MARYLAND
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20-3073047
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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808 Wilshire Boulevard, Suite 200, Santa Monica, California
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90401
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer x
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Accelerated filer o
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Non-accelerated filer o (Do not check if a smaller reporting company)
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Smaller reporting company o
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Class
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Outstanding at July 31, 2011
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|
Common Stock,
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127,625,185 shares
|
|
$0.01 par value per share
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PAGE NO.
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PART I.
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3
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3
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4
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5
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6
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21
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31
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31
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PART II.
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32
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32
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32
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32
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32
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32
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33
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34
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June 30, 2011
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December 31, 2010
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||||||
(unaudited)
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|||||||
Assets
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|||||||
Investment in real estate:
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|||||||
Land
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$ | 851,679 | $ | 851,679 | |||
Buildings and improvements
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5,229,278 | 5,226,269 | |||||
Tenant improvements and lease intangibles
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613,691 | 592,735 | |||||
Investment in real estate, gross
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6,694,648 | 6,670,683 | |||||
Less: accumulated depreciation
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(1,028,190 | ) | (913,923 | ) | |||
Investment in real estate, net
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5,666,458 | 5,756,760 | |||||
Cash and cash equivalents
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332,139 | 272,419 | |||||
Tenant receivables, net
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1,290 | 1,591 | |||||
Deferred rent receivables, net
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54,229 | 48,933 | |||||
Interest rate contracts
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28,753 | 52,528 | |||||
Acquired lease intangible assets, net
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7,604 | 9,356 | |||||
Investment in unconsolidated real estate funds
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117,659 | 110,920 | |||||
Other assets
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35,229 | 26,782 | |||||
Total assets
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$ | 6,243,361 | $ | 6,279,289 | |||
Liabilities
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|||||||
Secured notes payable, including loan premium
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$ | 3,669,222 | $ | 3,668,133 | |||
Accounts payable and accrued expenses
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50,834 | 57,793 | |||||
Security deposits
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32,995 | 31,850 | |||||
Acquired lease intangible liabilities, net
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97,811 | 110,244 | |||||
Interest rate contracts
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74,603 | 99,687 | |||||
Dividends payable
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16,318 | 12,413 | |||||
Total liabilities
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3,941,783 | 3,980,120 | |||||
Equity
|
|||||||
Douglas Emmett, Inc. stockholders' equity:
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|||||||
Common Stock, $0.01 par value 750,000,000 authorized, 125,522,893 and 124,131,557 outstanding at June 30, 2011 and December 31, 2010, respectively
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1,255 | 1,241 | |||||
Additional paid-in capital
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2,358,833 | 2,332,307 | |||||
Accumulated other comprehensive income (loss)
|
(46,334 | ) | (58,765 | ) | |||
Accumulated deficit
|
(481,835 | ) | (447,722 | ) | |||
Total Douglas Emmett, Inc. stockholders' equity
|
1,831,919 | 1,827,061 | |||||
Noncontrolling interests
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469,659 | 472,108 | |||||
Total equity
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2,301,578 | 2,299,169 | |||||
Total liabilities and equity
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$ | 6,243,361 | $ | 6,279,289 |
Three Months Ended June 30,
|
Six Months Ended June 30,
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||||||||||||||
2011
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2010
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2011
|
2010
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||||||||||||
Revenues
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|||||||||||||||
Office rental
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|||||||||||||||
Rental revenues
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$ | 98,109 | $ | 98,695 | $ | 197,319 | $ | 197,442 | |||||||
Tenant recoveries
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12,744 | 7,710 | 22,069 | 14,188 | |||||||||||
Parking and other income
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17,046 | 15,838 | 33,906 | 31,389 | |||||||||||
Total office revenues
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127,899 | 122,243 | 253,294 | 243,019 | |||||||||||
Multifamily rental
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|||||||||||||||
Rental revenues
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16,230 | 15,879 | 32,275 | 31,778 | |||||||||||
Parking and other income
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1,279 | 1,087 | 2,430 | 2,199 | |||||||||||
Total multifamily revenues
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17,509 | 16,966 | 34,705 | 33,977 | |||||||||||
Total revenues
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145,408 | 139,209 | 287,999 | 276,996 | |||||||||||
Operating Expenses
|
|||||||||||||||
Office expense
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42,183 | 37,198 | 82,787 | 73,312 | |||||||||||
Multifamily expense
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4,736 | 4,434 | 9,485 | 9,002 | |||||||||||
General and administrative
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6,820 | 5,944 | 14,306 | 11,794 | |||||||||||
Depreciation and amortization
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57,114 | 54,921 | 114,267 | 110,253 | |||||||||||
Total operating expenses
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110,853 | 102,497 | 220,845 | 204,361 | |||||||||||
Operating income
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34,555 | 36,712 | 67,154 | 72,635 | |||||||||||
Other income
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343 | 151 | 599 | 397 | |||||||||||
Loss including depreciation, from unconsolidated real estate funds
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(255 | ) | (2,200 | ) | (1,779 | ) | (3,704 | ) | |||||||
Interest expense
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(40,852 | ) | (45,676 | ) | (72,528 | ) | (90,810 | ) | |||||||
Acquisition-related expenses
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- | (292 | ) | - | (292 | ) | |||||||||
Net loss
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(6,209 | ) | (11,305 | ) | (6,554 | ) | (21,774 | ) | |||||||
Less: Net loss attributable to noncontrolling interests
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1,193 | 2,314 | 1,189 | 4,496 | |||||||||||
Net loss attributable to common stockholders
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$ | (5,016 | ) | $ | (8,991 | ) | $ | (5,365 | ) | $ | (17,278 | ) | |||
Net loss attributable to common stockholders
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|||||||||||||||
per share – basic and diluted
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$ | (0.04 | ) | $ | (0.07 | ) | $ | (0.04 | ) | $ | (0.14 | ) | |||
Dividends declared per common share
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$ | 0.13 | $ | 0.10 | $ | 0.23 | $ | 0.20 | |||||||
Weighted average shares of common stock
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|||||||||||||||
outstanding – basic and diluted
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124,610,351 | 122,331,803 | 124,411,176 | 121,989,652 |
Six Months Ended June 30,
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|||||||
2011
|
2010
|
||||||
Operating Activities
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|||||||
Net loss
|
$ | (6,554 | ) | $ | (21,774 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|||||||
Loss, including depreciation, from unconsolidated real estate funds
|
1,779 | 3,704 | |||||
Depreciation and amortization
|
114,267 | 110,253 | |||||
Net accretion of acquired lease intangibles
|
(10,681 | ) | (13,927 | ) | |||
Amortization of deferred loan costs
|
2,305 | 830 | |||||
Amortization of loan premium
