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. If you require operator assistance, please press star then zero. I will now turn the conference over to Stuart McElhenney, Vice President of Investor Relations for Douglas Emmett.

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, and thank you for joining us. In the third quarter, we leased over 1 million square feet of office space, including over 350,000 square feet of new leases. Tenant demand from our diverse industries was strong in each of our three regions. Moreover, we had our best quarter for new leasing to tenants over 10,000 square feet since late 2022, when recessionary fears surfaced. Overall, we achieved positive absorption of approximately 90,000 square feet and improved our portfolio leased rate by 50 basis points to 82%. Turning to our financial results, we achieved FFO of 43 cents per share. Based on our year-to-date results and our improved expectations for the fourth quarter, we're raising our full year guidance for FFO by 4 cents. Looking ahead, we are primarily focused on leasing up our office portfolio. We are seeing encouraging signs of increased tenant confidence overall, as well as good interest at Studio Plaza as it converts to a multi-tenant building. Leasing can be choppy quarter to quarter, and of course, there will be a drop in occupancy next quarter when Studio Plaza vacates. But I am encouraged by our lower than average lease expirations over the next five years. You can see the difference in the lease expiration chart in our earnings package. We are also focused on our repositioning projects, including Studio Plaza and Barrington Plaza, and hope to acquire a few high-quality assets at attractive prices during this part of the cycle. Now, I'll turn the call over to Kevin. Thanks, Jordan, and good morning, everyone. As Jordan mentioned, taking advantage of opportunities in the office market remains a key objective for us. The few recent transactions in our markets have so far been dominated by large tenant buildings, which are not our bread and butter. Larger tenants may mean fewer leasing transactions, but because of the concentration of risk and higher TIs, we prefer the stability of smaller high-end tenants. As a result, Our median lease size across our entire portfolio is only 2,400 square feet. In fact, out of our almost 2,700 office leases, we have only 28 leases over 40,000 square feet, and only one, which was recently renewed through 2037, over 100,000 square feet. In addition, 73% of that square footage covered by those 28 leases was signed after the start of the pandemic. While recent transactions have not fit within our discipline strategy, we are increasingly confident that there will be attractive opportunities in multi-tenant office buildings of vacancy, where we can leverage our operating platform to create value. Our company was founded in the early 90s, another period when office was an out of favor asset class. Our history, deep local knowledge, and unique operating platform give us the confidence to lean in at times like this. when others are overly cautious. With that, I will turn the call over to Stuart.