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, 2008

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.)

808 Wilshire Boulevard,

Suite 200

Santa Monica, California 90401

(Address and zip code of principal executive offices)

(310) 255-7700

(Registrant’s telephone number, including area code)

None

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

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  x     Noo

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x	Accelerated filer  o
Non-accelerated filero(Do not check if a smaller reporting company)	Smaller reporting company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o     Nox

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, 2008
Common Shares of beneficial interest,	121,456,334 shares
$0.01 par value per share

DOUGLAS EMMETT, INC.

FORM 10-Q

TABLE OF CONTENTS

			PAGE NO.
PART I.	FINANCIAL INFORMATION		3
	Item 1.	Financial Statements	3
		Consolidated Balance Sheets as of June 30, 2008 (unaudited) and December 31, 2007	3
		Consolidated Statements of Operations for the three and six months ended June 30, 2008 and 2007 (unaudited)	4
		Consolidated Statements of Cash Flows for the six months ended June 30, 2008 and 2007 (unaudited)	5
		Notes to Consolidated Financial Statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
	Item 4.	Controls and Procedures	26
PART II.	OTHER INFORMATION		27
	Item 1.	Legal Proceedings	27
	Item 1A.	Risk Factors	27
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
	Item 3.	Defaults Upon Senior Securities	27
	Item 4.	Submission of Matters to a Vote of Security Holders	27
	Item 5.	Other Information	28
	Item 6.	Exhibits	28
	SIGNATURES		29

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PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

Douglas Emmett, Inc.

Consolidated Balance Sheets

(in thousands, except for share data)

	June 30, 2008			December 31, 2007
	(unaudited)
Assets
Investment in real estate
Land	$	890,148		$	825,560
Buildings and improvements		5,515,561			4,978,124
Tenant improvements and lease intangibles		530,368			460,486
		6,936,077			6,264,170
Less: accumulated depreciation		(362,721	)		(242,114	)
Net investment in real estate		6,573,356			6,022,056
Cash and cash equivalents		2,764			5,843
Tenant receivables, net		553			955
Deferred rent receivables, net		28,447			20,805
Interest rate contracts		94,932			84,600
Acquired lease intangible assets, net		21,701			24,313
Other assets		25,636			31,396
Total assets	$	6,747,389		$	6,189,968
Liabilities
Secured notes payable, including loan premium	$	3,734,941		$	3,105,677
Accounts payable and accrued expenses		58,262			62,704
Security deposits		35,298			31,309
Acquired lease intangible liabilities, net		219,730			218,371
Interest rate contracts		133,769			129,083
Dividends payable		22,760			19,221
Total liabilities		4,204,760			3,566,365
Minority interests		568,844			793,764
Stockholders’ Equity
Common stock, $0.01 par value 750,000,000 authorized, 121,385,617 and 109,833,903 outstanding at June 30, 2008 and December 31, 2007, respectively.		1,214			1,098
Additional paid-in capital		2,275,364			2,019,716
Accumulated other comprehensive income		(88,178	)		(101,163	)
Accumulated deficit		(214,615	)		(89,812	)
Total stockholders’ equity		1,973,785			1,829,839
Total liabilities and stockholders’ equity	$	6,747,389		$	6,189,968

See notes to consolidated financial statements.

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Douglas Emmett, Inc.

Consolidated Statements of Operations

(unaudited and in thousands, except for share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Revenues
Office rental
Rental revenues	$	111,213		$	92,884		$	210,229		$	184,496
Tenant recoveries		7,269			5,575			12,637			13,761
Parking and other income		13,911			11,098			26,571			22,198
Total office revenues		132,393			109,557			249,437			220,455
Multifamily rental
Rental revenues		16,423			16,879			33,647			33,393
Parking and other income		559			526			1,119			1,017
Total multifamily revenues		16,982			17,405			34,766			34,410
Total revenues		149,375			126,962			284,203			254,865
Operating expenses
Office expense		36,574			31,337			67,938			64,631
Multifamily expense		3,759			3,872			7,636			8,795
General and administrative		5,729			5,120			11,014			10,162
Depreciation and amortization		63,858			50,494			120,607			101,615
Total operating expenses		109,920			90,823			207,195			185,203
Operating income		39,455			36,139			77,008			69,662
Interest and other income		123			372			532			454
Interest expense		(51,791	)		(38,313	)		(92,994	)		(76,615	)
Loss before minority interests		(12,213	)		(1,802	)		(15,454	)		(6,499	)
Minority interests		2,785			542			3,526			1,966
Net loss	$	(9,428	)	$	(1,260	)	$	(11,928	)	$	(4,533	)
Net loss per common share – basic and diluted	$	(0.08	)	$	(0.01	)	$	(0.10	)	$	(0.04	)
Dividends declared per common share	$	0.1875		$	0.175		$	0.375		$	0.35
Weighted average shares of common stock outstanding -basic and diluted		121,313,515			114,861,872			119,798,547			114,933,468

See notes to consolidated financial statements.

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Douglas Emmett, Inc.

Consolidated Statements of Cash Flows

(unaudited and in thousands)

	Six Months Ended June 30,
	2008			2007
Operating Activities
Net loss	$	(11,928	)	$	(4,533	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Minority interests		(3,526	)		(1,966	)
Depreciation and amortization		120,607			101,615
Net accretion of acquired lease intangibles		(21,690	)		(19,937	)
Amortization of deferred loan costs		840			500
Amortization of loan premium		(2,336	)		(2,205	)
Non-cash market value adjustments on interest rate contracts		7,339			6,529
Non-cash amortization of stock-based compensation		4,340			1,362
Change in working capital components
Tenant receivables		402			3,303
Deferred rent receivables		(7,642	)		(9,007	)
Accounts payable, accrued expenses and security deposits		(3,772	)		3,571
Other		8,145			(133	)
Net cash provided by operating activities		90,779			79,099
Investing Activities
Capital expenditures and property acquisitions		(642,750	)		(58,435	)
Net cash used in investing activities		(642,750	)		(58,435	)
Financing Activities
Proceeds from borrowings		1,052,700			285,500
Deferred loan costs		(3,225	)		(1,122	)
Repayment of borrowings		(383,600	)		(145,500	)
Net change in short-term borrowings		(37,500	)		-
Contribution by minority interest partner to consolidated joint venture		319			-
Distributions to minority interests		(14,753	)		(14,824	)
Redemption of minority interests		(23,758	)		(29,211	)
Issuance of common stock		667			-
Repurchase of common stock		-			(20,155	)
Cash dividends paid on common stock		(41,958	)		(33,927	)
Net cash provided by financing activities		548,892			40,761
Increase (decrease) in cash and cash equivalents		(3,079	)		61,425
Cash and cash equivalents at beginning of period		5,843			4,536
Cash and cash equivalents at end of period	$	2,764		$	65,961

See notes to consolidated financial statements for additional non-cash items.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements

(in thousands, except shares and per share data)

1. Organization and Description of Business

Douglas Emmett, Inc., a Maryland corporation incorporated on June 28, 2005, is a fully integrated, self-administered and self-managed Real Estate Investment Trust (REIT).  We did not have any meaningful operating activity until the consummation of our initial public offering (IPO) and the related acquisition of our predecessor and certain other entities on October 30, 2006.  Through our interest in Douglas Emmett Properties, LP (our operating partnership) and its subsidiaries, we own, manage, lease, acquire and develop real estate.  As of June 30, 2008, we owned a portfolio of 55 office properties (including ancillary retail space) and nine multifamily properties, as well as the fee interests in two parcels of land that we lease to third parties.  All of these properties are located in Los Angeles County, California and Honolulu, Hawaii.  We qualified as a REIT for federal income tax purposes beginning with our initial taxable year ending December 31, 2006 and expect to maintain such qualification.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements as of June 30, 2008 and December 31, 2007 and for the three and six months ended June 30, 2008 and 2007 are the consolidated financial statements of Douglas Emmett, Inc. and its subsidiaries including our operating partnership.  All significant intercompany balances and transactions have been eliminated in the consolidated financial statements.  Certain prior period amounts have been reclassified to conform with current period presentation.

Unaudited Interim Financial Information

The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain information and footnote disclosure normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) may have been condensed or omitted pursuant to such rules and regulations, although we believe that the disclosures are adequate to make the presentation not misleading.  The accompanying unaudited 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 ended December 31, 2008.  The interim financial statements should be read in conjunction with the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2007 and notes thereto.  Any reference to the number of properties and square footage are unaudited and outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions, for example with respect to the allocation of the purchase price of acquisitions among land, buildings, improvements, equipment and any related intangible assets and liabilities.  These estimates and assumptions are subjective and affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

Cash and Cash Equivalents

For purposes of the consolidated statements of cash flows, we consider short-term investments with maturities of three months or less when purchased to be cash equivalents.

Interest Rate Contracts

We manage our interest rate risk associated with borrowings by obtaining interest rate swap and interest rate cap contracts.  We do not use any other derivative instruments.

Statement of Financial Accounting Standards (FAS) No. 133, Accounting for Derivative Instruments and Hedging Activities (FAS 133), as amended and interpreted, establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities.  As required by FAS 133, we record all derivatives on the balance sheet at fair value.  The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and the resulting designation. Derivatives used to hedge the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, are considered fair value hedges. Derivatives used to hedge the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges.

Our objective in using derivatives is to add stability to interest expense and to manage our exposure to interest rate movements or other identified risks.  To accomplish this objective, we primarily use interest rate swaps as part of our cash flow hedging strategy.  Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts in exchange for fixed-rate payments over the life of the agreements without exchange of the underlying principal amount.  For derivatives designated as cash flow hedges, the effective portion of changes in the fair value of the derivative is initially reported in other comprehensive income (outside of earnings) and subsequently reclassified to earnings when the hedged transaction affects earnings.  The ineffective portion of changes in the fair value of the derivative is recognized directly in earnings.  We assess the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative hedging instrument with the changes in fair value or cash flows of the designated hedged item or transaction. For derivatives not designated as hedges, changes in fair value are recognized in earnings.  See Note 8 for the accounting of our interest rate hedges.

Income Taxes

We elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (IRC) commencing with our initial taxable year ending December 31, 2006.  To qualify as a REIT, we are required to distribute at least 90% of our REIT taxable income to our stockholders and meet the various other requirements imposed by the IRC relating to such matters as operating results, asset holdings, distribution levels and diversity of stock ownership. Provided we qualify for taxation as a REIT, we generally will not be subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. We will be subject to corporate-level tax on the earnings we derive through our taxable REIT subsidiary (TRS). If we fail to qualify as a REIT in any taxable year, and are unable to avail ourselves of certain savings provisions set forth in the IRC, all of our taxable income would be subject to federal income tax at regular corporate rates, including any applicable alternative minimum tax.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

In addition, we are subject to taxation by various state and local (and potentially foreign) jurisdictions, including those in which we transact business or reside.  Our non-TRS subsidiaries, including the operating partnership, are either partnerships or disregarded entities for federal income tax purposes.  Under applicable federal and state income tax rules, the allocated share of net income or loss from the limited partnerships and S-Corporation is reportable in the income tax returns of the respective partners and stockholders.  Accordingly, no income tax provision is included in the accompanying consolidated financial statements.

Earnings Per Share (EPS)

Basic EPS is calculated by dividing the net income applicable to common stockholders for the period by the weighted average of common shares outstanding during the period.  Diluted EPS is calculated by dividing the net income applicable to common stockholders for the period by the weighted average number of common and dilutive instruments outstanding during the period using the treasury stock method.  Since we were in a net loss position during the three and six months ended June 30, 2008 and 2007, all potentially dilutive instruments are anti-dilutive and have been excluded from our computation of weighted average dilutive shares outstanding.

Recently Issued Accounting Literature

In February 2007, the Financial Accounting Standards Board (FASB) issued FAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities Including an Amendment of FASB Statement No. 115.  This standard permits entities to choose to measure many financial instruments and certain other items at fair value and is effective for the first fiscal year beginning after November 15, 2007, which for us meant January 1, 2008.  We did not elect the fair value measurement option for any financial assets or liabilities during the first six months of 2008, nor do we currently expect to elect this option for any financial assets or liabilities in the near future.

In December 2007, the FASB issued FAS No. 160, Non-controlling Interests in Consolidated Financial Statements-an Amendment of Accounting Research Bulletin No. 51 (FAS 160).  FAS 160 establishes new accounting and reporting standards for a non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary.  Specifically, this statement requires the recognition of a non-controlling interest (minority interest) as equity in the consolidated financial statements separate from the parent’s equity.  The amount of net income attributable to the non-controlling interest will be included in consolidated net income on the face of the income statement.  FAS 160 clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest.  In addition, this statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated.  Such gain or loss will be measured using the fair value of the non-controlling equity investment on the deconsolidation date.  FAS 160 also includes expanded disclosure requirements regarding the interests of the parent and its non-controlling interest.  FAS 160 is effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008, which for us means January 1, 2009.  We are currently evaluating the impact that FAS 160 will have on our financial statements.

In December 2007, the FASB issued FAS No. 141 (Revised 2007), Business Combinations (FAS 141R).  FAS 141R will significantly change the accounting for business combinations.  Under FAS 141R, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value with limited exceptions.  FAS 141R will require that transaction costs such as legal, accounting and advisory fees be expensed.  FAS 141R also includes a substantial number of new disclosure requirements.  FAS 141R applies prospectively to business combinations occurring in any reporting period beginning on or after December 15, 2008, which for us means January 1, 2009.  We are currently evaluating the impact that FAS 141R will have on our financial statements.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

On January 1, 2008, we adopted FAS No. 157, Fair Value Measurements (FAS 157). FAS 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.  FAS 157 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.  FAS 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement.  Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability.  As a basis for considering market participant assumptions in fair value measurements, FAS 157 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).  Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.  Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates, foreign exchange rates, and yield curves that are observable at commonly quoted intervals.

Currently, we use interest rate swaps and capsto manage interest rate risk resulting from variable interest payments on our floating rate debt.  The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities.

To comply with the provisions of FAS 157, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.  In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.  We have determined that our derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.  We do not have any fair value measurements using significant unobservable inputs (Level 3) as of June 30, 2008.

The table below presents the assets and liabilities measured at fair value on a recurring basis as of June 30, 2008, aggregated by the level in the fair value hierarchy within which those measurements fall.

	Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Balance at June 30, 2008
Assets
Interest Rate Contracts	$              -	$94,932	$              -	$94,932
Liabilities
Interest Rate Contracts	$              -	$133,769	$              -	$133,769

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

In March 2008, the FASB issued Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities (FAS 161), an amendment of FAS 133, to expand disclosure requirements for an entity's derivative and hedging activities.  Under FAS 161, entities are required to provide enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments and related hedged items are accounted for under FAS 133 and its related interpretations, and how derivative instruments and related hedged items affect an entity's financial position, financial performance, and cash flows.  In order to meet these requirements, entities shall include quantitative disclosures about derivative fair values and gains/losses on derivative instruments, qualitative disclosures about objectives and strategies for using derivatives, and disclosures about credit-risk-related contingent features in derivative agreements. FAS 161 is effective for fiscal years and interim periods beginning after November 15, 2008, with early adoption encouraged.  We plan to adopt FAS 161 on January 1, 2009 and do not expect FAS 161 to have a significant impact as this statement only addresses disclosures.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

3. Acquisitions

On March 26, 2008, we acquired a 1.4 million square foot office portfolio consisting of six Class “A” buildings all located in our core Los Angeles submarkets – Santa Monica, Beverly Hills, Sherman Oaks/Encino and Warner Center/Woodland Hills – for a contract price of approximately $610 million.  An affiliate of the seller provided $380 million of first trust deed bridge financing at a floating rate of the London Interbank Offered Rate (LIBOR) plus 200 basis points for nine months.

On February 13, 2008, we acquired a two-thirds interest in a 78,298 square-foot office building located in Honolulu, Hawaii.  As part of the same transaction, we also acquired all of the assets of The Honolulu Club, a private membership athletic and social club, which is located in the building.  The aggregate contract price was approximately $18 million and the purchase was made in a consolidated joint venture with our local partner.  The joint venture financed the acquisition with an $18 million loan at a floating interest rate of LIBOR plus 125 basis points.  The loan has a term of two years with a one-year extension.  On May 1, 2008, the operations of the athletic club were transferred to a third party for a nominal cost.  Simultaneously, we entered into a lease of the space rented by the athletic club.  The results of operations and loss on sale of the assets of the athletic club were not material.

In May 2007, we acquired an approximate 50,000 rentable square foot Class “A” office building located in one of our core Los Angeles submarkets, Century City, for a contract price of $32 million.

The results of operations for each of the acquired properties are included in our consolidated statements of operations only from the date of each acquisition.  The following table summarizes the allocations of estimated fair values of the assets acquired and liabilities assumed at the date of acquisition.  The amounts shown for 2008 acquisitions represent our preliminary purchase price allocations.  These amounts are likely to change based on a more thorough calculation to be performed during the one-year purchase accounting period provided under the relevant accounting standards.

The following table represents acquisitions to our portfolio that impact the current reporting periods:

	2008 Acquisitions			2007 Acquisitions
Investment in real estate:
Land	$	64,558		$	3,650
Buildings and improvements		530,058			26,274
Tenant improvements and other in-place lease assets		51,063			3,024
Tenant receivables and other assets		-			24
Accounts payable, accrued expenses and tenant security deposits		(3,476	)		(988	)
Acquired lease intangible liabilities, net		(25,661	)		-
Net acquisition cost	$	616,542		$	31,984

Our acquired lease intangibles related to above/below-market leases is summarized as of:

	June 30, 2008			December 31, 2007
Above-market tenant leases	$	34,232		$	32,770
Accumulated amortization		(15,599	)		(11,564	)
Below-market ground leases		3,198			3,198
Accumulated amortization		(130	)		(91	)
Acquired lease intangible assets, net	$	21,701		$	24,313
Below-market tenant leases	$	288,383		$	261,260
Accumulated accretion		(82,301	)		(57,112	)
Above-market ground leases		16,200			16,200
Accumulated accretion		(2,552	)		(1,977	)
Acquired lease intangible liabilities, net	$	219,730		$	218,371

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

4. Other Assets

Other assets consist of the following at:

	June 30,		December 31,
	2008		2007
Deferred loan costs, net of accumulated amortization of $2,144 and $1,304 at
at June 30, 2008 and December 31, 2007, respectively	$	7,372	$	4,987
Deposits in escrow		-		4,000
Restricted cash		2,835		2,848
Prepaid interest		3,480		7,944
Prepaid expenses		1,429		3,095
Interest receivable		5,038		3,229
Other indefinite-lived intangible		1,988		1,988
Other		3,494		3,305
	$	25,636	$	31,396

We incurred deferred loan cost amortization expense of $478 and $251 for the three months ended June 30, 2008 and 2007, and $840 and $500 for the six months ended June 30, 2008 and 2007, respectively.  The deferred loan cost amortization is included as a component of interest expense in the consolidated statements of operations.

5. Minimum Future Lease Rentals

 We have leased space to tenants primarily under noncancelable operating leases, which generally contain provisions for a base rent plus reimbursement for certain operating expenses. Operating expense reimbursements are reflected in our consolidated statements of operations as tenant recoveries.