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(5,651 | ) | (2,624 | ) | |||
Non-cash market value adjustments on interest rate contracts
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12,102 | 9,454 | |||||
Non-cash amortization of stock-based compensation
|
3,754 | 3,498 | |||||
Change in working capital components:
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|||||||
Tenant receivables
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301 | 1,101 | |||||
Deferred rent receivables
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(5,296 | ) | (4,408 | ) | |||
Accounts payable and accrued expenses
|
(1,763 | ) | (4,677 | ) | |||
Security deposits
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1,145 | (447 | ) | ||||
Other
|
3,390 | 2,612 | |||||
Net cash provided by operating activities
|
109,098 | 83,595 | |||||
Investing Activities
|
|||||||
Capital expenditures and property acquisitions
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(26,203 | ) | (252,226 | ) | |||
Contributions to unconsolidated real estate funds
|
(9,211 | ) | (5,681 | ) | |||
Distributions from unconsolidated real estate funds
|
2,835 | - | |||||
Net cash used in investing activities
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(32,579 | ) | (257,907 | ) | |||
Financing Activities
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|||||||
Proceeds from long-term borrowings
|
860,000 | - | |||||
Deferred loan costs
|
(6,945 | ) | (105 | ) | |||
Repayment of borrowings
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(853,260 | ) | - | ||||
Net change in short-term borrowings
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- | 154,500 | |||||
Payment of refundable loan deposit
|
(7,100 | ) | - | ||||
Distributions to noncontrolling interests
|
(6,570 | ) | (6,811 | ) | |||
Distributions of capital to noncontrolling interests
|
- | (400 | ) | ||||
Cash dividends
|
(24,843 | ) | (24,363 | ) | |||
Investment in taxable REIT subsidiary
|
10 | - | |||||
Net proceeds from ATM common stock issuances
|
21,909 | - | |||||
Net cash (used in) provided by financing activities
|
(16,799 | ) | 122,821 | ||||
Increase (Decrease) in cash and cash equivalents
|
59,720 | (51,491 | ) | ||||
Cash and cash equivalents at beginning of period
|
272,419 | 72,740 | |||||
Cash and cash equivalents at end of period
|
$ | 332,139 | $ | 21,249 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
Office Segment
|
2011 |
2010
|
2011
|
2010
|
|||||||||||||
Rental revenue
|
$
|
127,899
|
$
|
122,243
|
$
|
253,294
|
$
|
243,019
|
|||||||||
Rental expense
|
(42,183
|
) |
(37,198
|
) |
(82,787
|
) |
(73,312
|
) | |||||||||
Segment profit
|
85,716
|
85,045
|
170,507
|
169,707
|
|||||||||||||
Multifamily Segment
|
|||||||||||||||||
Rental revenue
|
17,509
|
16,966
|
34,705
|
33,977
|
|||||||||||||
Rental expense
|
(4,736
|
) |
(4,434
|
) |
(9,485
|
) |
(9,002
|
) | |||||||||
Segment profit
|
12,773
|
12,532
|
25,220
|
24,975
|
|||||||||||||
Total segments' profit
|
$
|
98,489
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$
|
97,577
|
$
|
195,727
|
$
|
194,682
|
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||||||||
Total segments' profit
|
$
|
98,489
|
$
|
97,577
|
$
|
195,727
|
$
|
194,682
|
|||||||||
General and administrative expense
|
(6,820
|
) |
(5,944
|
) |
(14,306
|
) |
(11,794
|
) | |||||||||
Depreciation and amortization
|
(57,114
|
) |
(54,921
|
) |
(114,267
|
) |
(110,253
|
) | |||||||||
Other income
|
343
|
151
|
599
|
397
|
|||||||||||||
Loss, including depreciation, from unconsolidated real estate funds
|
(255
|
) |
(2,200
|
) |
(1,779
|
) |
(3,704
|
) | |||||||||
Interest expense
|
(40,852
|
) |
(45,676
|
) |
(72,528
|
) |
(90,810
|
) | |||||||||
Acquisition-related expenses
|
-
|
(292
|
) |
-
|
(292
|
) | |||||||||||
Net loss
|
(6,209
|
) |
(11,305
|
) |
(6,554
|
) |
(21,774
|
) | |||||||||
Less: Net loss attributable to noncontrolling interests
|
1,193
|
2,314
|
1,189
|
4,496
|
|||||||||||||
Net loss attributable to common stockholders
|
$
|
(5,016
|
) |
$
|
(8,991
|
) |
$
|
(5,365
|
) |
$
|
(17,278
|
) |
June 30, 2011 | December 31, 2010 | ||||||
Deferred loan costs, net of accumulated amortization of $6,633 and $4,770 at June 30, 2011 and December 31, 2010, respectively
|
$
|
16,505
|
$
|
12,561
|
|||
Restricted cash
|
2,451
|
2,675
|
|||||
Prepaid expenses
|
735
|
3,710
|
|||||
Interest receivable
|
3,517
|
3,560
|
|||||
Other indefinite-lived intangible
|
1,988
|
1,988
|
|||||
Deposits in escrow
|
7,852
|
-
|
|||||
Other
|
2,181
|
2,288
|
|||||
Total other assets
|
$
|
35,229
|
$
|
26,782
|
June 30, 2011 | December 31, 2010 | ||||||
Accounts payable
|
$
|
21,836
|
$
|
29,713
|
|||
Accrued interest payable
|
14,700
|
12,789
|
|||||
Deferred revenue
|
14,298
|
15,291
|
|||||
Total accounts payable and accrued expenses
|
$
|
50,834
|
$
|
57,793
|
June 30, 2011
|
December 31, 2010
|
||||||
Above-market tenant leases
|
$ | 34,968 | $ | 34,968 | |||
Accumulated amortization
|
(30,202 | ) | (28,489 | ) | |||
Below-market ground leases
|
3,198 | 3,198 | |||||
Accumulated amortization
|
(360 | ) | (321 | ) | |||
Acquired lease intangible assets, net
|
$ | 7,604 | $ | 9,356 | |||
Below-market tenant leases
|
$ | 263,220 | $ | 263,220 | |||
Accumulated accretion
|
(178,461 | ) | (166,127 | ) | |||
Above-market ground leases
|
16,200 | 16,200 | |||||
Accumulated accretion
|
(3,148 | ) | (3,049 | ) | |||
Acquired lease intangible liabilities, net
|
$ | 97,811 | $ | 110,244 |
Description
|
Maturity
Date (1)
|
Amount as of June 30, 2011 | Amount as of December 31, 2010 |
Variable Rate
|
Effective
Annual
Fixed Interest
Rate (1)
|
Swap Maturity Date
|
|||||||||||||
Term Loans (2)
|
8/31/2012
|
$
|
803,600
|
$
|
1,655,000
|
LIBOR + 0.85%
|
N/A
|
--
|
|||||||||||
Term Loans (2)
|
8/31/2012
|
322,500
|
322,500
|
LIBOR + 0.85%
|
4.98%
|
08/01/11
|
|||||||||||||
Term Loans (2)
|
8/31/2012
|
322,500
|
322,500
|
LIBOR + 0.85%
|
5.02%
|
08/01/12
|
|||||||||||||
Term Loan (3)
|
3/3/2014
|
16,140
|
18,000
|
LIBOR + 1.85%
|
N/A
|
--
|
|||||||||||||
Fannie Mae Loan (4)
|
2/1/2015
|
36,920
|
36,920
|
DMBS + 0.60%
|
(5)
|
5.78%
|
08/01/11
|
||||||||||||
Fannie Mae Loan (4)
|
2/1/2015
|
75,000
|
75,000
|
DMBS + 0.76%
|
(5)
|
4.86%
|
08/01/11
|
||||||||||||
Term Loan (6)
|
4/1/2015
|
340,000
|
340,000
|
LIBOR +1.50%
|
4.77%
|
01/02/13
|
|||||||||||||
Fannie Mae Loan (6)
|
2/1/2016
|
82,000
|
82,000
|
LIBOR + 0.62%
|
5.62%
|
03/01/12
|
|||||||||||||
Fannie Mae Loans (6)
|
6/1/2017
|
18,000
|
18,000
|
LIBOR + 0.62%
|
5.82%
|
06/01/12
|
|||||||||||||
Term Loan (6)
|
10/2/2017
|
400,000
|
400,000
|
LIBOR + 2.00%
|
4.45%
|
07/01/15
|
|||||||||||||
Term Loan (6)
|
4/2/2018
|
510,000
|
-
|
LIBOR + 2.00%
|
4.12%
|
04/01/16
|
|||||||||||||
Term Loan (7)
|
3/1/2020
|
(8)
|
350,000
|
-
|
--
|
4.46%
|
--
|
||||||||||||
Fannie Mae Loans (6)
|
11/2/2020
|
388,080
|
388,080
|
LIBOR + 1.65%
|
3.65%
|
11/01/17
|
|||||||||||||
Aggregate loan principal
|
3,664,740
|
3,658,000
|
|||||||||||||||||
Unamortized Loan Premium (9)
|
4,482
|
10,133
|
|||||||||||||||||
Total
|
$
|
3,669,222
|
$
|
3,668,133
|
|||||||||||||||
Aggregate amount of effective fixed rate loans
|
$
|
2,495,000
|
$
|
1,985,000
|
4.54%
|
(1)
|
|||||||||||||
Aggregate amount of fixed rate loans
|
350,000
|
--
|
4.46%
|
||||||||||||||||
Aggregate amount of variable rate loans
|
819,740
|
1,673,000
|
N/A
|
||||||||||||||||
Aggregate loan principal
|
3,664,740
|
3,658,000
|
|||||||||||||||||
Unamortized Loan Premium (9)
|
4,482
|
10,133
|
|||||||||||||||||
Total
|
$
|
3,669,222
|
$
|
3,668,133
|
(1)
|
Includes the effect of interest rate contracts and excludes amortization of loan fees, all shown on an actual/360-day basis. As of June 30, 2011, the weighted average remaining life of our consolidated outstanding debt was 4.5 years. Of the $2.8 billion of that debt where the interest rate was fixed under the terms of the loan or a swap, the weighted average remaining life was 5.5 years, the weighted average remaining period during which interest was fixed was 3.7 years and the weighted average annual interest rate was 4.52%.
|
(2)
|
Includes a group of five separate loans aggregating approximately $1.45 billion as of June 30, 2011 and seven separate loans aggregating $2.30 billion as of December 31, 2010; each secured by a separate collateralized pool of properties. Requires monthly payments of interest only, with outstanding principal due upon maturity. Originally, the interest rates on all of these loans were effectively fixed by interest rate swaps. As shown in the table, only certain of the debt remained effectively fixed as of June 30, 2011 because of the expiration of certain of these swaps. Subsequent to June 30, 2011, we closed two non-recourse, secured term loans and repaid all but one of these loans; See Note 15.
|
(3)
|
This loan is held by a consolidated entity in which our operating partnership held a two-thirds interest. In January 2011, we refinanced this debt at a reduced principal balance of $16.14 million, a rate of LIBOR + 1.85% and a maturity date of March 3, 2014. Prior to this refinancing, the interest rate was LIBOR + 1.25%.
|
(4)
|
Secured by one property; requires monthly payments of interest only with outstanding principal due upon maturity. The loan has two tranches aggregating $111.92 million with different interest rates.
|
(5)
|
Fannie Mae Discount Mortgage-Backed Security (DMBS) has historically tracked 90-day LIBOR, although volatility may exist between the two rates, resulting in an immaterial amount of swap ineffectiveness.
|
(6)
|
Each loan is secured by a separate collateral pool consisting of one or more properties, requiring monthly payments of interest only with outstanding principal due upon maturity.
|
(7)
|
Secured by seven properties in a collateralized pool. Bears interest at a fixed interest rate of 4.46% until March 1, 2018 and a floating interest rate thereafter. Monthly interest payments are interest-only for the first three years, with principal amortization thereafter based upon a 30-year amortization table.
|
(8)
|
There are two one-year extension options available, which would extend the maturity to March 1, 2020 from March 1, 2018, subject to meeting certain conditions.
|
(9)
|
Represents non-cash mark-to-market adjustment on variable rate debt associated with office properties.
