Douglas Emmett, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to the Douglas Emmett Quarterly Earnings Call. Today's call is being recorded, and at this time, all participants are in a listen-only mode. After management's prepared remarks, you will receive instructions for participating in the question-and-answer session. I would now like to turn the conference over to Stuart McElhenney, Vice President of Investor Relations for Douglas Emmett. Please go ahead.

Thank you. Joining us today on the call are Jordan Kaplan, our President and CEO, Kevin Crummey, our CIO, and Peter Seymour, our CFO. This call is being webcast live from our website and will be available for replay during the next 90 days. You can also find our earnings package at the investor relations section of our website. You can find reconciliations of non-GAAP financial measures discussed during today's call in the earnings package. During the course of this call, we will make forward-looking statements. These forward-looking statements are based on the beliefs of, assumptions made by, and information currently available to us. Our actual results will be affected by known and unknown risks, trends, uncertainties, and factors that are 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 prove to be incorrect. Therefore, our actual future results can be expected to differ from our expectations, and those differences may be material. For a more detailed description of some potential risks, please refer to our SEC filings, which can be found in the investor relations section of our website. When we reach the question and answer portion in consideration of others, please limit yourself to one question and one follow-up. I will now turn the call over to Jordan.

Good morning, everyone. Thank you for joining us. I'm pleased to report that our rent collection and leasing activity improved during the fourth quarter, despite continued headwinds from the pandemic and tenant-oriented lease enforcement moratoriums. In recent months, we have started to see movement on tenant payment plans for rent deferred under the pandemic. To date, we have reached agreements with tenants who owed about 15% of the outstanding balances. These deals are exempt from the moratorium protections, and we have already begun collecting deferred rent under them. Except for immaterial amounts, we have not forgiven rent, and we still expect to collect the large majority of all past due amounts. In prior downturns, The impact of personal guarantees and small business owners' commitment to their companies have kept our default rate extremely low. Our cash collections have also improved. As of today, we have collected 92.7% of our rent from the three quarters affected by the pandemic, including 96% of our residential rent, 95% of our office rent, and 45% of our retail rent. We saw stronger leasing demand last quarter. driven primarily by small tenants. We signed an impressive 197 leases, and retention was also above average. We see the economy beginning to recover, with tenants increasingly confident about their future. As more tenants engage, we should shift back to positive absorption. Of course, predicting the pace of recovery remains challenging at this early stage. And because occupancy is a lagging indicator, we expect to see some further decline during the first half of this year. Overall, we remain confident over the longer term. As I've said throughout the pandemic, I believe that companies will return to the office. Our tenants generally have short commutes, and they don't face significant mass transit, parking, or vertical transportation barriers to reoccupancy. In the meantime, Douglas Summit remains well capitalized, with no debt maturities before 2023. We own a dominant share of the best buildings in the best markets in LA, and there is no threat of material new office supply in the near future. Our integrated operating platform is built to withstand recessions, and our team continues working to get better every day. With that, I will turn the call over to Kevin. Thanks, Jordan, and good morning, everyone. Our two multifamily development projects continue to make impressive headway. The demand for new units at 1132 Bishop, our office to residential conversion project in downtown Honolulu, remains robust. As I previously mentioned, we have fully leased the first phase of 98 units, and by year end, had already leased 29 out of the 76 units in the second phase. Construction at our Brentwood high-rise apartment has nearly topped off and delivery of the first units remains on schedule for early 2022. In December, one of our joint ventures sold an 80,000 square foot Honolulu office property for $21 million. Our decision to close the health club as a result of the pandemic triggered interest from a number of owner users targeting that type of space. The buyer will use the club for space for youth vocational training and after-school programs. Property transactions in our markets remain slow, as many potential sellers are in a watch-and-wait mode given current uncertainties. I will now turn the call over to Stuart. Thanks, Kevin.