We have leased space to certain tenants under noncancelable leases, which provide for percentage rents based upon tenant revenues. Percentage rental income for the three months ended June 30, 2008 and 2007 totaled $185 and $357, respectively, and $429 and $621 for the six months ended June 30, 2008 and 2007, respectively.

Future minimum base rentals on noncancelable office and ground operating leases at June 30, 2008 were as follows:

July 1, 2008 to December 31, 2008	$	197,137
2009		371,293
2010		321,984
2011		266,867
2012		216,608
Thereafter		577,938
Total future minimum base rentals	$	1,951,827

The above future minimum lease payments exclude residential leases, which typically have a term of one year or less, as well as tenant reimbursements, amortization of deferred rent receivables and above/below-market lease intangibles. Some leases are subject to termination options. In general, these leases provide for termination payments should the termination options be exercised. The preceding table is prepared assuming such options are not exercised.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

6. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consist of the following as of:

	June 30,		December 31,
	2008		2007
Accounts payable	$	31,018	$	43,449
Accrued interest payable		20,723		13,963
Deferred revenue		6,521		5,292
	$	58,262	$	62,704

7. Secured Notes Payable

During the first six months of 2008, we borrowed an additional $738 million of debt, as follows:

·   We obtained a $380 million bridge loan from an affiliate of the seller in the March 2008 acquisitions described in Note 3.  This loan has an interest rate of one-month LIBOR plus 200 basis points and a nine-month term.

·   We obtained a non-recourse $340 million term loan secured by four of our previously unencumbered office properties.  This loan bears interest at a floating rate equal to one-month LIBOR plus 150 basis points, but we have entered into interest rate swap contracts that effectively fix the interest rate at 4.84%, until January 2, 2013.  This loan facility matures on April 1, 2015.  Proceeds from this loan were utilized to repay our secured revolving credit facility and for general corporate purposes.

·   The joint venture in which we have a two-thirds interest obtained an $18 million loan that financed the February 2008 acquisition described in Note 3.  This loan has an interest rate of one-month LIBOR plus 125 basis points and a two-year term with a one-year extension.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

The following summarizes our secured notes payable at:

Type of Debt	June 30, 2008		December 31, 2007	Variable Rate	Effective Annual Fixed Rate(1)	Maturity Date	Swap Maturity Date
Variable Rate Swapped to Fixed Rate:
Modified Term Loan I(2)(3)	$2,300,000		$2,300,000	LIBOR + 0.85%	5.20%	08/31/12	08/01/10-08/01/12
Term Loan II(4)	340,000		-	LIBOR + 1.50%	4.84	04/01/15	01/02/13
Fannie Mae Loan I (5)	293,000		293,000	DMBS + 0.60%	4.76	06/01/12	08/01/11
Fannie Mae Loan II(5)	95,080		95,080	DMBS + 0.60%	5.86	06/01/12	08/01/11
Fannie Mae Loan III(5)	36,920		36,920	DMBS + 0.60%	5.86	02/01/15	08/01/11
Fannie Mae Loan IV(5)	75,000		75,000	DMBS + 0.76%	4.93	02/01/15	08/01/11
Fannie Mae Loan V(5)	82,000		82,000	LIBOR + 0.62%	5.70	02/01/16	03/01/12
Fannie Mae Loan VI(5)	18,000		18,000	LIBOR + 0.62%	5.90	06/01/17	06/01/12
Subtotal	3,240,000	(6)	2,900,000		5.17%
Variable Rate:
General Electric Bridge Loan	380,000		-	LIBOR + 2.00%		01/02/09	--
Wells Fargo Loan(7)	18,000		-	LIBOR + 1.25%		03/01/10	--
$370 Million Senior Secured Revolving Credit Facility(8)	74,050		180,450	LIBOR / Fed Funds+(9)		10/30/09	--
Subtotal	3,712,050		3,080,450
Unamortized Loan Premium(10)	22,891		25,227
Total	$3,734,941		$3,105,677

(1) Includes the effect of interest rate contracts.  Based on actual/365-day basis and excludes amortization of loan fees and unused fees on credit line.

(2) Secured by seven separate cross-collateralized pools.  Requires monthly payments of interest only, with outstanding principal due upon maturity.

(3) Includes $1.11 billion swapped to 4.89% until August 1, 2010; $545.0 million swapped to 5.75% until December 1, 2010; $322.5 million swapped to 4.98% until August 1, 2011; and $322.5 million swapped to 5.02% until August 1, 2012.

(4) Secured by four properties in a cross-collateralized pool.  Requires monthly payments of interest only, with outstanding principal due upon maturity.

(5) Secured by four separate collateralized pools.  Fannie Mae Discount Mortgage-Backed Security (DMBS) generally tracks 90-day LIBOR.

(6) As of June 30, 2008, the weighted average remaining life of our total outstanding debt is 4.2 years, and the weighted average remaining life of the interest rate swaps is 2.9 years.

(7) This loan is carried by a consolidated joint venture formed in 2008, of which our operating partnership owns a two-thirds interest.

(8) This credit facility is secured by nine properties and has two one-year extension options available.

(9) This revolver bears interest at either LIBOR +0.70% or Fed Funds +0.95% at our election.  If the amount outstanding exceeds $262.5 million, the credit facility bears interest at either LIBOR +0.80% or Fed Funds +1.05% at our election.

(10) Represents non-cash mark-to-market adjustment on variable rate debt associated with office properties.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

The minimum future principal payments due on our secured notes payable, excluding the non-cash loan premium amortization, at June 30, 2008 were as follows:

July 1, 2008 to December 31, 2008	$	-
2009		454,050
2010		18,000
2011		-
2012		2,688,080
Thereafter		551,920
Total future principal	$	3,712,050

Senior Secured Revolving Credit Facility

We have a $370 million revolving credit facility.  Our secured revolving credit facility is with a group of banks led by Bank of America, NA and Banc of America Securities, LLC, and bears interest at a rate per annum equal to either LIBOR plus 70 basis points or Federal Funds Rate plus 95 basis points if the amount outstanding is $262.5 million or less and at either LIBOR plus 80 basis points or Federal Funds Rate plus 105 basis points if the amount outstanding is greater than $262.5 million.  Our secured revolving credit facility contains an accordion feature that allows us to increase the availability by an additional $130 million to $500 million, under specified circumstances.  The facility bears interest at 15 basis points on the undrawn balance.  The facility expires in 2009 with two one-year extensions at our option.

8. Interest Rate Contracts

We have executed interest rate swaps with a notional amount of $3.24 billion to protect against interest rate fluctuations on our existing variable-rate term loan facilities.  These derivatives were designated and qualify as highly effective cash flow hedges under FAS 133 and remove the variability from the hedged cash flows.  The change in fair value of these cash flow hedges was recorded as an unrealized gain during each of the respective reporting periods shown in the following table.  Such unrealized gains were recorded to accumulated other comprehensive income in our consolidated balance sheets.  An immaterial amount of hedge ineffectiveness has also been recorded in interest expense.

The components of comprehensive income consist of the following:

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Net loss	$	(9,428	)	$	(1,260	)	$	(11,928	)	$	(4,533	)
Cash flow hedge adjustment		103,831			42,673			12,985			30,785
Comprehensive income	$	94,403		$	41,413		$	1,057		$	26,252

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

We also have additional interest rate swaps that we acquired from our predecessor at the time of our IPO.  Our predecessor had $2.2 billion notional of pay-fixed interest rate swaps at swap rates ranging between 4.09% and 5.00%.  Concurrent with the completion of our IPO, we executed receive-fixed swaps for the same notional amount at swap rates ranging between 4.96% and 5.00%, which were intended to largely offset the future cash flows and future change in fair value of our predecessor’s pay-fixed swaps.  The acquired pay-fixed swaps and the new receive-fixed swaps were not designated as hedges under FAS 133 and as such, the changes in fair value of these interest rate swaps have been recognized in earnings for all periods.  The aggregate fair value of these swaps decreased $5.5 million and $2.9 million for the three months ended June 30, 2008 and 2007, respectively, and $7.4 million and $6.5 million for the six months ended June 30, 2008 and 2007, respectively.

9. Stockholders’ Equity and Minority Interests

Minority interests in our operating partnership relate to interests in that partnership which are not owned by us.  Minority interests amounted to approximately 22% of our operating partnership at June 30, 2008.  A unit in our operating partnership and a share of our common stock have essentially the same economic characteristics as they share equally in the total net income or loss distributions of our operating partnership.  Investors who own units in our operating partnership have the right to cause our operating partnership to redeem any or all of their units in our operating partnership for cash equal to the then-current market value of one share of common stock, or, at our election, shares of our common stock on a one-for-one basis.  At the end of each reporting period, we calculate the book value of net assets allocable to minority interests, and adjust the balance to reflect the calculated amount with a reclass to or from the retained earnings (accumulated deficit) balance.

Minority interests also includes the interest of a minority partner in a joint venture formed during the first quarter of 2008 to purchase an office building in Honolulu, Hawaii.  The joint venture is two-thirds owned by our operating partnership and is consolidated in our financial statements as of June 30, 2008, with the minority interest eliminated.

Dividends

During the first six months of 2008 and 2007, we declared quarterly dividends of $0.1875 and $0.175 per share, respectively, which equals an annualized rate of $0.75 and $0.70 per share, respectively.

Equity Conversions and Repurchases

During the first six months of 2008, investors converted 11.5 million operating partnership units to shares of common stock and we repurchased approximately 1.1 million share equivalents in private transactions for a total consideration of approximately $23.8 million.  We may make additional purchases of our share equivalents from time to time in private transactions or in the public markets, but do not have any commitments to do so.  Also, during the first six months of 2008, we issued approximately 31,000 shares of common stock to satisfy the exercise of certain vested employee stock options.

Taxability of Dividends

Earnings and profits, which determine the taxability of distributions to stockholders, will differ from income reported for financial reporting purposes due to the differences for federal income tax purposes in the treatment of loss on extinguishment of debt, revenue recognition, compensation expense and in the basis of depreciable assets and estimated useful lives used to compute depreciation.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

10. Stock-Based Compensation

The Douglas Emmett, Inc. 2006 Omnibus Stock Incentive Plan, our stock incentive plan, was adopted by our board of directors and approved by our stockholders prior to the consummation of our IPO. Our stock incentive plan is administered by the compensation committee of our board of directors.  All full-time and part-time officers, employees, directors and other key persons (including consultants and prospective employees) are eligible to participate in our stock incentive plan.  For more information on our stock incentive plan, please refer to the notes to the consolidated financial statements in our 2007 Annual Report on Form 10-K.

During the first quarter of 2008, we granted approximately 2.7 million long-term incentive units and stock options with a total fair market value of $9.9 million.  No additional grants have been made during 2008.  Upon the vesting of equity awards, we recognized non-cash compensation expense of $1.0 million and $0.7 million for the three months ended June 30, 2008 and 2007 respectively, and $2.1 million and $1.4 million for the six months ended June 30, 2008 and 2007, respectively.  An additional $2.2 million of equity awards vested during the first quarter of 2008 to satisfy a portion of the bonuses accrued during 2007.

11. Commitments and Contingencies

We are subject to various legal proceedings and claims that arise in the ordinary course of business. These matters are generally covered by insurance.  We believe that the ultimate outcome of these actions will not have a material adverse effect on our financial position and results of operations or cash flows.

Concentration of Credit Risk

Our properties are located in premier submarkets within Los Angeles County, California and Honolulu, Hawaii. The ability of the tenants to honor the terms of their respective leases is dependent upon the economic, regulatory and social factors affecting the markets in which the tenants operate.  We perform ongoing credit evaluations of our tenants for potential credit losses.  Financial instruments that subject us to credit risk consist primarily of cash, accounts receivable, deferred rents receivable and interest rate contracts. We maintain our cash and cash equivalents with high quality financial institutions. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $100,000.00 and to date, we have not experienced any losses on our deposited cash.  All of our deposits are maintained at banks with investment grade ratings as evaluated by the predominant rating agencies.

Asset Retirement Obligations

FASB Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations—an interpretation of FASB Statement No. 143 clarifies that the term “conditional asset retirement obligation” as used in FAS No. 143, Accounting for Asset Retirement Obligations, represents 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 a company’s control.  Under this standard, 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 and investigations have identified 18 properties in our portfolio containing asbestos, which would have to be removed in compliance with applicable environmental regulations if these properties undergo major renovations or are demolished.  As of June 30, 2008, the obligations to remove the asbestos from these properties have indeterminable settlement dates, and therefore, we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

Future Minimum Lease Payments

We lease portions of the land underlying three of our office properties as more fully described in the notes to consolidated financial statements contained in our 2007 Annual Report on Form 10-K. We expensed ground lease payments in the amount of $805 and $843 for the three months ended June 30, 2008 and 2007, respectively, and $1,591 and $1,704 for the six months ended June 30, 2008 and 2007, respectively.

The following is a schedule of minimum ground lease payments as of June 30, 2008:

July 1, 2008 to December 31, 2008	$	288
2009		707
2010		733
2011		733
2012		733
Thereafter		4,520
	$	7,714

Tenant Concentrations

For the six months ended June 30, 2008 and 2007, no tenant accounted for more than 10% of our total rental revenue and tenant reimbursements.

12. Segment Reporting

FAS No. 131, Disclosures about Segments of an Enterprise and Related Information, established standards for disclosure about operating segments and related disclosures about products and services, geographic areas and major customers. Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes. We have operated in two business segments: (i) the acquisition, redevelopment, ownership and management of office real estate and (ii) the acquisition, redevelopment, ownership and management of multifamily real estate.  The products for our office segment include primarily rental of office space and other tenant services including parking and storage space rental. The products 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 and make decisions to allocate resources.  Therefore, depreciation and amortization expense is not allocated among segments.  Interest and other income, management services, general and administrative expenses, interest expense, depreciation and amortization expense and net derivative gains and losses are not included in rental revenues less rental expenses as the internal reporting addresses these items on a corporate level.

- 18 - -

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements--(continued)

(in thousands, except shares and per share data)

Rental revenues less rental expenses is not a measure of operating results or cash flows from operating activities as measured by GAAP, and it is not indicative of cash available to fund cash needs and should not be considered an alternative to cash flows as a measure of liquidity. Not all companies may calculate rental revenues less rental expenses in the same manner. We consider rental revenues less rental expenses to be an appropriate supplemental measure to net income because it assists both investors and management in understanding the core operations of our properties.

 The following table represents operating activity within our reportable segments:

	Three Months Ended June 30, 2008									Three Months Ended June 30, 2007
		Office			Multifamily			Total			Office			Multifamily			Total
Rental revenues	$	132,393		$	16,982		$	149,375		$	109,557		$	17,405		$	126,962
Percentage of total		89	%		11	%		100	%		86	%		14	%		100	%
Rental expenses	$	36,574		$	3,759		$	40,333		$	31,337		$	3,872		$	35,209
Percentage of total		91	%		9	%		100	%		89	%		11	%		100	%
Rental revenues less rental expenses	$	95,819		$	13,223		$	109,042		$	78,220		$	13,533		$	91,753
Percentage of total		88	%		12	%		100	%		85	%		15	%		100	%

	Six months Ended June 30, 2008									Six months Ended June 30, 2007
		Office			Multifamily			Total			Office			Multifamily			Total
Rental revenues	$	249,437		$	34,766		$	284,203		$	220,455		$	34,410		$	254,865
Percentage of total		88	%		12	%		100	%		86	%		14	%		100	%
Rental expenses	$	67,938		$	7,636		$	75,574		$	64,631		$	8,795		$	73,426
Percentage of total		90	%		10	%		100	%		88	%		12	%		100	%
Rental revenues less rental expenses	$	181,499		$	27,130		$	208,629		$	155,824		$	25,615		$	181,439
Percentage of total		87	%		13	%		100	%		86	%		14	%		100	%

The following is a reconciliation of rental revenues less rental expenses to net loss:

	Three Months Ended June 30,						Six Months Ended June 30,
	2008			2007			2008			2007
Rental revenues less rental expenses	$	109,042		$	91,753		$	208,629		$	181,439
Interest and other income		123			372			532			454
General and administrative expenses		(5,729	)		(5,120	)		(11,014	)		(10,162	)
Interest expense		(51,791	)		(38,313	)		(92,994	)		(76,615	)
Depreciation and amortization		(63,858	)		(50,494	)		(120,607	)		(101,615	)
Minority interests		2,785			542			3,526			1,966
Net loss	$	(9,428	)	$	(1,260	)	$	(11,928	)	$	(4,533	)

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

Forward Looking Statements.

This Quarterly Report on Form 10-Q (Report) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act).  You can find many (but not all) of these statements by looking for words such as “approximates,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “would,” “may” 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 presented in this Report, or those that we may make orally or in writing from time to time, are based on the beliefs of, assumptions made by, and information currently available to us.  Such statements are based on assumptions and the actual outcome 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 inevitably prove to be incorrect.  As a result, our actual future results can be expected to differ from our expectations, and those differences may be material.  Accordingly, investors should use caution in relying on past forward-looking statements, which are based on known results and trends at the time they are made, to anticipate future results or trends.

Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include the following: adverse economic or real estate developments in Southern California and Honolulu; decreased rental rates or increased tenant incentive and vacancy rates; defaults on, early termination of, or non-renewal of leases by tenants; increased interest rates and operating costs; failure to generate sufficient cash flows to service our outstanding indebtedness; difficulties in identifying properties to acquire and completing acquisitions; failure to successfully operate acquired properties and operations; failure to maintain our status as a Real Estate Investment Trust (REIT) under the Internal Revenue Code of 1986, as amended; possible adverse changes in rent control laws and regulations; environmental uncertainties; risks related to natural disasters; lack or insufficient amount of insurance; inability to successfully expand into new markets and submarkets; risks associated with property development; conflicts of interest with our officers; changes in real estate, zoning laws and increases in real property tax rates; and the consequences of any future terrorist attacks. For further discussion of these and other factors, see “Item 1A.  Risk Factors” in our 2007 Annual Report on Form 10-K.

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.

Critical Accounting Policies

Our discussion and analysis of our historical financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.  The preparation of these financial statements in conformity with GAAP requires us to make estimates of certain items and judgments as to certain future events, for example with respect to the allocation of the purchase price of acquired property among land, buildings, improvements, equipment, and any related intangible assets and liabilities, or the effect of a property tax reassessment of our properties.  These determinations, even though inherently subjective and prone to change, affect the reported amounts of our assets, liabilities, revenues and expenses.  While we believe that our estimates are based on reasonable assumptions and judgments at the time they are made, some of our assumptions, estimates and judgments will inevitably prove to be incorrect.  As a result, actual outcomes will likely differ from our accruals, and those differences—positive or negative—could be material.  Some of our accruals are subject to adjustment, as we believe appropriate based on revised estimates and reconciliation to the actual results when available.

In addition, we identified certain critical accounting policies that affect certain of our more significant estimates and assumptions used in preparing our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2007.  We have not made any material changes to these policies during the periods covered by this report.

