Lease, Description [Line Items]
Number of land parcels subject to ground lease | land_parcel	2

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Commitments, Contingencies and Guarantees - Narrative (Details) ft² in Thousands, $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($) ft² apartment building
Other Commitments [Line Items]
Number of buildings containing asbestos | building	32
Development Projects
Other Commitments [Line Items]
Aggregate remaining contractual commitment | $	$ 201.8
Development Projects | California
Other Commitments [Line Items]
Number of apartments under construction | apartment	376
Development Projects | Hawaii
Other Commitments [Line Items]
Number of apartments under construction | apartment	500
Square footage (sq ft) | ft²	490
Repositionings, Capital Expenditure Projects, and Tenant Improvements
Other Commitments [Line Items]
Aggregate remaining contractual commitment | $	$ 11.4

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Commitments, Contingencies and Guarantees - Debt Related to Unconsolidated Funds (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2020 USD ($) property	Dec. 31, 2019 USD ($)
Debt Instrument [Line Items]
Principal balance	$ 4,702,892	$ 4,653,264
Partnership X
Debt Instrument [Line Items]
Maximum future payments under swap agreement	$ 700
Partnership X | Interest rate swap
Debt Instrument [Line Items]
Swap Fixed Interest Rate	2.30%
Swap Maturity Date	Mar. 01, 2021
Partnership X | Floating rate term loan
Debt Instrument [Line Items]
Loan Maturity Date	Mar. 01, 2023
Principal balance	$ 110,000
Number of properties to secure loan | property	2
Loan agreement LIBOR floor	0.00%
Partnership X | Floating rate term loan | LIBOR
Debt Instrument [Line Items]
Variable Interest Rate	1.40%
Assumed LIBOR interest rate to assess maximum future payments under swap agreement	0.00%

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Label	Element	Value
Restricted Cash	us-gaap_RestrictedCash	$ 121,000
Restricted Cash	us-gaap_RestrictedCash	$ 121,000