|
Twelve months ending June 30,
|
|||
2012
|
$ | - | |
2013
|
1,448,600 | ||
2014
|
16,140 | ||
2015
|
451,920 | ||
2016
|
82,000 | ||
Thereafter
|
1,666,080 | ||
Total future principal payments
|
$ | 3,664,740 |
Interest Rate Derivative
|
Number of Instruments
|
Notional
|
Interest Rate Swaps
|
19
|
$2,495,000
|
Interest Rate Derivative
|
Number of Instruments
|
Notional
|
Pay-Fixed Swaps
|
9
|
$802,000
|
Receive-Fixed Swaps
|
9
|
$802,000
|
Purchased Caps
|
7
|
$211,920
|
Sold Caps
|
7
|
$211,920
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||||||
Derivatives in Designated Cash Flow Hedging Relationships:
|
|||||||||||||||
Amount of gain (loss) recognized in OCI on derivatives (effective portion)
|
$ | (38,839 | ) | $ | (21,321 | ) | $ | (29,162 | ) | $ | (39,948 | ) | |||
Amount of gain (loss) reclassified from accumulated OCI into earnings under "interest expense" (effective portion)
|
$ | (23,925 | ) | $ | (36,835 | ) | $ | (44,941 | ) | $ | (73,760 | ) | |||
Amount of gain (loss) on derivatives recognized in earnings under "interest expense" (ineffective portion and amount excluded from effectiveness testing)
|
$ | 23 | $ | 80 | $ | 45 | $ | 162 | |||||||
Derivatives Not Designated as Cash Flow Hedges:
|
|||||||||||||||
Amount of realized and unrealized gain (loss) on derivatives recognized in earnings under "interest expense"
|
$ | (74 | ) | $ | (91 | ) | $ | (188 | ) | $ | (124 | ) |
June 30, 2011
|
December 31, 2010
|
||||||
Derivative assets, disclosed as "Interest Rate Contracts":
|
|||||||
Derivatives designated as accounting hedges
|
$ | 7,965 | $ | 14,204 | |||
Derivatives not designated as accounting hedges
|
20,788 | 38,324 | |||||
Total derivative assets
|
$ | 28,753 | $ | 52,528 | |||
Derivative liabilities, disclosed as "Interest Rate Contracts":
|
|||||||
Derivatives designated as accounting hedges
|
$ | 57,206 | $ | 67,990 | |||
Derivatives not designated as accounting hedges
|
17,397 | 31,697 | |||||
Total derivative liabilities
|
$ | 74,603 | $ | 99,687 |
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, 2011
|
||||||||||||
Assets
|
|||||||||||||||
Interest Rate Contracts
|
$ |
-
|
$ |
28,753
|
$ |
-
|
$ |
28,753
|
|||||||
Liabilities
|
|||||||||||||||
Interest Rate Contracts
|
$ |
-
|
$ |
74,603
|
$ |
-
|
$ |
74,603
|
Douglas Emmett, Inc. Stockholders' Equity |
Noncontrolling Interests
|
Total Equity
|
|||||||||
Balance as of January 1, 2011, as reported
|
$ | 1,827,061 | $ | 472,108 | $ | 2,299,169 | |||||
Comprehensive income (loss):
|
|||||||||||
Net loss
|
(5,365 | ) | (1,189 | ) | (6,554 | ) | |||||
Other comprehensive income (loss)
|
12,431 | 3,348 | 15,779 | ||||||||
Comprehensive income (loss)
|
7,066 | 2,159 | 9,225 | ||||||||
Dividends and distributions
|
(28,748 | ) | (6,406 | ) | (35,154 | ) | |||||
Conversion of operating partnership units
|
4,328 | (4,328 | ) | - | |||||||
Stock compensation
|
713 | 6,116 | 6,829 | ||||||||
Sale of common stock, net of offering costs
|
21,499 | - | 21,499 | ||||||||
Other
|
- | 10 | 10 | ||||||||
Balance as of June 30, 2011
|
$ | 1,831,919 | $ | 469,659 | $ | 2,301,578 |
Douglas Emmett, Inc. Stockholders' Equity
|
Noncontrolling Interests
|
Total Equity
|
|||||||||
Balance as of January 1, 2010, as reported
|
$ | 1,793,363 | $ | 499,022 | $ | 2,292,385 | |||||
Comprehensive income (loss):
|
|||||||||||
Net loss
|
(17,278 | ) | (4,496 | ) | (21,774 | ) | |||||
Other comprehensive income (loss)
|
27,336 | 6,476 | 33,812 | ||||||||
Comprehensive income (loss)
|
10,058 | 1,980 | 12,038 | ||||||||
Dividends and distributions
|
(24,466 | ) | (7,115 | ) | (31,581 | ) | |||||
Conversion of operating partnership units
|
15,290 | (15,290 | ) | - | |||||||
Stock compensation
|
3,268 | 3,386 | 6,654 | ||||||||
Balance as of June 30, 2010
|
$ | 1,797,513 | $ | 481,983 | $ | 2,279,496 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||||||
Net loss
|
$ | (6,209 | ) | $ | (11,305 | ) | $ | (6,554 | ) | $ | (21,774 | ) | |||
Cash flow hedge adjustment
|
(14,914 | ) | 15,515 | 15,779 | 33,812 | ||||||||||
Comprehensive income (loss)
|
(21,123 | ) | 4,210 | 9,225 | 12,038 | ||||||||||
Less: Comprehensive (income) loss attributable to noncontrolling interests
|
4,124 | (458 | ) | (2,159 | ) | (1,980 | ) | ||||||||
Comprehensive income (loss) attributable to common stockholders
|
$ | (16,999 | ) | $ | 3,752 | $ | 7,066 | $ | 10,058 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||||||
Net loss attributable to common stockholders
|
$ | (5,016 | ) | $ | (8,991 | ) | $ | (5,365 | ) | $ | (17,278 | ) | |||
Transfers from the noncontrolling interests:
|
|||||||||||||||
Increase in common stockholders paid-in capital
|
|||||||||||||||
for redemption of operating partnership units
|
1,844 | 8,898 | 4,325 | 15,280 | |||||||||||
Change from net income attributable to common
|
|||||||||||||||
stockholders and transfers from noncontrolling interests
|
$ | (3,172 | ) | $ | (93 | ) | $ | (1,040 | ) | $ | (1,998 | ) |
2012
|
$ | 364,530 | |
2013
|
328,412 | ||
2014
|
266,270 | ||
2015
|
213,725 | ||
2016
|
169,458 | ||
Thereafter
|
396,241 | ||
Total future minimum base rentals
|
$ | 1,738,636 |
Twelve months ending June 30:
|
|||
2012
|
$ | 733 | |
2013
|
733 | ||
2014
|
733 | ||
2015
|
733 | ||
2016
|
733 | ||
Thereafter
|
51,675 | ||
Total future minimum lease payments
|
$ | 55,340 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||||||
Total revenues
|
$ | 15,395 | $ | 11,304 | $ | 29,593 | $ | 22,709 | |||||||
Operating income (loss)
|
2,590 | (557 | ) | 3,619 | (1,045 | ) | |||||||||
Net loss
|
(3,432 | ) | (5,698 | ) | (8,314 | ) | (11,295 | ) |
June 30, 2011
|
December 31, 2010
|
||||||
Real estate
|
$ | 745,637 | $ | 712,228 | |||
Other assets
|
26,844 | 26,146 | |||||
Secured notes payable
|
420,747 | 421,225 | |||||
Other liabilities
|
37,759 | 43,636 |
·
|
In January 2011, we modified and extended the maturity of our $18 million loan that was scheduled to mature on March 1, 2011. The modified loan has an outstanding balance of $16.14 million, bears interest at a floating rate equal to one-month LIBOR plus 185 basis points and matures on March 3, 2014.
|
·
|
In February 2011, we obtained a secured, non-recourse $350 million term loan. This loan has a maturity date of March 1, 2020, including two one-year extension options. The loan bears interest at a fixed interest rate of 4.46% until March 1, 2018. The loan proceeds were primarily used to repay a term loan that was scheduled to mature in 2012.
|
·
|
In March 2011, we obtained a secured, non-recourse $510 million term loan. This loan has a maturity date of April 2, 2018, with an annual interest rate effectively fixed at 4.12% until April 1, 2016. The loan proceeds were used in the repayment of a term loan which was scheduled to mature in 2012.
|
Three Months Ended
|
|||||||||||||||
September 30, 2011
|
December 31, 2011
|
March 31, 2012
|
June 30, 2012
|
||||||||||||
Expiring square feet (1)
|
371,858 | 421,735 | 404,206 | 429,506 | |||||||||||
Expiring rent per square foot (2)
|
$ | 31.47 | $ | 35.80 | $ | 34.02 | $ | 36.06 |
(1)
|
Includes scheduled expirations for our total office portfolio, including our consolidated portfolio of 50 properties as well as eight properties totaling 1.8 million square feet owned by our Funds and a 78,000 square foot property owned by a joint venture in which we own a 66.7% interest. Expiring square footage reflects all existing leases that are scheduled to expire in the respective quarter shown above, excluding the square footage under leases where the existing tenant has renewed the lease prior to June 30, 2011. These numbers (i) include leases for space where someone other than the existing tenant (for example, a subtenant) had executed a lease for the space prior to June 30, 2011 but that had not commenced as of that date but (ii) do not include exercises of early termination options (unless exercised prior to June 30, 2011) or future defaults. All month-to-month tenants are included in the expiring leases in the first quarter listed.
|
(2)
|
Represents annualized base rent (i.e., excludes tenant reimbursements, parking and other revenue) per leased square foot at expiration. The amount reflects total cash base rent before abatements. For our Burbank and Honolulu office properties, annualized base rent is converted from triple net to gross by adding expense reimbursements to base rent. Expiring rent per square foot on a quarterly basis is impacted by a number of variables, including variations in the submarkets or buildings involved.
|
Twelve Months Ended December 31,
|
Six Months Ended
|
||||||||||||||||||
2007
|
2008
|
2009
|
2010
|
June 30, 2011
|
|||||||||||||||
Average rental rate (1)
|
$ | 43.37 | $ | 41.90 | $ | 35.11 | $ | 32.33 | $ | 30.40 | |||||||||
Annualized lease transaction costs (2)
|
$ | 3.62 | $ | 3.23 | $ | 3.33 | $ | 3.68 | $ | 3.79 |
(1)
|
Represents the weighted average straight-line annualized base rent (i.e., excludes tenant reimbursements, parking and other revenue) per leased square foot within our total office portfolio. For our Burbank and Honolulu office properties, annualized base rent is converted from triple net to gross by adding expense reimbursements to base rent.
|
(2)
|
Represents the weighted average leasing commissions and tenant improvement allowances under all office leases within our total office portfolio that were entered into during the applicable period, divided by the number of years of the lease.
|
Twelve Months Ended December 31,
|
Six Months Ended
|
||||||||||||||||||
2007
|
2008
|
2009
|
2010
|
June 30, 2011
|
|||||||||||||||
Rental rate
|
$ | 23,837 | $ | 23,427 | $ | 22,776 | $ | 22,497 | $ | 24,719 |
|
Comparison of three months ended June 30, 2011 to three months ended June 30, 2010
|
|
Comparison of six months ended June 30, 2011 to six months ended June 30, 2010
|
Type of Debt
|
Principal Balance (in millions) |
Maturity Date
|
Variable Rate
|
Fixed Rate
|
Swap Maturity Date
|
|||||||
Variable rate term loan (swapped to fixed rate) (1) (2)
|
$ |
365.0
|
08/19/13
|
LIBOR + 1.65%
|
5.52%
|
(3)
|
09/04/12
|
|||||
Fixed rate term loan (4)
|
$ |
55.7
|
04/01/16
|
N/A
|
5.67%
|
N/A
|
(1)
|
The loan is secured by six properties in a collateralized pool. Requires monthly payments of interest only, with outstanding principal due upon maturity.