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Historical Results of Operations

Overview

We are a fully integrated, self-administered and self-managed REIT and one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and in Honolulu, Hawaii.  Our presence in Los Angeles and Honolulu is the result of a consistent and focused strategy of identifying submarkets that are supply constrained, have high barriers to entry and exhibit strong economic characteristics such as population and job growth and a diverse economic base.  In our office portfolio, we focus primarily on owning and acquiring a substantial share of top-tier office properties within submarkets located near high-end executive housing and key lifestyle amenities. In our multifamily portfolio, we focus primarily on owning and acquiring select properties at premier locations within these same submarkets.  Our properties are concentrated in nine premier Los Angeles County submarkets—Brentwood, Olympic Corridor, Century City, Santa Monica, Beverly Hills, Westwood, Sherman Oaks/Encino, Warner Center/Woodland Hills and Burbank—as well as in Honolulu, Hawaii.

Significant Transactions

Acquisitions and Dispositions.  During the first six months of 2008, we completed the following transactions (see Note 3 to our consolidated financial statements included in this Report):

Ÿ   In March 2008, we acquired a 1.4 million square foot office portfolio consisting of six Class “A” buildings located in our core Los Angeles submarkets – Santa Monica, Beverly Hills, Sherman Oaks/Encino and Warner Center/Woodland Hills – for a contract price of approximately $610 million.

Ÿ   In February 2008, we acquired a 78,298 square-foot office building located in Honolulu, Hawaii.  As part of the same transaction, we also acquired all of the assets of The Honolulu Club, a private membership athletic and social club, which is located in the building.  The aggregate contract price was approximately $18 million and the purchase was made in a consolidated joint venture with our local partner.  In May 2008, we transferred the operations of the athletic club to a third party for a nominal cost and incurred an immaterial loss on disposition.

Financings.  During the first quarter of 2008, we completed the following transactions (see Note 7 to our consolidated financial statements included in this Report):

·   We obtained a non-recourse $340 million term loan secured by four of our previously unencumbered office properties.

·   We obtained a $380 million bridge loan from an affiliate of the seller in the March 2008 acquisitions described above.

·   The joint venture, in which we have a two-thirds interest, obtained an $18 million loan that financed the February 2008 acquisition described above.

- 21 - -

Comparison of three months ended June 30, 2008 to three months ended June 30, 2007

Revenues

Total Office Revenue.  Total office revenue consists of rental revenue, tenant recoveries and parking and other income.  For the reasons described below, total office portfolio revenue increased by $22.8 million, or 20.8%, to $132.4 million for the three months ended June 30, 2008 compared to $109.6 million for the three months ended June 30, 2007.

Rental Revenue.  Rental revenue includes rental revenues from our office properties, percentage rent on the retail space contained within office properties, and lease termination income.  Total office rental revenue increased by $18.3 million, or 19.7%, to $111.2 million for the three months ended June 30, 2008 compared to $92.9 million for the three months ended June 30, 2007.  Rent increased across our existing office portfolio due to increases in average rental rates for new and renewal leases.  The increase is also due to $14.7 million of incremental rent from the nine properties we acquired subsequent to the beginning of the second quarter of 2007, including the property acquisitions described above.

Tenant Recoveries.  Total office tenant recoveries increased by $1.7 million, or 30.4%, to $7.3 million for the three months ended June 30, 2008 compared to $5.6 million for the three months ended June 30, 2007.  The increase was due to $1.0 million of incremental recoverable operating expenses from the nine properties we acquired subsequent to the beginning of the second quarter of 2007, including the property acquisitions described above.

Parking and Other Income.  Total office parking and other income increased by $2.8 million, or 25.3%, to $13.9 million for the three months ended June 30, 2008 compared to $11.1 million for the three months ended June 30, 2007, primarily due to increases in parking rates implemented across the portfolio, increases in ground rent income, and incremental revenues of $1.5 million from the nine properties we acquired subsequent to the beginning of the second quarter of 2007, including the property acquisitions described above.

Total Multifamily Revenue.  Total multifamily revenue consists of rent, parking income and other income.  Total multifamily revenue decreased by $0.4 million, or 2.4%, to $17.0 million for the three months ended June 30, 2008, compared to $17.4 million for the three months ended June 30, 2007.  The decrease is primarily due to the amortization of the below-market leases for certain multifamily units initially recorded at the time of our IPO and formation transactions.  The value of these below-market leases were amortized over the life of the related leases, estimated to be 18 months, and recorded as an increase to rental income.  These below-market leases were fully amortized in April 2008, resulting in a decrease to multifamily revenue for the three months ended June 30, 2008 as compared to the three months ended June 30, 2007.  This decrease was partially offset by an increase in occupancy and an increase in rents charged to both new and existing tenants, including increases for select Santa Monica multifamily units.  These units were under leases signed prior to a 1999 change in California Law that allows landlords to reset rents to market rates when a tenant moves out.  Therefore, a portion of the multifamily increase was due to the rollover to market rents of several of these rent-controlled units, or “Pre-1999 Units”, since July 1, 2007.

Operating Expenses

Office Rental Expenses.  Total office rental expense increased by $5.2 million, or 16.7%, to $36.6 million for the three months ended June 30, 2008, compared to $31.3 million for the three months ended June 30, 2007.  The increase was due to $5.8 million of incremental operating expenses from the nine properties we acquired subsequent to the beginning of the second quarter of 2007, including the property acquisitions described above, slightly offset by lower expenses at our existing portfolio.

Depreciation and Amortization.  Depreciation and amortization expense increased $13.4 million, or 26.5%, to $63.9 million for the three months ended June 30, 2008, compared to $50.5 million for the three months ended June 30, 2007.  The increase is primarily due to the finalization of the purchase price allocation and related lives of real estate assets combined at the time of our IPO and incorporation transactions, as well as incremental depreciation and amortization of $9.0 million from the nine properties we acquired subsequent to the beginning of the second quarter of 2007, including the property acquisitions described above.

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Non-Operating Income and Expenses

Interest Expense.  Interest expense increased $13.5 million, or 35.2%, to $51.8 million for the three months ended June 30, 2008, compared to $38.3 million for the three months ended June 30, 2007.  The increase was primarily due to incremental interest from the $150 million borrowed during the second quarter of 2007, the increase in borrowings outstanding under our revolving credit facility, and the additional $738 million borrowed during 2008 to fund property acquisitions and for general corporate purposes.

Comparison of six months ended June 30, 2008 to six months ended June 30, 2007

Revenues

Total Office Revenue.  Total office revenue consists of rental revenue, tenant recoveries and parking and other income.  For the reasons described below, total office portfolio revenue increased by $29.0 million, or 13.1%, to $249.4 million for the six months ended June 30, 2008 compared to $220.5 million for the six months ended June 30, 2007.

Rental Revenue.  Rental revenue includes rental revenues from our office properties, percentage rent on the retail space contained within office properties and lease termination income.  Total office rental revenue increased by $25.7 million, or 13.9%, to $210.2 million for the six months ended June 30, 2008 compared to $184.5 million for the six months ended June 30, 2007.  Rent increased across our existing office portfolio due to increases in average rental rates for new and renewal leases.  The increase is also due to $17.5 million of incremental rent from the nine properties we acquired subsequent to the beginning of the second quarter of 2007, including the property acquisitions described above.

Tenant Recoveries.  Total office tenant recoveries decreased by $1.1 million, or 8.2%, to $12.6 million for the six months ended June 30, 2008 compared to $13.8 million for the six months ended June 30, 2007.  This is due in part to a reduction in the accrual of property tax expense during the second quarter of 2007.  This was partially offset by $1.3 million of incremental recoverable operating expenses from the nine properties we acquired subsequent to the beginning of the second quarter of 2007, including the property acquisitions described above.

Parking and Other Income.  Total office parking and other income increased by $4.4 million, or 19.7%, to $26.6 million for the six months ended June 30, 2008 compared to $22.2 million for the six months ended June 30, 2007, primarily due to increases in parking rates implemented across the portfolio, increases in ground rent income, and incremental revenues of $2.0 million from the nine properties we acquired subsequent to the beginning of the second quarter of 2007, including the property acquisitions described above.

Operating Expenses

Office Rental Expenses.  Total office rental expense increased by $3.3 million, or 5.1%, to $67.9 million for the six months ended June 30, 2008, compared to $64.6 million for the six months ended June 30, 2007.  The increase is primarily due to $7.3 million of incremental operating expenses from the nine properties we acquired subsequent to the beginning of the second quarter of 2007, including the property acquisitions described above.  The increase was offset by a reduction in the accrual of property tax expense during the second quarter of 2007.

 Multifamily Rental Expenses. Total multifamily rental expense decreased by $1.2 million, or 13.2%, to $7.6 million for the six months ended June 30, 2008, compared to $8.8 million for the six months ended June 30, 2007.  This is primarily due to a reduction in the accrual of property tax expense during the second quarter of 2007.

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Depreciation and Amortization.  Depreciation and amortization expense increased $19.0 million, or 18.7%, to $120.6 million for the six months ended June 30, 2008, compared to $101.6 million for the six months ended June 30, 2007.  The increase is primarily due to the finalization of the purchase price allocation and related lives of real estate assets combined at the time of our IPO and formation transactions, as well as $10.1 million of incremental depreciation and amortization from the nine properties we acquired subsequent to the beginning of the second quarter of 2007 including the property acquisitions described above.

Non-Operating Income and Expenses

Interest Expense.  Interest expense increased $16.4 million, or 21.4%, to $93.0 million for the six months ended June 30, 2008, compared to $76.6 million for the six months ended June 30, 2007.  The increase was primarily due to incremental interest from the $150 million borrowed during the second quarter of 2007, the increase in borrowings outstanding under our revolving credit facility and the additional $738 million borrowed during 2008 to fund property acquisitions and for general corporate purposes.

Liquidity and Capital Resources

Available Borrowings, Cash Balances and Capital Resources

We had total indebtedness of $3.7 billion at June 30, 2008, excluding a loan premium representing the mark-to-market adjustment on variable rate debt assumed from our predecessor.   Please see Note 7 to our consolidated financial statements included in this Report.

We have a revolving credit facility with a group of banks led by Bank of America, N.A. and Banc of America Securities LLC totaling $370 million.  At June 30, 2008, there was approximately $296 million available to us under this credit facility.  We have used our revolving credit facility for general corporate purposes, including acquisition funding, redevelopment and repositioning opportunities, tenant improvements and capital expenditures, share equivalent repurchases, recapitalizations and working capital.

We have historically financed our capital needs through short-term lines of credit and long-term secured mortgages at floating rates.  To mitigate the impact of fluctuations in short-term interest rates on our cash flow from operations, we generally enter into interest rate swap or interest rate cap agreements.  At June 30, 2008, 87% of our debt was effectively fixed at an overall rate of 5.17% by virtue of interest rate swap and interest rate cap agreements in place at the end of the reporting period.  See Notes 7 and 8 to our consolidated financial statements included in this Report.

At June 30, 2008, our total borrowings under secured loans, excluding the portion of consolidated debt attributable to our minority partner on the Honolulu Club joint venture, represented 52.0% of our total market capitalization of $7.1 billion.  Total market capitalization includes our consolidated debt and the value of common stock and operating partnership units each based on our common stock closing price at June 30, 2008 on the New York Stock Exchange of $21.97 per share.

The nature of our business, and the requirements imposed by REIT rules that we distribute a substantial majority of our income on an annual basis, will cause us to have substantial liquidity needs over both the short term and the long term.

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We expect to meet our short-term liquidity requirements generally through cash provided by operations and, if necessary, by drawing upon our senior secured revolving credit facility.  However, recent economic events have led to tighter and more uncertain credit markets.  As a result, although we have been successful in financings during 2008, disruptions in the credit markets could impact the availability of credit in the future or could impact the rates of any borrowings we do obtain.  Currently, we have approximately $454 million of principal payments maturing by the end of 2009, consisting of the $380 million bridge financing borrowed in connection with our March 2008 acquisitions and $74 million under our revolving credit facility.  We anticipate repaying the bridge loan from refinancing proceeds, available cash and borrowings under our credit facility prior to maturity.  Our credit facility contains two renewal options of one year each.  We anticipate that cash provided by operations and borrowings under our senior secured revolving credit facility will be sufficient to meet our liquidity requirements for at least the next 12 months.

Our long-term liquidity needs consist primarily of funds necessary to pay for acquisitions, redevelopment and repositioning of properties, non-recurring capital expenditures, and repayment of indebtedness at maturity.  We do not expect that we will have sufficient funds on hand to cover all of these long-term cash requirements.  We will seek to satisfy these needs through cash flow from operations, long-term secured and unsecured indebtedness, the issuance of debt and equity securities, including units in our operating partnership, property dispositions and joint venture transactions.  We have historically financed our operations, acquisitions and development, through the use of our revolving credit facility or other short-term acquisition lines of credit, which we subsequently repay with long-term secured floating rate mortgage debt.  To mitigate the impact of fluctuations in short-term interest rates on our cash flow from operations, we generally enter into interest rate swap or interest rate cap agreements at the time we enter into term borrowings.

We are also exploring raising capital for acquisitions through an institutional fund, controlled by an entity affiliated with us, which would receive certain fees as well as a carried interest in any distributions after the participating institutional investors receive a return of their invested capital and a preferred return.  If we close such a fund, it is likely that it would be our exclusive vehicle for our cash acquisitions during the investment period of the fund.  The exact terms of any such fund would be based on negotiations and market conditions.  Any securities offered in such a fund will not be registered under the Securities Act of 1933 and could not be offered or sold in the United States absent registration under that act or an applicable exemption from those registration requirements.  Nothing in the foregoing disclosure constitutes an offer to sell any securities in such a fund, nor a solicitation of an offer to purchase any such securities.

Contractual Obligations

During the second quarter of 2008, there were no material changes outside the ordinary course of business in the information regarding specified contractual obligations contained in our Annual Report on Form 10-K for the year ended December 31, 2007.

Off-Balance Sheet Arrangements

At June 30, 2008, we did not have any off-balance sheet financing arrangements.

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Cash Flows

Net cash provided by operating activities increased $11.7 million to $90.8 million for the six months ended June 30, 2008, compared to $79.1 million for the six months ended June 30, 2007.  The increase reflects higher net cash flow from existing properties that generated improved results, as well as incremental cash flow from acquired properties.

Net cash used in investing activities increased $584.3 million to $642.8 million for the six months ended June 30, 2008 compared to $58.4 million for the six months ended June 30, 2007.  The increase was primarily due to a higher level of spending on property acquisitions in the 2008 period compared to the 2007 period.  See Note 3 to our consolidated financial statements included in this Report.

Net cash provided by financing activities increased $508.1 million to $548.9 million for the six months ended June 30, 3008 compared to $40.8 million for the six months ended June 30, 2007.  The increase was primarily due to  borrowings in excess of equity repurchases and payments of dividends and distributions.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

During the first six months of 2008, there were no material changes in the information regarding market risk contained in our Annual Report on Form 10-K for the year ended December 31, 2007.

Item 4.  Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act)  that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and regulations and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of June 30, 2008, 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 Chief Executive Officer and Chief Financial Officer, regarding the effectiveness in design and operation of our disclosure controls and procedures at the end of the period covered by this Report.  Based on the foregoing, our Chief Executive Officer and Chief Financial Officer 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 recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) is accumulated and communicated to our management including our principal executive officer and our principal financial officer, to allow timely decisions regarding required disclosure.

There have been no significant changes that occurred during the quarter covered by this Report in our internal control over financial reporting identified in connection with the evaluation referenced above that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

We are subject to various legal proceedings and claims that arise in the ordinary course of business.  Most of these matters are generally covered by insurance and we do not believe that the ultimate outcome of these actions will have a material adverse effect on our financial position, results of operations or cash flows.

Item 1A.  Risk Factors

We are not aware of any material changes to the risk factors included in Item 1A “Risk Factors” in our 2007 Annual Report on Form 10-K.

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

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Submission of Matters to a Vote of Security Holders

Our annual meeting of stockholders was held on May 29, 2008.  Approximately 83% of the eligible shares were voted.  A detailed description of the matters voted upon at the meeting is contained in our proxy statement, which was filed with the U.S. Securities and Exchange Commission on April 19, 2008.  The voting results for each of the proposals are as follows:

Proposal	For	Withheld/ Against	Abstain
1.  Election of directors
Dan A. Emmett	99,778,589	950,776
Jordan L. Kaplan	100,342,510	386,855
Kenneth M. Panzer	100,177,890	551,475
Leslie E. Bider	91,089,703	9,639,662
Victor J. Coleman	100,293,510	435,855
Ghebre Selassie Mehreteab	93,598,140	7,131,255
Thomas E. O’Hern	93,648,140	7,081,225
Dr. Andrea Rich	97,345,469	3,383,896
William Wilson III	100,346,960	382,405
2.  Ratification of Ernst & Young LLP as independent registered public accounting firm	89,116,082	11,608,241	5,041

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Item 5.  Other Information

(a)                 Additional Disclosures.  None.

(b)                 Stockholder Nominations.  There have been no material changes to the procedures by which stockholders may recommend nominees to our board of directors during the quarter ended June 30, 2008.  Please see the discussion of our procedures in our most recent proxy statement.

Item 6.  Exhibits

Exhibit Number	Description
10.11	Employment agreement dated October 23, 2006 between Douglas Emmett, Inc., Douglas Emmett Properties, LP and Jordan L. Kaplan. (1)+
10.12	Employment agreement dated October 23, 2006 between Douglas Emmett, Inc., Douglas Emmett Properties, LP and Kenneth Panzer. (1)+
10.13	Employment agreement dated October 23, 2006 between Douglas Emmett, Inc., Douglas Emmett Properties, LP and William Kamer. (1)+
31.1	Certificate of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certificate of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.(2)
32.2	Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (2)

+ Denotes management contract or compensatory plan, contract or arrangement.

(1)   Copy originally filed with Amendment No. 3 to the Form S-11 filed by the Registrant on October 3, 2006; re-filed herewith to include conformed signatures.

(2)   In accordance with SEC Release No. 33-8212, the following exhibit is being furnished, and is not being filed as part of this Report on Form 10-Q or as a separate disclosure document, and is not being incorporated by reference into any Securities Act of 1933 registration statement.

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Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, 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, 2008	By:	/s/ JORDAN L. KAPLAN
		Jordan L. Kaplan
		President and Chief Executive Officer
Date: August 7, 2008	By:	/s/ WILLIAM KAMER
		William Kamer
		Chief Financial Officer

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EX-31.1

EXHIBIT 31.1

Certification of Chief Executive Officer

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 officers 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.

Dated: August 7, 2008	By:	/s/ JORDAN L. KAPLAN
		Jordan L. Kaplan
		President and Chief Executive Officer
		Douglas Emmett, Inc.

EX-31.2

EXHIBIT 31.2

Certification of Chief Financial Officer

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

I, William Kamer, 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 officers and I have disclosed, based on our 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.

Dated: August 7, 2008	By:	/s/ WILLIAM KAMER
		William Kamer
		Chief Financial Officer

EX-32.1

EXHIBIT 32.1

OFFICERS’ CERTIFICATIONS

Certification of Chief Executive Officer

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, 2008 (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.

.

Dated: August 7, 2008	By:	/s/ JORDAN L. KAPLAN
		Jordan L. Kaplan
		President and Chief Executive Officer
		Douglas Emmett, Inc.

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

Certification of Chief Financial Officer

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, 2008 (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.

