Douglas Emmett, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Douglas Emmett's quarterly earnings call. Today's call is being recorded. 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 will now turn the conference over to Stuart McElhaney, 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. In the third quarter, we increased FFO per share by 8 cents compared to the prior year. Compared to last quarter, despite new loan costs and higher utilities, FFO per share was up a penny due to stronger rent collections, greater tenant recoveries, increased parking revenues, higher office occupancy, and better multifamily occupancy and rents. It is worth noting that only 1.5% of our FFO is non-cash. These results reflect our recovering submarkets where average vaccination rates now exceed 85% for people 12 and over and COVID rates are among the lowest in the nation. Increased tenant confidence has raised our office utilization to approximately 70% in Los Angeles and to over 80% in Honolulu. We had another strong office leasing quarter, driving 30 basis points of positive absorption. Our residential portfolio is fully leased, with rents rising in all of our submarkets. Despite the recent California eviction moratorium extensions, Past due rent collection continues to accelerate without any meaningful rent forgiveness. Office and residential rent collection for the quarters affected by the pandemic improved to 97%, while retail rose to almost 70%. We continue to deliver highly accretive development projects while extending and lowering our cost of debt. And we have the capital to pursue new acquisitions and development opportunities as they emerge. With that, I will now turn the call over to Kevin. Thanks, Jordan, and good morning, everyone. I'm really pleased with the progress of our two multifamily development projects, where we continue to lease units as quickly as they are built at rents above our pro formas. We are already pre-leasing units to our 376-unit Brentwood residential tower, where we expect to begin delivering units before year end. At 1132 Bishop, our downtown Honolulu office to residential conversion, we have completed and leased approximately 40% of our planned 493 units and continue to convert floors as office tenants vacate. On the debt front, we are lowering our average interest rate and extending our maturities, having closed two new loans totaling $740 million in the third quarter. with an average effective interest rate of 2.13% per annum. This new non-recourse interest-only debt consisted of a $625 million loan due in August 2028 with interest effectively fixed at 2.12% until June 2025, which is secured by four properties owned by one of our consolidated joint ventures, and a $115 million loan due in September 2028, with interest effectively fixed at 2.19% until October 2026, which is secured by two properties owned by our unconsolidated fund. After paying off the prior loans, we generated an additional $55 million in working capital. Our overall portfolio weighted average interest rate is fixed at only 2.94%, and we have no term debt maturities before 2024. We also have significant financing capacity, as 46% of our office properties are currently unencumbered. Office property sales in our markets remain slow, but we are starting to see some multifamily opportunities, and we have ample liquidity for acquisitions as they become available. I will now turn the call over to Stuart.