|
(2)
|
We transferred this loan to one of our Funds during the fourth quarter of 2008 when we contributed the properties securing it to that Fund. We remain responsible under certain environmental and other limited indemnities and guarantees covering customary non-recourse carve outs under this loan, which we entered into prior to our contribution of this debt and the related properties, although we have an indemnity from that Fund for any amounts we would be required to pay under these agreements. If that Fund fails to perform any obligations under a swap agreement related to this loan, we remain liable to the swap counterparties. The maximum future payments under the swap agreements were approximately $16.9 million as of June 30, 2011. To date, all obligations under the swap agreements have been performed by that Fund in accordance with the terms of the agreements.
|
(3)
|
Effective annual rate including the effect of interest rate contracts. Based on actual/360-day basis and excludes amortization of loan fees.
|
(4)
|
Assumed by one of our Funds upon acquisition of the property securing the loan. Requires monthly payments of principal and interest.
|
·
|
As we previously disclosed in our Registration Statement 333-167431, withholding taxes may be imposed on certain types of payments made to “foreign financial institutions” and certain other non-United States entities. Specifically, a 30% withholding tax will be imposed on dividends and interest on, and gross proceeds from the sale or other disposition of, capital stock or debt securities paid to a foreign financial institution or to a foreign non-financial entity, unless (i) the foreign financial institution undertakes certain diligence and reporting obligations or (ii) the foreign non-financial entity either certifies it does not have any substantial United States owners or furnishes identifying information regarding each substantial United States owner. If the payee is a foreign financial institution, it must enter into an agreement with the United States Treasury requiring, among other things, that it undertake to identify accounts held by certain United States persons or United States-owned foreign entities, annually report certain information about such accounts, and withhold 30% on payments to certain other account holders. Although, these rules currently apply to applicable payments made after December 31, 2012 (other than payments made on debt securities outstanding on March 18, 2012), in guidance issued in July 2011, the IRS has indicated that Treasury Regulations will be issued providing that the withholding provisions described above will apply to payments of dividends on our common stock or interest on our debt securities (excluding those debt securities outstanding on March 18, 2012) made on or after January 1, 2014 and to payments of gross proceeds from a sale or other disposition of such stock or debt securities on or after January 1, 2015. Prospective investors should consult their tax advisors regarding these withholding provisions, including this new IRS guidance.
|
·
|
DEI X Partnership REIT, LP filed an election to be taxed as a corporation and as a REIT under Sections 856 through 860 of the Internal Revenue Code commencing with its initial taxable year ending December 31, 2010. As noted in our Prior Disclosure, a failure of this entity to qualify as a REIT could have an adverse effect on our ability to qualify as a REIT.
|
|
||
Exhibit Number
|
Description
|
|
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.(1)
|
|
32.2
|
Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (1)
|
|
101
|
The following financial information from Douglas Emmett Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets (unaudited), (ii) Consolidated Statements of Operations (unaudited), (iii) Consolidated Statement of Cash Flows (unaudited) and (iv) Notes to Consolidated Financial Statements, tagged as blocks of text.
|
(1)
|
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.
|
|
|
|
|
|
|
DOUGLAS EMMETT, INC.
|
|
||
Date: August 5, 2011
|
By:
|
/s/ JORDAN L. KAPLAN
|
|
|
|
|
Jordan L. Kaplan
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
||||
|
|
|
|
|
|
|
|
||
Date: August 5, 2011
|
By:
|
/s/ WILLIAM KAMER
|
|
|
|
|
William Kamer
|
|
|
|
|
Chief Financial Officer
|
|
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 officer 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.
|
Date: August 5, 2011
|
By:
|
/s/ JORDAN L. KAPLAN
|
|
|
Jordan L. Kaplan
|
President and Chief Executive Officer
|
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 officer 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.
|
Date: August 5, 2011
|
By:
|
/s/ WILLIAM KAMER
|
|
|
William Kamer
|
|
|
Chief Financial Officer
|
(i)
|
the accompanying quarterly report on Form 10-Q of the Company for the period ended June 30, 2011 (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.
|
Date: August 5, 2011
|
By:
|
/s/ JORDAN L. KAPLAN
|
|
|
Jordan L. Kaplan
|
President and Chief Executive Officer
|
(i)
|
the accompanying quarterly report on Form 10-Q of the Company for the period ended June 30, 2011 (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.
|
Date: August 5, 2011
|
By:
|
/s/ WILLIAM KAMER
|
|
|
William Kamer
|
|
|
Chief Financial Officer
|
Equity (Narrative) (Details) (USD $)
|
1 Months Ended | 3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|---|
Jul. 31, 2011
|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Equity | |||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 20.00% | 20.00% | |||
One OP unit is equivalent to one share of Common Stock | 1 | ||||
Ownership percentage of joint venture by operating partnership | 66.67% | 66.67% | |||
Number of operating partnership converted to shares of common stock | 293,000 | ||||
Common stock sold, shares | 1,900,000 | 1,100,000 | 1,100,000 | ||
Common stock sold, value | $ 38,200,000 | $ 21,909,000 | |||
Net equity compensation expense | 2,000,000 | 1,500,000 | 3,800,000 | 2,800,000 | |
Capitalized equity compensation | 200,000 | 100,000 | 300,000 | 200,000 | |
Immediately vested equity grants | $ 2,800,000 | $ 3,600,000 |
Consolidated Balance Sheets (Parenthetical) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Consolidated Balance Sheets (Parenthetical) | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares outstanding | 125,522,893 | 124,131,557 |
Consolidated Statements of Operations (USD $)
In Thousands, except Share data |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Office rental | ||||
Rental revenues | $ 98,109 | $ 98,695 | $ 197,319 | $ 197,442 |
Tenant recoveries | 12,744 | 7,710 | 22,069 | 14,188 |
Parking and other income | 17,046 | 15,838 | 33,906 | 31,389 |
Total office revenues | 127,899 | 122,243 | 253,294 | 243,019 |
Multifamily rental | ||||
Rental revenues | 16,230 | 15,879 | 32,275 | 31,778 |
Parking and other income | 1,279 | 1,087 | 2,430 | 2,199 |
Total multifamily revenues | 17,509 | 16,966 | 34,705 | 33,977 |
Total revenues | 145,408 | 139,209 | 287,999 | 276,996 |
Operating Expenses | ||||
Office expense | 42,183 | 37,198 | 82,787 | 73,312 |
Multifamily expense | 4,736 | 4,434 | 9,485 | 9,002 |
General and administrative | 6,820 | 5,944 | 14,306 | 11,794 |
Depreciation and amortization | 57,114 | 54,921 | 114,267 | 110,253 |
Total operating expenses | 110,853 | 102,497 | 220,845 | 204,361 |
Operating income | 34,555 | 36,712 | 67,154 | 72,635 |
Other income | 343 | 151 | 599 | 397 |
Loss, including depreciation, from unconsolidated real estate funds | (255) | (2,200) | (1,779) | (3,704) |
Interest expense | (40,852) | (45,676) | (72,528) | (90,810) |
Acquisition-related expenses | (292) | (292) | ||
Net loss | (6,209) | (11,305) | (6,554) | (21,774) |
Less: Net (income) loss attributable to noncontrolling interests | 1,193 | 2,314 | 1,189 | 4,496 |
Net loss attributable to common stockholders | $ (5,016) | $ (8,991) | $ (5,365) | $ (17,278) |
Net loss attributable to common stockholders per share - basic and diluted | $ (0.04) | $ (0.07) | $ (0.04) | $ (0.14) |
Dividends declared per common share | $ 0.13 | $ 0.10 | $ 0.23 | $ 0.20 |
Weighted average shares of common stock outstanding - basic and diluted | 124,610,351 | 122,331,803 | 124,411,176 | 121,989,652 |
Equity (Net Income Attributable to Common Stockholders and Transfers to Non-controlling Interests) (Details) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Net loss attributable to common stockholders | $ (5,016) | $ (8,991) | $ (5,365) | $ (17,278) |
Change from net income attributable to common stockholders and transfers from noncontrolling interests | (3,172) | (93) | (1,040) | (1,998) |
Additional Paid-in Capital [Member]
|
||||
Increase in common stockholders paid-in capital for redemption of operating partnership units | $ 1,844 | $ 8,898 | $ 4,325 | $ 15,280 |
Other Assets (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Other Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets |
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Document and Entity Information
|
6 Months Ended | |
---|---|---|
Jun. 30, 2011
|
Jul. 31, 2011
|
|
Document and Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2011 | |
Document Fiscal Year Focus | 2011 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Registrant Name | Douglas Emmett Inc | |
Entity Central Index Key | 0001364250 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 127,625,185 |
Interest Rate Contracts (Schedule of Fair Values of Derivative Instruments) (Details) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Total derivative assets | $ 28,753 | $ 52,528 |
Total derivative liabilities | 74,603 | 99,687 |
Interest Rate Contract [Member]
|
||
Total derivative assets | 28,753 | 52,528 |
Total derivative liabilities | 74,603 | 99,687 |
Interest Rate Contract [Member] | Designated as Hedging Instrument [Member]
|
||
Derivative asset, fair value | 7,965 | 14,204 |
Derivative liability, fair value | 57,206 | 67,990 |
Interest Rate Contract [Member] | Not Designated as Hedging Instrument [Member]
|
||
Derivative asset, fair value | 20,788 | 38,324 |
Derivative liability, fair value | $ 17,397 | $ 31,697 |
Secured Notes Payable (Tables)
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Secured Notes Payable | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notes Payable |
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Schedule of Minimum Future Principal Payments Due on Secured Notes Payable |
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Interest Rate Contracts (Effect of Derivative Instruments on Consolidated Statements of Operations) (Details) (Cash Flow Hedging [Member], USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
|
Jun. 30, 2010
|
Jun. 30, 2011
|
Jun. 30, 2010
|
|
Interest Expense [Member] | Designated as Hedging Instrument [Member]
|
||||
Amount of gain (loss) reclassified from accumulated OCI into earnings | $ (23,925) | $ (36,835) | $ (44,941) | $ (73,760) |
Amount of gain (loss) on derivatives recognized in earnings (ineffective portion and amount excluded from effectiveness testing) | 23 | 80 | 45 | 162 |
Interest Expense [Member] | Not Designated as Hedging Instrument [Member]
|
||||
Amount of realized and unrealized gain (loss) on derivatives | (74) | (91) | (188) | (124) |
Designated as Hedging Instrument [Member]
|
||||
Amount of gain (loss) recognized in OCI on derivatives (effective portion) | $ (38,839) | $ (21,321) | $ (29,162) | $ (39,948) |
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Secured Notes Payable
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Jun. 30, 2011
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Secured Notes Payable | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Secured Notes Payable | 7. Secured Notes Payable The following summarizes our secured notes payable:
(2) Includes a group of five separate loans aggregating approximately $1.45 billion as of June 30, 2011 and seven separate loans aggregating $2.30 billion as of December 31, 2010; each secured by a separate collateralized pool of properties. Requires monthly payments of interest only, with outstanding principal due upon maturity. Originally, the interest rates on all of these loans were effectively fixed by interest rate swaps. As shown in the table, only certain of the debt remained effectively fixed as of June 30, 2011 because of the expiration of certain of these swaps. Subsequent to June 30, 2011, we closed two non-recourse, secured term loans and repaid all but one of these loans; See Note 15. (3) This loan is held by a consolidated entity in which our operating partnership held a two-thirds interest. In January 2011, we refinanced this debt at a reduced principal balance of $16.14 million, a rate of LIBOR + 1.85% and a maturity date of March 3, 2014. Prior to this refinancing, the interest rate was LIBOR + 1.25%.