Dated: August 7, 2008	By:	/s/ WILLIAM KAMER
		William Kamer
		Chief Financial Officer

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-10.11

Exhibit 10.11

EMPLOYMENT AGREEMENT

        This EMPLOYMENT AGREEMENT (the "Agreement") is made effective as of October 23, 2006 (the "Effective Date") by and between Douglas Emmett, Inc. (the "Company"), Douglas Emmett Properties, LP (the "Partnership"), and Jordan L. Kaplan ("Executive") with respect to the following facts and circumstances:

        WHEREAS, the Company desires to engage Executive as the President and Chief Executive Officer of the Company, during the Agreement Term (as defined below), on the terms and conditions and for the consideration set forth herein.

        NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1.    Effectiveness; Term of Employment.    Subject to the provisions of Section 8 of this Agreement, Executive shall be employed by the Company on the terms and subject to the conditions set forth in this Agreement for a period commencing on the Effective Date and ending on December 31, 2010. Commencing on January 1, 2011 and on each January 1 thereafter (each an "Extension Date"), the Agreement Term shall be automatically extended for an additional one-year period unless either the Company or Executive provides the other party hereto sixty (60) days' prior written notice before the next Extension Date that the Agreement Term shall not be so extended (the "Agreement Term").

2.    Position; Duties.    During the Agreement Term, Executive shall serve as President and Chief Executive Officer of the Company and the Partnership. In such position, Executive shall have such duties and authority commensurate with such position as shall be determined from time to time by the Board of Directors of the Company (the "Board") including such duties and responsibilities with respect to any subsidiary, affiliate or joint venture of the Company (each a "Subsidiary"). Subject to the discretion of the Nominating Committee of the Board, Executive shall serve as a member of the Board and of the board of directors (or equivalent) of any Subsidiary without additional compensation. Executive's duties will be principally performed at the Company's headquarters, which will be located within the West Side of Los Angeles, with such travel as may be required to perform his duties hereunder as reasonably requested by the Company.

3.    Base Salary.    During the Agreement Term, the Company shall pay Executive a base salary at the annual rate of $950,000, payable in regular installments in accordance with the Company's usual payment practices. Executive's salary shall be reviewed at least annually by the Compensation Committee of the Board (the "Committee") and Executive shall be entitled to such increases in Executive's base salary, if any, as may be determined from time to time in the sole and absolute discretion of the Committee. Executive's annual base salary, as in effect from time to time, is hereinafter referred to as the "Base Salary."

4.    Annual Bonus.    With respect to each fiscal year during the Agreement Term, Executive shall be eligible to earn an annual bonus award (the "Annual Bonus") based upon reasonable criteria to be reasonably established not later than the first thirty (30) days of that fiscal year by the Compensation Committee of the Board in consultation with Executive. The amount of the bonus shall equal the following percentages of Executive's Base Salary during that fiscal year:

Threshold	Target	Superior	Outperformance
65%	100%	150%	200%

Unless otherwise approved by the Board in its discretion, no bonus will be payable to Executive for any year if Executive does not meet the Threshold criteria established for that year. The Company will pay any Annual Bonus earned by Executive with respect to a given fiscal year in accordance with the terms and conditions of the Company's annual bonus plan, but no later than the earlier of (i) the fifteenth day of the third month following the end of such fiscal year or (ii) the date that other senior executives are paid similar bonuses.

5.    Long-Term Incentive Compensation.    

        5.1.    Option Award.    As of the Effective Date, Executive shall be granted an option to purchase 2,488,889 shares of Company stock (the "Option Award") pursuant to a separate written Non Qualified Stock Option Agreement under the Company's 2006 Omnibus Stock Incentive Plan (the "Plan"). The Option Award shall be subject to the terms and conditions of that agreement and the Plan.

        5.2.    LTIP Award.    As of the Effective Date, Executive shall be granted 420,000 LTIP Units (the "LTIP Award") pursuant to a separate written LTIP Unit Award Agreement under the Plan. The LTIP Award shall be subject to the terms and conditions of that agreement and the Plan.

6.    Employee Benefits.    During the Agreement Term, Executive shall be entitled to participate in the Company's employee welfare and retirement benefit plans and perquisite programs as in effect, and subject to such modification as the Company may determine necessary or appropriate, from time to time (collectively "Employee Benefits"), on the same basis as those benefits are generally made available to other senior executives of the Company, which shall in any case include (i) the payment or reimbursement of tax/financial services, the use of and payment of all related expenses for an automobile, and a personal umbrella insurance policy all in amounts and on terms not less favorable than those provided to Executive by the Company's predecessor provided that, any such payment or reimbursement by the Company shall be made no later than the fifteenth day of the third month following the end of the calendar year in which Executive incurred such expense, and (ii) medical and dental benefits (without any co payment) for Executive, Executive's spouse and Executive's eligible dependents on terms not less favorable than those provided to Executive by the Company's predecessor. During the Agreement Term, Executive shall have the right (i) to participate in any future compensation plans implemented for executives of the Company on a basis commensurate with his position and (ii) to be indemnified by the Company for all actions taken as an officer, director or agent of the Company or its Subsidiaries to the full extent provided under law or pursuant to the Indemnification Agreement of even date herewith. Subject to the policies and procedures of the Company, in addition to any accrued personal time off ("PTO") accrued with respect to service to the predecessors of the Company, Executive shall be entitled to accrue twenty five (25) paid days of PTO per year during the Agreement Term.

7.    Business Expenses.    During the Agreement Term, the Company shall reimburse Executive for all reasonable business expenses incurred by Executive in the performance of Executive's duties hereunder in accordance with the Company's policies as in effect from time to time.

8.    Termination.    Notwithstanding any other provision of this Agreement, the provisions of this Section 8 shall exclusively govern Executive's rights upon termination of employment with the Company. Following Executive's termination of employment, except as set forth in this Section 8, Executive (and Executive's legal representative and estate) shall have no further rights to any compensation or any other benefits under this Agreement.

        8.1.    Definitions.    

        "Accrued Rights" means the sum of the following: (i) any accrued but unpaid Base Salary through the date of termination; (ii) a payment in respect of all unpaid, but accrued and unused PTO through the date of termination; (iii) any Annual Bonus earned but unpaid as of the date of termination for any previously completed fiscal year (i.e., not for the year of employment termination); (iv) reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy through the date of termination; (v) such rights, if any, under the Option Award, the LTIP Award and other compensation programs and Employee Benefits to which Executive may be entitled upon termination of employment according to the documents governing such benefits; and (vi) any existing rights to indemnification for prior acts through the date of termination.

        "Cause" means any of the following: (i) any act or omission by Executive which constitutes intentional misconduct or a willful violation of law; (ii) an act of fraud, conversion, misappropriation or embezzlement by Executive or conviction of, indictment for (or its procedural equivalent) or entering a guilty plea or plea of no contest with respect to a felony, the equivalent thereof or any crime involving any moral turpitude with respect to which imprisonment is a common punishment; or (iii) any other failure (other than any failure resulting from incapacity due to physical or mental illness) by Executive to perform his material and reasonable duties and responsibilities as an employee, director or consultant of the Company or

any Subsidiary which continues for ten (10) days following written notice from the Company or any Subsidiary (except in the case of a willful failure to perform his duties or a willful breach, which shall require no notice). For purposes of the foregoing sentence, no act, or failure to act, on Executive's part shall be considered "willful" unless the Executive acted, or failed to act, in bad faith or without reasonable belief that his act or failure to act was in the best interest of the Company or any Subsidiary.

        "Change of Control" shall be deemed to have occurred if

          (i)  there shall be consummated (a) any consolidation or merger of the Company, other than a merger or consolidation of the Company in which (1) the holders of the Company's common stock immediately prior to the merger or consolidation have at least fifty one percent (51%) ownership of the total voting power of the surviving entity immediately after the merger or consolidation, and (2) no person (other than an Exempted Holder as defined below) beneficially owns (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, 20% or more of the total voting power of the surviving entity or (b) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or

         (ii)  the shareholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company, or

        (iii)  any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) other than an Exempted Holder (as defined below) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of twenty percent (20%) or more of the Company's common stock. "Exempted Holder" means (a) the Company or any majority-owned Subsidiary (provided that this exclusion applies solely to the ownership levels of the Company or the majority-owned Subsidiary); (b) any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust sponsored or maintained by the Company or any Subsidiary; or (c) any underwriter or placement agent temporarily holding securities pursuant to an offering of such securities. However, a Change in Control shall not be deemed to have occurred if a person's percentage interest increases over twenty percent (20%) solely as a result of a decrease in the outstanding stock because of an acquisition of securities by the Company; provided, however, that a "Change in Control" shall be deemed to have occurred on any subsequent acquisitions of the Company's common stock by that person (other than pursuant to a stock split, stock dividend, or similar transaction) at a time when that person beneficially owns twenty percent (20%) or more of the Company's outstanding common stock, or

        (iv)  the Board shall cease for any reason to have a majority of Uncontested Directors. "Uncontested Directors" means directors who were initially elected or initially nominated (a) by a vote of at least two-thirds of the then Uncontested Directors and (b) not as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation.

        "Disability" means physical or mental incapacity whereby Executive is unable with or without reasonable accommodation for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period to perform the essential functions of Executive's duties.

        "Good Reason" shall be present where Executive gives notice to the Board of his voluntary resignation (a) within one hundred and twenty (120) days after the occurrence of any of the following, without Executive's written consent: (i) the failure of the Company to pay or cause to be paid Executive's Base Salary or Annual Bonus, when due hereunder, subject to a ten (10) day cure period by the Company (except in the case of a willful failure which shall require no notice); (ii) diminution in Executive's status, including, title, position, duties, authority or responsibility (including Executive ceasing to be a member of the Board other than as a result of a voluntary resignation), subject to a thirty (30) day cure period by the Company (except in the case of a willful breach, which shall require no notice); (iii) relocation of the Company's executive offices to a location outside of the West Side of Los Angeles; or (iv) the failure of the Company to obtain the express written assumption of this Agreement pursuant to Section 11.5 hereof (unless such Agreement is assumed by operation of law); (b) within eighteen (18) months after the occurrence of a Change of Control.

        8.2.    Termination by the Company for Cause or By Executive's Resignation without Good Reason.    The Agreement Term and Executive's employment hereunder may be terminated by the Company for Cause and shall terminate upon Executive's resignation without Good Reason, and in either case Executive shall be entitled to receive only his Accrued Rights.

        8.3.    Death/Disability.    The Agreement Term and Executive's employment hereunder shall terminate upon Executive's death or Disability. Upon termination of Executive's employment hereunder due to death or Disability, Executive's legal representative or estate (as the case may be) shall be entitled to receive (i) the Accrued Rights plus (ii) an amount equal to a pro-rated portion of the Annual Bonus Executive otherwise would have been paid for the fiscal year in which such termination of employment occurs, payable when the Annual Bonus would otherwise have been paid to Executive pursuant to Section 4, based upon (a) actual performance for such fiscal year, as determined at the end of such fiscal year and (b) the percentage of such fiscal year that shall have elapsed through the date of Executive's termination of employment; plus (iii) continued medical benefits for Executive and Executive's spouse and eligible dependents who at the time of Executive's termination are enrolled in the Company's medical plan. Such benefits shall be substantially identical to the benefits maintained for other senior executives of the Company and shall be provided for a period of twelve (12) months following Executive's termination of employment. Executive acknowledges that such benefit continuation is intended, and shall be deemed, to satisfy the obligations of the Company and any of its subsidiaries and affiliates to provide continuation of benefits under Section 4980B of the Internal Revenue Code of 1986, as amended ("COBRA") for such period and that the Company may satisfy such obligation by paying any applicable COBRA premiums.

        8.4.    Termination by the Company without Cause or Resignation by Executive for Good Reason.    The Agreement Term and Executive's employment hereunder may be terminated by the Company without Cause at any time and for any reason or by Executive's resignation for Good Reason at any time upon thirty (30) days written notice by the terminating party, although the Company may waive services during that period. If Executive's employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns for Good Reason, Executive shall be entitled to receive (i) the Accrued Rights, plus (ii) provided that Executive first executes and returns to the Company (and does not revoke) a release of all claims that is in form and substance reasonably satisfactory to the Company, and subject to Executive's continued compliance with the provisions of Section 9 of this Agreement (to the extent expressly applicable after the Agreement Term):

        8.4.1. an amount, payable in a lump sum without discount within 30 days of the date of termination, equal to three (3) times the average of Executive's compensation over the last three full calendar years ending prior to the termination date including (i) the Base Salary; (ii) the Annual Bonus and (iii) the value (based on a Black Scholes formula in the case of options and value of the underlying grants in the case of LTIP or outperformance plans) of any equity (including stock, LTIPs and options) or other compensation plans granted or awarded to Executive. In the event that there are less than three full calendar years completed after the execution of this Agreement, the average shall be based on (i) 2006 (including compensation paid by the predecessor of the Company) and (ii) any other full completed years prior to the date of termination.

        8.4.2. continued medical and dental benefits for Executive, Executive's spouse and Executive's eligible dependents, who at the time of Executive's termination are enrolled in the Company's benefits plans provided for a period of three (3) years following Executive's termination of employment. Such benefits shall be substantially identical to the benefits maintained for other senior executives of the Company. Executive acknowledges that such benefit continuation is intended, and shall be deemed, to satisfy the obligations of the Company and any of its subsidiaries and affiliates to provide continuation of benefits under COBRA for such period and that the Company may satisfy such obligation by paying any applicable COBRA premiums or causing such premiums to be paid.

        8.5.    Notice of Termination.    Any purported termination of employment by the Company or by Executive (other than due to Executive's death) shall be communicated by written notice to the other party, which indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated and the date of employment termination.

        8.6.    Employee Termination and Board/Committee/Officer Resignation.    Upon termination of Executive's employment for any reason, Executive's employment with each of the Company and each Subsidiary shall be terminated and Executive shall be deemed to resign, as of the date of such termination and to the extent applicable, from the boards of directors (and any committees thereof) of the Company and any Subsidiary and affiliates and as an officer of the Company and any Subsidiary. Executive shall confirm such resignation(s) in writing to the Company.

9.    Covenants.    

        9.1.    Confidentiality.    Executive acknowledges that, in his employment hereunder, he will occupy a position of trust and confidence with the Company and its Subsidiaries. Executive agrees that Executive shall not during the Agreement Term and for two (2) years thereafter, except (i) as may be required to perform his duties hereunder or as required by applicable law or (ii) until such information shall have become public other than by Executive's unauthorized disclosure or (iii) with the prior written consent of the Company, use, disclose or disseminate any trade secrets, confidential information or any other information of a secret, proprietary, confidential or generally undisclosed nature relating to the Company and/or any Subsidiary, or their respective businesses, contracts, projects, proposed projects, revenues, costs, operations, methods or procedures.

        9.2.    Non-solicitation.    Executive agrees that, for a period of one (1) year immediately following the end of Executive's employment with the Company, except acting on behalf of the Company during the Employment Term, Executive shall not, either directly or indirectly, solicit or participate in the solicitation of any employee or consultant of the Company to terminate or materially alter his, her or its relationship with the Company or any Subsidiary. This restriction shall not apply to Executive's assistant.

        9.3.    Full time; Non competition.    During the Agreement Term, Executive will devote Executive's full business time and best efforts to the performance of Executive's duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly; except that nothing herein shall preclude Executive from accepting appointment to or continuing to serve on any board of directors or trustees of any business entity, trade organization or any charitable organization or engaging in any activities or managing his investments and affairs so long as such activities in the aggregate do not interfere with the performance of Executive's duties hereunder or conflict with this Section 9.3 herein. During the Agreement Term, without the prior approval of the Board, Executive shall not in any city, town, county, parish where the Company and/or any Subsidiaries directly or indirectly engages in business or is actively contemplating engaging in business: (i) engage in a competing business for Executive's own account; (ii) enter the employ of, or render any consulting or any other services to, any entity that competes with the Company and/or any of its affiliates; or (iii) become interested in any such competing entity in any capacity, including, without limitation, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; provided, however, Executive may own, directly or indirectly, solely as a passive investment, 5% or less of any class of securities of any entity traded on any national securities exchange and any assets acquired in compliance with this Section. A business shall not be deemed a "competing business" if it does not invest in or deal with the same basic product type as the Company does from time to time. At this time the basic product type of the Company is large and mid-size office buildings and multi-family properties in Los Angeles County and Hawaii (larger than 50,000 sq. ft. for office properties and 50 units for apartment buildings).

        9.4.    Company Policies.    During the Agreement Term, Executive shall also be subject to and shall abide by all written reasonable policies and procedures of the Company provided to him, including regarding the protection of confidential information and intellectual property and potential conflicts of interest, except to the extent that such policies and procedures conflict with the other provisions of this Agreement, in which case this Agreement shall control. Executive acknowledges that the Company may amend any such policies and guidelines from, time to time, and that Executive remains at all times bound by their most current version to the extent made known to him and reasonable in scope.

        9.5.    Intellectual Property.    Except as permitted in Section 9.3 and as provided under Section 2870 of the California Labor Code, the Company shall be the sole owner of all the products and proceeds of Executive's services hereunder including, without limitation, all materials, ideas, concepts, formats, suggestions, developments, and other intellectual properties that Executive may acquire, obtain, develop or create in connection with his services hereunder and during the Agreement Term, free and clear of any claims by Executive (or anyone claiming under Executive) of any kind or character whatsoever (other than Executive's rights and benefits hereunder). Executive shall, at the request of the Company, execute such assignments, certificates or other instruments as the Company may from time to time deem necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in and to any such products and proceeds of Executive's services hereunder. Notwithstanding the above, Executive shall not be considered to be in breach of this Section 9.5 in connection with any property or other material of a type described in this Section 9.5 which does not become the property of the Company, so long as Executive does not, directly or indirectly, have or obtain any personal interest in such property or material.

        9.6.    General.    Executive and the Company intend that: (i) this Section 9 concerning (among other things) the exclusive services of Executive to the Company and/or its Subsidiaries shall be construed as a series of separate covenants; (ii) if any portion of the restrictions set forth in this Section 9 should, for any reason whatsoever, be declared invalid by an arbitrator or a court of competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected; and (iii) Executive declares that the territorial and time limitations set forth in this Section 9 are reasonable and properly required for the adequate protection of the business of the Company and/or its Subsidiaries. In the event that any such territorial or time limitation is deemed to be unreasonable by an arbitrator or a court of competent jurisdiction, Executive agrees to the reduction of the subject territorial or time limitation to the area or period which such arbitrator or court shall have deemed reasonable. All of the provisions of this Section 9 are in addition to any other written agreements on the subjects covered herein that Executive may have with the Company and/or any of its Subsidiaries and are not meant to and do not excuse any additional obligations that Executive may have under such agreements.

        9.7.    Specific Performance.    Executive acknowledges and agrees that the confidential information, non-solicitation, intellectual property rights and other rights of the Company referred to in Section 9 of this Agreement are each of substantial value to the Company and/or its subsidiaries and affiliates and that any breach of Section 9 by Executive would cause irreparable harm to the Company and/or its Subsidiaries, for which the Company and/or its Subsidiaries would have no adequate remedy at law. Therefore, in addition to any other remedies that may be available to the Company and/or any of its Subsidiaries under this Agreement or otherwise, the Company and/or its Subsidiaries shall be entitled to obtain temporary restraining orders, preliminary and permanent injunctions and/or other equitable relief to specifically enforce Executive's duties and obligations under this Agreement, or to enjoin any breach of this Agreement, without the need to post a bond or other security and without the need to demonstrate special damages. Furthermore, Executive agrees that any damages suffered by the Company and/or its Subsidiaries as a result of Executive's breach of Executive's duties and obligations under this Agreement shall entitle the Company and/or its Subsidiaries to offset such damages against any payments to be made pursuant to this Agreement, to the extent permitted by applicable law.

