Douglas Emmett, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenues were $261 million for Q3 2026, up from $251 million in Q3 2025.
• Net loss attributable to common stockholders was $9 million for Q3 2026, compared to a $11 million loss in Q3 2025.
• FFO per fully diluted share was $0.34 for Q3 2026, flat compared to $0.34 in Q3 2025.
• Adjusted Funds From Operations (AFFO) was $47 million for Q3 2026, down from $52 million in Q3 2025.
• Same Property Cash NOI was $148 million for Q3 2026, down from $153 million in Q3 2025.
• Office revenues were $210 million for Q3 2026, up from $201 million in Q3 2025.
• Multifamily revenues were $51 million for Q3 2026, up from $50 million in Q3 2025.
• Total operating expenses were $214 million for Q3 2026, up from $203 million in Q3 2025.
• Interest expense was $73 million for Q3 2026, compared to $73 million in Q3 2025.
• Cash and cash equivalents were $311 million at quarter end.
• Consolidated debt principal was $5.77 billion, with the company's share of debt being $4.68 billion.
• Net debt was $5.46 billion (consolidated) and $4.47 billion (company's share).
• Leverage ratio (Our Share of Net Debt to Pro Forma Enterprise Value) was 69%.
• AFFO Payout Ratio was 84.5% for the three months ended September 30, 2026.

Guidance and Future Outlook:

• 2026 Net Loss Per Common Share - Diluted is expected to be between $(0.20) and $(0.16).
• 2026 FFO per fully diluted share is expected to be between $1.39 and $1.43.
• Guidance assumes average office occupancy of 75.5% to 76.5%, residential leased rates essentially fully leased, and same property cash NOI decline of -2.5% to -0.5%.
• Guidance assumes interest expense of $275 million to $285 million and general and administrative expenses of $52 million to $56 million.
• Guidance excludes the impact of future property acquisitions or dispositions, common stock sales or repurchases, financings, property damage insurance recoveries, impairment charges, or other possible capital markets activities.
• Management expects rising occupancy and residential developments to drive FFO back to 2019 levels and beyond despite interest rates not moderating.

Business Segments and Product Lines:

• Office Portfolio: In-service portfolio includes 18.2 million square feet of Class A office properties. Occupancy increased by more than a full percentage point to 76.7%, the largest quarterly gain since 2012. Net absorption was positive for the fourth consecutive quarter with almost 1 million square feet of office leasing. Leases signed were 1.8% more valuable than expiring leases on a straight-line basis.
• Multifamily Portfolio: In-service portfolio includes 4,410 apartment units. The portfolio remained fully leased at 99.4%. Same property cash NOI increased 4.4% compared to the third quarter of 2025.
• Development Portfolio: Includes 1,035 apartment units in active development. Entitled residential development sites can accommodate 8,000 to 10,000 new units.
• Landmark Residences: A multi-year redevelopment of the 712-unit property in Brentwood continues; estimated construction cost is approximately $400 million.
• 10900 Wilshire: A mixed-use community in Westwood is under development with an estimated total project cost of $200 million to $250 million; potential for up to 323 new apartment units if converted.

Market and Competitive Landscape:

• Portfolio is located in premier coastal submarkets of Los Angeles (Westside and San Fernando Valley) and Honolulu, Hawaii.
• Market share is 39.3% overall, with 37.2% in the Westside, 45.4% in the Valley, and 22.2% in Honolulu.
• Office industry diversification includes Legal (19.6%), Financial Services (15.8%), Real Estate (13.3%), and Health Services (12.0%).
• Multifamily portfolio is divided into Santa Monica (21% of units), West Los Angeles (22% of units), and Honolulu (57% of units).

Risks and Challenges:

• Macroeconomic climate remains murky with occupancy recovery just beginning.
• Interest rates are the biggest challenge; average cost of debt increased from 3% to 5%, resulting in over $135 million more in interest expense compared to 2019.
• Office occupancy remains down over 10% from 2019 levels.
• Risks include adverse economic or real estate developments, competition, decreased rental rates, increased tenant incentives, reduced demand for office space due to remote work, lease defaults, elevated interest rates, increased operating and construction costs, and changes in zoning or rent control laws.

Management Commentary and Tone:

• Management noted that NOI has essentially recovered to 2019 levels despite office occupancy being down over 10%.
• Management highlighted strong office leasing translating into increased occupancy, with a leased-to-occupied spread almost double the historical average.
• Management expressed confidence that rising occupancy and residential developments can drive FFO back to 2019 levels and beyond.
• Management successfully refinanced $1.2 billion of loans over the last nine months despite a challenging loan market.

Other Key Points:

• On October 15, 2026, the company paid a quarterly cash dividend of $0.19 per common share ($0.76 annualized).
• During the third quarter, the company refinanced a $366 million office loan with new non-recourse four-year debt, effectively fixed for three years at 6.24% per annum.
• The company owns a weighted average interest of approximately 45% in seven consolidated joint ventures.
• The portfolio includes 75 office properties and 15 multifamily properties (13 in-service, 2 in development).
• Total rentable square feet for the office portfolio is 18,249,460.
• Total units for the multifamily portfolio are 5,445 (4,410 in-service, 1,035 in development).