(5) Fannie Mae Discount Mortgage-Backed Security (DMBS) has historically tracked 90-day LIBOR, although volatility may exist between the two rates, resulting in an immaterial amount of swap ineffectiveness. (6) Each loan is secured by a separate collateral pool consisting of one or more properties, requiring monthly payments of interest only with outstanding principal due upon maturity (7) Secured by seven properties in a collateralized pool. Bears interest at a fixed interest rate of 4.46% until March 1, 2018 and a floating interest rate thereafter. Monthly interest payments are interest-only for the first three years, with principal amortization thereafter based upon a 30-year amortization table. (8) There are two one-year extension options available, which would extend the maturity to March 1, 2020 from March 1, 2018, subject to meeting certain conditions. (9) Represents non-cash mark-to-market adjustment on variable rate debt associated with office properties.
The minimum future principal payments due on our secured notes payable at June 30, 2011, excluding the non-cash loan premium amortization, were as follows:
In January 2011, we modified and extended the maturity of an $18 million loan that was scheduled to mature on March 1, 2011. The modified loan has an outstanding balance of $16.14 million, bears interest at a floating rate equal to one-month LIBOR plus 1.85% and matures on March 3, 2014. In February 2011, we obtained a secured, non-recourse $350 million term loan. This loan has a maturity date of March 1, 2020, including two one-year extension options. The loan bears interest at a fixed interest rate of 4.46% until March 1, 2018 and a floating interest rate thereafter. Monthly loan payments are interest-only for the first three years with principal amortization thereafter based upon a 30-year amortization schedule. The loan proceeds were largely used to fully repay a $319.6 million term loan, which was scheduled to mature in 2012. The balance of the loan proceeds were retained for other corporate purposes. In March 2011, we obtained a secured, non-recourse $510 million term loan. This loan has a maturity date of April 2, 2018. The loan bears interest at a floating rate equal to LIBOR plus 2.00%, but we have entered into an interest rate swap contract that effectively fixes the annual interest rate at 4.12% for the period from April 1, 2011 until April 1, 2016. The loan proceeds were used in the repayment of a $531.8 million term loan, which was scheduled to mature in 2012. Subsequent to quarter end, we obtained two additional loans. See Note 15. |
Interest Rate Contracts (Tables)
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Jun. 30, 2011
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Interest Rate Contracts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Rate Derivatives Designated as Hedging Instruments |
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Interest Rate Derivatives Not Designated as Hedging Instruments |
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Effect of Derivative Instruments on Consolidated Statements of Operations |
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Schedule of Fair Values of Derivative Instruments |
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Schedule of Derivatives Assets and Liabilities Measured at Fair Value by Level in Fair Value Hierarchy |
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Secured Notes Payable (Schedule of Minimum Future Principal Payments Due on Secured Notes Payable) (Details) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Secured Notes Payable | ||
2012 | ||
2013 | 1,448,600 | |
2014 | 16,140 | |
2015 | 451,920 | |
2016 | 82,000 | |
Thereafter | 1,666,080 | |
Total future principal payments | $ 3,664,740 | $ 3,658,000 |
Other Assets (Schedule Of Other Assets) (Parenthetical) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Other Assets | ||
Deferred loan costs, net of accumulated amortization | $ 6,633 | $ 4,770 |
Acquired Lease Intangibles (Tables)
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Jun. 30, 2011
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Summary of Acquired Lease Intangibles |
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Fair Value of Financial Instruments
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6 Months Ended |
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Jun. 30, 2011
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Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 12. Fair Value of Financial Instruments
Our estimates of the fair value of financial instruments at June 30, 2011 were determined using available market information and appropriate valuation methods. Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions or estimation methods may have a material effect on the estimated fair value amounts.
The carrying amounts for cash and cash equivalents, restricted cash, rents and other receivables, due from affiliates, accounts payable and other liabilities approximate fair value because of the short-term nature of these instruments. We calculate the fair value of our secured notes payable by adjusting their face value for current market interest rates (assuming the loans are outstanding through maturity) and any collateral impairments. At June 30, 2011, the aggregate fair value of our secured notes payable was estimated to be approximately $3.62 billion, based on a credit-adjusted present value of the future principal and interest payments related to our debt, in comparison to the carrying value of $3.66 billion at June 30, 2011. As of December 31, 2010, the estimated fair value of our secured loans was approximately $3.58 billion compared to their carrying value of $3.66 billion at December 31, 2010.
Currently, we use interest rate swaps and caps to manage interest rate risk resulting from variable interest payments on our floating rate debt. These financial instruments are carried on our balance sheet at fair value based on assumptions used by market participants in pricing the asset or liability. See Note 8. |
Segment Reporting
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Segment Reporting | 3. Segment Reporting Segment information is prepared on the same basis that we review information for operational decision-making purposes. We operate 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 primarily include 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 or 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, and net derivative gains and losses are not included in segment profit as our internal reporting addresses these items on a corporate level. Segment profit is not a measure of operating income 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 segment profit in the same manner. We consider segment profit 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:
The following table is a reconciliation of segment profit to net loss attributable to common stockholders:
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Segment Reporting (Reconciliation of Segment Profit to Net Loss Attributable to Common Stockholders) (Details) (USD $)
In Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Segment Reporting | ||||
Total segments' profit | $ 98,489 | $ 97,577 | $ 195,727 | $ 194,682 |
General and administrative expense | (6,820) | (5,944) | (14,306) | (11,794) |
Depreciation and amortization | (57,114) | (54,921) | (114,267) | (110,253) |
Other income | 343 | 151 | 599 | 397 |
Loss, including depreciation, from unconsolidated real estate funds | (255) | (2,200) | (1,779) | (3,704) |
Interest expense | (40,852) | (45,676) | (72,528) | (90,810) |
Acquisition-related expenses | (292) | (292) | ||
Net loss | (6,209) | (11,305) | (6,554) | (21,774) |
Less: Net (income) loss attributable to noncontrolling interests | 1,193 | 2,314 | 1,189 | 4,496 |
Net loss attributable to common stockholders | $ (5,016) | $ (8,991) | $ (5,365) | $ (17,278) |
Equity
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Equity |
9. Equity Noncontrolling Interests Noncontrolling interests in our operating partnership relate to interests that are not owned by us. Noncontrolling interests represented approximately 20% of our operating partnership at June 30, 2011. 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. Noncontrolling interests also includes the interest of a minority partner in a joint venture which owns 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, 2011. The tables below represent our condensed consolidated statements of equity:
The table below represents our consolidated statements of comprehensive income (loss):
Equity Sales, Conversions and Repurchases
During the six months ended June 30, 2011, approximately 293,000 units in our operating partnership were converted to shares of our common stock and we sold approximately 1.1 million shares of our common stock in open market transactions under our "at the market" (ATM) stock offering program for net proceeds of approximately $21.9 million . See Note 15 with respect to additional sales following June 30, 2011. We did not make any repurchases of shares or share equivalents during the six months ended June 30, 2011. The table below represents the net income attributable to common stockholders and transfers (to) from the noncontrolling interests:
Stock-Based Compensation
The Douglas Emmett, Inc. 2006 Omnibus Stock Incentive Plan is administered by the compensation committee of our board of directors. All full-time and part-time officers, employees, directors and consultants 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 2010 Annual Report on Form 10-K, which was filed with the SEC on February 25, 2011.
Total net equity compensation expense for equity grants was $2.0 million and $1.5 million for the three months ended June 30, 2011 and 2010, respectively, and $3.8 million and $2.8 million for the six months ended June 30, 2011 and 2010, respectively. These amounts do not include (i) capitalized equity compensation totaling $0.2 million and $0.1 million for the three months ended June 30, 2011 and 2010, respectively, and $0.3 million and $0.2 million for the six months ended June 30, 2011 and 2010, respectively and (ii) $2.8 million and $3.6 million in immediately vested equity grants issued during the six months ended June 30, 2011 and 2010, respectively, to satisfy a portion of the annual bonuses that were accrued during the prior year. During each year, we accrue for certain grants of immediately vested equity which we expect to make shortly after the end of that year as part of the annual bonuses. Compensation expense for our long term incentive plan units which are not immediately vested is recognized using the accelerated recognition method. Compensation expense for options which are not immediately vested is recognized on a straight-line basis over the requisite service period which is equal to the vesting period. Certain amounts of equity compensation expense are capitalized for employees who provide leasing and construction services. |
Commitments and Contingencies
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Jun. 30, 2011
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Commitments and Contingencies | |
Commitments and Contingencies | 14. Commitments and Contingencies
We are subject to various legal proceedings and claims that arise in the ordinary course of business. Excluding ordinary, routine litigation incidental to our business, we are not currently a party to any legal proceedings that we believe would reasonably be expected to have a material adverse effect on our business, financial condition or results of operations.