10.    Excise Tax Gross-Up Payments.    Company agrees to pay Executive the amount or amounts specified in Schedule B, at such time or times as specified in Schedule B, as an excise tax Gross-Up Payment as provided in Schedule B. In connection therewith, the Company and Executive agree to the provisions of Schedule B, which are incorporated herein by this reference.

11.    Miscellaneous.    

        11.1.    Governing Law.    This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California, without regard to conflicts of laws principles or rules thereof.

        11.2.    Entire Agreement; Amendment.    This Agreement (and the Option Award and the LTIP Award) represents the entire agreement and understanding between the parties and, except as expressly stated in this Agreement, supersedes any prior agreement, understanding or negotiations respecting such subject. No change to or modification of this Agreement shall be valid or binding unless it is in writing and signed by Executive and a duly authorized director of the Company.

        11.3.    No Waiver.    Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times. No waiver of any breach of any term or provision of this Agreement shall be construed to be, nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in writing and signed by the party waiving the breach.

        11.4.    Severability; Invalid Provision.    In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby. The parties understand and agree that if any provision of this Agreement shall, for any reason, be adjudged by any court or arbitrator of competent jurisdiction to be invalid or unenforceable, such judgment shall not affect, impair, or invalidate the remainder of this Agreement, but shall be confined in its operation to the provision of this Agreement directly involved in the controversy in which such judgment shall have been rendered.

        11.5.    Assignment.    This Agreement and all of Executive's rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Company to a successor in interest to

substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place (except to the extent such assumption would occur by operation of law). It is anticipated that the Executive's employer of record and salary and bonus payor may be the Partnership or another Subsidiary, but the Company and the Partnership will be jointly and severally liable for all amounts payable to Executive hereunder.

        11.6.    Set Off.    The Company's obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Company or its Subsidiaries to the extent permitted by applicable law.

        11.7.    Successors; Binding Agreement.    This Agreement shall inure to the benefit of and be binding upon the parties' respective personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

        11.8.    Notice.    Any and all notice given hereunder shall be in writing and shall be deemed to have been duly given when received, if personally delivered; when transmitted, if transmitted by telecopy, or electronic or digital transmission method, upon receipt of telephonic or electronic confirmation; the day after the notice is sent, if sent for next day delivery to a domestic address using a generally recognized overnight delivery service (e.g., FedEx); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice will be sent as follows:

If to the Company:	Douglas Emmett, Inc. 808 Wilshire Blvd., Suite 200 Santa Monica, CA 90401 Attention: Chief Operating Officer Telephone: (310) 255-7700
If to Executive:	Jordan L. Kaplan 808 Wilshire Blvd., Suite 200 Telephone: 310 255 7700 Santa Monica, CA 90401

Either party may change its address and/or facsimile number for notice purposes by duly giving notice to the other party pursuant to this Section.

        11.9.    Executive's Representations.    Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive's duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound. Executive represents and warrants that he is not subject to any employment agreement, nondisclosure agreement, common law nondisclosure obligation, fiduciary duty, noncompetition agreement, restrictive covenant or any other obligation to any former employer or to any other person or entity in any way relating to the right or ability of Executive to be employed by and/or perform services for the Company and its Subsidiaries. Executive further represents and warrants that he has not brought to or disclosed to the Company or to its Subsidiaries, and covenants that he will not bring to or disclose to the Company or to its Subsidiaries or use in connection with his employment with the Company, any trade secrets or proprietary information from any of his prior employers or from any other person or entity.

        11.10.    Cooperation in Third-Party Disputes.    At the request of the Company, Executive shall cooperate with the Company and/or its Subsidiaries and each of their respective attorneys or other legal representatives (collectively referred to as "Attorneys") in connection with any claim, litigation, or judicial or arbitral proceeding which is now pending or may hereinafter be brought against the Company and/or any of its Subsidiaries or affiliates by any third party. Executive's duty of cooperation shall include, but shall not be limited to, (a) meeting with the Company's and/or its Subsidiaries' Attorneys by telephone or in person at mutually convenient times and places in order to state truthfully Executive's knowledge of the matters at issue and recollection of events; (b) appearing at the Company's and/or its Subsidiaries' and/or their Attorneys' request (and, to the extent possible, at a time

convenient to Executive that does not conflict with the needs or requirements of Executive's then-current employer or personal commitments) as a witness at depositions, trials or other proceedings, without the necessity of a subpoena, in order to state truthfully Executive's knowledge of the matters at issue; and (c) signing at the Company's request declarations or affidavits that truthfully state the matters of which Executive has knowledge. Such services will be without additional compensation if Executive is then employed by the Company or any Subsidiary and for reasonable compensation and subject to his reasonable availability if he is not so employed. The Company shall promptly reimburse Executive for Executive's actual and reasonable travel or other out-of-pocket expenses that Executive may incur in cooperating with the Company and/or its Subsidiaries under this Section 11.10.

        11.11.    Withholding Obligations.    The Company, or any other entity making a payment, may withhold and make such deductions from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld or deducted from time to time pursuant to any applicable law, governmental regulation and/or order. The amount of compensation payable to Executive pursuant to this Agreement shall be "grossed up" as necessary (on an after-tax basis) to compensate for any additional social security withholding taxes due as a result of Executive's shared employment by the any Subsidiary.

        11.12.    Counterparts.    This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. A facsimile signature shall be deemed to be the same as an original signature.

        11.13.    Interpretation.    Executive understands that this Agreement is deemed to have been drafted jointly by the parties and that the parties had a reasonable opportunity to retain legal counsel for such purpose. Any uncertainty or ambiguity shall not be construed for or against any party based on attribution of drafting to any party.

        11.14.    Headings.    Titles or captions of Sections contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provisions hereof.

        11.15.    Survival of Provisions.    All other rights and obligations of the parties hereto, other than those applicable by their express terms only during the Agreement Term, shall survive any termination or expiration of this Agreement or of Executive's employment with the Company, and shall be fully enforceable thereafter.

        11.16.    Arbitration of Disputes.    Except as is necessary for Executive and the Company to preserve their respective rights under this Agreement by seeking necessary equitable relief (including, but not limited to, the Company's rights under Section 9 of this Agreement) from a court of competent jurisdiction, the Company and Executive agree that any and all disputes based upon, relating to or arising out of this Agreement (including, but not limited to, any breach or alleged breach of this Agreement, or any dispute concerning the formation of this Agreement, or the validity, scope and/or enforceability of this arbitration provision), Executive's employment relationship with the Company and/or the termination of that relationship, and/or any other dispute by and between the Company and Executive, including any and all claims Executive may at any time attempt to assert against the Company, shall be submitted to binding arbitration in Los Angeles, California, in accordance with the rules of JAMS, provided that the arbitrator shall allow for discovery sufficient to adequately arbitrate any alleged claims, including access to essential documents and witnesses, and otherwise in accordance with California Code of Civil Procedure § 1283.05. The party prevailing in any action shall be entitled to its reasonable attorneys' fees in enforcing its rights hereunder. In any event, the Company shall pay any expenses that Executive would not otherwise have incurred if the dispute had been adjudicated in a court of law, rather than through arbitration, including the arbitrator's fee, any administrative fee and any filing fee in excess of the maximum court filing fee in the jurisdiction in which the arbitration is commenced. Judgment in a court of competent jurisdiction may be had on any decision and award of the arbitrator. For these purposes, the parties agree to submit to the jurisdiction of the state and federal courts located in Los Angeles County, California.

        11.17.    Section 409A of the Code.    This Agreement is intended to comply with Section 409A of the Code. Each party to this Agreement intends and agrees that this Agreement shall be interpreted and modified to the minimum extent necessary and to provide as near as possible the same economic benefit to the Executive provided hereunder in the absence of such modification, as mutually agreed by counsel for both parties, so as to avoid the imposition of any excise tax under Section 409A of the Internal Revenue Code and the regulations thereunder.

        IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

Douglas Emmett, Inc.		Executive
/S/ WILLIAM KAMER		/S/ JORDAN L. KAPLAN
By:	William Kamer	Jordan L. Kaplan
Title:	Chief Financial Officer
Douglas Emmett Properties, LP
By:	Douglas Emmett Management, Inc.
Its:	General Partner
/S/ WILLIAM KAMER
By:	William Kamer
Title:	Chief Financial Officer

Schedule A

CALIFORNIA LABOR CODE SECTION 2870

INVENTION ON OWN TIME-EXEMPTION FROM AGREEMENT

        "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

        (1)   Relate at the time of conception or reduction to practice of the invention to the employer's business, or actually or demonstrably anticipated research or development of the employer; or

        (2)   Result from any work performed by the employee for the employer.

        (b)   To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable."

Schedule B

Excise Tax Gross Up

I.

Subject to the following provisions of this Schedule B, but otherwise anything in this Agreement to the contrary notwithstanding, in the event that Executive shall become entitled to payments and/or benefits provided by this Agreement or any other amounts in the "nature of compensation" (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change of ownership or effective control covered by Section 280G of the Code or any successor provision or any person affiliated with the Company or such person) as a result of such change in ownership or effective control, but determined without regard to any additional payments required under this Schedule B (a "Payment") would be subject to the excise tax imposed by Section 4999 of the 1986 Internal Revenue Code, as amended (the "Code"), or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), the Company shall make a payment (a "Gross-Up Payment") to Executive in an amount such that, after payment by Executive of all income or other taxes (and any interest and penalties imposed with respect thereto) and Excise Taxes imposed on the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed on the Payments.

II.

Subject to the provisions of Paragraph III of this Schedule B, all determinations required to be made under this Schedule B, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a certified public accounting firm designated by Executive (the "Executive Accounting Firm") which shall provide detailed supporting calculations both to the Company and to Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier times as is requested by Executive. If Executive Accounting Firm determines that no Excise Tax is payable by Executive, it shall, upon the written request of Executive, furnish Executive with a written opinion that failure to report the Excise Tax on Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. The calculations prepared by Executive Accounting Firm shall be reviewed on behalf of the Company by the Company's independent auditors (the "Company Accounting Firm") which shall provide its conclusions, together with detailed supporting calculations, both to the Company and Executive within fifteen (15) business days after receipt of the calculations and supporting materials prepared by Executive Accounting Firm. In the event of a dispute between the Company Accounting Firm and Executive Accounting Firm, such firms shall, within five (5) business days of receipt of the conclusions and supporting materials prepared by the Company Accounting Firm, jointly select a third nationally recognized certified public accounting firm (the "Third Accounting Firm") to resolve the dispute. The Third Accounting Firm shall submit its conclusions to the Company and Executive within fifteen (15) business days after receipt of notice of its appointment hereunder and the decision of the Third Accounting Firm shall be final, binding and conclusive upon Executive and the Company subject to any determination by the Internal Revenue Service. All fees and expenses of all such accounting firms shall be borne solely by the Company. Any Gross-Up Payment shall be paid by the Company to Executive within five (5) business days after the earlier of acceptance by the Company of the calculations prepared by Executive Accounting Firm or the Company's receipt of the Third Accounting Firm's determination.

III.

As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination of whether any Gross-Up Payment should be made hereunder, it is possible that a Gross-Up Payment will have been due but not made by the Company (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant this Schedule B and Executive thereafter is required to make a payment of any Excise Tax, Executive Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

IV.

Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-up Payment. Such notification shall be given as soon as practicable (but not later than ten (10) business days after Executive is informed in writing of such claim) and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:

1.

Give the Company any information reasonably requested by it relating to such claim;

2.

Take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company and acceptable to Executive;

3.

Cooperate with the Company in good faith in order effectively to contest such claim; and

4.

Permit the Company to participate in any proceedings relating to such claim.

V.

The Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with a contest of a claim under Paragraph IV of this Schedule B and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Schedule B, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine. If the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance, provided that if any such advance would be in violation of the Sarbanes-Oxley Act the Company shall pay, rather than advance, the amounts to Executive. Any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

VI.

If, after the receipt by Executive of an amount advanced by the Company pursuant to this Schedule B, Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company's complying with the requirements of this Schedule B) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to this Schedule B, a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

EX-10.12

Exhibit 10.12

EMPLOYMENT AGREEMENT

        This EMPLOYMENT AGREEMENT (the "Agreement") is made effective as of October 23, 2006 (the "Effective Date") by and between Douglas Emmett, Inc. (the "Company"), Douglas Emmett Properties, LP (the "Partnership"), and Kenneth Panzer ("Executive") with respect to the following facts and circumstances:

        WHEREAS, the Company desires to engage Executive as the Chief Operating Officer of the Company, during the Agreement Term (as defined below), on the terms and conditions and for the consideration set forth herein.

        NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1.    Effectiveness; Term of Employment.    Subject to the provisions of Section 8 of this Agreement, Executive shall be employed by the Company on the terms and subject to the conditions set forth in this Agreement for a period commencing on the Effective Date and ending on December 31, 2010. Commencing on January 1, 2011 and on each January 1 thereafter (each an "Extension Date"), the Agreement Term shall be automatically extended for an additional one-year period unless either the Company or Executive provides the other party hereto sixty (60) days' prior written notice before the next Extension Date that the Agreement Term shall not be so extended (the "Agreement Term").

2.    Position; Duties.    During the Agreement Term, Executive shall serve as Chief Operating Officer of the Company and the Partnership. In such position, Executive shall have such duties and authority commensurate with such position as shall be determined from time to time by the Board of Directors of the Company (the "Board") including such duties and responsibilities with respect to any subsidiary, affiliate or joint venture of the Company (each a "Subsidiary"). Subject to the discretion of the Nominating Committee of the Board, Executive shall serve as a member of the Board and of the board of directors (or equivalent) of any Subsidiary without additional compensation. Executive's duties will be principally performed at the Company's headquarters, which will be located within the West Side of Los Angeles, with such travel as may be required to perform his duties hereunder as reasonably requested by the Company.

3.    Base Salary.    During the Agreement Term, the Company shall pay Executive a base salary at the annual rate of $950,000, payable in regular installments in accordance with the Company's usual payment practices. Executive's salary shall be reviewed at least annually by the Compensation Committee of the Board (the "Committee") and Executive shall be entitled to such increases in Executive's base salary, if any, as may be determined from time to time in the sole and absolute discretion of the Committee. Executive's annual base salary, as in effect from time to time, is hereinafter referred to as the "Base Salary."

4.    Annual Bonus.    With respect to each fiscal year during the Agreement Term, Executive shall be eligible to earn an annual bonus award (the "Annual Bonus") based upon reasonable criteria to be reasonably established not later than the first thirty (30) days of that fiscal year by the Compensation Committee of the Board in consultation with Executive. The amount of the bonus shall equal the following percentages of Executive's Base Salary during that fiscal year:

Threshold	Target	Superior	Outperformance
65%	100%	150%	200%

Unless otherwise approved by the Board in its discretion, no bonus will be payable to Executive for any year if Executive does not meet the Threshold criteria established for that year. The Company will pay any Annual Bonus earned by Executive with respect to a given fiscal year in accordance with the terms and conditions of the Company's annual bonus plan, but no later than the earlier of (i) the fifteenth day of the third month following the end of such fiscal year or (ii) the date that other senior executives are paid similar bonuses.

5.    Long-Term Incentive Compensation.    

        5.1.    Option Award.    As of the Effective Date, Executive shall be granted an option to purchase 2,488,889 shares of Company stock (the "Option Award") pursuant to a separate written Non Qualified Stock Option Agreement under the Company's 2006 Omnibus Stock Incentive Plan (the "Plan"). The Option Award shall be subject to the terms and conditions of that agreement and the Plan.

        5.2.    LTIP Award.    As of the Effective Date, Executive shall be granted 420,000 LTIP Units (the "LTIP Award") pursuant to a separate written LTIP Unit Award Agreement under the Plan. The LTIP Award shall be subject to the terms and conditions of that agreement and the Plan.

6.    Employee Benefits.    During the Agreement Term, Executive shall be entitled to participate in the Company's employee welfare and retirement benefit plans and perquisite programs as in effect, and subject to such modification as the Company may determine necessary or appropriate, from time to time (collectively "Employee Benefits"), on the same basis as those benefits are generally made available to other senior executives of the Company, which shall in any case include (i) the payment or reimbursement of tax/financial services, the use of and payment of all related expenses for an automobile, and a personal umbrella insurance policy all in amounts and on terms not less favorable than those provided to Executive by the Company's predecessor provided that, any such payment or reimbursement by the Company shall be made no later than the fifteenth day of the third month following the end of the calendar year in which Executive incurred such expense, and (ii) medical and dental benefits (without any co payment) for Executive, Executive's spouse and Executive's eligible dependents on terms not less favorable than those provided to Executive by the Company's predecessor. During the Agreement Term, Executive shall have the right (i) to participate in any future compensation plans implemented for executives of the Company on a basis commensurate with his position and (ii) to be indemnified by the Company for all actions taken as an officer, director or agent of the Company or its Subsidiaries to the full extent provided under law or pursuant to the Indemnification Agreement of even date herewith. Subject to the policies and procedures of the Company, in addition to any accrued personal time off ("PTO") accrued with respect to service to the predecessors of the Company, Executive shall be entitled to accrue twenty five (25) paid days of PTO per year during the Agreement Term.

7.    Business Expenses.    During the Agreement Term, the Company shall reimburse Executive for all reasonable business expenses incurred by Executive in the performance of Executive's duties hereunder in accordance with the Company's policies as in effect from time to time.

8.    Termination.    Notwithstanding any other provision of this Agreement, the provisions of this Section 8 shall exclusively govern Executive's rights upon termination of employment with the Company. Following Executive's termination of employment, except as set forth in this Section 8, Executive (and Executive's legal representative and estate) shall have no further rights to any compensation or any other benefits under this Agreement.

        8.1.    Definitions.    

        "Accrued Rights" means the sum of the following: (i) any accrued but unpaid Base Salary through the date of termination; (ii) a payment in respect of all unpaid, but accrued and unused PTO through the date of termination; (iii) any Annual Bonus earned but unpaid as of the date of termination for any previously completed fiscal year (i.e., not for the year of employment termination); (iv) reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy through the date of termination; (v) such rights, if any, under the Option Award, the LTIP Award and other compensation programs and Employee Benefits to which Executive may be entitled upon termination of employment according to the documents governing such benefits; and (vi) any existing rights to indemnification for prior acts through the date of termination.

        "Cause" means any of the following: (i) any act or omission by Executive which constitutes intentional misconduct or a willful violation of law; (ii) an act of fraud, conversion, misappropriation or embezzlement by Executive or conviction of, indictment for (or its procedural equivalent) or entering a guilty plea or plea of no contest with respect to a felony, the equivalent thereof or any crime involving any moral turpitude with respect to which imprisonment is a common punishment; or (iii) any other failure (other than any failure resulting from

incapacity due to physical or mental illness) by Executive to perform his material and reasonable duties and responsibilities as an employee, director or consultant of the Company or any Subsidiary which continues for ten (10) days following written notice from the Company or any Subsidiary (except in the case of a willful failure to perform his duties or a willful breach, which shall require no notice). For purposes of the foregoing sentence, no act, or failure to act, on Executive's part shall be considered "willful" unless the Executive acted, or failed to act, in bad faith or without reasonable belief that his act or failure to act was in the best interest of the Company or any Subsidiary.