Concentration of Credit Risk
Our properties are located in 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. In addition, we have financial instruments that subject us to credit risk, which consist primarily of accounts receivable, deferred rents receivable and interest rate contracts. We maintain our cash and cash equivalents with high quality financial institutions. Accounts at each U.S. banking institution are insured by the Federal Deposit Insurance Corporation up to $250. We have not experienced any losses to date 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
Conditional asset retirement obligations represent 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 our control. 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 20 properties in our consolidated 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, 2011, the obligations to remove the asbestos from these properties have indeterminable settlement dates, and we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation.
Investment in Unconsolidated Real Estate Fund
At June 30, 2011, we had commitments for future capital contributions related to our investments in our Funds totaling $38.0 million. Guarantees In 2008, we contributed six properties, a related $365 million term loan and the benefits and burdens of related interest rate swap agreements to one of our Funds. If that Fund fails to perform any obligations under the swap agreement, we remain liable to the swap counterparties. The maximum future payments under the swap agreement were approximately $16.9 million as of June 30, 2011. As of June 30, 2011, all obligations under the swap agreement have been performed by that Fund in accordance with the terms of that agreement. Tenant Concentrations For the six months ended June 30, 2011 and 2010, no tenant accounted for more than 10% of our total rental revenue and tenant recoveries. |
Future Minimum Lease Receipts
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Future Minimum Lease Receipts | 10. Future Minimum Lease Receipts We lease space to tenants primarily under noncancelable operating leases that 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 also lease space to certain tenants under noncancelable leases that provide for percentage rents based upon tenant revenues. Percentage rental income for the three months ended June 30, 2011 and 2010 totaled $106 and $115, respectively, and $254 and $246 for the six months ended June 30, 2011 and 2010, respectively. Future minimum base rentals on our non-cancelable office and ground operating leases at June 30, 2011 were as follows:
The above future minimum lease receipts 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, generally upon payment of a termination fee. The preceding table assumes that these options are not exercised. |
Overview (Details)
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Jun. 30, 2011
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Number of office properties owned | 58 |
Number of multifamily properties owned | 9 |
Number of land parcels | 2 |
Wholly Owned Consolidated Office Properties [Member]
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Number of office properties owned | 50 |
Partially Owned Unconsolidated Office Properties [Member]
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Number of office properties owned | 8 |
Interest Rate Contracts
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Interest Rate Contracts |
8. Interest Rate Contracts
Cash Flow Hedges of Interest Rate Risk
We manage our interest rate risk associated with floating-rate borrowings by obtaining interest rate swap and interest rate cap contracts. 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 to convert our floating-rate debt to a fixed-rate basis, thus reducing the impact of interest-rate changes on future interest expense and cash flows. These agreements involve the receipt of floating-rate amounts in exchange for fixed-rate interest payments over the life of the agreements without an exchange of the underlying principal amount. We may enter into derivative contracts that are intended to hedge certain economic risks, even though hedge accounting does not apply, or for which we elect to not apply hedge accounting. We do not use any other derivative instruments.
As of June 30, 2011, the totals of our existing swaps that qualified as highly effective cash flow hedges were as follows:
Non-designated Hedges
Derivatives not designated as hedges are not speculative. Prior to our initial public offering (IPO) in October 2006, we entered into pay-fixed swaps at swap rates ranging between 4.04% and 5.00%, as well as purchased caps to manage our exposure to interest rate movements and other identified risks. At the time of our IPO, we entered into offsetting receive-fixed swaps at swap rates ranging between 4.96% and 5.00%, as well as sold caps, which were intended to largely offset the future cash flows and reduce the effect on our reported earnings from any future change in fair value of our pre-IPO pay-fixed swaps and purchased caps. Over time, certain swaps have reached their natural maturity and others have been terminated. Most recently, in January 2011, we terminated $388.08 million of these interest rate caps as well as $388.08 million of the offsetting sold caps. Accordingly, as of June 30, 2011, we had the following outstanding interest rate derivatives that were not designated for accounting purposes as hedging instruments, but were used to hedge our economic exposure to interest rate risk:
Credit-risk-related Contingent Features We have agreements with each of our derivative counterparties that contain a provision under which we could also be declared in default on our derivative obligations if we default on any of our indebtedness, including any default where repayment of the indebtedness has not been accelerated by the lender. We have agreements with certain of our derivative counterparties that contain a provision under which, if we fail to maintain a minimum cash and cash equivalents balance of $1 million, then the derivative counterparty would have the right to terminate the derivative. There have been no events of default on any of our derivatives. As of June 30, 2011, the fair value of derivatives, aggregated by counterparty, in a net liability position was $56.2 million, which includes accrued interest but excludes any adjustment for nonperformance risk related to these agreements. Accounting for Interest Rate Contracts Hedge accounting generally provides for the timing of gain or loss recognition on the hedging instrument to match the earnings effect of the hedged forecasted transactions in a cash flow hedge. All other changes in fair value, with the exception of hedge ineffectiveness, are recorded in accumulated other comprehensive income (loss), which is a component of equity outside of earnings. Amounts reported in accumulated other comprehensive income (loss) related to derivatives designated as accounting hedges will typically be reclassified to interest expense as interest payments are made on our hedged variable-rate debt or amortized into interest expense on a straight-line basis over the original remaining contractual life for interest rate contracts that were terminated prior to their original maturity. The ineffective portion of changes in the fair value of the derivative is recognized directly in earnings as interest expense. 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 directly in earnings as interest expense. For derivatives designated as cash flow hedges, we estimate an additional $56.6 million will be reclassified within the next 12 months from accumulated other comprehensive income (loss) (OCI) to interest expense as an increase to interest expense. This estimate includes the amortization of accumulated OCI related to terminated swaps totaling $1.5 million. The following table represents the effect of derivative instruments on our consolidated statements of operations:
Fair Value Measurement We record all derivatives on the balance sheet at fair value, using the framework for measuring fair value established by the Financial Accounting Standards Board (FASB). The fair value of these hedges is obtained through independent third-party valuation sources that use conventional valuation algorithms. The following table represents the fair values of derivative instruments as of:
The FASB fair value framework includes a hierarchy that distinguishes between assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity's own assumptions about market-based inputs. Level 1 inputs utilize unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable either directly or indirectly for similar assets and liabilities in active markets. Level 3 inputs are unobservable assumptions generated by the reporting entity. The valuation of our interest rate swaps and caps 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. 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 did not have any fair value measurements using significant unobservable inputs (Level 3) as of June 30, 2011. The table below presents the derivative assets and liabilities presented in our financial statements at their estimated fair value on a gross basis as of June 30, 2011 without reflecting any net settlement positions with the same counterparty:
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Equity (Statements of Comprehensive Income (Loss)) (Details) (USD $)
In Thousands |
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Equity | ||||
Net loss | $ (6,209) | $ (11,305) | $ (6,554) | $ (21,774) |
Cash flow hedge adjustment | (14,914) | 15,515 | 15,779 | 33,812 |
Comprehensive income (loss) | (21,123) | 4,210 | 9,225 | 12,038 |
Less: Comprehensive (income) loss attributable to noncontrolling interests | 4,124 | (458) | (2,159) | (1,980) |
Comprehensive income (loss) attributable to common stockholders | $ (16,999) | $ 3,752 | $ 7,066 | $ 10,058 |
Overview
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Jun. 30, 2011
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Overview | |
Overview | 1. Overview Organization and Description of Business Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed Real Estate Investment Trust (REIT). The terms "us," "we" and "our" as used in these financial statements refer to Douglas Emmett, Inc. and its subsidiaries. Through our interest in Douglas Emmett Properties, LP (our operating partnership) and its subsidiaries, as well as our investment in our unconsolidated real estate funds (Funds), we own or partially own, manage, lease, acquire and develop real estate, consisting primarily of office and multifamily properties. As of June 30, 2011, we own a consolidated portfolio of 50 office properties (including ancillary retail space) and nine multifamily properties, as well as the fee interests in two parcels of land subject to ground leases. Alongside our consolidated portfolio, we also manage and own equity interests in unconsolidated Funds that, at June 30, 2011, owned eight additional office properties, for a combined 58 office properties in our total portfolio. All of these properties are located in Los Angeles County, California and Honolulu, Hawaii. We are 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 typically 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. Basis of Presentation The accompanying consolidated financial statements as of June 30, 2011 and December 31, 2010 and for the three and six months ended June 30, 2011 and 2010 are the consolidated financial statements of Douglas Emmett, Inc. and our subsidiaries, including our operating partnership. All significant intercompany balances and transactions have been eliminated in our consolidated financial statements. 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 disclosures 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 SEC rules and regulations, although we believe that the disclosures are adequate to make their 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, 2011. The interim financial statements should be read in conjunction with the consolidated financial statements in our 2010 Annual Report on Form 10-K and the 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. The preparation of financial statements in conformity with GAAP requires us to make certain estimates and assumptions, including, 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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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Other Assets | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | 4. Other Assets Other assets consist of the following as of:
We incurred deferred loan cost amortization expense of $926 and $409 for the three months ended June 30, 2011 and 2010, respectively, and $2,305 and $830 for the six months ended June 30, 2011 and 2010, respectively. Deferred loan cost amortization is included as a component of interest expense in the consolidated statements of operations. |
Acquired Lease Intangibles (Summary of Acquired Lease Intangibles) (Details) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Acquired lease intangible assets, net | $ 7,604 | $ 9,356 |
Acquired lease intangible liabilities, net | 97,811 | 110,244 |
Above-Market Tenant Leases [Member]
|
||
Acquired lease intangible assets, gross | 34,968 | 34,968 |
Accumulated amortization | (30,202) | (28,489) |
Below-Market Ground Leases [Member]
|
||
Acquired lease intangible assets, gross | 3,198 | 3,198 |
Accumulated amortization | (360) | (321) |
Below-Market Tenant Leases [Member]
|
||
Acquired lease intangible liabilities, gross | 263,220 | 263,220 |
Accumulated accretion | (178,461) | (166,127) |
Above-Market Ground Leases [Member]
|
||
Acquired lease intangible liabilities, gross | 16,200 | 16,200 |
Accumulated accretion | $ (3,148) | $ (3,049) |
Investments in Unconsolidated Real Estate Funds (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
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Investments in Unconsolidated Real Estate Funds | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Scheudle of Equity Interest Income Statement Line Items |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Equity Interest Balance Sheet Line Items |
|
Fair Value of Financial Instruments (Details) (USD $)
|
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Fair Value of Financial Instruments | ||
Fair value of secured notes payable | $ 3,620,000,000 | $ 3,580,000,000 |
Loan amount | $ 3,664,740,000 | $ 3,658,000,000 |
Investments in Unconsolidated Real Estate Funds (Schedule of Equity Interest Balance Sheet Line Items) (Details) (USD $)
In Thousands |
Jun. 30, 2011
|
Dec. 31, 2010
|
---|---|---|
Investments in Unconsolidated Real Estate Funds | ||
Real estate | $ 745,637 | $ 712,228 |
Other assets | 26,844 | 26,146 |
Other liabilities | 37,759 | 43,636 |
Secured notes payable | $ 420,747 | $ 421,225 |
Accounts Payable and Accrued Expenses
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Expenses | |||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Accrued Expenses |
|
Secured Notes Payable (Schedule of Notes Payable) (Details) (USD $)
In Thousands, unless otherwise specified |
6 Months Ended | 12 Months Ended | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2011
years
|
Dec. 31, 2010
|
|||||||||||||||||||||
Loan amount | $ 3,664,740 | $ 3,658,000 | ||||||||||||||||||||
Unamortized Loan Premium | 4,482 | [1] | 10,133 | [1] | ||||||||||||||||||
Secured notes payable, total | 3,669,222 | 3,668,133 | ||||||||||||||||||||
Number of separate loans aggregated in total | 5 | 7 | ||||||||||||||||||||
Number of properties securing loan | 7 | |||||||||||||||||||||
Weighted average remaining life of total outstanding debt | 4.5 | |||||||||||||||||||||
Weighted average remaining life of interest rate swaps and fixed rate debt | 5.5 | |||||||||||||||||||||
Weighted average annual interest rate | 4.52% | |||||||||||||||||||||
Term Loan With Maturity Date 8/31/2012 [Member]
|
||||||||||||||||||||||
Maturity Date | Aug. 31, 2012 | [2],[3] | ||||||||||||||||||||
Loan amount | 803,600 | [2] | 1,655,000 | [2] | ||||||||||||||||||
Variable Rate | LIBOR + 0.85% | [2] | ||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 4.98% [Member]
|
||||||||||||||||||||||
Maturity Date | Aug. 31, 2012 | [2],[3] | ||||||||||||||||||||
Loan amount | 322,500 | [2] | 322,500 | [2] | ||||||||||||||||||
Variable Rate | LIBOR + 0.85% | [2] | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 4.98% | [2],[3] | ||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 4.98% [Member] | Swap [Member]
|
||||||||||||||||||||||
Swap Maturity Date | Aug. 01, 2011 | [2] | ||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 5.02% [Member]
|
||||||||||||||||||||||
Maturity Date | Aug. 31, 2012 | [2],[3] | ||||||||||||||||||||
Loan amount | 322,500 | [2] | 322,500 | [2] | ||||||||||||||||||
Variable Rate | LIBOR + 0.85% | [2] | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 5.02% | [2],[3] | ||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 5.02% [Member] | Swap [Member]
|
||||||||||||||||||||||
Swap Maturity Date | Aug. 01, 2012 | [2] | ||||||||||||||||||||
Term Loan With Maturity Date 3/3/2014 [Member]
|
||||||||||||||||||||||
Maturity Date | Mar. 03, 2014 | [3],[4] | ||||||||||||||||||||
Loan amount | 16,140 | [4] | 18,000 | [4] | ||||||||||||||||||
Variable Rate | LIBOR + 1.85% | [4] | ||||||||||||||||||||
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.78% [Member]
|
||||||||||||||||||||||
Maturity Date | Feb. 01, 2015 | [3],[5] | ||||||||||||||||||||
Loan amount | 36,920 | [5] | 36,920 | [5] | ||||||||||||||||||
Variable Rate | DMBS + 0.60% | [5],[6] | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 5.78% | [3],[5] | ||||||||||||||||||||
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.78% [Member] | Swap [Member]
|
||||||||||||||||||||||
Swap Maturity Date | Aug. 01, 2011 | [5] | ||||||||||||||||||||
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 4.86% [Member]
|
||||||||||||||||||||||
Maturity Date | Feb. 01, 2015 | [3],[5] | ||||||||||||||||||||
Loan amount | 75,000 | [5] | 75,000 | [5] | ||||||||||||||||||
Variable Rate | DMBS + 0.76% | [5],[6] | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 4.86% | [3],[5] | ||||||||||||||||||||
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 4.86% [Member] | Swap [Member]
|
||||||||||||||||||||||
Swap Maturity Date | Aug. 01, 2011 | [5] | ||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 4.77% [Member]
|
||||||||||||||||||||||
Maturity Date | Apr. 01, 2015 | [3],[7] | ||||||||||||||||||||
Loan amount | 340,000 | [7] | 340,000 | [7] | ||||||||||||||||||
Variable Rate | LIBOR +1.50% | [7] | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 4.77% | [3],[7] | ||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 4.77% [Member] | Swap [Member]
|
||||||||||||||||||||||
Swap Maturity Date | Jan. 02, 2013 | [7] | ||||||||||||||||||||
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.62% [Member]
|
||||||||||||||||||||||
Maturity Date | Feb. 01, 2016 | [3],[7] | ||||||||||||||||||||
Loan amount | 82,000 | [7] | 82,000 | [7] | ||||||||||||||||||
Variable Rate | LIBOR + 0.62% | [7] | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 5.62% | [3],[7] | ||||||||||||||||||||
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.62% [Member] | Swap [Member]
|
||||||||||||||||||||||
Swap Maturity Date | Mar. 01, 2012 | [7] | ||||||||||||||||||||
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.82% [Member]
|
||||||||||||||||||||||
Maturity Date | Jun. 01, 2017 | [3],[7] | ||||||||||||||||||||
Loan amount | 18,000 | [7] | 18,000 | [7] | ||||||||||||||||||
Variable Rate | LIBOR + 0.62% | [7] | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 5.82% | [3],[7] | ||||||||||||||||||||
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.82% [Member] | Swap [Member]
|
||||||||||||||||||||||
Swap Maturity Date | Jun. 01, 2012 | [7] | ||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 4.45% [Member]
|
||||||||||||||||||||||
Maturity Date | Oct. 02, 2017 | [3],[7] | ||||||||||||||||||||
Loan amount | 400,000 | [7] | 400,000 | [7] | ||||||||||||||||||
Variable Rate | LIBOR + 2.00% | [7] | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 4.45% | [3],[7] | ||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 4.45% [Member] | Swap [Member]
|
||||||||||||||||||||||
Swap Maturity Date | Jul. 01, 2015 | [7] | ||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 4.12% [Member]
|
||||||||||||||||||||||
Maturity Date | Apr. 02, 2018 | [3],[7] | ||||||||||||||||||||
Loan amount | 510,000 | [7] | ||||||||||||||||||||
Variable Rate | LIBOR + 2.00% | [7] | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 4.12% | [3],[7] | ||||||||||||||||||||
Swap Maturity Date | Apr. 01, 2016 | |||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 4.12% [Member] | Swap [Member]
|
||||||||||||||||||||||
Swap Maturity Date | Apr. 01, 2016 | [7] | ||||||||||||||||||||
Term Loan With Effective Annual Fixed Interest Rate At 4.46% [Member]
|
||||||||||||||||||||||
Maturity Date | Mar. 01, 2020 | [3],[8],[9] | ||||||||||||||||||||
Loan amount | 350,000 | [8] | [8] | |||||||||||||||||||
Effective Annual Fixed Interest Rate | 4.46% | [3],[8] | ||||||||||||||||||||
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 3.65% [Member]
|
||||||||||||||||||||||
Maturity Date | Nov. 02, 2020 | [3],[7] | ||||||||||||||||||||
Loan amount | 388,080 | [7] | 388,080 | [7] | ||||||||||||||||||
Variable Rate | LIBOR + 1.65% | [7] | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 3.65% | [3],[7] | ||||||||||||||||||||
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 3.65% [Member] | Swap [Member]
|
||||||||||||||||||||||
Swap Maturity Date | Nov. 01, 2017 | [7] | ||||||||||||||||||||
Effective Fixed Rate Loans [Member]
|
||||||||||||||||||||||
Loan amount | 2,495,000 | 1,985,000 | ||||||||||||||||||||
Effective Annual Fixed Interest Rate | 4.54% | [3] | ||||||||||||||||||||
Fixed Rate Loans [Member]
|
||||||||||||||||||||||
Loan amount | 350,000 | |||||||||||||||||||||
Effective Annual Fixed Interest Rate | 4.46% | [3] | ||||||||||||||||||||
Variable Rate Loans [Member]
|
||||||||||||||||||||||
Loan amount | $ 819,740 | $ 1,673,000 | ||||||||||||||||||||
|
Equity (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
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Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Equity |
|
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Statements of Comprehensive Income (Loss) |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Attributable to Common Stockholders and Transfers to Non-controlling Interests |
|
Subsequent Events (Details) (USD $)
In Thousands, except Share data in Millions, unless otherwise specified |
1 Months Ended | 6 Months Ended | |
---|---|---|---|
Jul. 31, 2011
|
Jun. 30, 2011
|
Dec. 31, 2010
|
|
Loan amount | $ 3,664,740 | $ 3,658,000 | |
Common stock sold, shares | 1.9 | 1.1 | |
Common stock sold, value | 38,200 | 21,909 | |
Number of loans closed | 2 | ||
Non Recourse Loans [Member]
|
|||
Loan amount | 885,000 | ||
Interest Rate Swap [Member] | Variable Interest Rate Loan [Member]
|
|||
Effective Annual Fixed Interest Rate | 3.74% | ||
Effective date of derivative | August 1, 2011 | ||
Derivative maturity dates | Aug. 01, 2016 | ||
Fixed Interest Rate Loan [Member]
|
|||
Loan amount | 355,000 | ||
Fixed interest rate | 4.14% | ||
Maturity Date | Aug. 05, 2018 | ||
Loan payment terms | Monthly payments are interest-only for the first four and one-half years, with principal amortization thereafter based upon a 30-year amortization table. | ||
Variable Interest Rate Loan [Member]
|
|||
Loan amount | $ 530,000 | ||
Variable rate description | LIBOR plus 1.70% | ||