        "Change of Control" shall be deemed to have occurred if

          (i)  there shall be consummated (a) any consolidation or merger of the Company, other than a merger or consolidation of the Company in which (1) the holders of the Company's common stock immediately prior to the merger or consolidation have at least fifty one percent (51%) ownership of the total voting power of the surviving entity immediately after the merger or consolidation, and (2) no person (other than an Exempted Holder as defined below) beneficially owns (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, 20% or more of the total voting power of the surviving entity or (b) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or

         (ii)  the shareholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company, or

        (iii)  any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) other than an Exempted Holder (as defined below) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of twenty percent (20%) or more of the Company's common stock. "Exempted Holder" means (a) the Company or any majority-owned Subsidiary (provided that this exclusion applies solely to the ownership levels of the Company or the majority-owned Subsidiary); (b) any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust sponsored or maintained by the Company or any Subsidiary; or (c) any underwriter or placement agent temporarily holding securities pursuant to an offering of such securities. However, a Change in Control shall not be deemed to have occurred if a person's percentage interest increases over twenty percent (20%) solely as a result of a decrease in the outstanding stock because of an acquisition of securities by the Company; provided, however, that a "Change in Control" shall be deemed to have occurred on any subsequent acquisitions of the Company's common stock by that person (other than pursuant to a stock split, stock dividend, or similar transaction) at a time when that person beneficially owns twenty percent (20%) or more of the Company's outstanding common stock, or

        (iv)  the Board shall cease for any reason to have a majority of Uncontested Directors. "Uncontested Directors" means directors who were initially elected or initially nominated (a) by a vote of at least two-thirds of the then Uncontested Directors and (b) not as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation.

        "Disability" means physical or mental incapacity whereby Executive is unable with or without reasonable accommodation for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period to perform the essential functions of Executive's duties.

        "Good Reason" shall be present where Executive gives notice to the Board of his voluntary resignation (a) within one hundred and twenty (120) days after the occurrence of any of the following, without Executive's written consent: (i) the failure of the Company to pay or cause to be paid Executive's Base Salary or Annual Bonus, when due hereunder, subject to a ten (10) day cure period by the Company (except in the case of a willful failure which shall require no notice); (ii) diminution in Executive's status, including, title, position, duties, authority or responsibility (including Executive ceasing to be a member of the Board other than as a result of a voluntary

resignation), subject to a thirty (30) day cure period by the Company (except in the case of a willful breach, which shall require no notice); (iii) relocation of the Company's executive offices to a location outside of the West Side of Los Angeles; or (iv) the failure of the Company to obtain the express written assumption of this Agreement pursuant to Section 11.5 hereof (unless such Agreement is assumed by operation of law); (b) within eighteen (18) months after the occurrence of a Change of Control.

        8.2.    Termination by the Company for Cause or By Executive's Resignation without Good Reason.    The Agreement Term and Executive's employment hereunder may be terminated by the Company for Cause and shall terminate upon Executive's resignation without Good Reason, and in either case Executive shall be entitled to receive only his Accrued Rights.

        8.3.    Death/Disability.    The Agreement Term and Executive's employment hereunder shall terminate upon Executive's death or Disability. Upon termination of Executive's employment hereunder due to death or Disability, Executive's legal representative or estate (as the case may be) shall be entitled to receive (i) the Accrued Rights plus (ii) an amount equal to a pro-rated portion of the Annual Bonus Executive otherwise would have been paid for the fiscal year in which such termination of employment occurs, payable when the Annual Bonus would otherwise have been paid to Executive pursuant to Section 4, based upon (a) actual performance for such fiscal year, as determined at the end of such fiscal year and (b) the percentage of such fiscal year that shall have elapsed through the date of Executive's termination of employment; plus (iii) continued medical benefits for Executive and Executive's spouse and eligible dependents who at the time of Executive's termination are enrolled in the Company's medical plan. Such benefits shall be substantially identical to the benefits maintained for other senior executives of the Company and shall be provided for a period of twelve (12) months following Executive's termination of employment. Executive acknowledges that such benefit continuation is intended, and shall be deemed, to satisfy the obligations of the Company and any of its subsidiaries and affiliates to provide continuation of benefits under Section 4980B of the Internal Revenue Code of 1986, as amended ("COBRA") for such period and that the Company may satisfy such obligation by paying any applicable COBRA premiums.

        8.4.    Termination by the Company without Cause or Resignation by Executive for Good Reason.    The Agreement Term and Executive's employment hereunder may be terminated by the Company without Cause at any time and for any reason or by Executive's resignation for Good Reason at any time upon thirty (30) days written notice by the terminating party, although the Company may waive services during that period. If Executive's employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns for Good Reason, Executive shall be entitled to receive (i) the Accrued Rights, plus (ii) provided that Executive first executes and returns to the Company (and does not revoke) a release of all claims that is in form and substance reasonably satisfactory to the Company, and subject to Executive's continued compliance with the provisions of Section 9 of this Agreement (to the extent expressly applicable after the Agreement Term):

        8.4.1. an amount, payable in a lump sum without discount within 30 days of the date of termination, equal to three (3) times the average of Executive's compensation over the last three full calendar years ending prior to the termination date including (i) the Base Salary; (ii) the Annual Bonus and (iii) the value (based on a Black Scholes formula in the case of options and value of the underlying grants in the case of LTIP or outperformance plans) of any equity (including stock, LTIPs and options) or other compensation plans granted or awarded to Executive. In the event that there are less than three full calendar years completed after the execution of this Agreement, the average shall be based on (i) 2006 (including compensation paid by the predecessor of the Company) and (ii) any other full completed years prior to the date of termination.

        8.4.2. continued medical and dental benefits for Executive, Executive's spouse and Executive's eligible dependents, who at the time of Executive's termination are enrolled in the Company's benefits plans provided for a period of three (3) years following Executive's termination of employment. Such benefits shall be substantially identical to the

benefits maintained for other senior executives of the Company. Executive acknowledges that such benefit continuation is intended, and shall be deemed, to satisfy the obligations of the Company and any of its subsidiaries and affiliates to provide continuation of benefits under COBRA for such period and that the Company may satisfy such obligation by paying any applicable COBRA premiums or causing such premiums to be paid.

        8.5.    Notice of Termination.    Any purported termination of employment by the Company or by Executive (other than due to Executive's death) shall be communicated by written notice to the other party, which indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated and the date of employment termination.

        8.6.    Employee Termination and Board/Committee/Officer Resignation.    Upon termination of Executive's employment for any reason, Executive's employment with each of the Company and each Subsidiary shall be terminated and Executive shall be deemed to resign, as of the date of such termination and to the extent applicable, from the boards of directors (and any committees thereof) of the Company and any Subsidiary and affiliates and as an officer of the Company and any Subsidiary. Executive shall confirm such resignation(s) in writing to the Company.

9.    Covenants.    

        9.1.    Confidentiality.    Executive acknowledges that, in his employment hereunder, he will occupy a position of trust and confidence with the Company and its Subsidiaries. Executive agrees that Executive shall not during the Agreement Term and for two (2) years thereafter, except (i) as may be required to perform his duties hereunder or as required by applicable law or (ii) until such information shall have become public other than by Executive's unauthorized disclosure or (iii) with the prior written consent of the Company, use, disclose or disseminate any trade secrets, confidential information or any other information of a secret, proprietary, confidential or generally undisclosed nature relating to the Company and/or any Subsidiary, or their respective businesses, contracts, projects, proposed projects, revenues, costs, operations, methods or procedures.

        9.2.    Non-solicitation.    Executive agrees that, for a period of one (1) year immediately following the end of Executive's employment with the Company, except acting on behalf of the Company during the Employment Term, Executive shall not, either directly or indirectly, solicit or participate in the solicitation of any employee or consultant of the Company to terminate or materially alter his, her or its relationship with the Company or any Subsidiary. This restriction shall not apply to Executive's assistant.

        9.3.    Full time; Non competition.    During the Agreement Term, Executive will devote Executive's full business time and best efforts to the performance of Executive's duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly; except that nothing herein shall preclude Executive from accepting appointment to or continuing to serve on any board of directors or trustees of any business entity, trade organization or any charitable organization or engaging in any activities or managing his investments and affairs so long as such activities in the aggregate do not interfere with the performance of Executive's duties hereunder or conflict with this Section 9.3 herein. During the Agreement Term, without the prior approval of the Board, Executive shall not in  any city, town, county, parish where the Company and/or any Subsidiaries directly or indirectly engages in business or is actively contemplating engaging in business: (i) engage in a competing business for Executive's own account; (ii) enter the employ of, or render any consulting or any other services to, any entity that competes with the Company and/or any of its affiliates; or (iii) become interested in any such competing entity in any capacity, including, without limitation, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; provided, however, Executive may own, directly or indirectly, solely as a passive investment, 5% or less of any class of securities of any entity traded on any national securities exchange and any assets acquired in compliance with this Section. A business shall not be deemed a "competing business" if it does not invest in or deal with the same basic product type as the Company does from time to time. At this time the basic product type of the Company is large and mid-size office buildings and multi-family properties in Los Angeles County and Hawaii (larger than 50,000 sq. ft. for office properties and 50 units for apartment buildings).

        9.4.    Company Policies.    During the Agreement Term, Executive shall also be subject to and shall abide by all written reasonable policies and procedures of the Company provided to him, including regarding the protection of confidential information and intellectual property and potential conflicts of interest, except to the extent that such

policies and procedures conflict with the other provisions of this Agreement, in which case this Agreement shall control. Executive acknowledges that the Company may amend any such policies and guidelines from, time to time, and that Executive remains at all times bound by their most current version to the extent made known to him and reasonable in scope.

        9.5.    Intellectual Property.    Except as permitted in Section 9.3 and as provided under Section 2870 of the California Labor Code, the Company shall be the sole owner of all the products and proceeds of Executive's services hereunder including, without limitation, all materials, ideas, concepts, formats, suggestions, developments, and other intellectual properties that Executive may acquire, obtain, develop or create in connection with his services hereunder and during the Agreement Term, free and clear of any claims by Executive (or anyone claiming under Executive) of any kind or character whatsoever (other than Executive's rights and benefits hereunder). Executive shall, at the request of the Company, execute such assignments, certificates or other instruments as the Company may from time to time deem necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in and to any such products and proceeds of Executive's services hereunder. Notwithstanding the above, Executive shall not be considered to be in breach of this Section 9.5 in connection with any property or other material of a type described in this Section 9.5 which does not become the property of the Company, so long as Executive does not, directly or indirectly, have or obtain any personal interest in such property or material.

        9.6.    General.    Executive and the Company intend that: (i) this Section 9 concerning (among other things) the exclusive services of Executive to the Company and/or its Subsidiaries shall be construed as a series of separate covenants; (ii) if any portion of the restrictions set forth in this Section 9 should, for any reason whatsoever, be declared invalid by an arbitrator or a court of competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected; and (iii) Executive declares that the territorial and time limitations set forth in this Section 9 are reasonable and properly required for the adequate protection of the business of the Company and/or its Subsidiaries. In the event that any such territorial or time limitation is deemed to be unreasonable by an arbitrator or a court of competent jurisdiction, Executive agrees to the reduction of the subject territorial or time limitation to the area or period which such arbitrator or court shall have deemed reasonable. All of the provisions of this Section 9 are in addition to any other written agreements on the subjects covered herein that Executive may have with the Company and/or any of its Subsidiaries and are not meant to and do not excuse any additional obligations that Executive may have under such agreements.

        9.7.    Specific Performance.    Executive acknowledges and agrees that the confidential information, non-solicitation, intellectual property rights and other rights of the Company referred to in Section 9 of this Agreement are each of substantial value to the Company and/or its subsidiaries and affiliates and that any breach of Section 9 by Executive would cause irreparable harm to the Company and/or its Subsidiaries, for which the Company and/or its Subsidiaries would have no adequate remedy at law. Therefore, in addition to any other remedies that may be available to the Company and/or any of its Subsidiaries under this Agreement or otherwise, the Company and/or its Subsidiaries shall be entitled to obtain temporary restraining orders, preliminary and permanent injunctions and/or other equitable relief to specifically enforce Executive's duties and obligations under this Agreement, or to enjoin any breach of this Agreement, without the need to post a bond or other security and without the need to demonstrate special damages. Furthermore, Executive agrees that any damages suffered by the Company and/or its Subsidiaries as a result of Executive's breach of Executive's duties and obligations under this Agreement shall entitle the Company and/or its Subsidiaries to offset such damages against any payments to be made pursuant to this Agreement, to the extent permitted by applicable law.

10.    Excise Tax Gross-Up Payments.    Company agrees to pay Executive the amount or amounts specified in Schedule B, at such time or times as specified in Schedule B, as an excise tax Gross-Up Payment as provided in Schedule B. In connection therewith, the Company and Executive agree to the provisions of Schedule B, which are incorporated herein by this reference.

11.    Miscellaneous.    

        11.1.    Governing Law.    This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California, without regard to conflicts of laws principles or rules thereof.

        11.2.    Entire Agreement; Amendment.    This Agreement (and the Option Award and the LTIP Award) represents the entire agreement and understanding between the parties and, except as expressly stated in this Agreement, supersedes any prior agreement, understanding or negotiations respecting such subject. No change to or modification of this Agreement shall be valid or binding unless it is in writing and signed by Executive and a duly authorized director of the Company.

        11.3.    No Waiver.    Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times. No waiver of any breach of any term or provision of this Agreement shall be construed to be, nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in writing and signed by the party waiving the breach.

        11.4.    Severability; Invalid Provision.    In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby. The parties understand and agree that if any provision of this Agreement shall, for any reason, be adjudged by any court or arbitrator of competent jurisdiction to be invalid or unenforceable, such judgment shall not affect, impair, or invalidate the remainder of this Agreement, but shall be confined in its operation to the provision of this Agreement directly involved in the controversy in which such judgment shall have been rendered.

        11.5.    Assignment.    This Agreement and all of Executive's rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Company to a successor in interest to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place (except to the extent such assumption would occur by operation of law). It is anticipated that the Executive's employer of record and salary and bonus payor may be the Partnership or another Subsidiary, but the Company and the Partnership will be jointly and severally liable for all amounts payable to Executive hereunder.

        11.6.    Set Off.    The Company's obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Company or its Subsidiaries to the extent permitted by applicable law.

        11.7.    Successors; Binding Agreement.    This Agreement shall inure to the benefit of and be binding upon the parties' respective personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

        11.8.    Notice.    Any and all notice given hereunder shall be in writing and shall be deemed to have been duly given when received, if personally delivered; when transmitted, if transmitted by telecopy, or electronic or digital transmission method, upon receipt of telephonic or electronic confirmation; the day after the notice is sent, if sent for next day delivery to a domestic address using a generally recognized overnight delivery service (e.g., FedEx); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice will be sent as follows:

If to the Company:	Douglas Emmett, Inc. 808 Wilshire Blvd., Suite 200, Santa Monica, CA 90401 Attention: Chief Executive Officer Telephone: (310) 255-7700
If to Executive:	Kenneth Panzer 808 Wilshire Blvd., Suite 200, Santa Monica, CA 90401 Telephone: 310 255 7700

Either party may change its address and/or facsimile number for notice purposes by duly giving notice to the other party pursuant to this Section.

        11.9.    Executive's Representations.    Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive's duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound. Executive represents and warrants that he is not subject to any employment agreement, nondisclosure agreement, common law nondisclosure obligation, fiduciary duty, noncompetition agreement, restrictive covenant or any other obligation to any former employer or to any other person or entity in any way relating to the right or ability of Executive to be employed by and/or perform services for the Company and its Subsidiaries. Executive further represents and warrants that he has not brought to or disclosed to the Company or to its Subsidiaries, and covenants that he will not bring to or disclose to the Company or to its Subsidiaries or use in connection with his employment with the Company, any trade secrets or proprietary information from any of his prior employers or from any other person or entity.

        11.10.    Cooperation in Third-Party Disputes.    At the request of the Company, Executive shall cooperate with the Company and/or its Subsidiaries and each of their respective attorneys or other legal representatives (collectively referred to as "Attorneys") in connection with any claim, litigation, or judicial or arbitral proceeding which is now pending or may hereinafter be brought against the Company and/or any of its Subsidiaries or affiliates by any third party. Executive's duty of cooperation shall include, but shall not be limited to, (a) meeting with the Company's and/or its Subsidiaries' Attorneys by telephone or in person at mutually convenient times and places in order to state truthfully Executive's knowledge of the matters at issue and recollection of events; (b) appearing at the Company's and/or its Subsidiaries' and/or their Attorneys' request (and, to the extent possible, at a time convenient to Executive that does not conflict with the needs or requirements of Executive's then-current employer or personal commitments) as a witness at depositions, trials or other proceedings, without the necessity of a subpoena, in order to state truthfully Executive's knowledge of the matters at issue; and (c) signing at the Company's request declarations or affidavits that truthfully state the matters of which Executive has knowledge. Such services will be without additional compensation if Executive is then employed by the Company or any Subsidiary and for reasonable compensation and subject to his reasonable availability if he is not so employed. The Company shall promptly reimburse Executive for Executive's actual and reasonable travel or other out-of-pocket expenses that Executive may incur in cooperating with the Company and/or its Subsidiaries under this Section 11.10.

        11.11.    Withholding Obligations.    The Company, or any other entity making a payment, may withhold and make such deductions from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld or deducted from time to time pursuant to any applicable law, governmental regulation and/or order. The amount of compensation payable to Executive pursuant to this Agreement shall be "grossed up" as necessary (on an after-tax basis) to compensate for any additional social security withholding taxes due as a result of Executive's shared employment by the any Subsidiary.

        11.12.    Counterparts.    This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. A facsimile signature shall be deemed to be the same as an original signature.

        11.13.    Interpretation.    Executive understands that this Agreement is deemed to have been drafted jointly by the parties and that the parties had a reasonable opportunity to retain legal counsel for such purpose. Any uncertainty or ambiguity shall not be construed for or against any party based on attribution of drafting to any party.

        11.14.    Headings.    Titles or captions of Sections contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provisions hereof.

        11.15.    Survival of Provisions.    All other rights and obligations of the parties hereto, other than those applicable by their express terms only during the Agreement Term, shall survive any termination or expiration of this Agreement or of Executive's employment with the Company, and shall be fully enforceable thereafter.

        11.16.    Arbitration of Disputes.    Except as is necessary for Executive and the Company to preserve their respective rights under this Agreement by seeking necessary equitable relief (including, but not limited to, the Company's rights under Section 9 of this Agreement) from a court of competent jurisdiction, the Company and Executive agree that any and all disputes based upon, relating to or arising out of this Agreement (including, but not limited to, any breach or alleged breach of this Agreement, or any dispute concerning the formation of this Agreement, or the validity, scope and/or enforceability of this arbitration provision), Executive's employment relationship with the Company and/or the termination of that relationship, and/or any other dispute by and between the Company and Executive, including any and all claims Executive may at any time attempt to assert against the Company, shall be submitted to binding arbitration in Los Angeles, California, in accordance with the rules of JAMS, provided that the arbitrator shall allow for discovery sufficient to adequately arbitrate any alleged claims, including access to essential documents and witnesses, and otherwise in accordance with California Code of Civil Procedure § 1283.05. The party prevailing in any action shall be entitled to its reasonable attorneys' fees in enforcing its rights hereunder. In any event, the Company shall pay any expenses that Executive would not otherwise have incurred if the dispute had been adjudicated in a court of law, rather than through arbitration, including the arbitrator's fee, any administrative fee and any filing fee in excess of the maximum court filing fee in the jurisdiction in which the arbitration is commenced. Judgment in a court of competent jurisdiction may be had on any decision and award of the arbitrator. For these purposes, the parties agree to submit to the jurisdiction of the state and federal courts located in Los Angeles County, California.

        11.17.    Section 409A of the Code.    This Agreement is intended to comply with Section 409A of the Code. Each party to this Agreement intends and agrees that this Agreement shall be interpreted and modified to the minimum extent necessary and to provide as near as possible the same economic benefit to the Executive provided hereunder in the absence of such modification, as mutually agreed by counsel for both parties, so as to avoid the imposition of any excise tax under Section 409A of the Internal Revenue Code and the regulations thereunder.

        IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

Douglas Emmett, Inc.		Executive
/S/ WILLIAM KAMER		/S/ KENNETH PANZER
By:	William Kamer	Kenneth Panzer
Title:	Chief Financial Officer
Douglas Emmett Properties, LP
By:	Douglas Emmett Management, Inc.
Its:	General Partner
/S/ WILLIAM KAMER
By:	William Kamer
Title:	Chief Financial Officer

Schedule A

CALIFORNIA LABOR CODE SECTION 2870

INVENTION ON OWN TIME-EXEMPTION FROM AGREEMENT

        "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

        (1)   Relate at the time of conception or reduction to practice of the invention to the employer's business, or actually or demonstrably anticipated research or development of the employer; or

        (2)   Result from any work performed by the employee for the employer.

        (b)   To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable."

Schedule B

Excise Tax Gross Up

I.

Subject to the following provisions of this Schedule B, but otherwise anything in this Agreement to the contrary notwithstanding, in the event that Executive shall become entitled to payments and/or benefits provided by this Agreement or any other amounts in the "nature of compensation" (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change of ownership or effective control covered by Section 280G of the Code or any successor provision or any person affiliated with the Company or such person) as a result of such change in ownership or effective control, but determined without regard to any additional payments required under this Schedule B (a "Payment") would be subject to the excise tax imposed by Section 4999 of the 1986 Internal Revenue Code, as amended (the "Code"), or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), the Company shall make a payment (a "Gross-Up Payment") to Executive in an amount such that, after payment by Executive of all income or other taxes (and any interest and penalties imposed with respect thereto) and Excise Taxes imposed on the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed on the Payments.

II.

Subject to the provisions of Paragraph III of this Schedule B, all determinations required to be made under this Schedule B, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a certified public accounting firm designated by Executive (the "Executive Accounting Firm") which shall provide detailed supporting calculations both to the Company and to Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier times as is requested by Executive. If Executive Accounting Firm determines that no Excise Tax is payable by Executive, it shall, upon the written request of Executive, furnish Executive with a written opinion that failure to report the Excise Tax on Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. The calculations prepared by Executive Accounting Firm shall be reviewed on behalf of the Company by the Company's independent auditors (the "Company Accounting Firm") which shall provide its conclusions, together with detailed supporting calculations, both to the Company and Executive within fifteen (15) business days after receipt of the calculations and supporting materials prepared by Executive Accounting Firm. In the event of a dispute between the Company Accounting Firm and Executive Accounting Firm, such firms shall, within five (5) business days of receipt of the conclusions and supporting materials prepared by the Company Accounting Firm, jointly select a third nationally recognized certified public accounting firm (the "Third Accounting Firm") to resolve the dispute. The Third Accounting Firm shall submit its conclusions to the Company and Executive within fifteen (15) business days after receipt of notice of its appointment hereunder and the decision of the Third Accounting Firm shall be final, binding and conclusive upon Executive and the Company subject to any determination by the Internal Revenue Service. All fees and expenses of all such accounting firms shall be borne solely by the Company. Any Gross-Up Payment shall be paid by the Company to Executive within five (5) business days after the earlier of acceptance by the Company of the calculations prepared by Executive Accounting Firm or the Company's receipt of the Third Accounting Firm's determination.

III.

As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination of whether any Gross-Up Payment should be made hereunder, it is possible that a Gross-Up Payment will have been due but not made by the Company (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant this Schedule B and Executive thereafter is required to make a payment of any Excise Tax, Executive Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

IV.

Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-up Payment. Such notification shall be given as soon as practicable (but not later than ten (10) business days after Executive is informed in writing

of such claim) and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:

1.

Give the Company any information reasonably requested by it relating to such claim;

2.

Take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company and acceptable to Executive;

3.

Cooperate with the Company in good faith in order effectively to contest such claim; and

4.

Permit the Company to participate in any proceedings relating to such claim.

V.

The Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with a contest of a claim under Paragraph IV of this Schedule B and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Schedule B, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine. If the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance, provided that if any such advance would be in violation of the Sarbanes-Oxley Act the Company shall pay, rather than advance, the amounts to Executive. Any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

VI.

If, after the receipt by Executive of an amount advanced by the Company pursuant to this Schedule B, Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company's complying with the requirements of this Schedule B) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to this Schedule B, a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.

EX-10.13

Exhibit 10.13

EMPLOYMENT AGREEMENT

        This EMPLOYMENT AGREEMENT (the "Agreement") is made effective as of October 23, 2006 (the "Effective Date") by and between Douglas Emmett, Inc. (the "Company"), Douglas Emmett Properties, LP (the "Partnership"), and William Kamer ("Executive") with respect to the following facts and circumstances:

        WHEREAS, the Company desires to engage Executive as the Chief Financial Officer of the Company, during the Agreement Term (as defined below), on the terms and conditions and for the consideration set forth herein.

        NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

1.    Effectiveness; Term of Employment.    Subject to the provisions of Section 8 of this Agreement, Executive shall be employed by the Company on the terms and subject to the conditions set forth in this Agreement for a period commencing on the Effective Date and ending on December 31, 2010. Commencing on January 1, 2011 and on each January 1 thereafter (each an "Extension Date"), the Agreement Term shall be automatically extended for an additional one-year period unless either the Company or Executive provides the other party hereto sixty (60) days' prior written notice before the next Extension Date that the Agreement Term shall not be so extended (the "Agreement Term").

2.    Position; Duties.    During the Agreement Term, Executive shall serve as Chief Financial Officer of the Company and the Partnership. In such position, Executive shall have such duties and authority commensurate with such position as shall be determined from time to time by the Board of Directors of the Company (the "Board") including such duties and responsibilities with respect to any subsidiary, affiliate or joint venture of the Company (each a "Subsidiary"). Executive's duties will be principally performed at the Company's headquarters, which will be located within the West Side of Los Angeles, with such travel as may be required to perform his duties hereunder as reasonably requested by the Company.

3.    Base Salary.    During the Agreement Term, the Company shall pay Executive a base salary at the annual rate of $575,000, payable in regular installments in accordance with the Company's usual payment practices. Executive's salary shall be reviewed at least annually by the Compensation Committee of the Board (the "Committee") and Executive shall be entitled to such increases in Executive's base salary, if any, as may be determined from time to time in the sole and absolute discretion of the Committee. Executive's annual base salary, as in effect from time to time, is hereinafter referred to as the "Base Salary."

4.    Annual Bonus.    With respect to each full fiscal year commencing during the Agreement Term, Executive shall be eligible to earn an annual bonus award (the "Annual Bonus") based upon reasonable criteria to be reasonably established not later than the first thirty (30) days of that fiscal year by the Compensation Committee of the Board in consultation with Executive. The amount of the bonus shall equal the following percentages of Executive's Base Salary during that fiscal year:

Threshold	Target	Superior	Outperformance
50%	80%	100%	120%

        Unless otherwise approved by the Board in its discretion, no bonus will be payable to Executive for any year if Executive does not meet the Threshold criteria established for that year. The Company will pay any Annual Bonus earned by Executive with respect to a given fiscal year in accordance with the terms and conditions of the Company's annual bonus plan, but no later than the earlier of (i) the fifteenth day of the third month following the end of such fiscal year or (ii) the date that other senior executives are paid similar bonuses.

5.    Long-Term Incentive Compensation.    

        5.1.    Option Award.    As of the Effective Date, Executive shall be granted an option to purchase 386,667 shares of Company stock (the "Option Award") pursuant to a separate written Non Qualified Stock Option Agreement under the Company's 2006 Omnibus Stock Incentive Plan (the "Plan"). The Option Award shall be subject to the terms and conditions of that agreement and the Plan.

        5.2.    LTIP Award.    As of the Effective Date, Executive shall be granted 101,500 LTIP Units (the "LTIP Award") pursuant to a separate written LTIP Unit Award Agreement under the Plan. The LTIP Award shall be subject to the terms and conditions of that agreement and the Plan.

6.    Employee Benefits.    During the Agreement Term, Executive shall be entitled to participate in the Company's employee welfare and retirement benefit plans and perquisite programs as in effect, and subject to such modification as the Company may determine necessary or appropriate, from time to time (collectively "Employee Benefits"), on the same basis as those benefits are generally made available to other senior executives of the Company, plus (i) $1,200 per month for the purchase of health insurance benefits during any period in which he is not participating in the Company's health plan and (ii) a car allowance of $500 per month.    During the Agreement Term, Executive shall have the right (i) to participate in any future compensation plans implemented for executives of the Company on a basis commensurate with his position and (ii) to be indemnified by the Company for all actions taken as an officer, director or agent of the Company or its Subsidiaries to the full extent provided under law or pursuant to the Indemnification Agreement of even date herewith. Subject to the policies and procedures of the Company, in addition to any accrued personal time off ("PTO") accrued with respect to service to the predecessors of the Company, Executive shall be entitled to accrue twenty five (25) paid days of PTO per year during the Agreement Term.

7.    Business Expenses.    During the Agreement Term, the Company shall reimburse Executive for all reasonable business expenses incurred by Executive in the performance of Executive's duties hereunder in accordance with the Company's policies as in effect from time to time.

8.    Termination.    Notwithstanding any other provision of this Agreement, the provisions of this Section 8 shall exclusively govern Executive's rights upon termination of employment with the Company. Following Executive's termination of employment, except as set forth in this Section 8, Executive (and Executive's legal representative and estate) shall have no further rights to any compensation or any other benefits under this Agreement.

        8.1.    Definitions.    

        "Accrued Rights" means the sum of the following: (i) any accrued but unpaid Base Salary through the date of termination; (ii) a payment in respect of all unpaid, but accrued and unused PTO through the date of termination; (iii) any Annual Bonus earned but unpaid as of the date of termination for any previously completed fiscal year (i.e., not for the year of employment termination); (iv) reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy through the date of termination; (v) such rights, if any, under the Option Award, the LTIP Award and other compensation programs and Employee Benefits to which Executive may be entitled upon termination of employment according to the documents governing such benefits; and (vi) any existing rights to indemnification for prior acts through the date of termination.

        "Cause" means any of the following: (i) any act or omission by Executive which constitutes intentional misconduct or a willful violation of law; (ii) an act of fraud, conversion, misappropriation or embezzlement by Executive or conviction of, indictment for (or its procedural equivalent) or entering a guilty plea or plea of no contest with respect to a felony, the equivalent thereof or any crime involving any moral turpitude with respect to which imprisonment is a common punishment; or (iii) any other failure (other than any failure resulting from incapacity due to physical or mental illness) by Executive to perform his material and reasonable duties and responsibilities as an employee, director or consultant of the Company or any Subsidiary which continues for ten (10) days following written notice from the Company or any Subsidiary (except in the case of a willful failure to perform his duties or a willful breach, which shall require no notice). For purposes of the foregoing sentence, no act, or failure to act, on Executive's part shall be considered "willful" unless the Executive acted, or failed to act, in bad faith or without reasonable belief that his act or failure to act was in the best interest of the Company or any Subsidiary.

        "Change of Control" shall be deemed to have occurred if

          (i)  there shall be consummated (a) any consolidation or merger of the Company, other than a merger or consolidation of the Company in which (1) the holders of the Company's common stock immediately prior to the merger or consolidation have at least fifty one percent (51%) ownership of the total voting power of the surviving entity immediately after the merger or consolidation, and (2) no person (other than an Exempted Holder as defined below) beneficially owns (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, 20% or more of the total voting power of the surviving entity or (b) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company, or

         (ii)  the shareholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company, or

        (iii)  any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) other than an Exempted Holder (as defined below) shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of twenty percent (20%) or more of the Company's common stock. "Exempted Holder" means (a) the Company or any majority-owned Subsidiary (provided that this exclusion applies solely to the ownership levels of the Company or the majority-owned Subsidiary); (b) any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trust sponsored or maintained by the Company or any Subsidiary; (c) any underwriter or placement agent temporarily holding securities pursuant to an offering of such securities; or (d) Dan Emmett, Jordan Kaplan or Ken Panzer, their immediate family members and family trusts or family-only partnerships and any charitable foundations, any entities in which they and their families beneficially own a majority of the voting interests, and any "group" (as described in Rule 13d-5(b)(i) under the Exchange Act) including them. However, a Change in Control shall not be deemed to have occurred if a person's percentage interest increases over twenty percent (20%) solely as a result of a decrease in the outstanding stock because of an acquisition of securities by the Company; provided, however, that a "Change in Control" shall be deemed to have occurred on any subsequent acquisitions of the Company's common stock by that person (other than pursuant to a stock split, stock dividend, or similar transaction) at a time when that person beneficially owns twenty percent (20%) or more of the Company's outstanding common stock, or

        (iv)  the Board shall cease for any reason to have a majority of Uncontested Directors. "Uncontested Directors" means directors who were initially elected or initially nominated (a) by a vote of at least two-thirds of the then Uncontested Directors and (b) not as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation.

        "Disability" means physical or mental incapacity whereby Executive is unable with or without reasonable accommodation for a period of six (6) consecutive months or for an aggregate of nine (9) months in any twenty-four (24) consecutive month period to perform the essential functions of Executive's duties.

        "Good Reason" shall be present where Executive gives notice to the Board of his voluntary resignation (a) within one hundred and twenty (120) days after the occurrence of any of the following, without Executive's written consent: (i) the failure of the Company to pay or cause to be paid Executive's Base Salary or Annual Bonus, when due hereunder, subject to a ten (10) day cure period by the Company (except in the case of a willful failure which shall require no notice); (ii) diminution in Executive's status, including, title, position, duties, authority or responsibility, subject to a thirty (30) day cure period by the Company (except in the case of a willful breach, which shall require no notice); (iii) relocation of the Company's executive offices to a location outside of the West Side of Los Angeles; or (iv) the failure of the Company to obtain the express written assumption of this Agreement pursuant to Section 11.5 hereof (unless such Agreement is assumed by operation of law); (b) within eighteen (18) months after the occurrence of a Change of Control.

        8.2.    Termination by the Company for Cause or By Executive's Resignation without Good Reason.    The Agreement Term and Executive's employment hereunder may be terminated by the Company for Cause and shall terminate upon Executive's resignation without Good Reason, and in either case Executive shall be entitled to receive only his Accrued Rights.

        8.3.    Death/Disability.    The Agreement Term and Executive's employment hereunder shall terminate upon Executive's death or Disability. Upon termination of Executive's employment hereunder due to death or Disability, Executive's legal representative or estate (as the case may be) shall be entitled to receive (i) the Accrued Rights plus (ii) an amount equal to a pro-rated portion of the Annual Bonus Executive otherwise would have been paid for the fiscal year in which such termination of employment occurs, payable when the Annual Bonus would otherwise have been paid to Executive pursuant to Section 4, based upon (a) actual performance for such fiscal year, as determined at the end of such fiscal year and (b) the percentage of such fiscal year that shall have elapsed through the date of Executive's termination of employment; plus (iii) continued medical benefits for Executive and Executive's spouse and eligible dependents who at the time of Executive's termination are enrolled in the Company's medical plan. Such benefits shall be substantially identical to the

benefits maintained for other senior executives of the Company and shall be provided for a period of twelve (12) months following Executive's termination of employment. Executive acknowledges that such benefit continuation is intended, and shall be deemed, to satisfy the obligations of the Company and any of its subsidiaries and affiliates to provide continuation of benefits under Section 4980B of the Internal Revenue Code of 1986, as amended ("COBRA") for such period and that the Company may satisfy such obligation by paying any applicable COBRA premiums.

        8.4.    Termination by the Company without Cause or Resignation by Executive for Good Reason.    The Agreement Term and Executive's employment hereunder may be terminated by the Company without Cause at any time and for any reason or by Executive's resignation for Good Reason at any time upon thirty (30) days written notice by the terminating party, although the Company may waive services during that period. If Executive's employment is terminated by the Company without Cause (other than by reason of death or Disability) or if Executive resigns for Good Reason, Executive shall be entitled to receive (i) the Accrued Rights, plus (ii) provided that Executive first executes and returns to the Company (and does not revoke) a release of all claims that is in form and substance reasonably satisfactory to the Company, and subject to Executive's continued compliance with the provisions of Section 9 of this Agreement (to the extent expressly applicable after the Agreement Term):

        8.4.1. an amount, payable in a lump sum without discount within 30 days of the date of termination, equal to two (2) times the average of Executive's compensation over the last three full calendar years ending prior to the termination date including (i) the Base Salary; (ii) the Annual Bonus and (iii) the value (based on a Black Scholes formula in the case of options and value of the underlying grants in the case of LTIP or outperformance plans) of any equity (including stock, LTIPs and options) or other compensation plans granted or awarded to Executive. In the event that there are less than three full calendar years completed after the execution of this Agreement, the average shall be based on (i) 2006 (including compensation paid by the predecessor of the Company) and (ii) any other full completed years prior to the date of termination.

        8.4.2. continued medical and dental benefits for Executive, Executive's spouse and Executive's eligible dependents, who at the time of Executive's termination are enrolled in the Company's benefits plans provided for a period of two (2) years following Executive's termination of employment. Such benefits shall be substantially identical to the benefits maintained for other senior executives of the Company. Executive acknowledges that such benefit continuation is intended, and shall be deemed, to satisfy the obligations of the Company and any of its subsidiaries and affiliates to provide continuation of benefits under COBRA for such period and that the Company may satisfy such obligation by paying any applicable COBRA premiums or causing such premiums to be paid.

        8.5.    Notice of Termination.    Any purported termination of employment by the Company or by Executive (other than due to Executive's death) shall be communicated by written notice to the other party, which indicates the specific termination provision in this Agreement relied upon and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated and the date of employment termination.

        8.6.    Employee Termination and Officer Resignation.    Upon termination of Executive's employment for any reason, Executive's employment with each of the Company and each Subsidiary shall be terminated and Executive shall be deemed to resign, as of the date of such termination and to the extent applicable, as an officer of the Company and any Subsidiary. Executive shall confirm such resignation(s) in writing to the Company.