Maturity Date | Aug. 01, 2018 | ||
Loan payment terms | The second loan, for $530 million, bears interest at a floating rate equal to LIBOR plus 1.70% through the maturity date of August 1, 2018, but we have entered into an interest rate swap contract that effectively fixes the annual interest rate at 3.74% for the period from August 1, 2011 until August 1, 2016. |
Summary of Significant Accounting Policies (Details)
|
Jun. 30, 2011
|
---|---|
Summary of Significant Accounting Policies | |
Distribution of REIT taxable income | 90.00% |
Secured Notes Payable (Narrative) (Details) (USD $)
|
6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | 1 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
|
Dec. 31, 2010
|
Jun. 30, 2011
Term Loan With Maturity Date 8/31/2012 [Member]
|
Dec. 31, 2010
Term Loan With Maturity Date 8/31/2012 [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.98% [Member]
|
Dec. 31, 2010
Term Loan With Effective Annual Fixed Interest Rate At 4.98% [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.98% [Member]
Swap [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 5.02% [Member]
|
Dec. 31, 2010
Term Loan With Effective Annual Fixed Interest Rate At 5.02% [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 5.02% [Member]
Swap [Member]
|
Jun. 30, 2011
Term Loan With Maturity Date 3/3/2014 [Member]
|
Dec. 31, 2010
Term Loan With Maturity Date 3/3/2014 [Member]
|
Jun. 30, 2011
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.78% [Member]
|
Dec. 31, 2010
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.78% [Member]
|
Jun. 30, 2011
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.78% [Member]
Swap [Member]
|
Jun. 30, 2011
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 4.86% [Member]
|
Dec. 31, 2010
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 4.86% [Member]
|
Jun. 30, 2011
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 4.86% [Member]
Swap [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.77% [Member]
|
Dec. 31, 2010
Term Loan With Effective Annual Fixed Interest Rate At 4.77% [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.77% [Member]
Swap [Member]
|
Jun. 30, 2011
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.62% [Member]
|
Dec. 31, 2010
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.62% [Member]
|
Jun. 30, 2011
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.62% [Member]
Swap [Member]
|
Jun. 30, 2011
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.82% [Member]
|
Dec. 31, 2010
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.82% [Member]
|
Jun. 30, 2011
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 5.82% [Member]
Swap [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.45% [Member]
|
Dec. 31, 2010
Term Loan With Effective Annual Fixed Interest Rate At 4.45% [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.45% [Member]
Swap [Member]
|
Mar. 31, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.12% [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.12% [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.12% [Member]
Swap [Member]
|
Feb. 28, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.46% [Member]
|
Jun. 30, 2011
Term Loan With Effective Annual Fixed Interest Rate At 4.46% [Member]
|
Dec. 31, 2010
Term Loan With Effective Annual Fixed Interest Rate At 4.46% [Member]
|
Jun. 30, 2011
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 3.65% [Member]
|
Dec. 31, 2010
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 3.65% [Member]
|
Jun. 30, 2011
Fannie Mae Loan With Effective Annual Fixed Interest Rate At 3.65% [Member]
Swap [Member]
|
Jun. 30, 2011
Effective Fixed Rate Loans [Member]
|
Dec. 31, 2010
Effective Fixed Rate Loans [Member]
|
Jun. 30, 2011
Fixed Rate Loans [Member]
|
Jun. 30, 2011
Variable Rate Loans [Member]
|
Dec. 31, 2010
Variable Rate Loans [Member]
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Loan amount | $ 3,664,740,000 | $ 3,658,000,000 | $ 803,600,000 | [1] | $ 1,655,000,000 | [1] | $ 322,500,000 | [1] | $ 322,500,000 | [1] | $ 322,500,000 | [1] | $ 322,500,000 | [1] | $ 16,140,000 | [2] | $ 18,000,000 | [2] | $ 36,920,000 | [3] | $ 36,920,000 | [3] | $ 75,000,000 | [3] | $ 75,000,000 | [3] | $ 340,000,000 | [4] | $ 340,000,000 | [4] | $ 82,000,000 | [4] | $ 82,000,000 | [4] | $ 18,000,000 | [4] | $ 18,000,000 | [4] | $ 400,000,000 | [4] | $ 400,000,000 | [4] | $ 510,000,000 | [4] | $ 350,000,000 | [5] | [5] | $ 388,080,000 | [4] | $ 388,080,000 | [4] | $ 2,495,000,000 | $ 1,985,000,000 | $ 350,000,000 | $ 819,740,000 | $ 1,673,000,000 | |||||||||||||||||||||||||||||||||||||||
Aggregate amount of separate loans secured by separate collateralized pools of properties | 1,450,000,000 | 2,300,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repayment of term loan | $ 531,800,000 | $ 319,600,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity year of term loan repaid | 2012 | 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective Annual Fixed Interest Rate | 4.98% | [1],[6] | 5.02% | [1],[6] | 5.78% | [3],[6] | 4.86% | [3],[6] | 4.77% | [4],[6] | 5.62% | [4],[6] | 5.82% | [4],[6] | 4.45% | [4],[6] | 4.12% | [4],[6] | 4.46% | [5],[6] | 3.65% | [4],[6] | 4.54% | [6] | 4.46% | [6] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable rate description | LIBOR + 0.85% | [1] | LIBOR + 0.85% | [1] | LIBOR + 0.85% | [1] | LIBOR + 1.85% | [2] | DMBS + 0.60% | [3],[7] | DMBS + 0.76% | [3],[7] | LIBOR +1.50% | [4] | LIBOR + 0.62% | [4] | LIBOR + 0.62% | [4] | LIBOR + 2.00% | [4] | LIBOR + 2.00% | [4] | LIBOR + 1.65% | [4] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of one-year extension options available | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative maturity dates | Aug. 01, 2011 | [1] | Aug. 01, 2012 | [1] | Aug. 01, 2011 | [3] | Aug. 01, 2011 | [3] | Jan. 02, 2013 | [4] | Mar. 01, 2012 | [4] | Jun. 01, 2012 | [4] | Jul. 01, 2015 | [4] | Apr. 01, 2016 | Apr. 01, 2016 | [4] | Nov. 01, 2017 | [4] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effective date of derivative | April 1, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturity date of loan before modification | March 1, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Future Minimum Lease Payments (Tables)
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6 Months Ended | |||||||||||||||||||||||||||
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Jun. 30, 2011
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Future Minimum Lease Payments | ||||||||||||||||||||||||||||
Future Minimum Ground Lease Payments |
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Investments in Unconsolidated Real Estate Funds
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Investments in Unconsolidated Real Estate Funds | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Unconsolidated Real Estate Funds | 13. Investments in Unconsolidated Real Estate Funds
We manage and own an equity interest in two Funds through which institutional investors provide capital commitments for acquisition of properties. The table below reflects selected financial information for our Funds. The amounts represent 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value.
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Future Minimum Lease Payments (Narrative) (Details) (USD $)
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3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2011
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Jun. 30, 2010
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Jun. 30, 2011
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Jun. 30, 2010
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Future Minimum Lease Payments | ||||
Ground lease payments expensed | $ 543,000 | $ 543,000 | $ 1,082,000 | $ 1,082,000 |
Lease purchase option exercise date | May 31, 2014 | |||
Lease purchase price | $ 27,500,000 | $ 27,500,000 | ||
Number of ground leases held | 2 | |||
Number of ground leases held with purchase options | 1 |
Commitments and Contingencies (Details) (USD $)
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6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2011
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Jun. 30, 2010
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Dec. 31, 2008
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Dec. 31, 2010
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Amount of accounts insured by Federal Deposit Insurance Corporation | $ 250,000 | |||
Number of consolidated properties containing asbestos | 20 | |||
Investment in unconsolidated real estate fund | 38,000,000 | |||
Number of properties contributed to our unconsolidated funds | 6 | |||
Maximum future payments under the swap agreement | 16,900,000 | |||
Concentration risk percentage | 10.00% | 10.00% | ||
Number of tenants exceeding concentration risk percentage | 0 | 0 | ||
Term loan under guarantee | 3,664,740,000 | 3,658,000,000 | ||
Unconsolidated Properties [Member]
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Term loan under guarantee | $ 365,000,000 |
Acquired Lease Intangibles
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2011
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Acquired Lease Intangibles | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquired Lease Intangibles | 6. Acquired Lease Intangibles The following summarizes our acquired lease intangibles related to above/below-market leases as of:
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Summary of Significant Accounting Policies (Policy)
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6 Months Ended |
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Jun. 30, 2011
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Summary of Significant Accounting Policies | |
Cash and Cash Equivalents |
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. |
Income Taxes | Income Taxes We have 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 are generally not subject to corporate-level income tax on the earnings distributed currently to our stockholders that we derive from our REIT qualifying activities. We are subject to corporate-level tax on the earnings we derive through our taxable REIT subsidiaries (TRS). If we fail to qualify as a REIT in any taxable year, and were 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. 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 our 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 disregarded entities (including limited partnerships and S-Corporations) 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) | 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, 2011 and 2010, all potentially dilutive instruments are anti-dilutive and have been excluded from our computation of weighted average dilutive shares outstanding. |
Recently Issued Accounting Literature | Recently Issued Accounting Literature
Changes to GAAP are established by the FASB in the form of ASUs. We consider the applicability and impact of all ASUs. Recently issued ASUs not listed below are expected to not have any material impact on our consolidated financial position and results of operations, because either the ASU is not applicable or the impact is expected to be immaterial.
In June 2011, the FASB issued Accounting Standard Update (ASU) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. This ASU requires an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income, or in two separate but consecutive statements. This ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders' equity. This ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011, which for us means the first quarter of 2012. We do not believe the adoption of this guidance will have a material effect on our financial position or results of operations as it only affects presentation. |
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