9.    Covenants.    

        9.1.    Confidentiality.    Executive acknowledges that, in his employment hereunder, he will occupy a position of trust and confidence with the Company and its Subsidiaries. Executive agrees that Executive shall not during the Agreement Term and for two (2) years thereafter, except (i) as may be required to perform his duties hereunder or as required by applicable law or (ii) until such information shall have become public other than by Executive's unauthorized disclosure or (iii) with the prior written consent of the Company, use, disclose or disseminate any trade secrets, confidential information or any other information of a secret, proprietary, confidential or generally undisclosed nature relating to the Company and/or any Subsidiary, or their respective businesses, contracts, projects, proposed projects, revenues, costs, operations, methods or procedures.

        9.2.    Non-solicitation.    Executive agrees that, for a period of one (1) year immediately following the end of Executive's employment with the Company, except acting on behalf of the Company during the Employment Term, Executive shall not, either directly or indirectly, solicit or participate in the solicitation of any employee or consultant of the Company to terminate or materially alter his, her or its relationship with the Company or any Subsidiary. This restriction shall not apply to Executive's assistant.

        9.3.    Full time; Non competition.    During the Agreement Term, Executive will devote Executive's full business time and best efforts to the performance of Executive's duties hereunder and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict or interfere with the rendition of such services either directly or indirectly; except that nothing herein shall preclude Executive from accepting appointment to or continuing to serve on any board of directors or trustees of any business entity, trade organization or any charitable organization or engaging in any activities or managing his investments and affairs so long as such activities in the aggregate do not interfere with the performance of Executive's duties hereunder or conflict with this Section 9.3 herein. During the Agreement Term, without the prior approval of the Board, Executive shall not in any city, town, county, parish where the Company and/or any Subsidiaries directly or indirectly engages in business or is actively contemplating engaging in business: (i) engage in a competing business for Executive's own account; (ii) enter the employ of, or render any consulting or any other services to, any entity that competes with the Company and/or any of its affiliates; or (iii) become interested in any such competing entity in any capacity, including, without limitation, as an individual, partner, shareholder, officer, director, principal, agent, trustee or consultant; provided, however, Executive may own, directly or indirectly, solely as a passive investment, 5% or less of any class of securities of any entity traded on any national securities exchange and any assets acquired in compliance with this Section. A business shall not be deemed a "competing business" if it does not invest in or deal with the same basic product type as the Company does from time to time. At this time the basic product type of the Company is large and mid-size office buildings and multi-family properties in Los Angeles County and Hawaii (larger than 50,000 sq. ft. for office properties and 50 units for apartment buildings).

        9.4.    Company Policies.    During the Agreement Term, Executive shall also be subject to and shall abide by all written reasonable policies and procedures of the Company provided to him, including regarding the protection of confidential information and intellectual property and potential conflicts of interest, except to the extent that such policies and procedures conflict with the other provisions of this Agreement, in which case this Agreement shall control. Executive acknowledges that the Company may amend any such policies and guidelines from, time to time, and that Executive remains at all times bound by their most current version to the extent made known to him and reasonable in scope.

        9.5.    Intellectual Property.    Except as permitted in Section 9.3 and as provided under Section 2870 of the California Labor Code, the Company shall be the sole owner of all the products and proceeds of Executive's services hereunder including, without limitation, all materials, ideas, concepts, formats, suggestions, developments, and other intellectual properties that Executive may acquire, obtain, develop or create in connection with his services

hereunder and during the Agreement Term, free and clear of any claims by Executive (or anyone claiming under Executive) of any kind or character whatsoever (other than Executive's rights and benefits hereunder). Executive shall, at the request of the Company, execute such assignments, certificates or other instruments as the Company may from time to time deem necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or defend the Company's right, title and interest in and to any such products and proceeds of Executive's services hereunder. Notwithstanding the above, Executive shall not be considered to be in breach of this Section 9.5 in connection with any property or other material of a type described in this Section 9.5 which does not become the property of the Company, so long as Executive does not, directly or indirectly, have or obtain any personal interest in such property or material.

        9.6.    General.    Executive and the Company intend that: (i) this Section 9 concerning (among other things) the exclusive services of Executive to the Company and/or its Subsidiaries shall be construed as a series of separate covenants; (ii) if any portion of the restrictions set forth in this Section 9 should, for any reason whatsoever, be declared invalid by an arbitrator or a court of competent jurisdiction, the validity or enforceability of the remainder of such restrictions shall not thereby be adversely affected; and (iii) Executive declares that the territorial and time limitations set forth in this Section 9 are reasonable and properly required for the adequate protection of the business of the Company and/or its Subsidiaries. In the event that any such territorial or time limitation is deemed to be unreasonable by an arbitrator or a court of competent jurisdiction, Executive agrees to the reduction of the subject territorial or time limitation to the area or period which such arbitrator or court shall have deemed reasonable. All of the provisions of this Section 9 are in addition to any other written agreements on the subjects covered herein that Executive may have with the Company and/or any of its Subsidiaries and are not meant to and do not excuse any additional obligations that Executive may have under such agreements.

        9.7.    Specific Performance.    Executive acknowledges and agrees that the confidential information, non-solicitation, intellectual property rights and other rights of the Company referred to in Section 9 of this Agreement are each of substantial value to the Company and/or its subsidiaries and affiliates and that any breach of Section 9 by Executive would cause irreparable harm to the Company and/or its Subsidiaries, for which the Company and/or its Subsidiaries would have no adequate remedy at law. Therefore, in addition to any other remedies that may be available to the Company and/or any of its Subsidiaries under this Agreement or otherwise, the Company and/or its Subsidiaries shall be entitled to obtain temporary restraining orders, preliminary and permanent injunctions and/or other equitable relief to specifically enforce Executive's duties and obligations under this Agreement, or to enjoin any breach of this Agreement, without the need to post a bond or other security and without the need to demonstrate special damages. Furthermore, Executive agrees that any damages suffered by the Company and/or its Subsidiaries as a result of Executive's breach of Executive's duties and obligations under this Agreement shall entitle the Company and/or its Subsidiaries to offset such damages against any payments to be made pursuant to this Agreement, to the extent permitted by applicable law.

10.    Excise Tax Gross-Up Payments.    Company agrees to pay Executive the amount or amounts specified in Schedule B, at such time or times as specified in Schedule B, as an excise tax Gross-Up Payment as provided in Schedule B. In connection therewith, the Company and Executive agree to the provisions of Schedule B, which are incorporated herein by this reference.

11.    Miscellaneous.    

        11.1.    Governing Law.    This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of California, without regard to conflicts of laws principles or rules thereof.

        11.2.    Entire Agreement; Amendment.    This Agreement (and the Option Award and the LTIP Award) represents the entire agreement and understanding between the parties and, except as expressly stated in this Agreement, supersedes any prior agreement, understanding or negotiations respecting such subject. No change to or modification of this Agreement shall be valid or binding unless it is in writing and signed by Executive and a duly authorized director of the Company.

        11.3.    No Waiver.    Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times. No waiver of any breach of any term or provision of this Agreement shall be construed to be, nor shall be, a waiver of any other breach of this Agreement. No waiver shall be binding unless in writing and signed by the party waiving the breach.

        11.4.    Severability; Invalid Provision.    In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby. The parties understand and agree that if any provision of this Agreement shall, for any reason, be adjudged by any court or arbitrator of competent jurisdiction to be invalid or unenforceable, such judgment shall not affect, impair, or invalidate the remainder of this Agreement, but shall be confined in its operation to the provision of this Agreement directly involved in the controversy in which such judgment shall have been rendered.

        11.5.    Assignment.    This Agreement and all of Executive's rights and duties hereunder, shall not be assignable or delegable by Executive. Any purported assignment or delegation by Executive in violation of the foregoing shall be null and void ab initio and of no force and effect. This Agreement may be assigned by the Company to a successor in interest to substantially all of the business operations of the Company. Upon such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such affiliate or successor person or entity. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place (except to the extent such assumption would occur by operation of law). It is anticipated that the Executive's employer of record and salary and bonus payor may be the Partnership or another Subsidiary, but the Company and the Partnership will be jointly and severally liable for all amounts payable to Executive hereunder.

        11.6.    Set Off.    The Company's obligation to pay Executive the amounts provided and to make the arrangements provided hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by Executive to the Company or its Subsidiaries to the extent permitted by applicable law.

        11.7.    Successors; Binding Agreement.    This Agreement shall inure to the benefit of and be binding upon the parties' respective personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

        11.8.    Notice.    Any and all notice given hereunder shall be in writing and shall be deemed to have been duly given when received, if personally delivered; when transmitted, if transmitted by telecopy, or electronic or digital transmission method, upon receipt of telephonic or electronic confirmation; the day after the notice is sent, if sent for next day delivery to a domestic address using a generally recognized overnight delivery service (e.g., FedEx); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice will be sent as follows:

If to the Company:	Douglas Emmett, Inc. 808 Wilshire Blvd., Suite 200, Santa Monica, CA 90401 Attention: Chief Executive Officer Telephone: (310) 255-7700
If to Executive:	William Kamer 808 Wilshire Blvd., Suite 200, Santa Monica, CA 90401 Telephone: 310 255 7700

Either party may change its address and/or facsimile number for notice purposes by duly giving notice to the other party pursuant to this Section.

        11.9.    Executive's Representations.    Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of Executive's duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound. Executive represents and warrants that he is not subject to any employment agreement, nondisclosure agreement, common law nondisclosure obligation, fiduciary duty, noncompetition agreement, restrictive covenant or any other obligation to any former employer or to any other person or entity in any way relating to the right or ability of Executive to be employed by and/or perform services for the Company and its Subsidiaries. Executive further represents and warrants that he has not brought to or disclosed to the Company or to its Subsidiaries, and covenants that he will not bring to or disclose to the Company or to its Subsidiaries or use in connection with his employment with the Company, any trade secrets or proprietary information from any of his prior employers or from any other person or entity.

        11.10.    Cooperation in Third-Party Disputes.    At the request of the Company, Executive shall cooperate with the Company and/or its Subsidiaries and each of their respective attorneys or other legal representatives (collectively referred to as "Attorneys") in connection with any claim, litigation, or judicial or arbitral proceeding which is now pending or may hereinafter be brought against the Company and/or any of its Subsidiaries or affiliates by any third party. Executive's duty of cooperation shall include, but shall not be limited to, (a) meeting with the Company's and/or its Subsidiaries' Attorneys by telephone or in person at mutually convenient times and places in order to state truthfully Executive's knowledge of the matters at issue and recollection of events; (b) appearing at the Company's and/or its Subsidiaries' and/or their Attorneys' request (and, to the extent possible, at a time convenient to Executive that does not conflict with the needs or requirements of Executive's then-current employer or personal commitments) as a witness at depositions, trials or other proceedings, without the necessity of a subpoena, in order to state truthfully Executive's knowledge of the matters at issue; and (c) signing at the Company's request declarations or affidavits that truthfully state the matters of which Executive has knowledge. Such services will be without additional compensation if Executive is then employed by the Company or any Subsidiary and for reasonable compensation and subject to his reasonable availability if he is not so employed. The Company shall promptly reimburse Executive for Executive's actual and reasonable travel or other out-of-pocket expenses that Executive may incur in cooperating with the Company and/or its Subsidiaries under this Section 11.10.

        11.11.    Withholding Obligations.    The Company, or any other entity making a payment, may withhold and make such deductions from any amounts payable under this Agreement such federal, state and local taxes as may be required to be withheld or deducted from time to time pursuant to any applicable law, governmental regulation and/or order. The amount of compensation payable to Executive pursuant to this Agreement shall be "grossed up" as necessary (on an after-tax basis) to compensate for any additional social security withholding taxes due as a result of Executive's shared employment by the any Subsidiary.

        11.12.    Counterparts.    This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. A facsimile signature shall be deemed to be the same as an original signature.

        11.13.    Interpretation.    Executive understands that this Agreement is deemed to have been drafted jointly by the parties and that the parties had a reasonable opportunity to retain legal counsel for such purpose. Any uncertainty or ambiguity shall not be construed for or against any party based on attribution of drafting to any party.

        11.14.    Headings.    Titles or captions of Sections contained in this Agreement are inserted only as a matter of convenience and for reference, and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provisions hereof.

        11.15.    Survival of Provisions.    All other rights and obligations of the parties hereto, other than those applicable by their express terms only during the Agreement Term, shall survive any termination or expiration of this Agreement or of Executive's employment with the Company, and shall be fully enforceable thereafter.

        11.16.    Arbitration of Disputes.    Except as is necessary for Executive and the Company to preserve their respective rights under this Agreement by seeking necessary equitable relief (including, but not limited to, the Company's rights under Section 9 of this Agreement) from a court of competent jurisdiction, the Company and Executive agree that any and all disputes based upon, relating to or arising out of this Agreement (including, but not limited to, any breach or alleged breach of this Agreement, or any dispute concerning the formation of this Agreement, or the validity, scope and/or enforceability of this arbitration provision), Executive's employment relationship with the Company and/or the termination of that relationship, and/or any other dispute by and between the Company and Executive, including any and all claims Executive may at any time attempt to assert against the Company, shall be submitted to binding arbitration in Los Angeles, California, in accordance with the rules of JAMS, provided that the arbitrator shall allow for discovery sufficient to adequately arbitrate any alleged claims, including access to essential documents and witnesses, and otherwise in accordance with California Code of Civil Procedure § 1283.05. The party prevailing in any action shall be entitled to its reasonable attorneys' fees in enforcing its rights hereunder. In any event, the Company shall pay any expenses that Executive would not otherwise have incurred if the dispute had been adjudicated in a court of law, rather than through arbitration, including the arbitrator's fee, any administrative fee and any filing fee in excess of the maximum court filing fee in the jurisdiction in which the arbitration is commenced. Judgment in a court of competent jurisdiction may be had on any decision and award of the arbitrator. For these purposes, the parties agree to submit to the jurisdiction of the state and federal courts located in Los Angeles County, California.

        11.17.    Section 409A of the Code.    This Agreement is intended to comply with Section 409A of the Code. Each party to this Agreement intends and agrees that this Agreement shall be interpreted and modified to the minimum extent necessary and to provide as near as possible the same economic benefit to the Executive provided hereunder in the absence of such modification, as mutually agreed by counsel for both parties, so as to avoid the imposition of any excise tax under Section 409A of the Internal Revenue Code and the regulations thereunder.

        IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

Douglas Emmett, Inc.		Executive
/S/ JORDAN L. KAPLAN		/S/ WILLIAM KAMER
By:	Jordan L. Kaplan	William Kamer
Title:	Chief Executive Officer and President
Douglas Emmett Properties, LP
By:	Douglas Emmett Management, Inc.
Its:	General Partner
/S/ JORDAN L. KAPLAN
By:	Jordan L. Kaplan
Title:	Chief Executive Officer and President

Schedule A

CALIFORNIA LABOR CODE SECTION 2870

INVENTION ON OWN TIME-EXEMPTION FROM AGREEMENT

        "(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

        (1)   Relate at the time of conception or reduction to practice of the invention to the employer's business, or actually or demonstrably anticipated research or development of the employer; or

        (2)   Result from any work performed by the employee for the employer.

        (b)   To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable."

Schedule B

Excise Tax Gross Up

I.

Subject to the following provisions of this Schedule B, but otherwise anything in this Agreement to the contrary notwithstanding, in the event that Executive shall become entitled to payments and/or benefits provided by this Agreement or any other amounts in the "nature of compensation" (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change of ownership or effective control covered by Section 280G of the Code or any successor provision or any person affiliated with the Company or such person) as a result of such change in ownership or effective control, but determined without regard to any additional payments required under this Schedule B (a "Payment") would be subject to the excise tax imposed by Section 4999 of the 1986 Internal Revenue Code, as amended (the "Code"), or any interest or penalties are incurred by Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), the Company shall make a payment (a "Gross-Up Payment") to Executive in an amount such that, after payment by Executive of all income or other taxes (and any interest and penalties imposed with respect thereto) and Excise Taxes imposed on the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed on the Payments.

II.

Subject to the provisions of Paragraph III of this Schedule B, all determinations required to be made under this Schedule B, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a certified public accounting firm designated by Executive (the "Executive Accounting Firm") which shall provide detailed supporting calculations both to the Company and to Executive within fifteen (15) business days of the receipt of notice from Executive that there has been a Payment, or such earlier times as is requested by Executive. If Executive Accounting Firm determines that no Excise Tax is payable by Executive, it shall, upon the written request of Executive, furnish Executive with a written opinion that failure to report the Excise Tax on Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. The calculations prepared by Executive Accounting Firm shall be reviewed on behalf of the Company by the Company's independent auditors (the "Company Accounting Firm") which shall provide its conclusions, together with detailed supporting calculations, both to the Company and Executive within fifteen (15) business days after receipt of the calculations and supporting materials prepared by Executive Accounting Firm. In the event of a dispute between the Company Accounting Firm and Executive Accounting Firm, such firms shall, within five (5) business days of receipt of the conclusions and supporting materials prepared by the Company Accounting Firm, jointly select a third nationally recognized certified public accounting firm (the "Third Accounting Firm") to resolve the dispute. The Third Accounting Firm shall submit its conclusions to the Company and Executive within fifteen (15) business days after receipt of notice of its appointment hereunder and the decision of the Third Accounting Firm shall be final, binding and conclusive upon Executive and the Company subject to any determination by the Internal Revenue Service. All fees and expenses of all such accounting firms shall be borne solely by the Company. Any Gross-Up Payment shall be paid by the Company to Executive within five (5) business days after the earlier of acceptance by the Company of the calculations prepared by Executive Accounting Firm or the Company's receipt of the Third Accounting Firm's determination.

III.

As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination of whether any Gross-Up Payment should be made hereunder, it is possible that a Gross-Up Payment will have been due but not made by the Company (an "Underpayment"), consistent with the calculations required to be made hereunder. In the event that the Company exhausts its remedies pursuant this Schedule B and Executive thereafter is required to make a payment of any Excise Tax, Executive Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Company to or for the benefit of Executive.

IV.

Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-up Payment. Such notification shall be given as soon as practicable (but not later than ten (10) business days after Executive is informed in writing of such claim) and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. Executive shall not pay such claim prior to the expiration of the thirty (30) day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies Executive in writing prior to the expiration of such period that it desires to contest such claim, Executive shall:

1.

Give the Company any information reasonably requested by it relating to such claim;

2.

Take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company and acceptable to Executive;

3.

Cooperate with the Company in good faith in order effectively to contest such claim; and

4.

Permit the Company to participate in any proceedings relating to such claim.

V.

The Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with a contest of a claim under Paragraph IV of this Schedule B and shall indemnify and hold Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this Schedule B, the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and Executive agrees to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine. If the Company directs Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to Executive on an interest-free basis and shall indemnify and hold Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance, provided that if any such advance would be in violation of the Sarbanes-Oxley Act the Company shall pay, rather than advance, the amounts to Executive. Any extension of the statute of limitations relating to payment of taxes for the taxable year of Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

VI.

If, after the receipt by Executive of an amount advanced by the Company pursuant to this Schedule B, Executive becomes entitled to receive any refund with respect to such claim, Executive shall (subject to the Company's complying with the requirements of this Schedule B) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by Executive of an amount advanced by the Company pursuant to this Schedule B, a determination is made that Executive shall not be entitled to any refund with respect to such claim and the Company does not notify Executive in writing of its intent to contest such denial of refund prior to the expiration of thirty days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid.