10-Q

United States

Securities and Exchange Commission

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

Commission file number: 001-33106

Douglas Emmett, Inc.

(Exact name of registrant as specified in its charter)

Maryland	20-3073047
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1299 Ocean Avenue, Suite 1000, Santa Monica, California	90401
(Address of principal executive offices)	(Zip Code)

(310) 255-7700

(Registrant’s telephone number, including area code)

N/A

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes xNo ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes xNo ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer", "accelerated filer", "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company ¨
Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨No x

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value per share	DEI	New York Stock Exchange

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at	April 29, 2019
Common Stock, $0.01 par value per share	170,284,515	shares

1

DOUGLAS EMMETT, INC. FORM 10-Q
Table of Contents
		Page
	Glossary	3
	Forward Looking Statements	5
	PART I. FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)	6
	Consolidated Balance Sheets	6
	Consolidated Statements of Operations	7
	Consolidated Statements of Comprehensive Income	8
	Consolidated Statements of Equity	9
	Consolidated Statements of Cash Flows	10
	Notes to Consolidated Financial Statements	12
	Overview	12
	Summary of Significant Accounting Policies	13
	Ground Lease	15
	Acquired Lease Intangibles	16
	Investments in Unconsolidated Real Estate Funds	17
	Other Assets	17
	Secured Notes Payable and Revolving Credit Facility, Net	18
	Interest Payable, Accounts Payable and Deferred Revenue	20
	Derivative Contracts	20
	Equity	22
	EPS	24
	Fair Value of Financial Instruments	25
	Segment Reporting	27
	Future Minimum Lease Rental Receipts	28
	Commitments, Contingencies & Guarantees	28
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4	Controls and Procedures	41
	PART II. OTHER INFORMATION
Item 1	Legal Proceedings	42
Item 1A	Risk Factors	42
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	42
Item 3	Defaults Upon Senior Securities	42
Item 4	Mine Safety Disclosures	42
Item 5	Other Information	42
Item 6	Exhibits	43
	SIGNATURES	44

2

Glossary

Abbreviations used in this Report:

AOCI	Accumulated Other Comprehensive Income (Loss)
ASC	Accounting Standards Codification
ASU	Accounting Standards Update
ATM	At-the-Market
BOMA	Building Owners and Managers Association
CEO	Chief Executive Officer
CFO	Chief Financial Officer
Code	Internal Revenue Code of 1986, as amended
DEI	Douglas Emmett, Inc.
EPS	Earnings Per Share
Exchange Act	Securities Exchange Act of 1934, as amended
FASB	Financial Accounting Standards Board
FDIC	Federal Deposit Insurance Corporation
FFO	Funds from Operations
Fund X	Douglas Emmett Fund X, LLC
Funds	Unconsolidated institutional real estate funds (Fund X, Partnership X and Opportunity Fund)
GAAP	Generally Accepted Accounting Principles (United States)
JV	Joint Venture
LIBOR	London Interbank Offered Rate
LTIP Units	Long-Term Incentive Plan Units
NAREIT	National Association of Real Estate Investment Trusts
OCI	Other Comprehensive Income (Loss)
OP Units	Operating Partnership Units
Operating Partnership	Douglas Emmett Properties, LP
Opportunity Fund	Fund X Opportunity Fund, LLC
Partnership X	Douglas Emmett Partnership X, LP
PCAOB	Public Company Accounting Oversight Board (United States)
REIT	Real Estate Investment Trust
Report	Quarterly Report on Form 10-Q
SEC	Securities and Exchange Commission
Securities Act	Securities Act of 1933, as amended
TRS	Taxable REIT subsidiary(ies)
US	United States
USD	United States Dollar
VIE	Variable Interest Entity(ies)

3

Glossary

Defined terms used in this Report:

Annualized Rent	Annualized cash base rent (excluding tenant reimbursements, parking and other income) before abatements under leases commenced as of the reporting date. Annualized rent for our triple net office leases is calculated by adding expense reimbursements and estimates of normal building expenses paid by tenants to base rent. Annualized rent does not include lost rent recovered from insurance and rent for building management use.
Consolidated Portfolio	Includes the properties in our consolidated results, which includes the properties owned by our consolidated JVs.
Funds From Operations (FFO)	We calculate FFO in accordance with the standards established by NAREIT by excluding gains (or losses) on sales of investments in real estate, gains (or losses) from changes in control of investments in real estate, real estate depreciation and amortization (other than amortization of right-of-use assets for which we are the lessee and amortization of deferred loan costs) from our net income (including adjusting for the effect of such items attributable to consolidated joint ventures and unconsolidated real estate funds, but not for noncontrolling interests included in our Operating Partnership). FFO is a non-GAAP supplemental financial measure that we report because it is useful to our investors. See Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Report for a discussion of FFO.
Net Operating Income (NOI)	We calculate NOI as revenue less operating expenses attributable to the properties that we own and operate. NOI is calculated by excluding the following from our net income: general and administrative expense, depreciation and amortization expense, other income, other expense, income, including depreciation, from unconsolidated real estate funds, interest expense, gains (or losses) on sales of investments in real estate and net income attributable to noncontrolling interests. NOI is a non-GAAP supplemental financial measure that we report because it is useful to our investors. See Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 2 of this Report for a discussion of our Same Property NOI.
Occupancy Rate	The percentage leased, excluding signed leases not yet commenced, as of the reporting date. Management space is considered leased and occupied, while space taken out of service during a repositioning is excluded from both the numerator and denominator for calculating percentage leased and occupied.
Recurring Capital Expenditures	Building improvements required to maintain revenues once a property has been stabilized, and excludes capital expenditures for (i) acquired buildings being stabilized, (ii) newly developed space, (iii) upgrades to improve revenues or operating expenses, (iv) casualty damage or (v) bringing the property into compliance with governmental requirements.
Rentable Square Feet	Based on the BOMA remeasurement and consists of leased square feet (including square feet with respect to signed leases not commenced as of the reporting date), available square feet, building management use square feet and square feet of the BOMA adjustment on leased space.
Same Properties	Our consolidated properties that have been owned and operated by us in a consistent manner, and reported in our consolidated results during the entire span of both periods being compared. We exclude from our same property subset any properties (i) acquired during the comparative periods; (ii) sold, held for sale, contributed or otherwise removed from our consolidated financial statements during the comparative periods; or (iii) that underwent a major repositioning project that we believed significantly affected its results during the comparative periods.
Short-Term Leases	Represents leases that expired on or before the reporting date or had a term of less than one year, including hold over tenancies, month to month leases and other short term occupancies.
Total Portfolio	Includes our Consolidated Portfolio plus the properties owned by our Funds.

4

Forward Looking Statements

This Report contains forward-looking statements within the meaning of the Section 27A of the Securities Act and Section 21E of the Exchange Act. You can find many (but not all) of these statements by looking for words such as “believe”, “expect”, “anticipate”, “estimate”, “approximate”, “intend”, “plan”, “would”, “could”, “may”, “future” or other similar expressions in this Report. We claim the protection of the safe harbor contained in the Private Securities Litigation Reform Act of 1995. We caution investors that any forward-looking statements used in this Report, or those that we make orally or in writing from time to time, are based on our beliefs and assumptions, as well as information currently available to us. Actual outcomes will be affected by known and unknown risks, trends, uncertainties and factors beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will inevitably prove to be incorrect. As a result, our future results can be expected to differ from our expectations, and those differences may be material. Accordingly, investors should use caution when relying on previously reported forward-looking statements, which were based on results and trends at the time they were made, to anticipate future results or trends. Some of the risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include the following:

• adverse economic or real estate developments affecting Southern California or Honolulu, Hawaii;

• competition from other real estate investors in our markets;

• decreasing rental rates or increasing tenant incentive and vacancy rates;

• defaults on, early terminations of, or non-renewal of leases by tenants;

• increases in interest rates or operating costs;

• insufficient cash flows to service our outstanding debt or pay rent on ground leases;

• difficulties in raising capital;

• inability to liquidate real estate or other investments quickly;

• adverse changes to rent control laws and regulations;

• environmental uncertainties;

• natural disasters;

• insufficient insurance, or increases in insurance costs;

• inability to successfully expand into new markets and submarkets;

• difficulties in identifying properties to acquire and failure to complete acquisitions successfully;

• failure to successfully operate acquired properties;

• risks associated with property development;

• risks associated with JVs;

• conflicts of interest with our officers and reliance on key personnel;    

• changes in zoning and other land use laws;

• adverse results of litigation or governmental proceedings;

• failure to comply with laws, regulations and covenants that are applicable to our properties;

• possible terrorist attacks or wars;

• possible cyber attacks or intrusions;

• adverse changes to accounting rules;

• weaknesses in our internal controls over financial reporting;

• failure to maintain our REIT status under federal tax laws; and

• adverse changes to tax laws, including those related to property taxes.

For further discussion of these and other risk factors see Item 1A. "Risk Factors” in our 2018 Annual Report on Form 10-K for the fiscal year ended December 31, 2018. This Report and all subsequent written and oral forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We do not undertake any obligation to release publicly any revisions to our forward-looking statements to reflect events or circumstances after the date of this Report.

5

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Douglas Emmett, Inc. Consolidated Balance Sheets (In thousands, except share data)
	March 31, 2019			December 31, 2018
	Unaudited
Assets
Investment in real estate:
Land	$	1,067,639		$	1,065,099
Buildings and improvements	8,088,899			7,995,203
Tenant improvements and lease intangibles	847,471			840,653
Property under development	57,527			129,753
Investment in real estate, gross	10,061,536			10,030,708
Less: accumulated depreciation and amortization	(2,309,901		)	(2,246,887		)
Investment in real estate, net	7,751,635			7,783,821
Ground lease right-of-use asset	7,483			—
Cash and cash equivalents	149,722			146,227
Tenant receivables, net	5,281			4,371
Deferred rent receivables, net	129,203			124,834
Acquired lease intangible assets, net	3,092			3,251
Interest rate contract assets	46,880			73,414
Investment in unconsolidated real estate funds	105,526			111,032
Other assets	17,087			14,759
Total Assets	$	8,215,909		$	8,261,709
Liabilities
Secured notes payable and revolving credit facility, net	$	4,129,271		$	4,134,030
Ground lease liability	10,887			—
Interest payable, accounts payable and deferred revenue	142,339			130,154
Security deposits	50,802			50,733
Acquired lease intangible liabilities, net	44,883			52,569
Interest rate contract liabilities	5,283			1,530
Dividends payable	44,262			44,263
Total liabilities	4,427,727			4,413,279
Equity
Douglas Emmett, Inc. stockholders' equity:
Common Stock, $0.01 par value, 750,000,000 authorized, 170,237,122 and 170,214,809 outstanding at March 31, 2019 and December 31, 2018, respectively	1,702			1,702
Additional paid-in capital	3,282,388			3,282,316
Accumulated other comprehensive income	30,943			53,944
Accumulated deficit	(953,335		)	(935,630		)
Total Douglas Emmett, Inc. stockholders' equity	2,361,698			2,402,332
Noncontrolling interests	1,426,484			1,446,098
Total equity	3,788,182			3,848,430
Total Liabilities and Equity	$	8,215,909		$	8,261,709

See accompanying notes to the consolidated financial statements.

6

Douglas Emmett, Inc.

Consolidated Statements of Operations

(Unaudited; in thousands, except per share data)

	Three Months Ended March 31,
	2019			2018
Revenues
Office rental
Rental revenues and tenant recoveries	$	167,235		$	158,824
Parking and other income	30,055			28,509
Total office revenues	197,290			187,333
Multifamily rental
Rental revenues	24,893			23,061
Parking and other income	2,003			1,853
Total multifamily revenues	26,896			24,914
Total revenues	224,186			212,247
Operating Expenses
Office expenses	63,449			60,356
Multifamily expenses	7,555			6,698
General and administrative expenses	9,832			9,567
Depreciation and amortization	79,873			72,498
Total operating expenses	160,709			149,119
Operating income	63,477			63,128
Other income	2,898			2,630
Other expenses	(1,845		)	(1,733		)
Income, including depreciation, from unconsolidated real estate funds	1,551			1,506
Interest expense	(33,293		)	(32,900		)
Net income	32,788			32,631
Less:  Net income attributable to noncontrolling interests	(4,087		)	(4,425		)
Net income attributable to common stockholders	$	28,701		$	28,206
Net income attributable to common stockholders per share – basic	$	0.17		$	0.17
Net income attributable to common stockholders per share – diluted	$	0.17		$	0.17
Dividends declared per common share	$	0.26		$	0.25

See accompanying notes to the consolidated financial statements.

7

Douglas Emmett, Inc.

Consolidated Statements of Comprehensive Income

(Unaudited and in thousands)

	Three Months Ended March 31,
	2019			2018
Net income	$	32,788		$	32,631
Other comprehensive (loss) income: cash flow hedges	(33,308		)	44,369
Comprehensive (loss) income	(520		)	77,000
Less: Comprehensive loss (income) attributable to noncontrolling interests	6,220			(17,872		)
Comprehensive income attributable to common stockholders	$	5,700		$	59,128

See accompanying notes to the consolidated financial statements.

8

Douglas Emmett, Inc.

Consolidated Statements of Equity

(Unaudited and in thousands)

		Three Months Ended March 31,
		2019			2018
Shares of Common Stock	Beginning balance	170,215			169,565
	Exchange of OP units for common stock	22			322
	Exercise of stock options	—			14
	Ending balance	170,237			169,901
Common Stock	Beginning balance	$	1,702		$	1,696
	Exchange of OP units for common stock	—			3
	Ending balance	$	1,702		$	1,699
Additional Paid-in Capital	Beginning balance	$	3,282,316		$	3,272,539
	Exchange of OP units for common stock	363			5,196
	Repurchase of OP Units with cash	(291		)	—
	Taxes paid on exercise of stock options	—			(314		)
	Ending balance	$	3,282,388		$	3,277,421
AOCI	Beginning balance	$	53,944		$	43,099
	Cash flow hedge fair value adjustments	(23,001		)	30,922
	Ending balance	$	30,943		$	74,021
Accumulated Deficit	Beginning balance	$	(935,630	)	$	(879,810	)
	Beginning balance adjustment - ASU 2016-02 adoption	(2,144		)	—
	Beginning balance adjustment - ASU 2017-12 adoption	—			(211		)
	Net income attributable to common stockholders	28,701			28,206
	Dividends	(44,262		)	(42,474		)
	Ending balance	$	(953,335	)	$	(894,289	)
Noncontrolling Interests	Beginning balance	$	1,446,098		$	1,464,525
	Beginning balance adjustment - ASU 2016-02 adoption	(355		)	—
	Net income attributable to noncontrolling interests	4,087			4,425
	Cash flow hedge fair value adjustments	(10,307		)	13,447
	Distributions	(15,760		)	(13,086		)
	Exchange of OP units for common stock	(363		)	(5,199		)
	Repurchase of OP Units with cash	(216		)	—
	Stock-based compensation	3,300			3,503
	Ending balance	$	1,426,484		$	1,467,615
Total Equity	Beginning balance	$	3,848,430		$	3,902,049
	Beginning balance adjustment - ASU 2016-02 adoption	(2,499		)	—
	Beginning balance adjustment - ASU 2017-12 adoption	—			(211		)
	Net income	32,788			32,631
	Cash flow hedge fair value adjustments	(33,308		)	44,369
	Repurchase of OP Units with cash	(507		)	—
	Taxes paid on exercise of stock options	—			(314		)
	Dividends	(44,262		)	(42,474		)
	Distributions	(15,760		)	(13,086		)
	Stock-based compensation	3,300			3,503
	Ending balance	$	3,788,182		$	3,926,467

See accompanying notes to the consolidated financial statements.

9

Douglas Emmett, Inc.
Consolidated Statements of Cash Flows
(Unaudited and in thousands)

	Three Months Ended March 31,
	2019			2018
Operating Activities
Net income	$	32,788		$	32,631
Adjustments to reconcile net income to net cash provided by operating activities:
Income, including depreciation, from unconsolidated real estate funds	(1,551		)	(1,506		)
Depreciation and amortization	79,873			72,498
Net accretion of acquired lease intangibles	(4,120		)	(6,152		)
Straight-line rent	(4,369		)	(5,172		)
Increase in the allowance for doubtful accounts	1,688			1,691
Deferred loan costs amortized and written off	1,917			2,309
Amortization of loan premium	(51		)	(51		)
Amortization of stock-based compensation	2,630			3,051
Operating distributions from unconsolidated real estate funds	1,551			1,506
Change in working capital components:
Tenant receivables	(2,598		)	(1,582		)
Interest payable, accounts payable and deferred revenue	25,369			16,944
Security deposits	69			(471		)
Other assets	(707		)	1,921
Net cash provided by operating activities	132,489			117,617
Investing Activities
Capital expenditures for improvements to real estate	(46,498		)	(25,259		)
Capital expenditures for developments	(17,565		)	(11,018		)
Capital distributions from unconsolidated real estate funds	2,225			1,953
Net cash used in investing activities	(61,838		)	(34,324		)
Financing Activities
Proceeds from borrowings	72,318			485,000
Repayment of borrowings	(77,495		)	(502,808		)
Loan cost payments	(1,449		)	(2,785		)
Distributions paid to noncontrolling interests	(15,760		)	(13,085		)
Dividends paid to common stockholders	(44,263		)	(42,391		)
Taxes paid on exercise of stock options	—			(313		)
Repurchase of OP Units	(507		)	—
Net cash used in financing activities	(67,156		)	(76,382		)
Increase in cash and cash equivalents and restricted cash	3,495			6,911
Cash and cash equivalents and restricted cash - beginning balance	146,348			176,766
Cash and cash equivalents and restricted cash - ending balance	$	149,843		$	183,677

10

Douglas Emmett, Inc.
Consolidated Statements of Cash Flows
(Unaudited and in thousands)

Supplemental Cash Flows Information

	Three Months Ended March 31,
	2019			2018
Operating Activities
Cash paid for interest, net of capitalized interest	$	31,060		$	29,937
Capitalized interest paid	$	838		$	773
Non-cash Investing Transactions
Accrual for additions to real estate and developments	$	17,070		$	15,995
Capitalized stock-based compensation for improvements to real estate and developments	$	670		$	452
Removal of fully depreciated and amortized tenant improvements and lease intangibles	$	16,805		$	10,630
Removal of fully amortized acquired lease intangible assets	$	1,786		$	206
Removal of fully accreted acquired lease intangible liabilities	$	873		$	6,038
Recognition of ground lease right-of-use asset - Adoption of ASU 2016-02	$	10,887		$	—
Above-market ground lease intangible liability offset against right-of-use asset - Adoption of ASU 2016-02	$	3,408		$	—
Recognition of ground lease liability - Adoption of ASU 2016-02	$	10,887		$	—
Non-cash Financing Transactions
Gain recorded in AOCI - Adoption of ASU 2017-12 - consolidated derivatives	$	—		$	211
(Loss) gain recorded in AOCI - consolidated derivatives	$	(21,563	)	$	39,731
(Loss) gain recorded in AOCI - unconsolidated Funds' derivatives (our share)	$	(2,405	)	$	4,475
Dividends declared	$	44,262		$	42,474
Exchange of OP units for common stock	$	363		$	5,199

See accompanying notes to the consolidated financial statements.

11

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited)

1. Overview

Organization and Business Description

Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed REIT. We are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and Honolulu, Hawaii. Through our interest in our Operating Partnership and its subsidiaries, consolidated JVs and unconsolidated Funds, we focus on owning, acquiring, developing and managing a significant market share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities. The terms "us," "we" and "our" as used in the financial statements refer to Douglas Emmett, Inc. and its subsidiaries on a consolidated basis. At March 31, 2019, our Consolidated Portfolio consisted of (i) a 16.5 million square foot office portfolio, (ii) 3,642 multifamily apartment units and (iii) fee interests in two parcels of land from which we receive rent under ground leases. We also manage and own equity interests in unconsolidated Funds which, at March 31, 2019, owned an additional 1.8 million square feet of office space. We manage our unconsolidated Funds alongside our Consolidated Portfolio, and we therefore present the statistics for our office portfolio on a Total Portfolio basis. As of March 31, 2019, our portfolio (not including two parcels of land from which we receive rent under ground leases), consisted of the following office and multifamily properties (both of which include ancillary retail space):

	Consolidated Portfolio	Total Portfolio
Office
Wholly-owned properties	53	53
Consolidated JV properties	10	10
Unconsolidated Fund properties	—	8
	63	71
Multifamily
Wholly-owned properties	10	10
Total	73	81

Basis of Presentation

The accompanying financial statements are the consolidated financial statements of Douglas Emmett, Inc. and its subsidiaries, including our Operating Partnership and our consolidated JVs.  All significant intercompany balances and transactions have been eliminated in our consolidated financial statements. Our Operating Partnership and consolidated JVs are VIEs of which we are the primary beneficiary. As of March 31, 2019, the total consolidated assets, liabilities and equity of the VIEs was $8.22 billion  (of which $7.75 billion related to investment in real estate), $4.43 billion and $3.79 billion (of which $1.43 billion related to noncontrolling interests), respectively.

We report our office rental revenues and tenant recoveries on a combined basis as office Rental revenues and tenant recoveries in our consolidated statements of operations, and we reclassified the comparable periods to conform to the current period presentation.

The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in the financial statements prepared in conformity with 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 interim 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 ending December 31, 2019. The interim financial statements should be read in conjunction with the consolidated financial statements in our 2018 Annual Report on Form 10-K and the notes thereto. Any references to the number or class of properties, square footage, per square footage amounts, apartment units and geography, are outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the PCAOB.

12

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

2. Summary of Significant Accounting Policies

On January 1, 2019, we adopted ASUs that changed our accounting policy for leases. See "New Accounting Pronouncements" below. We have not made any other changes to our significant accounting policies disclosed in our 2018 Annual Report on Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Revenue Recognition

Office parking revenues, which are included in office Parking and other income in our consolidated statements of operations, are within the scope of Topic 606 (Revenue from Contracts with Customers). Our lease contracts generally make a specified number of parking spaces available to the tenant, and we bill and recognize parking revenues on a monthly basis in accordance with the lease agreements, generally using the monthly parking rates in effect at the time of billing. Office parking revenues were $26.4 million and $25.2 million for the three months ended March 31, 2019 and 2018, respectively. Office parking receivables were $1.2 million and $1.1 million as of March 31, 2019 and December 31, 2018, respectively, and are included in Tenant receivables in our consolidated balance sheets.

Income Taxes

We have elected to be taxed as a REIT under the Code. Provided that 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 that we derive through our TRS.

New Accounting Pronouncements 

Changes to GAAP are implemented by the FASB in the form of ASUs.  We consider the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not issued any other ASUs that we expect to be applicable and have a material impact on our financial statements.

ASUs Adopted

ASU 2016-02 (Topic 842 - "Leases")

In February 2016, the FASB issued ASU No. 2016-02, (Topic 842 - "Leases"). The primary impact of the ASU is the recognition of lease assets and liabilities on the balance sheet by lessees for leases classified as operating leases. The accounting applied by lessors is largely unchanged. For example, the vast majority of operating leases remain classified as operating leases, and lessors continue to recognize lease payments for those leases on a straight-line basis over the lease term.

We adopted the ASU on January 1, 2019 using the modified retrospective transition method. We recorded a cumulative adjustment of $2.5 million to the opening balance of retained earnings (accumulated deficit) for leasing expenses related to leases that were entered into before the adoption date but commenced after the adoption date. The ASU provides a practical expedient package, which we elected to use, that allows entities (a) not to reassess whether any expired or existing contracts as of the adoption date are considered or contain leases; (b) not to reassess the lease classification for any expired or existing leases as of the adoption date; and (c) not to reassess initial direct costs for any existing leases as of the adoption date. All leases entered into on or after the adoption date were accounted for under the ASU.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

We lease space to tenants at our office and multifamily properties. Under the ASU, all of our tenant leases continue to be classified as operating leases. The ASU continues to require that lease payments for operating leases be recognized over the lease term on a straight-line basis unless another systematic and rational basis is more representative of the pattern in which benefit is expected to be derived from the use of the underlying asset. If collectability of the lease payments is not probable at the commencement date, then the lease income should be limited to the lesser of the income recognized on a straight-line basis or cash basis. If the assessment of collectibility changes after the commencement date, any difference between the lease income that would have been recognized on a straight-line basis and cash basis must be recognized as a current-period adjustment to lease income.

The ASU requires separation of the lease from the non-lease components (for example, maintenance services or other activities that transfer a good or service to the customer) in a contract. Only the lease components are accounted for in accordance with the ASU. The consideration in the contract is allocated to the lease and non-lease components on a relative standalone selling price basis and the non-lease component would be accounted for in accordance with ASC 606 ("Revenue from Contracts with Customers"). In July 2018, the FASB issued ASU No. 2018-11 which includes an optional practical expedient for lessors to elect, by class of underlying asset, to not separate the lease from the non-lease components if certain criteria are met. Our office tenant leases include a lease component for the rental income and a non-lease component for the related tenant recoveries. We determined that our office tenant leases qualify for the single component presentation and we adopted the practical expedient. We account for the combined components under the ASU.

Rental revenues and tenant recoveries from our office tenant leases is included in office Rental revenues and tenant recoveries in our consolidated statements of operations. Rental revenues from our multifamily tenant leases is included in multifamily Rental revenues in our consolidated statements of operations. Rental revenue recognized on a straight-line basis in excess of billed rents is included in Deferred rent receivables in our consolidated balance sheets. See Note 14 for more information regarding the future lease rental receipts from our operating leases.

The ASU defines initial direct costs of a lease, which may be capitalized, as costs that would not have been incurred had the lease not been executed. Costs to negotiate a lease that would have been incurred regardless of whether the lease was executed, such as employee salaries, are not considered to be initial direct costs, and may not be capitalized. We historically capitalized most of our leasing costs. During the three months ended March 31, 2019, we expensed $1.1 million of leasing costs related to our tenant leases that did not qualify as initial direct costs of a lease, which are included in General and administrative expenses in our consolidated statements of operations.

We pay rent under a ground lease which expires on December 31, 2086. Upon adoption of the ASU, we continued to classify the lease as an operating lease, and we recognized a right-of-use asset for the land and a lease liability for the future lease payments of $10.9 million. We calculated the carrying value of the right-of-use asset and lease liability by discounting the future lease payments using our incremental borrowing rate. We adjusted the right-of-use asset carrying value for a related above-market ground lease liability of $3.4 million, which reduced the carrying value of the asset to $7.5 million. We continued to recognize the lease payments as expense, which is included in Office expenses in our Consolidated Statements of Operations. See Note 3 for more information regarding this ground lease. See Note 12 for the fair value disclosures related to the ground lease liability.

In December 2018, the FASB issued ASU 2018-20, an update to ASU 2016-02, which provides guidance on accounting for sales and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and nonlease components. We adopted the ASU and it did not have a material impact on our financial statements.

In March 2019, the FASB issued ASU 2019-01, an update to ASU 2016-02, which provides guidance on transition disclosures related to Topic 250 "Accounting Changes and Error Corrections" and other technical updates. We adopted the ASU and it did not have a material impact on our financial statements.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

3. Ground Lease

We pay rent under a ground lease located in Honolulu, Hawaii, which expires on December 31, 2086. The rent is fixed at $733 thousand per year until February 28, 2029, after which it will reset to the greater of the existing ground rent or market. As of March 31, 2019, the right-of-use asset carrying value of this ground lease was $7.5 million and the ground lease liability was $10.9 million. We incurred ground rent expense of $180 thousand and $183 thousand for the three months ended March 31, 2019 and 2018, respectively, which is included in Office expenses in our Consolidated Statements of Operations. The table below, which assumes that the ground rent payments will continue to be $733 thousand per year after February 28, 2029, presents the future minimum ground lease payments as of March 31, 2019:

Twelve months ending March 31:	(In thousands)
2020	$	733
2021	733
2022	733
2023	733
2024	733
Thereafter	45,995
Total future minimum lease payments	$	49,660

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

4. Acquired Lease Intangibles

Summary of our Acquired Lease Intangibles

(In thousands)	March 31, 2019			December 31, 2018
Above-market tenant leases	$	3,809		$	5,595
Above-market tenant leases - accumulated amortization	(1,658		)	(3,289		)
Above-market ground lease where we are the lessor	1,152			1,152
Above-market ground lease - accumulated amortization	(211		)	(207		)
Acquired lease intangible assets, net	$	3,092		$	3,251
Below-market tenant leases	$	111,302		$	112,175
Below-market tenant leases - accumulated accretion	(66,419		)	(63,013		)
Above-market ground lease where we are the tenant(1)	—			4,017
Above-market ground lease - accumulated accretion(1)	—			(610		)
Acquired lease intangible liabilities, net	$	44,883		$	52,569

______________________________________________

(1) Upon adoption of ASU 2016-02 on January 1, 2019 we adjusted the ground lease right-of-use asset carrying value for the carrying value of the above-market ground lease - see Notes 2 and 3.

Impact on the Consolidated Statements of Operations

The table below summarizes the net amortization/accretion related to our above- and below-market leases:

	Three Months Ended March 31,
(In thousands)	2019			2018
Net accretion of above- and below-market tenant lease assets and liabilities(1)	$	4,124		$	6,144
Amortization of an above-market ground lease asset(2)	(4		)	(4		)
Accretion of an above-market ground lease liability(3)	—			12
Total	$	4,120		$	6,152

______________________________________________

(1) Recorded as a net increase to office and multifamily rental revenues.

(2) Recorded as a decrease to office parking and other income.

(3) Recorded as a decrease to office expense. Upon adoption of ASU 2016-02 on January 1, 2019 we adjusted the ground lease right-of-use asset carrying value with the carrying value of the above-market ground lease - see Notes 2 and 3.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

5. Investments in Unconsolidated Real Estate Funds

Description of our Funds

We manage and own equity interests in three unconsolidated Funds, the Opportunity Fund, Fund X and Partnership X, through which we and investors own eight office properties totaling 1.8 million square feet. At March 31, 2019, we held direct and indirect equity interests of 6.2% of the Opportunity Fund, 71.3% of Fund X and 24.5% of Partnership X. Our Funds pay us fees and reimburse us for certain expenses related to property management and other services we provide, which are included in Other income in our consolidated statements of operations. We also receive distributions based on invested capital and on any profits that exceed certain specified cash returns to the investors. The table below presents cash distributions we received from our Funds:

	Three Months Ended March 31,
(In thousands)	2019		2018
Operating distributions received	$	1,551	$	1,506
Capital distributions received	2,225		1,953
Total distributions received	$	3,776	$	3,459

Summarized Financial Information for our Funds

The tables below present selected financial information for the Funds on a combined basis.  The amounts presented reflect 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value:

(In thousands)	March 31, 2019		December 31, 2018
Total assets	$	688,590	$	694,713
Total liabilities	$	528,032	$	525,483
Total equity	$	160,558	$	169,230

	Three Months Ended March 31,
(In thousands)	2019		2018
Total revenues	$	20,159	$	19,147
Operating income	$	5,395	$	5,566
Net income	$	1,332	$	1,434

6. Other Assets

(In thousands)	March 31, 2019		December 31, 2018
Restricted cash	$	121	$	121
Prepaid expenses	8,383		7,830
Other indefinite-lived intangibles	1,988		1,988
Furniture, fixtures and equipment, net	2,441		1,101
Other	4,154		3,719
Total other assets	$	17,087	$	14,759

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

7. Secured Notes Payable and Revolving Credit Facility, Net

Description	Maturity Date(1)	Principal Balance as of March 31, 2019			Principal Balance as of December 31, 2018			Variable Interest Rate	Fixed Interest Rate(2)	Swap Maturity Date
		(In thousands)
Wholly Owned Subsidiaries
Fannie Mae loan	10/1/2019	$	145,000		$	145,000		LIBOR + 1.25%	N/A	N/A
Term loan(3)	4/15/2022	340,000			340,000			LIBOR + 1.40%	2.77%	4/1/2020
Term loan(3)	7/27/2022	180,000			180,000			LIBOR + 1.45%	3.06%	7/1/2020
Term loan(3)	11/1/2022	400,000			400,000			LIBOR + 1.35%	2.64%	11/1/2020
Term loan(3)	6/23/2023	360,000			360,000			LIBOR + 1.55%	2.57%	7/1/2021
Term loan(3)	12/23/2023	220,000			220,000			LIBOR + 1.70%	3.62%	12/23/2021
Term loan(3)	1/1/2024	300,000			300,000			LIBOR + 1.55%	3.46%	1/1/2022
Term loan(3)	3/3/2025	335,000			335,000			LIBOR + 1.30%	3.84%	3/1/2023
Fannie Mae loan(3)	4/1/2025	102,400			102,400			LIBOR + 1.25%	2.84%	3/1/2020
Fannie Mae loan(3)	12/1/2025	115,000			115,000			LIBOR + 1.25%	2.76%	12/1/2020
Fannie Mae loan(3)	6/1/2027	550,000			550,000			LIBOR + 1.37%	3.16%	6/1/2022
Term loan(4)	6/1/2038	31,406			31,582			N/A	4.55%	N/A
Revolving credit facility(3)(5)	8/21/2023	100,000			105,000			LIBOR + 1.15%	N/A	N/A
Total Wholly Owned Subsidiary Debt		3,178,806			3,183,982
Consolidated JVs
Term loan(3)	2/28/2023	580,000			580,000			LIBOR + 1.40%	2.37%	3/1/2021
Term loan(3)	12/19/2024	400,000			400,000			LIBOR + 1.30%	3.47%	1/1/2023
Total Consolidated Debt(6)		4,158,806			4,163,982
Unamortized loan premium, net		3,935			3,986
Unamortized deferred loan costs, net		(33,470		)	(33,938		)
Total Consolidated Debt, net		$	4,129,271		$	4,134,030

___________________________________________________

Except as noted below, each loan (including our revolving credit facility) is non-recourse and secured by one or more separate collateral pools consisting of one or more properties, and requires monthly payments of interest only with the outstanding principal due upon maturity.

(1) Maturity dates include the effect of extension options.

(2) Includes the effect of interest rate swaps and excludes the effect of prepaid loan fees. See Note 9 for details of our interest rate swaps. See below for details of our loan costs.

(3) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor.

(4) Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule.

(5) In March 2019, we renewed our $400.0 million revolving credit facility, releasing two previously encumbered properties, lowering the borrowing rate and unused facility fees, and extending the maturity date. Unused commitment fees range from 0.10% to 0.15%.

(6) See Note 12 for our fair value disclosures.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Debt Statistics

The following table summarizes our fixed and floating rate debt:

(In thousands)	Principal Balance as of March 31, 2019		Principal Balance as of December 31, 2018
Aggregate swapped to fixed rate loans	$	3,882,400	$	3,882,400
Aggregate fixed rate loans	31,406		31,582
Aggregate floating rate loans	245,000		250,000
Total Debt	$	4,158,806	$	4,163,982

The following table summarizes certain debt statistics as of March 31, 2019:

Statistics for consolidated loans with interest fixed under the terms of the loan or a swap
Principal balance (in billions)	$3.91
Weighted average remaining life (including extension options)	5.2 years
Weighted average remaining fixed interest period	2.5 years
Weighted average annual interest rate	3.07%

Future Principal Payments

At March 31, 2019, the minimum future principal payments due on our secured notes payable and revolving credit facility were as follows:

Twelve months ending March 31:	Excluding Maturity Extension Options		Including Maturity Extension Options(1)
	(In thousands)
2020	$	145,727	$	145,727
2021	295,760		760
2022	300,796		796
2023	1,655,833		1,500,833
2024	680,871		980,871
Thereafter	1,079,819		1,529,819
Total future principal payments	$	4,158,806	$	4,158,806

____________________________________________

(1) Our loan agreements generally require that we meet certain minimum financial thresholds to be able to extend the loan maturity.

Loan Costs

Deferred loan costs are net of accumulated amortization of $26.1 million and $24.2 million at March 31, 2019 and December 31, 2018, respectively. The table below presents loan costs, which are included in Interest expense in our consolidated statements of operations:

	Three Months Ended March 31,
(In thousands)	2019		2018
Loan costs expensed	$	—	$	404
Deferred loan cost amortization	1,917		1,905
Total	$	1,917	$	2,309

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

8. Interest Payable, Accounts Payable and Deferred Revenue

(In thousands)	March 31, 2019		December 31, 2018
Interest payable	$	11,023	$	10,657
Accounts payable and accrued liabilities	88,585		75,111
Deferred revenue	42,731		44,386
Total interest payable, accounts payable and deferred revenue	$	142,339	$	130,154

9. Derivative Contracts

We make use of interest rate swap and cap contracts to manage the risk associated with changes in interest rates on our floating-rate debt. When we enter into a floating-rate term loan, we generally enter into an interest rate swap agreement for the equivalent principal amount, for a period covering the majority of the loan term, which effectively converts our floating-rate debt to a fixed-rate basis during that time. In limited instances, we also make use of interest rate caps to limit our exposure to interest rate increases on our floating-rate debt. We do not speculate in derivatives and we do not make use of any other derivative instruments. See Note 7 regarding our debt, and our consolidated JVs debt, that is hedged. See Note 15 regarding our unconsolidated Funds debt that is hedged.

Derivative Summary

As of March 31, 2019, all of our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Funds, were designated as cash flow hedges:

	Number of Interest Rate Swaps	Notional   (In thousands)
Consolidated derivatives(1)(3)	27	$	3,882,400
Unconsolidated Funds' derivatives(2)(3)	4	$	510,000

___________________________________________________

(1) The notional amount reflects 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2) The notional amount reflects 100%, not our pro-rata share, of our unconsolidated Funds' derivatives.

(3) See Note 12 for our derivative fair value disclosures.

Credit-risk-related Contingent Features

We have agreements with each of our interest rate swap counterparties that contain a provision under which we could also be declared in default on our derivative obligations if we default on the underlying indebtedness that we are hedging. As of March 31, 2019, there have been no events of default with respect to our interest rate swaps or our consolidated JVs' or unconsolidated Funds' interest rate swaps. We do not post collateral for our interest rate swap contract liabilities. The fair value of our interest rate swap contract liabilities, including accrued interest and excluding credit risk adjustments, were as follows:

(In thousands)	March 31, 2019		December 31, 2018
Consolidated derivatives(1)	$	5,422	$	1,681
Unconsolidated Funds' derivatives(2)	—		—

___________________________________________________

(1) Includes 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2) Our unconsolidated Funds' did not have any derivatives in a liability position.

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Counterparty Credit Risk

We are subject to credit risk from the counterparties on our interest rate swap contract assets because we do not receive collateral. We seek to minimize that risk by entering into agreements with a variety of high quality counterparties with investment grade ratings. The fair value of our interest rate swap contract assets, including accrued interest and excluding credit risk adjustments, were as follows:

(In thousands)	March 31, 2019		December 31, 2018
Consolidated derivatives(1)	$	49,807	$	76,021
Unconsolidated Funds' derivatives(2)	$	7,804	$	12,576

___________________________________________________

(1) The amounts reflect 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2) The amounts reflect 100%, not our pro-rata share, of our unconsolidated Funds' derivatives.

Impact of Hedges on AOCI and the Consolidated Statements of Operations

The table below presents the effect of our derivatives on our AOCI and the consolidated statements of operations:

(In thousands)	Three Months Ended March 31,
	2019			2018
Derivatives Designated as Cash Flow Hedges:
Consolidated derivatives:
Gain recorded in AOCI - adoption of ASU 2017-12(1)	$	—		$	211
(Loss) gain recorded in AOCI before reclassifications(1)	$	(21,563	)	$	39,731
(Gain) loss reclassified from AOCI to Interest Expense(1)	$	(8,724	)	$	(131	)
Interest Expense presented in the consolidated statements of operations	$	(33,293	)	$	(32,900	)
Unconsolidated Funds' derivatives (our share)(2):
(Loss) gain recorded in AOCI before reclassifications(1)	$	(2,405	)	$	4,475
(Gain) loss reclassified from AOCI to Income, including depreciation, from unconsolidated real estate funds(1)	$	(616	)	$	83
Income, including depreciation, from unconsolidated real estate funds presented in the consolidated statements of operations	$	1,551		$	1,506

___________________________________________________

(1) See Note 10 for our AOCI reconciliation.

(2) We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

Future Reclassifications from AOCI

At March 31, 2019, our estimate of the AOCI related to derivatives designated as cash flow hedges that will be reclassified to earnings during the next twelve months as interest rate swap payments are made is as follows:

	(In thousands)
Consolidated derivatives:
Gains to be reclassified from AOCI to Interest Expense	$	30,188
Unconsolidated Funds' derivatives (our share):
Gains to be reclassified from AOCI to Income, including depreciation, from unconsolidated real estate funds	$	2,090

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

10.  Equity

Transactions

During the three months ended March 31, 2019, we (i) acquired 22 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units and (ii) acquired 13 thousand OP Units for $507 thousand in cash.

During the three months ended March 31, 2018, we (i) acquired 322 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units and (ii) issued 14 thousand shares of our common stock for the exercise of 32 thousand stock options on a net settlement basis (net of the exercise price and related taxes).

Noncontrolling Interests

Our noncontrolling interests consist of interests in our Operating Partnership and consolidated JVs which are not owned by us. Noncontrolling interests in our Operating Partnership consist of OP Units and fully-vested LTIP Units, and represented approximately 14% of our Operating Partnership's total interests as of March 31, 2019 when we and our Operating Partnership had 170.2 million shares of common stock and 28.2 million OP Units and fully-vested LTIP Units outstanding, respectively. A share of our common stock, an OP Unit and an LTIP Unit (once vested and booked up) have essentially the same economic characteristics, sharing equally in the distributions from our Operating Partnership.  Investors who own OP Units have the right to cause our Operating Partnership to acquire their OP Units for an amount of cash per unit equal to the market value of one share of our common stock at the date of acquisition, or, at our election, exchange their OP Units for shares of our common stock on aone-for-one basis. LTIP Units have been granted to our key employees and non-employee directors as part of their compensation. These awards generally vest over a service period and once vested can generally be converted to OP Units provided our stock price increases by more than a specified hurdle.

Changes in our Ownership Interest in our Operating Partnership

The table below presents the effect on our equity from net income attributable to common stockholders and changes in our ownership interest in our Operating Partnership:

	Three Months Ended March 31,
(In thousands)	2019			2018
Net income attributable to common stockholders	$	28,701		$	28,206
Transfers from noncontrolling interests:
Exchange of OP Units with noncontrolling interests	363			5,199
Repurchase of OP Units from noncontrolling interests	(291		)	—
Net transfers from noncontrolling interests	72			5,199
Change from net income attributable to common stockholders and transfers from noncontrolling interests	$	28,773		$	33,405

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

AOCI Reconciliation⁽¹⁾ 

The table below presents a reconciliation of our AOCI, which consists solely of adjustments related to derivatives designated as cash flow hedges:

	Three Months Ended March 31,
(In thousands)	2019			2018
Beginning balance	$	53,944		$	43,099
Adoption of ASU 2017-12 - cumulative opening balance adjustment	—			211
Consolidated derivatives:
Other comprehensive (loss) income before reclassifications	(21,563		)	39,731
Reclassification of gains from AOCI to Interest Expense	(8,724		)	(131		)
Unconsolidated Funds' derivatives (our share)(2):
Other comprehensive (loss) income before reclassifications	(2,405		)	4,475
Reclassification of (gains) losses from AOCI to Income, including depreciation, from unconsolidated real estate funds	(616		)	83
Net current period OCI	(33,308		)	44,369
OCI attributable to noncontrolling interests	10,307			(13,447		)
OCI attributable to common stockholders	(23,001		)	30,922
Ending balance	$	30,943		$	74,021

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(1) See Note 9 for the details of our derivatives and Note 12 for our derivative fair value disclosures.

(2) We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

Equity Compensation

On June 2, 2016, the Douglas Emmett 2016 Omnibus Stock Incentive Plan ("2016 Plan") became effective after receiving stockholder approval, superseding our prior plan, the Douglas Emmett 2006 Omnibus Stock Incentive Plan ("2006 Plan"), both of which allow for awards to our directors, officers, employees and consultants. The key terms of the two plans are substantially identical, except for the date of expiration, the number of shares authorized for grants and various technical provisions. Grants after June 2, 2016 were awarded under the 2016 Plan, while grants prior to that date were awarded under the 2006 Plan (grants under the 2006 Plan remain outstanding according to their terms). Both plans are administered by the compensation committee of our board of directors.  

Total net stock-based compensation expense was $2.6 million and $3.1 million for the three months ended March 31, 2019 and 2018, respectively. These amounts are net of capitalized stock-based compensation of $670 thousand and $452 thousand for the three months ended March 31, 2019 and 2018, respectively. There were no outstanding options during the three months ended March 31, 2019. The intrinsic value of options exercised was $0.8 million for the three months ended March 31, 2018.

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Notes to Consolidated Financial Statements (unaudited) (continued)

11. EPS

We calculate basic EPS by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. We calculate diluted EPS by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method. We account for unvested LTIP awards that contain nonforfeitable rights to dividends as participating securities and include these securities in the computation of basic and diluted EPS using the two-class method. The table below presents the calculation of basic and diluted EPS:

	Three Months Ended March 31,
	2019			2018
Numerator (In thousands):
Net income attributable to common stockholders	$	28,701		$	28,206
Allocation to participating securities: Unvested LTIP Units	(126		)	(117		)
Numerator for basic and diluted net income attributable to common stockholders	$	28,575		$	28,089
Denominator (In thousands):
Weighted average shares of common stock outstanding - basic	170,221			169,601
Effect of dilutive securities: Stock options(1)	—			24
Weighted average shares of common stock and common stock equivalents outstanding - diluted	170,221			169,625
Basic EPS:
Net income attributable to common stockholders per share	$	0.17		$	0.17
Diluted EPS:
Net income attributable to common stockholders per share	$	0.17		$	0.17

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(1) There were no outstanding options during the three months ended March 31, 2019. The following securities were excluded from the calculation of diluted EPS because including them would be anti-dilutive to the calculation:

	Three Months Ended March 31,
(In thousands)	2019	2018
OP Units	26,340	26,943
Vested LTIP Units	1,831	800

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Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

12. Fair Value of Financial Instruments

Our estimates of the fair value of financial instruments were determined using available market information and widely used valuation methods.  Considerable judgment is necessary to interpret market data and determine an estimated fair value.  The use of different market assumptions or valuation methods may have a material effect on the estimated fair values. The FASB fair value framework hierarchy 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.  The hierarchy is as follows:

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

As of March 31, 2019, we did not have any fair value estimates of financial instruments using Level 3 inputs.

Financial instruments disclosed at fair value

Short term financial instruments:The carrying amounts for cash and cash equivalents, tenant receivables, revolving credit line, interest payable, accounts payable, security deposits and dividends payable approximate fair value because of the short-term nature of these instruments.

Secured notes payable:See Note 7 for the details of our secured notes payable. We estimate the fair value of our consolidated secured notes payable by calculating the credit-adjusted present value of the principal and interest payments for each secured note payable. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs, assumes that the loans will be outstanding through maturity, and excludes any maturity extension options. The table below presents the estimated fair value and carrying value of our secured notes payable (excluding our revolving credit facility), the carrying value includes unamortized loan premium and excludes unamortized deferred loan fees:

(In thousands)	March 31, 2019		December 31, 2018
Fair value	$	4,100,464	$	4,087,979
Carrying value	$	4,062,741	$	4,062,968

Ground lease liability:See Note 3 for the details of our ground lease. We estimate the fair value of our ground lease liability by calculating the present value of the future lease payments disclosed in Note 3 using our incremental borrowing rate. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs. The table below presents the estimated fair value and carrying value of our ground lease liability:

(In thousands)	March 31, 2019
Fair value	11,350
Carrying value	10,887

25

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

Financial instruments measured at fair value

Derivative instruments:See Note 9 for the details of our derivatives. We present our derivatives on the balance sheet at fair value, on a gross basis, excluding accrued interest.  We estimate the fair value of our derivative instruments by calculating the credit-adjusted present value of the expected future cash flows of each derivative.  The calculation incorporates the contractual terms of the derivatives, observable market interest rates which we consider to be Level 2 inputs, and credit risk adjustments to reflect the counterparty's as well as our own nonperformance risk. Our derivatives are not subject to master netting arrangements.  The table below presents the estimated fair value of our derivatives:

(In thousands)	March 31, 2019		December 31, 2018
Derivative Assets:
Fair value - consolidated derivatives(1)	$	46,880	$	73,414
Fair value - unconsolidated Funds' derivatives(2)	$	7,416	$	12,228
Derivative Liabilities:
Fair value - consolidated derivatives(1)	$	5,283	$	1,530
Fair value - unconsolidated Funds' derivatives(2)	$	—	$	—

____________________________________________________

(1) Consolidated derivatives, which include 100%, not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts in our consolidated balance sheets. The fair values exclude accrued interest which is included in interest payable in the consolidated balance sheets.

(2) Reflects 100%, not our pro-rata share, of our unconsolidated Funds' derivatives. Our pro-rata share of the amounts related to the unconsolidated Funds' derivatives is included in our Investment in unconsolidated real estate funds in our consolidated balance sheets. See Note 15 regarding our unconsolidated Funds debt and derivatives.

26

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

13. Segment Reporting

Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes.  We operate in two business segments: (i) the acquisition, development, ownership and management of office real estate and (ii) the acquisition, development, ownership and management of multifamily real estate.  The services for our office segment primarily include rental of office space and other tenant services, including parking and storage space rental.  The services 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.  General and administrative expenses and interest expense are not included in segment profit as our internal reporting addresses these items on a corporate level. The table below presents the operating activity of our reportable segments:

(In thousands)	Three Months Ended March 31,
	2019			2018
Office Segment
Total office revenues	$	197,290		$	187,333
Office expenses	(63,449		)	(60,356		)
Office segment profit	133,841			126,977
Multifamily Segment
Total multifamily revenues	26,896			24,914
Multifamily expenses	(7,555		)	(6,698		)
Multifamily segment profit	19,341			18,216
Total profit from all segments	$	153,182		$	145,193

The table below presents a reconciliation of the total profit from all segments to net income attributable to common stockholders:

(In thousands)	Three Months Ended March 31,
	2019			2018
Total profit from all segments	$	153,182		$	145,193
General and administrative expenses	(9,832		)	(9,567		)
Depreciation and amortization	(79,873		)	(72,498		)
Other income	2,898			2,630
Other expenses	(1,845		)	(1,733		)
Income, including depreciation, from unconsolidated real estate funds	1,551			1,506
Interest expense	(33,293		)	(32,900		)
Net income	32,788			32,631
Less: Net income attributable to noncontrolling interests	(4,087		)	(4,425		)
Net income attributable to common stockholders	$	28,701		$	28,206

27

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

14. Future Minimum Lease Rental Receipts

We lease space to tenants primarily under non-cancelable operating leases that generally contain provisions for a base rent plus reimbursement of certain operating expenses, and we own fee interests in two parcels of land from which we receive rent under ground leases. The table below presents the future minimum base rentals on our non-cancelable office tenant and ground leases at March 31, 2019:

Twelve months ending March 31:	(In thousands)
2020	$	648,328
2021	579,740
2022	476,073
2023	384,943
2024	290,637
Thereafter	687,219
Total future minimum base rentals(1)	$	3,066,940

_____________________________________________________

(1) Does not include (i) residential leases, which typically have a term of one year or less, (ii) holdover rent, (iii) other types of rent such as storage and antenna rent, (iv) tenant reimbursements, (v) straight- line rent, (vi) amortization/accretion of acquired above/below-market lease intangibles and (vii) percentage rents.  The amounts assume that early termination options held by tenants are not exercised.

15. Commitments, Contingencies and Guarantees

Legal Proceedings

From time to time, we are party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our 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 materially adverse effect on our business, financial condition or results of operations.

Concentration of Risk

We are subject to credit risk with respect to our tenant receivables and deferred rent receivables related to our tenant leases. Our tenants' ability to honor the terms of their respective leases remains dependent upon economic, regulatory and social factors. We seek to minimize our credit risk from our tenant leases by (i) targeting smaller, more affluent tenants, from a diverse mix of industries, (ii) performing credit evaluations of prospective tenants and (iii) obtaining security deposits or letters of credit from our tenants.  For the three months ended March 31, 2019 and 2018, no tenant accounted for more than 10% of our total revenues.  

All of our properties, including the properties of our consolidated JVs and unconsolidated Funds, are located in Los Angeles County, California and Honolulu, Hawaii, and we are therefore susceptible to adverse economic and regulatory developments, as well as natural disasters, in those markets.

We are subject to credit risk with respect to our interest rate swap counterparties that we use to manage the risk associated with our floating rate debt. We do not post or receive collateral with respect to our swap transactions. See Note 9 for the details of our interest rate contracts. We seek to minimize our credit risk by entering into agreements with a variety of high quality counterparties with investment grade ratings.

We have significant cash balances invested in a variety of short-term money market funds that are intended to preserve principal value and maintain a high degree of liquidity while providing current income. These investments are not insured against loss of principal and there is no guarantee that our investments in these funds will be redeemable at par value. We also have significant cash balances in bank accounts with high quality financial institutions with investment grade ratings.  Interest bearing bank accounts at each U.S. banking institution are insured by the FDIC up to $250 thousand.

28

Douglas Emmett, Inc.

Notes to Consolidated Financial Statements (unaudited) (continued)

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 have identified twenty-eight buildings in our Consolidated Portfolio and four buildings owned by our unconsolidated Funds which contain asbestos, and would have to be removed in compliance with applicable environmental regulations if these properties are demolished or undergo major renovations.  As of March 31, 2019, the obligations to remove the asbestos from these properties if they were demolished or undergo major renovations have indeterminable settlement dates, and we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation. As of March 31, 2019, the obligations to remove the asbestos from properties that are currently undergoing major renovations, or that we plan to renovate in the future, are not material to our financial statements.

Development and Other Contracts

In West Los Angeles, we are building a high-rise apartment building with 376 apartments. In downtown Honolulu, we are converting a 25 story, 490,000 square foot office tower into approximately 500 rental apartments. We expect the conversion to occur in phases over a number of years as the office space is vacated. As of March 31, 2019, we had an aggregate remaining contractual commitment for these and other development projects of approximately $192.0 million. As of March 31, 2019, we had an aggregate remaining contractual commitment for repositionings, capital expenditure projects and tenant improvements of approximately $40.2 million.

Guarantees

We have made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve- outs for our unconsolidated Funds' debt. We have also guaranteed the related swaps. Our Funds have agreed to indemnify us for any amounts that we would be required to pay under these agreements. As of March 31, 2019, all of the obligations under the related debt and swap agreements have been performed in accordance with the terms of those agreements. The table below summarizes our Funds' debt as of March 31, 2019. The amounts represent 100% (not our pro-rata share) of the amounts related to our Funds:

Fund(1)	Loan Maturity Date	Principal Balance (In Millions)		Variable Interest Rate	Swap Fixed Interest Rate	Swap Maturity Date
Partnership X(2)(4)	3/1/2023	$	110.0	LIBOR + 1.40%	2.30%	3/1/2021
Fund X(3)(4)	7/1/2024	400.0		LIBOR + 1.65%	3.44%	7/1/2022
		$	510.0

___________________________________________________

(1) See Note 5 for more information regarding our unconsolidated Funds.

(2) Floating rate term loan, swapped to fixed, which is secured by two properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of March 31, 2019, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $1.9 million.

(3) Floating rate term loan, swapped to fixed, which is secured by six properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of March 31, 2019, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $23.6 million. Loan agreement includes the requirement to purchase an interest rate cap if one-month LIBOR equals or exceeds 3.56% for fourteen consecutive days after the related swap matures.

(4) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor.

29

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

The following discussion should be read in conjunction with our consolidated financial statements and related notes in Part I, Item 1 of this Report, and our Forward Looking Statements disclaimer.

Business Description

Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed REIT. Through our interest in our Operating Partnership and its subsidiaries, our consolidated JVs and our unconsolidated Funds, 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. We focus on owning, acquiring, developing and managing a substantial share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities. As of March 31, 2019, our portfolio consisted of the following:

	Consolidated Portfolio(1)	Total Portfolio(2)
Office
Class A Properties(3)	63	71
Rentable Square Feet (in thousands)(4)	16,527	18,367
Leased rate	91.9%	91.8%
Occupied rate	90.4%	90.3%
Multifamily
Properties(3)	10	10
Units	3,642	3,642
Leased rate	99.6%	99.6%
Occupied rate	97.4%	97.4%

______________________________________________________________________

(1) Our Consolidated Portfolio includes the properties in our consolidated results. Through our subsidiaries, we own 100% of these properties except for ten office properties totaling 2.8 million square feet, which we own through three consolidated JVs. Our Consolidated Portfolio also includes two land parcels from which we receive ground rent from ground leases to the owners of a Class A office building and a hotel.

(2) Our Total Portfolio includes our Consolidated Portfolio as well as eight properties totaling 1.8 million square feet owned by our unconsolidated Funds. See Note 5 to our consolidated financial statements in Item 1 of this Report for more information about our unconsolidated Funds.

(3) Our office and multifamily portfolios include ancillary retail space.

(4) During the three months ended March 31, 2019, we removed approximately 122,000 rentable square feet of vacant space at an office building we are converting to residential apartments.

Annualized rent

As of March 31, 2019, annualized rent from our Consolidated Portfolio was derived as follows:

____

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Financings, Developments and Repositionings

Financings

• In March 2019, we renewed our $400 million revolving credit facility, releasing two previously encumbered properties, lowering the borrowing rate and unused facility fees, and extending the maturity date. The renewed facility bears interest at LIBOR + 1.15% and matures on August 21, 2023. See Note 7 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt.

Developments

• In West Los Angeles, we are building a 34 story high-rise apartment building with 376 apartments. The tower is being built on a site that is directly adjacent to our existing office building and a 712 unit residential property that we own. We expect the cost of the development to be approximately $180.0 million to $200.0 million, which does not include the cost of the land which we have owned since 1997. As part of the project, we are investing additional capital to build a one acre park on Wilshire Boulevard that will be available to the public and provide a valuable amenity to our surrounding properties and community. We expect construction to take about 3 years.

• At our Moanalua Hillside Apartments in Honolulu, we completed the construction of an additional 491 new apartments on 28 acres which now join our existing 680 apartments. We also invested additional capital to upgrade the existing buildings, improve the parking and landscaping, built a new leasing and management office, and constructed a new fitness center and two pools.

• In downtown Honolulu, we are converting a 25 story, 490 thousand square foot office tower into approximately 500 rental apartments. We expect the conversion to occur in phases over a number of years as the office space is vacated. We currently estimate the construction costs to be approximately $80.0 million to $100.0 million, although the inherent uncertainties of development are compounded by the multi-year and phased nature of the conversion. Assuming timely approvals, we expect the first units to be delivered in 2020. This project will help address the severe shortage of rental housing in Honolulu and revitalize the central business district.

Repositionings

We often strategically purchase properties with large vacancies or expected near-term lease roll-over and use our knowledge of the property and submarket to reposition the property for the optimal use and tenant mix. The work we undertake to reposition a building typically takes months or even years, and could involve a range of improvements from a complete structural renovation to a targeted remodeling of selected spaces. We generally select a property for repositioning at the time we purchase it, although repositioning efforts can also occur at properties that we already own. During the repositioning, the affected property may display depressed rental revenue and occupancy levels which impacts our results and, therefore, comparisons of our performance from period to period.

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Rental Rate Trends - Total Portfolio

Office Rental Rates

The table below presents the average annual rental rate per leased square foot and the annualized lease transaction costs per leased square foot for leases executed in our total office portfolio:

	Three Months Ended	Year Ended December 31,
	March 31, 2019	2018	2017	2016	2015
Average straight-line rental rate(1)(2)	$45.52	$48.77	$44.48	$43.21	$42.65
Annualized lease transaction costs(3)	$5.34	$5.80	$5.68	$5.74	$4.77

___________________________________________________

(1) Because straight-line rent takes into account the full economic value of each lease, including rent concessions and escalations, we believe that it may provide a better comparison than ending cash rents, which include the impact of the annual escalations over the entire term of the lease. However, care should be taken in any comparison, as the averages are often significantly affected from period to period by factors such as the buildings, submarkets, and types of space and terms involved in the leases executed during the respective reporting period.

(2) Reflects the weighted average straight-line Annualized Rent.

(3) Reflects the weighted average leasing commissions and tenant improvement allowances divided by the weighted average number of years for the leases. Excludes leases substantially negotiated by the seller in the case of acquired properties and leases for tenants relocated from space being taken out of service.

Office Rent Roll

The table below presents the rent roll for new and renewed leases per leased square foot executed in our total office portfolio during the three months ended March 31, 2019:

Rent Roll (1)(2)	Starting Cash Rent	Straight-line Rent	Expiring Cash Rent
Leases signed during the period	$44.21	$45.52	N/A
Prior leases for the same space	$36.62	$37.78	$40.54
Percentage change	20.7%	20.5%	9.1%	(3)

___________________________________________________

(1) Represents the average initial stabilized cash and straight-line rents on new and renewal leases signed during the quarter compared to the prior lease on the same space, excluding Short-Term Leases, leases where the prior lease was terminated more than a year before signing of the new lease, leases for tenants relocated from space being taken out of service, and leases in acquired buildings where we believe the information about the prior agreement is incomplete or where we believe base rent reflects other off-market inducements to the tenant that are not reflected in the prior lease document.

(2) Our office rent roll can fluctuate from period to period as a result of changes in our submarkets, buildings and term of the expiring leases, making these metrics difficult to predict.

(3) The percentage change for expiring cash rent represents the comparison between the starting cash rent on leases executed during the respective period and the expiring cash rent on the prior leases for the same space.

32

Multifamily Rental Rates

The table below presents the average annual rental rate per leased unit for new tenants.

	Three Months Ended	Year Ended December 31,
	March 31, 2019	2018	2017	2016	2015
Average annual rental rate - new tenants(1)	$26,951	$27,542	$28,613	$28,435	$27,936

_____________________________________________________

(1) These average rental rates are not directly comparable from year to year because of changes in the properties and units included. In particular, in 2018 and 2019 we added a significant number of units with our Moanalua Hillside Apartments development in Honolulu, where the rental rates are lower than the average in our portfolio.

Multifamily Rent Roll

The rent on leases subject to rent change during the three months ended March 31, 2019 (new tenants and existing tenants undergoing annual rent review) was 1.4%higher than the prior rent on the same unit.

Occupancy Rates - Total Portfolio

The tables below present the occupancy rates for our total office portfolio and multifamily portfolio:

		December 31,
Occupancy Rates(1) as of:	March 31, 2019	2018	2017	2016	2015
Office portfolio	90.3%	90.3%	89.8%	90.4%	91.2%
Multifamily portfolio(2)	97.4%	97.0%	96.4%	97.9%	98.0%

	Three Months Ended	Year Ended December 31,
Average OccupancyRates(1)(3):	March 31, 2019	2018	2017	2016	2015
Office portfolio	90.3%	89.4%	89.5%	90.6%	90.9%
Multifamily portfolio(2)	97.2%	96.6%	97.2%	97.6%	98.2%

___________________________________________________

(1) Occupancy rates include the impact of property acquisitions, most of whose occupancy rates at the time of acquisition were below that of our existing portfolio.

(2) The occupancy rate for our multifamily portfolio was impacted during 2019 and 2018 by the new units that we were leasing at our Moanalua Hillside Apartments development in Honolulu - see "Financings, Developments and Repositionings" above.

(3) Average occupancy rates are calculated by averaging the occupancy rates at the end of each of the quarters in the period and at the end of the quarter immediately prior to the start of the period.

33

Office Lease Expirations

As of March 31, 2019, assuming non-exercise of renewal options and early termination rights, we expect to see expiring square footage in our total office portfolio as follows:

____________________________________________________

(1) Average of the percentage of leases at March 31, 2016, 2017, 2018 with the same remaining duration as the leases for the labeled year had at March 31, 2019. Acquisitions are included in the prior year average commencing in the quarter after the acquisition.

34

Results of Operations

Comparison of three months ended March 31, 2019 to three months ended March 31, 2018

	2019		2018		Favorable (Unfavorable)			Percentage		Commentary
	(In thousands)
Revenues
Office rental revenue and tenant recoveries	$	167,235	$	158,824	$	8,411		5.3	%	The increase was due to an increase in rental revenues of $5.8 million and an increase in tenant recoveries of $2.6 million. The increase in rental revenues was primarily due to an increase in occupancy and rental rates. The increase in tenant recoveries was due to an increase in recoverable operating costs.
Office parking and other income	$	30,055	$	28,509	$	1,546		5.4	%	The increase was primarily due to an increase in occupancy.
Multifamily revenue	$	26,896	$	24,914	$	1,982		8.0	%	The increase was primarily due to an increase in rental revenues of $1.8 million, of which $1.0 million was due to an increase in revenues from new apartments at our Moanalua Hillside Apartments development and $0.8 million which was due to an increase in revenues from other residential properties. The increase from the other residential properties was due to an increase in occupancy and rental rates.
Operating expenses
Office rental expenses	$	63,449	$	60,356	$	(3,093	)	(5.1	)%	The increase was primarily due to an increase in property taxes, utility expenses, repairs and maintenance and scheduled services expenses.
Multifamily rental expenses	$	7,555	$	6,698	$	(857	)	(12.8	)%	The increase was primarily due to an increase of $0.3 million from new apartments at our Moanalua Hillside Apartments development and an increase of $0.5 million from other residential properties. The increase from the other residential properties was primarily due to an increase in utility expenses, property and excise taxes, scheduled services expenses and personnel expenses.
General and administrative expenses	$	9,832	$	9,567	$	(265	)	(2.8	)%	The increase was primarily due to an increase in leasing expenses partially offset by a decrease in personnel expenses.
Depreciation and amortization	$	79,873	$	72,498	$	(7,375	)	(10.2	)%	The increase was primarily due to activity at our repositioning properties and an increase in investment in real estate balances.

35

	2019			2018			Favorable (Unfavorable)			Percentage		Commentary
	(In thousands)
Non-Operating Income and Expenses
Other income	$	2,898		$	2,630		$	268		10.2	%	The increase was primarily due to an increase in interest income due to higher money market interest rates.
Other expenses	$	(1,845	)	$	(1,733	)	$	(112	)	(6.5	)%	The increase was primarily due an increase in expenses from the health club that we own and operate.
Income, including depreciation, from unconsolidated real estate funds	$	1,551		$	1,506		$	45		3.0	%	The increase was primarily due to an increase in net income for our unconsolidated Funds, which was primarily due to an increase in revenues as a result of an increase in occupancy and rental rates.
Interest expense	$	(33,293	)	$	(32,900	)	$	(393	)	(1.2	)%	The increase was primarily due to a higher balance on our revolving credit facility and higher interest rates.

36

Non-GAAP Supplemental Financial Measure: FFO

Usefulness to Investors

We report FFO because it is a widely reported measure of the performance of equity REITs, and is also used by some investors to identify trends in occupancy rates, rental rates and operating costs from year to year, and to compare our performance with other REITs. FFO is a non-GAAP financial measure for which we believe that net income is the most directly comparable GAAP financial measure. FFO has limitations as a measure of our performance because it excludes depreciation and amortization of real estate, and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures, tenant improvements and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations. FFO should be considered only as a supplement to net income as a measure of our performance and should not be used as a measure of our liquidity or cash flow, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends. Other REITs may not calculate FFO in accordance with the NAREIT definition and, accordingly, our FFO may not be comparable to the FFO of other REITs. See "Results of Operations" above for a discussion of the items that impacted our net income.

Comparison of three months ended March 31, 2019 to three months ended March 31, 2018

For the three months ended March 31, 2019, FFO increased by $7.1 million, or 7.4%, to $103.1 million, compared to $96.0 million for the three months ended March 31, 2018. The increase was primarily due to (i) an increase in operating income from our office and residential portfolios due to an increase in occupancy and rental rates, and (ii) the leasing of new units at our Moanalua Hillside Apartments development.

Reconciliation to GAAP

The table below reconciles our FFO (the FFO attributable to our common stockholders and noncontrolling interests in our Operating Partnership - which includes our share of our consolidated JVs and our unconsolidated Funds FFO) to net income attributable to common stockholders computed in accordance with GAAP:

	Three Months Ended March 31,
(In thousands)	2019			2018
Net income attributable to common stockholders	$	28,701		$	28,206
Depreciation and amortization of real estate assets	79,873			72,498
Net income attributable to noncontrolling interests	4,087			4,425
Adjustments attributable to unconsolidated Funds(1)	4,514			4,097
Adjustments attributable to consolidated JVs(2)	(14,077		)	(13,242		)
FFO	$	103,098		$	95,984

_______________________________________________

(1) Adjusts for our share of our unconsolidated Funds depreciation and amortization of real estate assets.

(2) Adjusts for the net income and depreciation and amortization of real estate assets that is attributable to the noncontrolling interests in our consolidated JVs.

37

Non-GAAP Supplemental Financial Measure: Same Property NOI

Usefulness to Investors

We report Same Property NOI to facilitate a comparison of our operations between reported periods. Many investors use Same Property NOI to evaluate our operating performance and to compare our operating performance with other REITs, because it can reduce the impact of investing transactions on operating trends. NOI is a non-GAAP financial measure for which we believe that net income is the most directly comparable GAAP financial measure.  We report NOI because it is a widely recognized measure of the performance of equity REITs, and is used by some investors to identify trends in occupancy rates, rental rates and operating costs and to compare our operating performance with that of other REITs.  NOI has limitations as a measure of our performance because it excludes depreciation and amortization expense, and captures neither the changes in the value of our properties that result from use or market conditions, nor the level of capital expenditures, tenant improvements and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results from operations. Other REITs may not calculate Same Property NOI in the same manner. As a result, our Same Property NOI may not be comparable to the Same Property NOI of other REITs. Same Property NOI should be considered only as a supplement to net income as a measure of our performance and should not be used as a measure of our liquidity or cash flow, nor is it indicative of funds available to fund our cash needs, including our ability to pay dividends.

Comparison of three months ended March 31, 2019 to three months ended March 31, 2018

As of March 31, 2019, our Same Properties included 59 office properties, aggregating 15.3 million Rentable Square Feet, and 9 multifamily properties with an aggregate 2,640 units. The amounts presented include 100% (not our pro-rata share).

	Three Months Ended March 31,						Favorable
	2019			2018			(Unfavorable)			Percentage		Commentary
	(In thousands)
Office revenues	$	181,989		$	170,977		$	11,012		6.4	%	The increase was primarily due to an increase in occupancy and rental rates, and an increase in tenant recoveries reflecting an increase in recoverable operating costs.
Office expenses	(56,952		)	(54,280		)	(2,672		)	(4.9	)%	The increase was primarily due to an increase in property taxes, and utility, repairs and maintenance, scheduled services and personnel expenses.
Office NOI	125,037			116,697			8,340			7.1	%
Multifamily revenues	21,526			20,845			681			3.3	%	The increase was primarily due to an increase in occupancy and rental rates.
Multifamily expenses	(5,602		)	(5,330		)	(272		)	(5.1	)%	The increase was primarily due to an increase in utility, personnel, repairs and maintenance and scheduled services expenses.
Multifamily NOI	15,924			15,515			409			2.6	%
Total NOI	$	140,961		$	132,212		$	8,749		6.6	%

38

Reconciliation to GAAP

The table below presents a reconciliation of our Same Property NOI to net income attributable to common stockholders:

	Three Months Ended March 31,
(In thousands)	2019			2018
Same Property NOI	$	140,961		$	132,212
Non-comparable office revenues	15,301			16,356
Non-comparable office expenses	(6,497		)	(6,076		)
Non-comparable multifamily revenues	5,370			4,069
Non-comparable multifamily expenses	(1,953		)	(1,368		)
NOI	153,182			145,193
General and administrative expenses	(9,832		)	(9,567		)
Depreciation and amortization	(79,873		)	(72,498		)
Operating income	63,477			63,128
Other income	2,898			2,630
Other expenses	(1,845		)	(1,733		)
Income, including depreciation, from unconsolidated real estate funds	1,551			1,506
Interest expense	(33,293		)	(32,900		)
Net income	32,788			32,631
Less: Net income attributable to noncontrolling interests	(4,087		)	(4,425		)
Net income attributable to common stockholders	$	28,701		$	28,206

Liquidity and Capital Resources

Short-term liquidity

Excluding acquisitions, development projects and debt refinancings, we expect to meet our short-term liquidity requirements through cash on hand, cash generated by operations and our revolving credit facility.  See Note 7 to our consolidated financial statements in Item 1 of this Report for more information regarding our revolving credit facility.

Long-term liquidity

Our long-term liquidity needs consist primarily of funds necessary to pay for acquisitions, development projects and debt refinancings. We do not expect to have sufficient funds on hand to cover these long-term cash requirements due to the requirement to distribute a substantial majority of our income on an annual basis imposed by REIT federal tax rules. We plan to meet our long-term liquidity needs through long-term secured non-recourse indebtedness, the issuance of equity securities, including common stock and OP Units, as well as property dispositions and JV transactions. We have an ATM program which would allow us, subject to market conditions, to sell up to $400 million of shares of common stock as of the date of this Report.

To mitigate the impact of changing interest rates on our cash flows from operations, we generally enter into interest rate swap agreements with respect to our loans with floating interest rates.  These swap agreements generally expire between one to two years before the maturity date of the related loan, during which time we can refinance the loan without any interest penalty. See Notes 7 and 9 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt and derivative contracts, respectively.  

39

Contractual Obligations

See Note 3 to our consolidated financial statements in Item 1 of this Report for information regarding our minimum future ground lease payments, Note 7 for information regarding our minimum future principal payments due on our secured notes payable and revolving credit facility, as well as the interest rates that determine our future periodic interest payments, and Note 15 for information regarding our contractual obligations related to our developments, capital expenditure projects and repositionings.

Off-Balance Sheet Arrangements

Unconsolidated Funds Debt

Our unconsolidated Funds have their own secured non-recourse debt, and we have made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve-outs related to those loans. We have also guaranteed the related swaps. Our Funds have agreed to indemnify us for any amounts that we would be required to pay under these agreements. As of March 31, 2019, all of the obligations under the respective loans and swap agreements have been performed in accordance with the terms of those agreements. See Note 15 to our consolidated financial statements in Item 1 of this Report.

Cash Flows

Comparison of three months ended March 31, 2019 to three months ended March 31, 2018

	Three Months Ended March 31,						Increase
	2019			2018			(Decrease)			Percentage
	(In thousands)
Net cash provided by operating activities(1)	$	132,489		$	117,617		$	14,872		12.6	%
Net cash used in investing activities(2)	$	(61,838	)	$	(34,324	)	$	27,514		80.2	%
Net cash used in financing activities(3)	$	(67,156	)	$	(76,382	)	$	(9,226	)	(12.1	)%

___________________________________________________

(1) Our cash flows provided by operating activities are primarily dependent upon the occupancy and rental rates of our portfolio, the collectability of rent and recoveries from our tenants, and the level of our operating expenses and general and administrative expenses, and interest expense.  The increase was primarily due to (i) an increase in operating income from our office and residential portfolios due to an increase in occupancy and rental rates, and (ii) the leasing of new units at our Moanalua Hillside Apartments development.

(2) Our cash flows used in investing activities is generally used to fund property acquisitions, developments and redevelopment projects, and Recurring and non-Recurring Capital Expenditures. The increase was primarily due to an increase of $27.8 million in capital expenditures for improvements to real estate and developments.

(3) Our cash flows used in financing activities are generally impacted by our borrowings and capital activities, as well as dividends and distributions paid to common stockholders and noncontrolling interests, respectively.  The decrease was primarily due to a decrease of $12.6 million in net repayments of borrowings.

Critical Accounting Policies

We adopted an ASU during the period covered by this Report that changed our accounting policy for leases - see Note 2 to our consolidated financial statements in Item 1 of this Report for a discussion of new accounting pronouncements. We have not made any other changes during the period covered by this Report to our critical accounting policies disclosed in our 2018 Annual Report on Form 10-K. Our discussion and analysis of our financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP, and which requires us to make estimates of certain items, which affect the reported amounts of our assets, liabilities, revenues and expenses. While we believe that our estimates are based upon reasonable assumptions and judgments at the time that they are made, some of our estimates could prove to be incorrect, and those differences could be material. Some of our estimates are subject to adjustment as we believe appropriate, based on revised estimates, and reconciliation to actual results when available.

40

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

We use derivative instruments to hedge interest rate risk related to our floating rate borrowings. However, our use of these instruments exposes us to credit risk from the potential inability of our counterparties to perform under the terms of those agreements. We attempt to minimize this credit risk by contracting with a variety of high-quality financial counterparties. See Notes 7 and 9 to our consolidated financial statements in Item 1 of this Report for more information regarding our debt and derivatives. At March 31, 2019, 5.9% of our consolidated debt was unhedged floating rate debt. A fifty-basis point change in the one month USD LIBOR interest rate would result in an annual impact to our earnings (through interest expense) of  $1.2 million. We calculate interest sensitivity by multiplying the amount of unhedged floating rate debt by fifty-basis points.

In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee ("ARRC") has proposed that the Secured Overnight Financing Rate ("SOFR") is the rate that represents best practice as the alternative to USD-LIBOR for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR. Our floating rate borrowings and derivative instruments are indexed to USD-LIBOR and we are monitoring this activity and evaluating the related risks.

Item 4.  Controls and Procedures

As of March 31, 2019, the end of the period covered by this Report, we carried out an evaluation, under the supervision and with the participation of management, including our CEO and CFO, regarding the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) at the end of the period covered by this Report. Based on the foregoing, our CEO and CFO concluded, as of that time, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our CEO and our CFO, as appropriate, to allow for timely decisions regarding required disclosure.

There have not been any changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2019, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

41

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our 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 materially adverse effect on our business, financial condition or results of operations.

Item 1A.  Risk Factors

Except for any additional relevant information disclosed in our public reports during 2019, we are not aware of any other material changes to the risk factors disclosed in Part I, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2018.

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

None.

Item 3.  Defaults Upon Senior Securities

None.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

In Exhibit 99.1 to our Current Report on Form 8-K filed November 8, 2018 (the “Tax Disclosures”), we made certain tax disclosures which were incorporated by reference into the following registration statements that we have filed with the Securities and Exchange Commission:

(1) Registration Statement on Form S-3 (No. 333-147483) of Douglas Emmett, Inc. filed with the SEC on November 16, 2007;

(2) Registration Statement on Form S-3 (No. 333-219731) of Douglas Emmett, Inc. filed with the SEC on August 4, 2017 (the “August 4, 2017 Registration Statement”); and

(3) Registration Statement on Form S-8 (No. 333-212129) pertaining to the Douglas Emmett, Inc. 2016 Omnibus Stock Incentive Plan filed with the SEC on June 20, 2016.

Because we have changed our tax counsel, as set forth below we are amending the Tax Disclosures to reflect that change in counsel and the date of its opinion.

United States Federal Income Tax Considerations Update

The information in the following paragraph hereby supersedes and replaces the information included under the second paragraph under the heading “Material U.S. Federal Income Tax Considerations-Taxation of Our Company” in the Tax Disclosures:

“Fried, Frank, Harris, Shriver & Jacobson LLP (“Fried Frank”) has acted as our tax counsel in connection with the Base Prospectus and our election to be taxed as a REIT. Fried Frank has rendered an opinion to us, as of May 6, 2019, to the effect that, commencing with our taxable year ended December 31, 2015, we have been organized and have operated in conformity with the requirements for qualification and taxation as a REIT under the Code, and our proposed method of operation will enable us to continue to meet the requirements for qualification and taxation as a REIT under the Code. It must be emphasized that this opinion was based on various assumptions and representations as to factual matters, including representations made by us in a factual certificate provided by one of our officers. In addition, this opinion was based upon our factual representations set forth in the Base Prospectus. Moreover, our qualification and taxation as a REIT depend upon our ability to meet the various qualification tests imposed under the Code, which are discussed below, including

42

through actual operating results, asset composition, distribution levels and diversity of stock ownership, the results of which have not been and will not be reviewed by Fried Frank. Accordingly, no assurance can be given that our actual results of operation for any particular taxable year have satisfied or will satisfy those requirements. Further, the anticipated U.S. federal income tax treatment described herein may be changed, perhaps retroactively, by legislative, administrative or judicial action at any time. Fried Frank has no obligation to update its opinion subsequent to the date of such opinion.”

Conforming Changes

To make conforming changes arising from the aforementioned tax section updates, the information in the following paragraph hereby supersedes and replaces the information included under the heading “Validity of Securities” in the prospectus dated August 4, 2017 that forms a part of the August 4, 2017 Registration Statement:

“Unless otherwise indicated in the applicable prospectus supplement, the validity of any securities we issue under this prospectus will be passed upon for us by Venable LLP, Baltimore, Maryland. In addition, the description of material federal income tax consequences contained in this prospectus under the heading “Material U.S. Federal Income Tax Considerations” is based upon the opinion of Fried, Frank, Harris, Shriver & Jacobson LLP, Washington, DC.”

Similarly, to make additional conforming changes, the information in the following paragraph hereby supersedes and replaces the information included under the heading “Legal Matters” in the prospectus supplement dated November 20, 2018 filed by the Company pursuant to Rule 424(b) under the Securities Act of 1933, as amended:

“Venable LLP, Baltimore, Maryland, will pass upon certain matters relating to this offering for us, and Manatt, Phelps & Phillips, LLP, Los Angeles, California, is acting as our counsel in this offering. Fried, Frank, Harris, Shriver & Jacobson LLP, Washington, DC, is acting as our tax counsel in this offering. Certain legal matters will be passed upon for the Agents by Latham & Watkins LLP, Los Angeles, California. Additional or replacement counsel, if any, used by us or the Agents in this offering will be named in a prospectus supplement or other filing incorporated by reference into this prospectus supplement that specifically references this offering.”

Finally, Exhibit 8.1 to this Report hereby supersedes and replaces Exhibit 8.1 that was filed as an exhibit to the August 4, 2017 Registration Statement.

Item 6.  Exhibits

Exhibit Number	Description
8.1	Opinion of Fried, Frank, Harris, Shriver & Jacobson LLP
23.1	Consent of Fried, Frank, Harris, Shriver & Jacobson LLP (contained in the opinion filed as Exhibit 8.1 hereto)
31.1	Certificate of CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certificate of CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certificate of CEO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certificate of CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.

________________________________________________

* In accordance with SEC Release No. 33-8212, these exhibits are being furnished, and are not being filed as part of this Report on Form 10-Q or as a separate disclosure document, and are not being incorporated by reference into any Securities Act registration statement.

43

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		DOUGLAS EMMETT, INC.
Date:	May 6, 2019	By:	/s/ JORDAN L. KAPLAN
			Jordan L. Kaplan
			President and CEO
Date:	May 6, 2019	By:	/s/ PETER D. SEYMOUR
			Peter D. Seymour
			CFO

44

EX-8.1

	Exhibit 8.1
Fried, Frank, Harris, Shriver & Jacobson LLP 801 17th Street, NW Washington, DC 20006 Tel:    +1.202.639.7000 Fax:    +1.202.639.7003 www.friedfrank.com

May 6, 2019

Douglas Emmett, Inc.

1299 Ocean Avenue, Suite 1000

Santa Monica, CA 90401

Re: Douglas Emmett, Inc.

Ladies and Gentlemen:

We have acted as tax counsel to Douglas Emmett, Inc., a Maryland corporation (the “Company”), in connection with (i) the Company’s registration statement on Form S-3 under the Securities Act of 1933, as amended (the “Act”), filed with the United States Securities and Exchange Commission (the “Commission”) on August 4, 2017 (as so filed and together with the attachments thereto and all documents incorporated by reference therein and all amendments thereto, the “Registration Statement”), (ii) a base prospectus dated August 4, 2017 contained in the Registration Statement (together with the discussion under the heading “Material U.S. Federal Income Tax Considerations” in Exhibit 99.1 to the Company’s Current Report on Form 8-K (the “Current Report”) filed with the Commission on November 8, 2018, the “Base Prospectus”), (iii) a prospectus supplement dated November 20, 2017 (together with the Base Prospectus, the “Prospectus”) and (iv) the Company’s quarterly report on Form 10-Q filed with the Commission on the date hereof (the “Q1 2019 Quarterly Report”). You have provided us with a draft of the Q1 2019 Quarterly Report in the form in which it will be filed with the Commission.

You have requested our opinion concerning certain of the federal income tax considerations relating to the Company, including with respect to its election to be taxed as a real estate investment trust (a “REIT”).

Bases for Opinion

The opinion set forth in this letter is based on relevant current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations thereunder (including proposed and temporary Treasury Regulations), and interpretations of the foregoing as expressed in court decisions, applicable legislative history, and the administrative rulings and practices of the Internal Revenue Service (the “IRS”), including its practices and policies in issuing private letter rulings, which are not binding on the IRS except with respect to a taxpayer that receives such a ruling, all as of the date hereof. These provisions and interpretations are subject to change by the IRS, Congress and the courts (as applicable), which may or may not be retroactive in effect and which might result in material modifications of our opinion. We assume no obligation to advise you of any such subsequent changes. Our opinion does not foreclose the possibility of a contrary determination by the IRS or a court of competent jurisdiction, or of a contrary position taken by the IRS or the Treasury Department in regulations or rulings issued in the future. In this regard, an opinion of counsel with respect to an issue represents counsel’s best professional judgment with respect to the outcome on the merits with respect to such issue, if such issue were to be litigated, but an opinion is not binding on the IRS or the courts, and is not a guarantee that the IRS will not assert a contrary position with respect to such issue or that a court will not sustain such a position asserted by the IRS.

New York Washington London Frankfurt

Fried, Frank, Harris, Shriver & Jacobson LLP is a Delaware Limited Liability Partnership

Fried, Frank, Harris, Shriver & Jacobson LLP

Douglas Emmett, Inc.

May 6, 2019

Page 2

The opinion set forth in this letter is also based on various facts and assumptions, including the facts set forth in the Registration Statement and the Prospectus concerning the business, assets and governing documents of the Company and its subsidiaries. We have also been furnished with, and with your consent have relied on, certain written representations made by the Company and its subsidiaries with respect to certain factual matters through a certificate of an officer of the Company dated as of the date hereof (the “Officer’s Certificate” and together with the documents referred to in the preceding sentence, the “Reviewed Documents”).

In our capacity as tax counsel to the Company, we have made such legal and factual examinations and inquiries, including an examination of originals or copies certified or otherwise identified to our satisfaction of such documents, corporate records and other instruments as we have deemed necessary or appropriate for purposes of this opinion. For purposes of rendering our opinion, we have not made an independent investigation or audit of the facts set forth in the Reviewed Documents, including the Registration Statement or the Officer’s Certificate. We consequently have relied upon the representations and statements of the Company as described in the Reviewed Documents, and assumed that the information presented in such documents or otherwise furnished to us is accurate and complete in all material respects. In this regard, we have assumed with your consent the following:

1. all of the factual representations and statements set forth in the Reviewed Documents and the Officer’s Certificate are true, correct, and complete in all material respects as of the date hereof;

2. any representation or statement in the Reviewed Documents and the Officer’s Certificate made as a belief or made “to the knowledge of” or similarly qualified is correct and accurate in all material respects as of the date hereof, without such qualification;

3. each agreement described in the Reviewed Documents is valid, binding and enforceable in accordance with its terms;

4. each of the obligations of the Company and its subsidiaries, as described in the Reviewed Documents and the Officer’s Certificate, has been or will be performed or satisfied in accordance with its terms;

5. the genuineness of all signatures, the proper execution of all documents, the authenticity of all documents submitted to us as originals, the conformity to originals of documents submitted to us as copies, and the authenticity of the originals from which any copies were made;

6. any documents as to which we have reviewed only a form or draft were or will be duly executed without material changes from the form or draft reviewed by us; and

7. the Company was organized and operated in conformity with the requirements for qualification and taxation as a REIT under the Code for each of its taxable years beginning with its taxable year ended December 31, 2006, and through its taxable year ended December 31, 2014.

Any material variation or difference in the facts from those set forth in the documents that we have reviewed and upon which we have relied (including, in particular, the Prospectus and the Officer’s Certificate) may adversely affect the conclusions stated herein.

Opinion

Based upon, subject to, and limited by the assumptions and qualifications set forth herein and in the Registration Statement, the Prospectus, and the Officer’s Certificate, we are of the opinion that:

1. the Company has been organized and has operated in conformity with the requirements for qualification and taxation as a REIT under the Code for each of its taxable years beginning with its taxable year ended December 31, 2015, and the Company’s current organization and current and proposed method of operation (as defined in the Registration Statement, the Prospectus, and the Officer’s Certificate) will enable it to continue to meet the requirements for qualification and taxation as a REIT under the Code for its taxable year ending December 31, 2019, and future taxable years; and

New York Washington London Frankfurt

Fried, Frank, Harris, Shriver & Jacobson LLP is a Delaware Limited Liability Partnership

Fried, Frank, Harris, Shriver & Jacobson LLP

Douglas Emmett, Inc.

May 6, 2019

Page 3

2. the statements in Exhibit 99.1 to the Current Report under the heading “Material U.S. Federal Income Tax Considerations,” as updated by the Q1 2019 Quarterly Report, insofar as such statements purport to summarize matters of U.S. federal income tax laws or legal conclusions with respect thereto, and subject to the limitations, qualifications and assumptions set forth therein, fairly and accurately summarize in all material respects the matters set forth therein.

This opinion letter addresses only the specific U.S. federal income tax matters set forth above and does not address any other U.S. federal, state or local or non-U.S. tax issues. No opinion is expressed as to any matter not discussed herein. Furthermore, the Company’s qualification as a REIT will depend upon the Company’s meeting, in its actual operations, the applicable asset composition, source of income, shareholder diversification, distribution and other requirements of the Code and Treasury Regulations necessary for a corporation to qualify as a REIT. In addition, the opinion set forth above does not foreclose the possibility that the Company may have to pay a deficiency dividend, or an excise or penalty tax, which could be significant in amount, in order to maintain its REIT qualification.

Moreover, we have not participated in the preparation of the Registration Statement, except with respect to the statements in Exhibit 99.1 to the Current Report under the heading “Material Federal Income Tax Considerations,” as updated by the Q1 2019 Quarterly Report, and we do not assume any responsibility for, and make no representation that we have independently verified, the accuracy, completeness, or fairness of the statements contained in the Registration Statement, except to the extent described above with respect to the statements in Exhibit 99.1 to the Current Report under the heading “Material Federal Income Tax Considerations,” as updated by the Q1 2019 Quarterly Report.

This opinion is rendered only to you and is solely for your benefit in connection with the Registration Statement and the filing of the Q1 2019 Quarterly Report. This opinion may not be used for any other purpose without our prior written consent. We assume no obligation by reason of this opinion letter or otherwise to advise you of any changes in our opinion subsequent to the date hereof.

We hereby consent to the filing of this opinion as Exhibit 8.1 to the Q1 2019 Quarterly Report and to the reference to Fried, Frank, Harris, Shriver & Jacobson LLP in the Q1 2019 Quarterly Report under the headings “Material U.S. Federal Income Tax Considerations” and “Legal Matters.” In giving such consent we do not admit that we are in the category of persons whose consent is required under Section 7 of the Act or the rules and regulations of the Commission thereunder

Very truly yours,

/s/ Fried, Frank, Harris, Shriver & Jacobson LLP

FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP

New York Washington London Frankfurt

Fried, Frank, Harris, Shriver & Jacobson LLP is a Delaware Limited Liability Partnership

EX-31.1

EXHIBIT 31.1

CEO Certification

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

I, Jordan L. Kaplan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Douglas Emmett, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a

material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;    

3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying 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:	May 6, 2019	By:	/s/ JORDAN L. KAPLAN
			Jordan L. Kaplan
			President and CEO

EX-31.2

EXHIBIT 31.2

CFO Certification

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

I, Peter D. Seymour, certify that: 

1. I have reviewed this Quarterly Report on Form 10-Q of Douglas Emmett, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying 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:	May 6, 2019	By:	/s/ PETER D. SEYMOUR
			Peter D. Seymour
			CFO

EX-32.1

EXHIBIT 32.1

OFFICERS’ CERTIFICATIONS

CEO Certification

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Douglas Emmett, Inc. (the “Company”), hereby certifies, to such officer’s knowledge, that:

(i) the accompanying quarterly report on Form 10-Q of the Company for the period ended March 31, 2019 (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:	May 6, 2019	By:	/s/ JORDAN L. KAPLAN
			Jordan L. Kaplan
			President and CEO

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

EX-32.2

EXHIBIT 32.2

OFFICERS’ CERTIFICATIONS

CFO Certification

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Douglas Emmett, Inc. (the “Company”), hereby certifies, to such officer’s knowledge, that:

(i) the accompanying quarterly report on Form 10-Q of the Company for the period ended March 31, 2019 (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:	May 6, 2019	By:	/s/ PETER D. SEYMOUR
			Peter D. Seymour
			CFO

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. §1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 29, 2019
Document And Entity Information [Abstract]
Entity Registrant Name	Douglas Emmett Inc
Entity Central Index Key	0001364250
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Entity Emerging Growth Company	false
Entity Small Business	false
Amendment Flag	false
Entity Common Stock, Shares Outstanding		170,284,515

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Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investment in real estate:
Land	$ 1,067,639	$ 1,065,099
Buildings and improvements	8,088,899	7,995,203
Tenant improvements and lease intangibles	847,471	840,653
Property under development	57,527	129,753
Investment in real estate, gross	10,061,536	10,030,708
Less: accumulated depreciation and amortization	(2,309,901)	(2,246,887)
Investment in real estate, net	7,751,635	7,783,821
Ground lease right-of-use asset	7,483
Cash and cash equivalents	149,722	146,227
Tenant receivables, net	5,281	4,371
Deferred rent receivables, net	129,203	124,834
Acquired lease intangible assets, net	3,092	3,251
Interest rate contract assets	46,880	73,414
Investment in unconsolidated real estate funds	105,526	111,032
Other assets	17,087	14,759
Total Assets	8,215,909	8,261,709
Liabilities
Secured notes payable and revolving credit facility, net	4,129,271	4,134,030
Ground lease liability	10,887
Interest payable, accounts payable and deferred revenue	142,339	130,154
Security deposits	50,802	50,733
Acquired lease intangible liabilities, net	44,883	52,569
Interest rate contract liabilities	5,283	1,530
Dividends payable	44,262	44,263
Total liabilities	4,427,727	4,413,279
Douglas Emmett, Inc. stockholders' equity:
Common Stock, $0.01 par value, 750,000,000 authorized, 170,237,122 and 170,214,809 outstanding at March 31, 2019 and December 31, 2018, respectively	1,702	1,702
Additional paid-in capital	3,282,388	3,282,316
Accumulated other comprehensive income	30,943	53,944
Accumulated deficit	(953,335)	(935,630)
Total Douglas Emmett, Inc. stockholders' equity	2,361,698	2,402,332
Noncontrolling interests	1,426,484	1,446,098
Total equity	3,788,182	3,848,430
Total Liabilities and Equity	$ 8,215,909	$ 8,261,709

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Common Stock, par value (usd per share)	$ 0.01	$ 0.01
Common Stock, authorized (in shares)	750,000,000	750,000,000
Common Stock, outstanding (in shares)	170,237,122	170,214,809

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Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Revenues	$ 224,186	$ 212,247
Operating Expenses
General and administrative expenses	9,832	9,567
Depreciation and amortization	79,873	72,498
Total operating expenses	160,709	149,119
Operating income	63,477	63,128
Other income	2,898	2,630
Other expenses	(1,845)	(1,733)
Income, including depreciation, from unconsolidated real estate funds	1,551	1,506
Interest expense	(33,293)	(32,900)
Net income	32,788	32,631
Less: Net income attributable to noncontrolling interests	(4,087)	(4,425)
Net income attributable to common stockholders	$ 28,701	$ 28,206
Net income attributable to common stockholders per share – basic (usd per share)	$ 0.17	$ 0.17
Net income attributable to common stockholders per share – diluted (usd per share)	0.17	0.17
Dividends declared per common share (usd per share)	$ 0.26	$ 0.25
Office rental
Revenues
Revenues	$ 197,290	$ 187,333
Operating Expenses
Operating expenses	63,449	60,356
Office rental | Rental revenues and tenant recoveries
Revenues
Revenues	167,235	158,824
Office rental | Parking and other income
Revenues
Revenues	30,055	28,509
Multifamily rental
Revenues
Revenues	26,896	24,914
Operating Expenses
Operating expenses	7,555	6,698
Multifamily rental | Rental revenues
Revenues
Revenues	24,893	23,061
Multifamily rental | Parking and other income
Revenues
Revenues	$ 2,003	$ 1,853

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 32,788	$ 32,631
Other comprehensive (loss) income: cash flow hedges	(33,308)	44,369
Comprehensive (loss) income	(520)	77,000
Less: Comprehensive loss (income) attributable to noncontrolling interests	6,220	(17,872)
Comprehensive income attributable to common stockholders	$ 5,700	$ 59,128

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Consolidated Statements of Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	AOCI	Accumulated Deficit	Noncontrolling Interests
Beginning balance (in shares) at Dec. 31, 2017		169,565,000
Stockholders' Equity [Roll Forward]
Exchange of OP units for common stock (in shares)	322,000	322,000
Exercise of stock options (in shares)	32,000	14,000
Ending balance (in shares) at Mar. 31, 2018		169,901,000
Beginning balance at Dec. 31, 2017	$ 3,902,049	$ 1,696	$ 3,272,539	$ 43,099	$ (879,810)	$ 1,464,525
Stockholders' Equity [Roll Forward]
Exchange of OP units for common stock		3	5,196			(5,199)
Net income	32,631					4,425
Cash flow hedge fair value adjustments	44,369			30,922		13,447
Repurchase of OP Units with cash	0					0
Taxes paid on exercise of stock options	(314)		(314)
Net income attributable to common stockholders	28,206				28,206
Dividends	(42,474)				(42,474)
Distributions	(13,086)					(13,086)
Stock-based compensation	3,503					3,503
Ending balance at Mar. 31, 2018	$ 3,926,467	$ 1,699	3,277,421	74,021	(894,289)	1,467,615
Beginning balance (in shares) at Dec. 31, 2018	170,214,809	170,215,000
Stockholders' Equity [Roll Forward]
Exchange of OP units for common stock (in shares)	22,000	22,000
Ending balance (in shares) at Mar. 31, 2019	170,237,122	170,237,000
Beginning balance at Dec. 31, 2018	$ 3,848,430	$ 1,702	3,282,316	53,944	(935,630)	1,446,098
Stockholders' Equity [Roll Forward]
Exchange of OP units for common stock			363			(363)
Net income	32,788					4,087
Cash flow hedge fair value adjustments	(33,308)			(23,001)		(10,307)
Repurchase of OP Units with cash	(507)		(291)			(216)
Taxes paid on exercise of stock options	0		0
Net income attributable to common stockholders	28,701				28,701
Dividends	(44,262)				(44,262)
Distributions	(15,760)					(15,760)
Stock-based compensation	3,300					3,300
Ending balance at Mar. 31, 2019	$ 3,788,182	$ 1,702	$ 3,282,388	$ 30,943	$ (953,335)	$ 1,426,484

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating Activities
Net income	$ 32,788	$ 32,631
Adjustments to reconcile net income to net cash provided by operating activities:
Income, including depreciation, from unconsolidated real estate funds	(1,551)	(1,506)
Depreciation and amortization	79,873	72,498
Net accretion of acquired lease intangibles	(4,120)	(6,152)
Straight-line rent	(4,369)	(5,172)
Increase in the allowance for doubtful accounts	1,688	1,691
Deferred loan costs amortized and written off	1,917	2,309
Amortization of loan premium	(51)	(51)
Amortization of stock-based compensation	2,630	3,051
Operating distributions from unconsolidated real estate funds	1,551	1,506
Change in working capital components:
Tenant receivables	(2,598)	(1,582)
Interest payable, accounts payable and deferred revenue	25,369	16,944
Security deposits	69	(471)
Other assets	(707)	1,921
Net cash provided by operating activities	132,489	117,617
Investing Activities
Capital expenditures for improvements to real estate	(46,498)	(25,259)
Capital expenditures for developments	(17,565)	(11,018)
Capital distributions from unconsolidated real estate funds	2,225	1,953
Net cash used in investing activities	(61,838)	(34,324)
Financing Activities
Proceeds from borrowings	72,318	485,000
Repayment of borrowings	(77,495)	(502,808)
Loan cost payments	(1,449)	(2,785)
Distributions paid to noncontrolling interests	(15,760)	(13,085)
Dividends paid to common stockholders	(44,263)	(42,391)
Taxes paid on exercise of stock options	0	(313)
Repurchase of OP Units	(507)	0
Net cash used in financing activities	(67,156)	(76,382)
Increase in cash and cash equivalents and restricted cash	3,495	6,911
Cash and cash equivalents and restricted cash - beginning balance	146,348	176,766
Cash and cash equivalents and restricted cash - ending balance	149,843	183,677
Operating Activities
Cash paid for interest, net of capitalized interest	31,060	29,937
Capitalized interest paid	838	773
Non-cash Investing Transactions
Accrual for additions to real estate and developments	17,070	15,995
Capitalized stock-based compensation for improvements to real estate and developments	670	452
Removal of fully depreciated and amortized tenant improvements and lease intangibles	16,805	10,630
Removal of fully amortized acquired lease intangible assets	1,786	206
Removal of fully accreted acquired lease intangible liabilities	873	6,038
Recognition of ground lease right-of-use asset - Adoption of ASU 2016-02	10,887
Above-market ground lease intangible liability offset against right-of-use asset - Adoption of ASU 2016-02	3,408
Recognition of ground lease liability - Adoption of ASU 2016-02	10,887
Non-cash Financing Transactions
Gain recorded in AOCI - Adoption of ASU 2017-12 - consolidated derivatives	0	211
Gain (loss) recorded in AOCI - derivatives	(21,563)	39,731
Dividends declared	44,262	42,474
Exchange of OP units for common stock	363	5,199
Unconsolidated Funds
Non-cash Financing Transactions
Gain (loss) recorded in AOCI - derivatives	$ (2,405)	$ 4,475

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Overview

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Overview

Overview

Organization and Business Description

Douglas Emmett, Inc. is a fully integrated, self-administered and self-managed REIT. We are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and Honolulu, Hawaii. Through our interest in our Operating Partnership and its subsidiaries, consolidated JVs and unconsolidated Funds, we focus on owning, acquiring, developing and managing a significant market share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities. The terms "us," "we" and "our" as used in the financial statements refer to Douglas Emmett, Inc. and its subsidiaries on a consolidated basis. At March 31, 2019, our Consolidated Portfolio consisted of (i) a 16.5 million square foot office portfolio, (ii) 3,642 multifamily apartment units and (iii) fee interests in two parcels of land from which we receive rent under ground leases. We also manage and own equity interests in unconsolidated Funds which, at March 31, 2019, owned an additional 1.8 million square feet of office space. We manage our unconsolidated Funds alongside our Consolidated Portfolio, and we therefore present the statistics for our office portfolio on a Total Portfolio basis. As of March 31, 2019, our portfolio (not including two parcels of land from which we receive rent under ground leases), consisted of the following office and multifamily properties (both of which include ancillary retail space):

	Consolidated Portfolio	Total Portfolio
Office
Wholly-owned properties	53	53
Consolidated JV properties	10	10
Unconsolidated Fund properties	—	8
	63	71
Multifamily
Wholly-owned properties	10	10
Total	73	81

Basis of Presentation

The accompanying financial statements are the consolidated financial statements of Douglas Emmett, Inc. and its subsidiaries, including our Operating Partnership and our consolidated JVs.  All significant intercompany balances and transactions have been eliminated in our consolidated financial statements. Our Operating Partnership and consolidated JVs are VIEs of which we are the primary beneficiary. As of March 31, 2019, the total consolidated assets, liabilities and equity of the VIEs was $8.22 billion  (of which $7.75 billion related to investment in real estate), $4.43 billion and $3.79 billion (of which $1.43 billion related to noncontrolling interests), respectively.

We report our office rental revenues and tenant recoveries on a combined basis as office Rental revenues and tenant recoveries in our consolidated statements of operations, and we reclassified the comparable periods to conform to the current period presentation.

The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in the financial statements prepared in conformity with 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 interim 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 ending December 31, 2019. The interim financial statements should be read in conjunction with the consolidated financial statements in our 2018 Annual Report on Form 10-K and the notes thereto. Any references to the number or class of properties, square footage, per square footage amounts, apartment units and geography, are outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the PCAOB.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

On January 1, 2019, we adopted ASUs that changed our accounting policy for leases. See "New Accounting Pronouncements" below. We have not made any other changes to our significant accounting policies disclosed in our 2018 Annual Report on Form 10-K.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Revenue Recognition

Office parking revenues, which are included in office Parking and other income in our consolidated statements of operations, are within the scope of Topic 606 (Revenue from Contracts with Customers). Our lease contracts generally make a specified number of parking spaces available to the tenant, and we bill and recognize parking revenues on a monthly basis in accordance with the lease agreements, generally using the monthly parking rates in effect at the time of billing. Office parking revenues were $26.4 million and $25.2 million for the three months ended March 31, 2019 and 2018, respectively. Office parking receivables were $1.2 million and $1.1 million as of March 31, 2019 and December 31, 2018, respectively, and are included in Tenant receivables in our consolidated balance sheets.

Income Taxes

We have elected to be taxed as a REIT under the Code. Provided that 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 that we derive through our TRS.

New Accounting Pronouncements 

Changes to GAAP are implemented by the FASB in the form of ASUs.  We consider the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not issued any other ASUs that we expect to be applicable and have a material impact on our financial statements.

ASUs Adopted

ASU 2016-02 (Topic 842 - "Leases")

In February 2016, the FASB issued ASU No. 2016-02, (Topic 842 - "Leases"). The primary impact of the ASU is the recognition of lease assets and liabilities on the balance sheet by lessees for leases classified as operating leases. The accounting applied by lessors is largely unchanged. For example, the vast majority of operating leases remain classified as operating leases, and lessors continue to recognize lease payments for those leases on a straight-line basis over the lease term.

We adopted the ASU on January 1, 2019 using the modified retrospective transition method. We recorded a cumulative adjustment of $2.5 million to the opening balance of retained earnings (accumulated deficit) for leasing expenses related to leases that were entered into before the adoption date but commenced after the adoption date. The ASU provides a practical expedient package, which we elected to use, that allows entities (a) not to reassess whether any expired or existing contracts as of the adoption date are considered or contain leases; (b) not to reassess the lease classification for any expired or existing leases as of the adoption date; and (c) not to reassess initial direct costs for any existing leases as of the adoption date. All leases entered into on or after the adoption date were accounted for under the ASU.

We lease space to tenants at our office and multifamily properties. Under the ASU, all of our tenant leases continue to be classified as operating leases. The ASU continues to require that lease payments for operating leases be recognized over the lease term on a straight-line basis unless another systematic and rational basis is more representative of the pattern in which benefit is expected to be derived from the use of the underlying asset. If collectability of the lease payments is not probable at the commencement date, then the lease income should be limited to the lesser of the income recognized on a straight-line basis or cash basis. If the assessment of collectibility changes after the commencement date, any difference between the lease income that would have been recognized on a straight-line basis and cash basis must be recognized as a current-period adjustment to lease income.

The ASU requires separation of the lease from the non-lease components (for example, maintenance services or other activities that transfer a good or service to the customer) in a contract. Only the lease components are accounted for in accordance with the ASU. The consideration in the contract is allocated to the lease and non-lease components on a relative standalone selling price basis and the non-lease component would be accounted for in accordance with ASC 606 ("Revenue from Contracts with Customers"). In July 2018, the FASB issued ASU No. 2018-11 which includes an optional practical expedient for lessors to elect, by class of underlying asset, to not separate the lease from the non-lease components if certain criteria are met. Our office tenant leases include a lease component for the rental income and a non-lease component for the related tenant recoveries. We determined that our office tenant leases qualify for the single component presentation and we adopted the practical expedient. We account for the combined components under the ASU.

Rental revenues and tenant recoveries from our office tenant leases is included in office Rental revenues and tenant recoveries in our consolidated statements of operations. Rental revenues from our multifamily tenant leases is included in multifamily Rental revenues in our consolidated statements of operations. Rental revenue recognized on a straight-line basis in excess of billed rents is included in Deferred rent receivables in our consolidated balance sheets. See Note 14 for more information regarding the future lease rental receipts from our operating leases.

The ASU defines initial direct costs of a lease, which may be capitalized, as costs that would not have been incurred had the lease not been executed. Costs to negotiate a lease that would have been incurred regardless of whether the lease was executed, such as employee salaries, are not considered to be initial direct costs, and may not be capitalized. We historically capitalized most of our leasing costs. During the three months ended March 31, 2019, we expensed $1.1 million of leasing costs related to our tenant leases that did not qualify as initial direct costs of a lease, which are included in General and administrative expenses in our consolidated statements of operations.

We pay rent under a ground lease which expires on December 31, 2086. Upon adoption of the ASU, we continued to classify the lease as an operating lease, and we recognized a right-of-use asset for the land and a lease liability for the future lease payments of $10.9 million. We calculated the carrying value of the right-of-use asset and lease liability by discounting the future lease payments using our incremental borrowing rate. We adjusted the right-of-use asset carrying value for a related above-market ground lease liability of $3.4 million, which reduced the carrying value of the asset to $7.5 million. We continued to recognize the lease payments as expense, which is included in Office expenses in our Consolidated Statements of Operations. See Note 3 for more information regarding this ground lease. See Note 12 for the fair value disclosures related to the ground lease liability.

In December 2018, the FASB issued ASU 2018-20, an update to ASU 2016-02, which provides guidance on accounting for sales and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and nonlease components. We adopted the ASU and it did not have a material impact on our financial statements.

In March 2019, the FASB issued ASU 2019-01, an update to ASU 2016-02, which provides guidance on transition disclosures related to Topic 250 "Accounting Changes and Error Corrections" and other technical updates. We adopted the ASU and it did not have a material impact on our financial statements.

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Ground Lease

3 Months Ended

Mar. 31, 2019

Lessee Disclosure [Abstract]

Ground Lease

Ground Lease

We pay rent under a ground lease located in Honolulu, Hawaii, which expires on December 31, 2086. The rent is fixed at $733 thousand per year until February 28, 2029, after which it will reset to the greater of the existing ground rent or market. As of March 31, 2019, the right-of-use asset carrying value of this ground lease was $7.5 million and the ground lease liability was $10.9 million. We incurred ground rent expense of $180 thousand and $183 thousand for the three months ended March 31, 2019 and 2018, respectively, which is included in Office expenses in our Consolidated Statements of Operations. The table below, which assumes that the ground rent payments will continue to be $733 thousand per year after February 28, 2029, presents the future minimum ground lease payments as of March 31, 2019:

Twelve months ending March 31:	(In thousands)
2020	$	733
2021	733
2022	733
2023	733
2024	733
Thereafter	45,995
Total future minimum lease payments	$	49,660

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Investment in Real Estate

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Investment in Real Estate

Investment in Real Estate

We account for our property acquisitions as asset acquisitions. The acquired properties results of operations are included in our results of operations from the respective acquisition dates. During the nine months ended March 31, 2019, we did not purchase any properties. During the three months ended March 31, 2018, a consolidated JV that we manage and in which we own an equity interest acquired three Class A office properties. The table below summarizes the purchase price allocations for the acquisitions. The contract and purchase prices differ due to prorations and similar matters:

(In thousands)	1299 Ocean			429 Santa Monica			9665 Wilshire
Submarket	Santa Monica			Santa Monica			Beverly Hills
Acquisition date	April 25			April 25			July 20
Contract price	$	275,800		$	77,000		$	177,000
Building square footage	206			87			171
Investment in real estate:
Land	$	22,748		$	4,949		$	5,568
Buildings and improvements	260,188			69,286			175,960
Tenant improvements and lease intangibles	5,010			3,248			1,112
Acquired above- and below-market leases, net	(10,683		)	(722		)	(4,339		)
Net assets and liabilities acquired	$	277,263		$	76,761		$	178,301

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Acquired Lease Intangibles

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Acquired Lease Intangibles

Acquired Lease Intangibles

Summary of our Acquired Lease Intangibles

(In thousands)	March 31, 2019			December 31, 2018
Above-market tenant leases	$	3,809		$	5,595
Above-market tenant leases - accumulated amortization	(1,658		)	(3,289		)
Above-market ground lease where we are the lessor	1,152			1,152
Above-market ground lease - accumulated amortization	(211		)	(207		)
Acquired lease intangible assets, net	$	3,092		$	3,251
Below-market tenant leases	$	111,302		$	112,175
Below-market tenant leases - accumulated accretion	(66,419		)	(63,013		)
Above-market ground lease where we are the tenant(1)	—			4,017
Above-market ground lease - accumulated accretion(1)	—			(610		)
Acquired lease intangible liabilities, net	$	44,883		$	52,569

______________________________________________

(1) Upon adoption of ASU 2016-02 on January 1, 2019 we adjusted the ground lease right-of-use asset carrying value for the carrying value of the above-market ground lease - see Notes 2 and 3.

Impact on the Consolidated Statements of Operations

The table below summarizes the net amortization/accretion related to our above- and below-market leases:

	Three Months Ended March 31,
(In thousands)	2019			2018
Net accretion of above- and below-market tenant lease assets and liabilities(1)	$	4,124		$	6,144
Amortization of an above-market ground lease asset(2)	(4		)	(4		)
Accretion of an above-market ground lease liability(3)	—			12
Total	$	4,120		$	6,152

______________________________________________

(1) Recorded as a net increase to office and multifamily rental revenues.

(2) Recorded as a decrease to office parking and other income.

(3) Recorded as a decrease to office expense. Upon adoption of ASU 2016-02 on January 1, 2019 we adjusted the ground lease right-of-use asset carrying value with the carrying value of the above-market ground lease - see Notes 2 and 3.

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Investments in Unconsolidated Real Estate Funds

3 Months Ended

Mar. 31, 2019

Real Estate Investments, Net [Abstract]

Investments In Unconsolidated Real Estate Funds

Investments in Unconsolidated Real Estate Funds

Description of our Funds

We manage and own equity interests in three unconsolidated Funds, the Opportunity Fund, Fund X and Partnership X, through which we and investors own eight office properties totaling 1.8 million square feet. At March 31, 2019, we held direct and indirect equity interests of 6.2% of the Opportunity Fund, 71.3% of Fund X and 24.5% of Partnership X. Our Funds pay us fees and reimburse us for certain expenses related to property management and other services we provide, which are included in Other income in our consolidated statements of operations. We also receive distributions based on invested capital and on any profits that exceed certain specified cash returns to the investors. The table below presents cash distributions we received from our Funds:

	Three Months Ended March 31,
(In thousands)	2019		2018
Operating distributions received	$	1,551	$	1,506
Capital distributions received	2,225		1,953
Total distributions received	$	3,776	$	3,459

Summarized Financial Information for our Funds

The tables below present selected financial information for the Funds on a combined basis.  The amounts presented reflect 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value:

(In thousands)	March 31, 2019		December 31, 2018
Total assets	$	688,590	$	694,713
Total liabilities	$	528,032	$	525,483
Total equity	$	160,558	$	169,230

	Three Months Ended March 31,
(In thousands)	2019		2018
Total revenues	$	20,159	$	19,147
Operating income	$	5,395	$	5,566
Net income	$	1,332	$	1,434

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Other Assets

3 Months Ended

Mar. 31, 2019

Other Assets [Abstract]

Other Assets

Other Assets

(In thousands)	March 31, 2019		December 31, 2018
Restricted cash	$	121	$	121
Prepaid expenses	8,383		7,830
Other indefinite-lived intangibles	1,988		1,988
Furniture, fixtures and equipment, net	2,441		1,101
Other	4,154		3,719
Total other assets	$	17,087	$	14,759

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Secured Notes Payable and Revolving Credit Facility, Net

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Secured Notes Payable and Revolving Credit Facility, Net

Secured Notes Payable and Revolving Credit Facility, Net

Description	Maturity Date(1)	Principal Balance as of March 31, 2019			Principal Balance as of December 31, 2018			Variable Interest Rate	Fixed Interest Rate(2)	Swap Maturity Date
		(In thousands)
Wholly Owned Subsidiaries
Fannie Mae loan	10/1/2019	$	145,000		$	145,000		LIBOR + 1.25%	N/A	N/A
Term loan(3)	4/15/2022	340,000			340,000			LIBOR + 1.40%	2.77%	4/1/2020
Term loan(3)	7/27/2022	180,000			180,000			LIBOR + 1.45%	3.06%	7/1/2020
Term loan(3)	11/1/2022	400,000			400,000			LIBOR + 1.35%	2.64%	11/1/2020
Term loan(3)	6/23/2023	360,000			360,000			LIBOR + 1.55%	2.57%	7/1/2021
Term loan(3)	12/23/2023	220,000			220,000			LIBOR + 1.70%	3.62%	12/23/2021
Term loan(3)	1/1/2024	300,000			300,000			LIBOR + 1.55%	3.46%	1/1/2022
Term loan(3)	3/3/2025	335,000			335,000			LIBOR + 1.30%	3.84%	3/1/2023
Fannie Mae loan(3)	4/1/2025	102,400			102,400			LIBOR + 1.25%	2.84%	3/1/2020
Fannie Mae loan(3)	12/1/2025	115,000			115,000			LIBOR + 1.25%	2.76%	12/1/2020
Fannie Mae loan(3)	6/1/2027	550,000			550,000			LIBOR + 1.37%	3.16%	6/1/2022
Term loan(4)	6/1/2038	31,406			31,582			N/A	4.55%	N/A
Revolving credit facility(3)(5)	8/21/2023	100,000			105,000			LIBOR + 1.15%	N/A	N/A
Total Wholly Owned Subsidiary Debt		3,178,806			3,183,982
Consolidated JVs
Term loan(3)	2/28/2023	580,000			580,000			LIBOR + 1.40%	2.37%	3/1/2021
Term loan(3)	12/19/2024	400,000			400,000			LIBOR + 1.30%	3.47%	1/1/2023
Total Consolidated Debt(6)		4,158,806			4,163,982
Unamortized loan premium, net		3,935			3,986
Unamortized deferred loan costs, net		(33,470		)	(33,938		)
Total Consolidated Debt, net		$	4,129,271		$	4,134,030

___________________________________________________

Except as noted below, each loan (including our revolving credit facility) is non-recourse and secured by one or more separate collateral pools consisting of one or more properties, and requires monthly payments of interest only with the outstanding principal due upon maturity.

(1) Maturity dates include the effect of extension options.

(2) Includes the effect of interest rate swaps and excludes the effect of prepaid loan fees. See Note 9 for details of our interest rate swaps. See below for details of our loan costs.

(3) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor.

(4) Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule.

(5) In March 2019, we renewed our $400.0 million revolving credit facility, releasing two previously encumbered properties, lowering the borrowing rate and unused facility fees, and extending the maturity date. Unused commitment fees range from 0.10% to 0.15%.

(6) See Note 12 for our fair value disclosures.

Debt Statistics

The following table summarizes our fixed and floating rate debt:

(In thousands)	Principal Balance as of March 31, 2019		Principal Balance as of December 31, 2018
Aggregate swapped to fixed rate loans	$	3,882,400	$	3,882,400
Aggregate fixed rate loans	31,406		31,582
Aggregate floating rate loans	245,000		250,000
Total Debt	$	4,158,806	$	4,163,982

The following table summarizes certain debt statistics as of March 31, 2019:

Statistics for consolidated loans with interest fixed under the terms of the loan or a swap
Principal balance (in billions)	$3.91
Weighted average remaining life (including extension options)	5.2 years
Weighted average remaining fixed interest period	2.5 years
Weighted average annual interest rate	3.07%

Future Principal Payments

At March 31, 2019, the minimum future principal payments due on our secured notes payable and revolving credit facility were as follows:

Twelve months ending March 31:	Excluding Maturity Extension Options		Including Maturity Extension Options(1)
	(In thousands)
2020	$	145,727	$	145,727
2021	295,760		760
2022	300,796		796
2023	1,655,833		1,500,833
2024	680,871		980,871
Thereafter	1,079,819		1,529,819
Total future principal payments	$	4,158,806	$	4,158,806

____________________________________________

(1) Our loan agreements generally require that we meet certain minimum financial thresholds to be able to extend the loan maturity.

Loan Costs

Deferred loan costs are net of accumulated amortization of $26.1 million and $24.2 million at March 31, 2019 and December 31, 2018, respectively. The table below presents loan costs, which are included in Interest expense in our consolidated statements of operations:

	Three Months Ended March 31,
(In thousands)	2019		2018
Loan costs expensed	$	—	$	404
Deferred loan cost amortization	1,917		1,905
Total	$	1,917	$	2,309

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Interest Payable, Accounts Payable and Deferred Revenue

3 Months Ended

Mar. 31, 2019

Accounts Payable and Accrued Liabilities [Abstract]

Interest Payable, Accounts Payable and Deferred Revenue

Interest Payable, Accounts Payable and Deferred Revenue

(In thousands)	March 31, 2019		December 31, 2018
Interest payable	$	11,023	$	10,657
Accounts payable and accrued liabilities	88,585		75,111
Deferred revenue	42,731		44,386
Total interest payable, accounts payable and deferred revenue	$	142,339	$	130,154

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Derivative Contracts

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Contracts

Derivative Contracts

We make use of interest rate swap and cap contracts to manage the risk associated with changes in interest rates on our floating-rate debt. When we enter into a floating-rate term loan, we generally enter into an interest rate swap agreement for the equivalent principal amount, for a period covering the majority of the loan term, which effectively converts our floating-rate debt to a fixed-rate basis during that time. In limited instances, we also make use of interest rate caps to limit our exposure to interest rate increases on our floating-rate debt. We do not speculate in derivatives and we do not make use of any other derivative instruments. See Note 7 regarding our debt, and our consolidated JVs debt, that is hedged. See Note 15 regarding our unconsolidated Funds debt that is hedged.

Derivative Summary

As of March 31, 2019, all of our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Funds, were designated as cash flow hedges:

	Number of Interest Rate Swaps	Notional   (In thousands)
Consolidated derivatives(1)(3)	27	$	3,882,400
Unconsolidated Funds' derivatives(2)(3)	4	$	510,000

___________________________________________________

(1) The notional amount reflects 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2) The notional amount reflects 100%, not our pro-rata share, of our unconsolidated Funds' derivatives.

(3) See Note 12 for our derivative fair value disclosures.

Credit-risk-related Contingent Features

We have agreements with each of our interest rate swap counterparties that contain a provision under which we could also be declared in default on our derivative obligations if we default on the underlying indebtedness that we are hedging. As of March 31, 2019, there have been no events of default with respect to our interest rate swaps or our consolidated JVs' or unconsolidated Funds' interest rate swaps. We do not post collateral for our interest rate swap contract liabilities. The fair value of our interest rate swap contract liabilities, including accrued interest and excluding credit risk adjustments, were as follows:

(In thousands)	March 31, 2019		December 31, 2018
Consolidated derivatives(1)	$	5,422	$	1,681
Unconsolidated Funds' derivatives(2)	—		—

___________________________________________________

(1) Includes 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2) Our unconsolidated Funds' did not have any derivatives in a liability position.

Counterparty Credit Risk

We are subject to credit risk from the counterparties on our interest rate swap contract assets because we do not receive collateral. We seek to minimize that risk by entering into agreements with a variety of high quality counterparties with investment grade ratings. The fair value of our interest rate swap contract assets, including accrued interest and excluding credit risk adjustments, were as follows:

(In thousands)	March 31, 2019		December 31, 2018
Consolidated derivatives(1)	$	49,807	$	76,021
Unconsolidated Funds' derivatives(2)	$	7,804	$	12,576

___________________________________________________

(1) The amounts reflect 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2) The amounts reflect 100%, not our pro-rata share, of our unconsolidated Funds' derivatives.

Impact of Hedges on AOCI and the Consolidated Statements of Operations

The table below presents the effect of our derivatives on our AOCI and the consolidated statements of operations:

(In thousands)	Three Months Ended March 31,
	2019			2018
Derivatives Designated as Cash Flow Hedges:
Consolidated derivatives:
Gain recorded in AOCI - adoption of ASU 2017-12(1)	$	—		$	211
(Loss) gain recorded in AOCI before reclassifications(1)	$	(21,563	)	$	39,731
(Gain) loss reclassified from AOCI to Interest Expense(1)	$	(8,724	)	$	(131	)
Interest Expense presented in the consolidated statements of operations	$	(33,293	)	$	(32,900	)
Unconsolidated Funds' derivatives (our share)(2):
(Loss) gain recorded in AOCI before reclassifications(1)	$	(2,405	)	$	4,475
(Gain) loss reclassified from AOCI to Income, including depreciation, from unconsolidated real estate funds(1)	$	(616	)	$	83
Income, including depreciation, from unconsolidated real estate funds presented in the consolidated statements of operations	$	1,551		$	1,506

___________________________________________________

(1) See Note 10 for our AOCI reconciliation.

(2) We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

Future Reclassifications from AOCI

At March 31, 2019, our estimate of the AOCI related to derivatives designated as cash flow hedges that will be reclassified to earnings during the next twelve months as interest rate swap payments are made is as follows:

	(In thousands)
Consolidated derivatives:
Gains to be reclassified from AOCI to Interest Expense	$	30,188
Unconsolidated Funds' derivatives (our share):
Gains to be reclassified from AOCI to Income, including depreciation, from unconsolidated real estate funds	$	2,090

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Equity

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Equity

Equity

Transactions

During the three months ended March 31, 2019, we (i) acquired 22 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units and (ii) acquired 13 thousand OP Units for $507 thousand in cash.

During the three months ended March 31, 2018, we (i) acquired 322 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units and (ii) issued 14 thousand shares of our common stock for the exercise of 32 thousand stock options on a net settlement basis (net of the exercise price and related taxes).

Noncontrolling Interests

Our noncontrolling interests consist of interests in our Operating Partnership and consolidated JVs which are not owned by us. Noncontrolling interests in our Operating Partnership consist of OP Units and fully-vested LTIP Units, and represented approximately 14% of our Operating Partnership's total interests as of March 31, 2019 when we and our Operating Partnership had 170.2 million shares of common stock and 28.2 million OP Units and fully-vested LTIP Units outstanding, respectively. A share of our common stock, an OP Unit and an LTIP Unit (once vested and booked up) have essentially the same economic characteristics, sharing equally in the distributions from our Operating Partnership.  Investors who own OP Units have the right to cause our Operating Partnership to acquire their OP Units for an amount of cash per unit equal to the market value of one share of our common stock at the date of acquisition, or, at our election, exchange their OP Units for shares of our common stock on aone-for-one basis. LTIP Units have been granted to our key employees and non-employee directors as part of their compensation. These awards generally vest over a service period and once vested can generally be converted to OP Units provided our stock price increases by more than a specified hurdle.

Changes in our Ownership Interest in our Operating Partnership

The table below presents the effect on our equity from net income attributable to common stockholders and changes in our ownership interest in our Operating Partnership:

	Three Months Ended March 31,
(In thousands)	2019			2018
Net income attributable to common stockholders	$	28,701		$	28,206
Transfers from noncontrolling interests:
Exchange of OP Units with noncontrolling interests	363			5,199
Repurchase of OP Units from noncontrolling interests	(291		)	—
Net transfers from noncontrolling interests	72			5,199
Change from net income attributable to common stockholders and transfers from noncontrolling interests	$	28,773		$	33,405

AOCI Reconciliation⁽¹⁾ 

The table below presents a reconciliation of our AOCI, which consists solely of adjustments related to derivatives designated as cash flow hedges:

	Three Months Ended March 31,
(In thousands)	2019			2018
Beginning balance	$	53,944		$	43,099
Adoption of ASU 2017-12 - cumulative opening balance adjustment	—			211
Consolidated derivatives:
Other comprehensive (loss) income before reclassifications	(21,563		)	39,731
Reclassification of gains from AOCI to Interest Expense	(8,724		)	(131		)
Unconsolidated Funds' derivatives (our share)(2):
Other comprehensive (loss) income before reclassifications	(2,405		)	4,475
Reclassification of (gains) losses from AOCI to Income, including depreciation, from unconsolidated real estate funds	(616		)	83
Net current period OCI	(33,308		)	44,369
OCI attributable to noncontrolling interests	10,307			(13,447		)
OCI attributable to common stockholders	(23,001		)	30,922
Ending balance	$	30,943		$	74,021

___________________________________________________

(1) See Note 9 for the details of our derivatives and Note 12 for our derivative fair value disclosures.

(2) We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

Equity Compensation

On June 2, 2016, the Douglas Emmett 2016 Omnibus Stock Incentive Plan ("2016 Plan") became effective after receiving stockholder approval, superseding our prior plan, the Douglas Emmett 2006 Omnibus Stock Incentive Plan ("2006 Plan"), both of which allow for awards to our directors, officers, employees and consultants. The key terms of the two plans are substantially identical, except for the date of expiration, the number of shares authorized for grants and various technical provisions. Grants after June 2, 2016 were awarded under the 2016 Plan, while grants prior to that date were awarded under the 2006 Plan (grants under the 2006 Plan remain outstanding according to their terms). Both plans are administered by the compensation committee of our board of directors.  

Total net stock-based compensation expense was $2.6 million and $3.1 million for the three months ended March 31, 2019 and 2018, respectively. These amounts are net of capitalized stock-based compensation of $670 thousand and $452 thousand for the three months ended March 31, 2019 and 2018, respectively. There were no outstanding options during the three months ended March 31, 2019. The intrinsic value of options exercised was $0.8 million for the three months ended March 31, 2018.

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EPS

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

EPS

EPS

We calculate basic EPS by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares outstanding during the period. We calculate diluted EPS by dividing the net income attributable to common stockholders for the period by the weighted average number of common shares and dilutive instruments outstanding during the period using the treasury stock method. We account for unvested LTIP awards that contain nonforfeitable rights to dividends as participating securities and include these securities in the computation of basic and diluted EPS using the two-class method. The table below presents the calculation of basic and diluted EPS:

	Three Months Ended March 31,
	2019			2018
Numerator (In thousands):
Net income attributable to common stockholders	$	28,701		$	28,206
Allocation to participating securities: Unvested LTIP Units	(126		)	(117		)
Numerator for basic and diluted net income attributable to common stockholders	$	28,575		$	28,089
Denominator (In thousands):
Weighted average shares of common stock outstanding - basic	170,221			169,601
Effect of dilutive securities: Stock options(1)	—			24
Weighted average shares of common stock and common stock equivalents outstanding - diluted	170,221			169,625
Basic EPS:
Net income attributable to common stockholders per share	$	0.17		$	0.17
Diluted EPS:
Net income attributable to common stockholders per share	$	0.17		$	0.17

____________________________________________________

(1) There were no outstanding options during the three months ended March 31, 2019. The following securities were excluded from the calculation of diluted EPS because including them would be anti-dilutive to the calculation:

	Three Months Ended March 31,
(In thousands)	2019	2018
OP Units	26,340	26,943
Vested LTIP Units	1,831	800

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Our estimates of the fair value of financial instruments were determined using available market information and widely used valuation methods.  Considerable judgment is necessary to interpret market data and determine an estimated fair value.  The use of different market assumptions or valuation methods may have a material effect on the estimated fair values. The FASB fair value framework hierarchy 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.  The hierarchy is as follows:

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

As of March 31, 2019, we did not have any fair value estimates of financial instruments using Level 3 inputs.

Financial instruments disclosed at fair value

Short term financial instruments:The carrying amounts for cash and cash equivalents, tenant receivables, revolving credit line, interest payable, accounts payable, security deposits and dividends payable approximate fair value because of the short-term nature of these instruments.

Secured notes payable:See Note 7 for the details of our secured notes payable. We estimate the fair value of our consolidated secured notes payable by calculating the credit-adjusted present value of the principal and interest payments for each secured note payable. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs, assumes that the loans will be outstanding through maturity, and excludes any maturity extension options. The table below presents the estimated fair value and carrying value of our secured notes payable (excluding our revolving credit facility), the carrying value includes unamortized loan premium and excludes unamortized deferred loan fees:

(In thousands)	March 31, 2019		December 31, 2018
Fair value	$	4,100,464	$	4,087,979
Carrying value	$	4,062,741	$	4,062,968

Ground lease liability:See Note 3 for the details of our ground lease. We estimate the fair value of our ground lease liability by calculating the present value of the future lease payments disclosed in Note 3 using our incremental borrowing rate. The calculation incorporates observable market interest rates which we consider to be Level 2 inputs. The table below presents the estimated fair value and carrying value of our ground lease liability:

(In thousands)	March 31, 2019
Fair value	11,350
Carrying value	10,887

Financial instruments measured at fair value

Derivative instruments:See Note 9 for the details of our derivatives. We present our derivatives on the balance sheet at fair value, on a gross basis, excluding accrued interest.  We estimate the fair value of our derivative instruments by calculating the credit-adjusted present value of the expected future cash flows of each derivative.  The calculation incorporates the contractual terms of the derivatives, observable market interest rates which we consider to be Level 2 inputs, and credit risk adjustments to reflect the counterparty's as well as our own nonperformance risk. Our derivatives are not subject to master netting arrangements.  The table below presents the estimated fair value of our derivatives:

(In thousands)	March 31, 2019		December 31, 2018
Derivative Assets:
Fair value - consolidated derivatives(1)	$	46,880	$	73,414
Fair value - unconsolidated Funds' derivatives(2)	$	7,416	$	12,228
Derivative Liabilities:
Fair value - consolidated derivatives(1)	$	5,283	$	1,530
Fair value - unconsolidated Funds' derivatives(2)	$	—	$	—

____________________________________________________

(1) Consolidated derivatives, which include 100%, not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts in our consolidated balance sheets. The fair values exclude accrued interest which is included in interest payable in the consolidated balance sheets.

(2) Reflects 100%, not our pro-rata share, of our unconsolidated Funds' derivatives. Our pro-rata share of the amounts related to the unconsolidated Funds' derivatives is included in our Investment in unconsolidated real estate funds in our consolidated balance sheets. See Note 15 regarding our unconsolidated Funds debt and derivatives.

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Segment Reporting

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

Segment information is prepared on the same basis that our management reviews information for operational decision-making purposes.  We operate in two business segments: (i) the acquisition, development, ownership and management of office real estate and (ii) the acquisition, development, ownership and management of multifamily real estate.  The services for our office segment primarily include rental of office space and other tenant services, including parking and storage space rental.  The services 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.  General and administrative expenses and interest expense are not included in segment profit as our internal reporting addresses these items on a corporate level. The table below presents the operating activity of our reportable segments:

(In thousands)	Three Months Ended March 31,
	2019			2018
Office Segment
Total office revenues	$	197,290		$	187,333
Office expenses	(63,449		)	(60,356		)
Office segment profit	133,841			126,977
Multifamily Segment
Total multifamily revenues	26,896			24,914
Multifamily expenses	(7,555		)	(6,698		)
Multifamily segment profit	19,341			18,216
Total profit from all segments	$	153,182		$	145,193

The table below presents a reconciliation of the total profit from all segments to net income attributable to common stockholders:

(In thousands)	Three Months Ended March 31,
	2019			2018
Total profit from all segments	$	153,182		$	145,193
General and administrative expenses	(9,832		)	(9,567		)
Depreciation and amortization	(79,873		)	(72,498		)
Other income	2,898			2,630
Other expenses	(1,845		)	(1,733		)
Income, including depreciation, from unconsolidated real estate funds	1,551			1,506
Interest expense	(33,293		)	(32,900		)
Net income	32,788			32,631
Less: Net income attributable to noncontrolling interests	(4,087		)	(4,425		)
Net income attributable to common stockholders	$	28,701		$	28,206

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Future Minimum Lease Rental Receipts

3 Months Ended

Mar. 31, 2019

Lessor Disclosure [Abstract]

Future Minimum Lease Rental Receipts

Future Minimum Lease Rental Receipts

We lease space to tenants primarily under non-cancelable operating leases that generally contain provisions for a base rent plus reimbursement of certain operating expenses, and we own fee interests in two parcels of land from which we receive rent under ground leases. The table below presents the future minimum base rentals on our non-cancelable office tenant and ground leases at March 31, 2019:

Twelve months ending March 31:	(In thousands)
2020	$	648,328
2021	579,740
2022	476,073
2023	384,943
2024	290,637
Thereafter	687,219
Total future minimum base rentals(1)	$	3,066,940

_____________________________________________________

(1) Does not include (i) residential leases, which typically have a term of one year or less, (ii) holdover rent, (iii) other types of rent such as storage and antenna rent, (iv) tenant reimbursements, (v) straight- line rent, (vi) amortization/accretion of acquired above/below-market lease intangibles and (vii) percentage rents.  The amounts assume that early termination options held by tenants are not exercised.

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Commitments, Contingencies and Guarantees

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments, Contingencies and Guarantees

Commitments, Contingencies and Guarantees

Legal Proceedings

From time to time, we are party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of our 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 materially adverse effect on our business, financial condition or results of operations.

Concentration of Risk

We are subject to credit risk with respect to our tenant receivables and deferred rent receivables related to our tenant leases. Our tenants' ability to honor the terms of their respective leases remains dependent upon economic, regulatory and social factors. We seek to minimize our credit risk from our tenant leases by (i) targeting smaller, more affluent tenants, from a diverse mix of industries, (ii) performing credit evaluations of prospective tenants and (iii) obtaining security deposits or letters of credit from our tenants.  For the three months ended March 31, 2019 and 2018, no tenant accounted for more than 10% of our total revenues.  

All of our properties, including the properties of our consolidated JVs and unconsolidated Funds, are located in Los Angeles County, California and Honolulu, Hawaii, and we are therefore susceptible to adverse economic and regulatory developments, as well as natural disasters, in those markets.

We are subject to credit risk with respect to our interest rate swap counterparties that we use to manage the risk associated with our floating rate debt. We do not post or receive collateral with respect to our swap transactions. See Note 9 for the details of our interest rate contracts. We seek to minimize our credit risk by entering into agreements with a variety of high quality counterparties with investment grade ratings.

We have significant cash balances invested in a variety of short-term money market funds that are intended to preserve principal value and maintain a high degree of liquidity while providing current income. These investments are not insured against loss of principal and there is no guarantee that our investments in these funds will be redeemable at par value. We also have significant cash balances in bank accounts with high quality financial institutions with investment grade ratings.  Interest bearing bank accounts at each U.S. banking institution are insured by the FDIC up to $250 thousand.

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 have identified twenty-eight buildings in our Consolidated Portfolio and four buildings owned by our unconsolidated Funds which contain asbestos, and would have to be removed in compliance with applicable environmental regulations if these properties are demolished or undergo major renovations.  As of March 31, 2019, the obligations to remove the asbestos from these properties if they were demolished or undergo major renovations have indeterminable settlement dates, and we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation. As of March 31, 2019, the obligations to remove the asbestos from properties that are currently undergoing major renovations, or that we plan to renovate in the future, are not material to our financial statements.

Development and Other Contracts

In West Los Angeles, we are building a high-rise apartment building with 376 apartments. In downtown Honolulu, we are converting a 25 story, 490,000 square foot office tower into approximately 500 rental apartments. We expect the conversion to occur in phases over a number of years as the office space is vacated. As of March 31, 2019, we had an aggregate remaining contractual commitment for these and other development projects of approximately $192.0 million. As of March 31, 2019, we had an aggregate remaining contractual commitment for repositionings, capital expenditure projects and tenant improvements of approximately $40.2 million.

Guarantees

We have made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve- outs for our unconsolidated Funds' debt. We have also guaranteed the related swaps. Our Funds have agreed to indemnify us for any amounts that we would be required to pay under these agreements. As of March 31, 2019, all of the obligations under the related debt and swap agreements have been performed in accordance with the terms of those agreements. The table below summarizes our Funds' debt as of March 31, 2019. The amounts represent 100% (not our pro-rata share) of the amounts related to our Funds:

Fund(1)	Loan Maturity Date	Principal Balance (In Millions)		Variable Interest Rate	Swap Fixed Interest Rate	Swap Maturity Date
Partnership X(2)(4)	3/1/2023	$	110.0	LIBOR + 1.40%	2.30%	3/1/2021
Fund X(3)(4)	7/1/2024	400.0		LIBOR + 1.65%	3.44%	7/1/2022
		$	510.0

___________________________________________________

(1) See Note 5 for more information regarding our unconsolidated Funds.

(2) Floating rate term loan, swapped to fixed, which is secured by two properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of March 31, 2019, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $1.9 million.

(3) Floating rate term loan, swapped to fixed, which is secured by six properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of March 31, 2019, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $23.6 million. Loan agreement includes the requirement to purchase an interest rate cap if one-month LIBOR equals or exceeds 3.56% for fourteen consecutive days after the related swap matures.

(4) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying financial statements are the consolidated financial statements of Douglas Emmett, Inc. and its subsidiaries, including our Operating Partnership and our consolidated JVs.  All significant intercompany balances and transactions have been eliminated in our consolidated financial statements. Our Operating Partnership and consolidated JVs are VIEs of which we are the primary beneficiary. As of March 31, 2019, the total consolidated assets, liabilities and equity of the VIEs was $8.22 billion  (of which $7.75 billion related to investment in real estate), $4.43 billion and $3.79 billion (of which $1.43 billion related to noncontrolling interests), respectively.

We report our office rental revenues and tenant recoveries on a combined basis as office Rental revenues and tenant recoveries in our consolidated statements of operations, and we reclassified the comparable periods to conform to the current period presentation.

The accompanying unaudited interim financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in the financial statements prepared in conformity with 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 interim 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 ending December 31, 2019. The interim financial statements should be read in conjunction with the consolidated financial statements in our 2018 Annual Report on Form 10-K and the notes thereto. Any references to the number or class of properties, square footage, per square footage amounts, apartment units and geography, are outside the scope of our independent registered public accounting firm’s review of our financial statements in accordance with the standards of the PCAOB.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make certain estimates that affect the reported amounts in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Revenue Recognition

Revenue Recognition

Office parking revenues, which are included in office Parking and other income in our consolidated statements of operations, are within the scope of Topic 606 (Revenue from Contracts with Customers). Our lease contracts generally make a specified number of parking spaces available to the tenant, and we bill and recognize parking revenues on a monthly basis in accordance with the lease agreements, generally using the monthly parking rates in effect at the time of billing.

Income Taxes

Income Taxes

We have elected to be taxed as a REIT under the Code. Provided that 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 that we derive through our TRS.

New Accounting Pronouncements

New Accounting Pronouncements 

Changes to GAAP are implemented by the FASB in the form of ASUs.  We consider the applicability and impact of all ASUs. Other than the ASUs discussed below, the FASB has not issued any other ASUs that we expect to be applicable and have a material impact on our financial statements.

ASUs Adopted

ASU 2016-02 (Topic 842 - "Leases")

In February 2016, the FASB issued ASU No. 2016-02, (Topic 842 - "Leases"). The primary impact of the ASU is the recognition of lease assets and liabilities on the balance sheet by lessees for leases classified as operating leases. The accounting applied by lessors is largely unchanged. For example, the vast majority of operating leases remain classified as operating leases, and lessors continue to recognize lease payments for those leases on a straight-line basis over the lease term.

We adopted the ASU on January 1, 2019 using the modified retrospective transition method. We recorded a cumulative adjustment of $2.5 million to the opening balance of retained earnings (accumulated deficit) for leasing expenses related to leases that were entered into before the adoption date but commenced after the adoption date. The ASU provides a practical expedient package, which we elected to use, that allows entities (a) not to reassess whether any expired or existing contracts as of the adoption date are considered or contain leases; (b) not to reassess the lease classification for any expired or existing leases as of the adoption date; and (c) not to reassess initial direct costs for any existing leases as of the adoption date. All leases entered into on or after the adoption date were accounted for under the ASU.

We lease space to tenants at our office and multifamily properties. Under the ASU, all of our tenant leases continue to be classified as operating leases. The ASU continues to require that lease payments for operating leases be recognized over the lease term on a straight-line basis unless another systematic and rational basis is more representative of the pattern in which benefit is expected to be derived from the use of the underlying asset. If collectability of the lease payments is not probable at the commencement date, then the lease income should be limited to the lesser of the income recognized on a straight-line basis or cash basis. If the assessment of collectibility changes after the commencement date, any difference between the lease income that would have been recognized on a straight-line basis and cash basis must be recognized as a current-period adjustment to lease income.

The ASU requires separation of the lease from the non-lease components (for example, maintenance services or other activities that transfer a good or service to the customer) in a contract. Only the lease components are accounted for in accordance with the ASU. The consideration in the contract is allocated to the lease and non-lease components on a relative standalone selling price basis and the non-lease component would be accounted for in accordance with ASC 606 ("Revenue from Contracts with Customers"). In July 2018, the FASB issued ASU No. 2018-11 which includes an optional practical expedient for lessors to elect, by class of underlying asset, to not separate the lease from the non-lease components if certain criteria are met. Our office tenant leases include a lease component for the rental income and a non-lease component for the related tenant recoveries. We determined that our office tenant leases qualify for the single component presentation and we adopted the practical expedient. We account for the combined components under the ASU.

Rental revenues and tenant recoveries from our office tenant leases is included in office Rental revenues and tenant recoveries in our consolidated statements of operations. Rental revenues from our multifamily tenant leases is included in multifamily Rental revenues in our consolidated statements of operations. Rental revenue recognized on a straight-line basis in excess of billed rents is included in Deferred rent receivables in our consolidated balance sheets. See Note 14 for more information regarding the future lease rental receipts from our operating leases.

The ASU defines initial direct costs of a lease, which may be capitalized, as costs that would not have been incurred had the lease not been executed. Costs to negotiate a lease that would have been incurred regardless of whether the lease was executed, such as employee salaries, are not considered to be initial direct costs, and may not be capitalized. We historically capitalized most of our leasing costs. During the three months ended March 31, 2019, we expensed $1.1 million of leasing costs related to our tenant leases that did not qualify as initial direct costs of a lease, which are included in General and administrative expenses in our consolidated statements of operations.

We pay rent under a ground lease which expires on December 31, 2086. Upon adoption of the ASU, we continued to classify the lease as an operating lease, and we recognized a right-of-use asset for the land and a lease liability for the future lease payments of $10.9 million. We calculated the carrying value of the right-of-use asset and lease liability by discounting the future lease payments using our incremental borrowing rate. We adjusted the right-of-use asset carrying value for a related above-market ground lease liability of $3.4 million, which reduced the carrying value of the asset to $7.5 million. We continued to recognize the lease payments as expense, which is included in Office expenses in our Consolidated Statements of Operations. See Note 3 for more information regarding this ground lease. See Note 12 for the fair value disclosures related to the ground lease liability.

In December 2018, the FASB issued ASU 2018-20, an update to ASU 2016-02, which provides guidance on accounting for sales and other similar taxes collected from lessees, certain lessor costs, and recognition of variable payments for contracts with lease and nonlease components. We adopted the ASU and it did not have a material impact on our financial statements.

In March 2019, the FASB issued ASU 2019-01, an update to ASU 2016-02, which provides guidance on transition disclosures related to Topic 250 "Accounting Changes and Error Corrections" and other technical updates. We adopted the ASU and it did not have a material impact on our financial statements.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Our estimates of the fair value of financial instruments were determined using available market information and widely used valuation methods.  Considerable judgment is necessary to interpret market data and determine an estimated fair value.  The use of different market assumptions or valuation methods may have a material effect on the estimated fair values. The FASB fair value framework hierarchy 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.  The hierarchy is as follows:

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

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Overview (Tables)

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Real Estate Properties

As of March 31, 2019, our portfolio (not including two parcels of land from which we receive rent under ground leases), consisted of the following office and multifamily properties (both of which include ancillary retail space):

	Consolidated Portfolio	Total Portfolio
Office
Wholly-owned properties	53	53
Consolidated JV properties	10	10
Unconsolidated Fund properties	—	8
	63	71
Multifamily
Wholly-owned properties	10	10
Total	73	81

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Ground Lease (Tables)

3 Months Ended

Mar. 31, 2019

Lessee Disclosure [Abstract]

Schedule of Future Minimum Ground Lease Payments

The table below, which assumes that the ground rent payments will continue to be $733 thousand per year after February 28, 2029, presents the future minimum ground lease payments as of March 31, 2019:

Twelve months ending March 31:	(In thousands)
2020	$	733
2021	733
2022	733
2023	733
2024	733
Thereafter	45,995
Total future minimum lease payments	$	49,660

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Investment in Real Estate (Tables)

3 Months Ended

Mar. 31, 2019

Business Combinations [Abstract]

Schedule of Acquisitions and Net Assets and Liabilities Acquired

The table below summarizes the purchase price allocations for the acquisitions. The contract and purchase prices differ due to prorations and similar matters:

(In thousands)	1299 Ocean			429 Santa Monica			9665 Wilshire
Submarket	Santa Monica			Santa Monica			Beverly Hills
Acquisition date	April 25			April 25			July 20
Contract price	$	275,800		$	77,000		$	177,000
Building square footage	206			87			171
Investment in real estate:
Land	$	22,748		$	4,949		$	5,568
Buildings and improvements	260,188			69,286			175,960
Tenant improvements and lease intangibles	5,010			3,248			1,112
Acquired above- and below-market leases, net	(10,683		)	(722		)	(4,339		)
Net assets and liabilities acquired	$	277,263		$	76,761		$	178,301

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Acquired Lease Intangibles (Tables)

3 Months Ended

Mar. 31, 2019

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Acquired Lease Intangibles

Summary of our Acquired Lease Intangibles

(In thousands)	March 31, 2019			December 31, 2018
Above-market tenant leases	$	3,809		$	5,595
Above-market tenant leases - accumulated amortization	(1,658		)	(3,289		)
Above-market ground lease where we are the lessor	1,152			1,152
Above-market ground lease - accumulated amortization	(211		)	(207		)
Acquired lease intangible assets, net	$	3,092		$	3,251
Below-market tenant leases	$	111,302		$	112,175
Below-market tenant leases - accumulated accretion	(66,419		)	(63,013		)
Above-market ground lease where we are the tenant(1)	—			4,017
Above-market ground lease - accumulated accretion(1)	—			(610		)
Acquired lease intangible liabilities, net	$	44,883		$	52,569

______________________________________________

(1) Upon adoption of ASU 2016-02 on January 1, 2019 we adjusted the ground lease right-of-use asset carrying value for the carrying value of the above-market ground lease - see Notes 2 and 3.

Schedule of Net Amortization or Accretion of Above- and Below-Market Leases

The table below summarizes the net amortization/accretion related to our above- and below-market leases:

	Three Months Ended March 31,
(In thousands)	2019			2018
Net accretion of above- and below-market tenant lease assets and liabilities(1)	$	4,124		$	6,144
Amortization of an above-market ground lease asset(2)	(4		)	(4		)
Accretion of an above-market ground lease liability(3)	—			12
Total	$	4,120		$	6,152

______________________________________________

(1) Recorded as a net increase to office and multifamily rental revenues.

(2) Recorded as a decrease to office parking and other income.

(3) Recorded as a decrease to office expense. Upon adoption of ASU 2016-02 on January 1, 2019 we adjusted the ground lease right-of-use asset carrying value with the carrying value of the above-market ground lease - see Notes 2 and 3.

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Investments in Unconsolidated Real Estate Funds (Tables)

3 Months Ended

Mar. 31, 2019

Real Estate Investments, Net [Abstract]

Summary of Statement of Operations for Investments in Unconsolidated Real Estate Funds and Cash Received from Funds

The table below presents cash distributions we received from our Funds:

	Three Months Ended March 31,
(In thousands)	2019		2018
Operating distributions received	$	1,551	$	1,506
Capital distributions received	2,225		1,953
Total distributions received	$	3,776	$	3,459

The tables below present selected financial information for the Funds on a combined basis.  The amounts presented reflect 100% (not our pro-rata share) of amounts related to the Funds, and are based upon historical acquired book value:

(In thousands)	March 31, 2019		December 31, 2018
Total assets	$	688,590	$	694,713
Total liabilities	$	528,032	$	525,483
Total equity	$	160,558	$	169,230

	Three Months Ended March 31,
(In thousands)	2019		2018
Total revenues	$	20,159	$	19,147
Operating income	$	5,395	$	5,566
Net income	$	1,332	$	1,434

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Other Assets (Tables)

3 Months Ended

Mar. 31, 2019

Other Assets [Abstract]

Schedule of Other Assets

(In thousands)	March 31, 2019		December 31, 2018
Restricted cash	$	121	$	121
Prepaid expenses	8,383		7,830
Other indefinite-lived intangibles	1,988		1,988
Furniture, fixtures and equipment, net	2,441		1,101
Other	4,154		3,719
Total other assets	$	17,087	$	14,759

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Secured Notes Payable and Revolving Credit Facility, Net (Tables)

3 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Schedule of Secured Notes Payable and Revolving Credit Facility

Description	Maturity Date(1)	Principal Balance as of March 31, 2019			Principal Balance as of December 31, 2018			Variable Interest Rate	Fixed Interest Rate(2)	Swap Maturity Date
		(In thousands)
Wholly Owned Subsidiaries
Fannie Mae loan	10/1/2019	$	145,000		$	145,000		LIBOR + 1.25%	N/A	N/A
Term loan(3)	4/15/2022	340,000			340,000			LIBOR + 1.40%	2.77%	4/1/2020
Term loan(3)	7/27/2022	180,000			180,000			LIBOR + 1.45%	3.06%	7/1/2020
Term loan(3)	11/1/2022	400,000			400,000			LIBOR + 1.35%	2.64%	11/1/2020
Term loan(3)	6/23/2023	360,000			360,000			LIBOR + 1.55%	2.57%	7/1/2021
Term loan(3)	12/23/2023	220,000			220,000			LIBOR + 1.70%	3.62%	12/23/2021
Term loan(3)	1/1/2024	300,000			300,000			LIBOR + 1.55%	3.46%	1/1/2022
Term loan(3)	3/3/2025	335,000			335,000			LIBOR + 1.30%	3.84%	3/1/2023
Fannie Mae loan(3)	4/1/2025	102,400			102,400			LIBOR + 1.25%	2.84%	3/1/2020
Fannie Mae loan(3)	12/1/2025	115,000			115,000			LIBOR + 1.25%	2.76%	12/1/2020
Fannie Mae loan(3)	6/1/2027	550,000			550,000			LIBOR + 1.37%	3.16%	6/1/2022
Term loan(4)	6/1/2038	31,406			31,582			N/A	4.55%	N/A
Revolving credit facility(3)(5)	8/21/2023	100,000			105,000			LIBOR + 1.15%	N/A	N/A
Total Wholly Owned Subsidiary Debt		3,178,806			3,183,982
Consolidated JVs
Term loan(3)	2/28/2023	580,000			580,000			LIBOR + 1.40%	2.37%	3/1/2021
Term loan(3)	12/19/2024	400,000			400,000			LIBOR + 1.30%	3.47%	1/1/2023
Total Consolidated Debt(6)		4,158,806			4,163,982
Unamortized loan premium, net		3,935			3,986
Unamortized deferred loan costs, net		(33,470		)	(33,938		)
Total Consolidated Debt, net		$	4,129,271		$	4,134,030

___________________________________________________

Except as noted below, each loan (including our revolving credit facility) is non-recourse and secured by one or more separate collateral pools consisting of one or more properties, and requires monthly payments of interest only with the outstanding principal due upon maturity.

(1) Maturity dates include the effect of extension options.

(2) Includes the effect of interest rate swaps and excludes the effect of prepaid loan fees. See Note 9 for details of our interest rate swaps. See below for details of our loan costs.

(3) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor.

(4) Requires monthly payments of principal and interest. Principal amortization is based upon a 30-year amortization schedule.

(5) In March 2019, we renewed our $400.0 million revolving credit facility, releasing two previously encumbered properties, lowering the borrowing rate and unused facility fees, and extending the maturity date. Unused commitment fees range from 0.10% to 0.15%.

(6) See Note 12 for our fair value disclosures.

Debt Statistics

The following table summarizes our fixed and floating rate debt:

(In thousands)	Principal Balance as of March 31, 2019		Principal Balance as of December 31, 2018
Aggregate swapped to fixed rate loans	$	3,882,400	$	3,882,400
Aggregate fixed rate loans	31,406		31,582
Aggregate floating rate loans	245,000		250,000
Total Debt	$	4,158,806	$	4,163,982

The following table summarizes certain debt statistics as of March 31, 2019:

Statistics for consolidated loans with interest fixed under the terms of the loan or a swap
Principal balance (in billions)	$3.91
Weighted average remaining life (including extension options)	5.2 years
Weighted average remaining fixed interest period	2.5 years
Weighted average annual interest rate	3.07%

Schedule of Future Minimum Principal Payments Due on Secured Notes Payable and Revolving Credit Facility

At March 31, 2019, the minimum future principal payments due on our secured notes payable and revolving credit facility were as follows:

Twelve months ending March 31:	Excluding Maturity Extension Options		Including Maturity Extension Options(1)
	(In thousands)
2020	$	145,727	$	145,727
2021	295,760		760
2022	300,796		796
2023	1,655,833		1,500,833
2024	680,871		980,871
Thereafter	1,079,819		1,529,819
Total future principal payments	$	4,158,806	$	4,158,806

____________________________________________

(1) Our loan agreements generally require that we meet certain minimum financial thresholds to be able to extend the loan maturity.

Schedule of Loan Costs and Amortization of Deferred Loan Costs

The table below presents loan costs, which are included in Interest expense in our consolidated statements of operations:

	Three Months Ended March 31,
(In thousands)	2019		2018
Loan costs expensed	$	—	$	404
Deferred loan cost amortization	1,917		1,905
Total	$	1,917	$	2,309

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Interest Payable, Accounts Payable and Deferred Revenue (Tables)

3 Months Ended

Mar. 31, 2019

Accounts Payable and Accrued Liabilities [Abstract]

Schedule of Interest Payable, Accounts Payable and Deferred Revenue

(In thousands)	March 31, 2019		December 31, 2018
Interest payable	$	11,023	$	10,657
Accounts payable and accrued liabilities	88,585		75,111
Deferred revenue	42,731		44,386
Total interest payable, accounts payable and deferred revenue	$	142,339	$	130,154

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Derivative Contracts (Tables)

3 Months Ended

Mar. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Interest Rate Swap Derivatives

As of March 31, 2019, all of our interest rate swaps, which include the interest rate swaps of our consolidated JVs and our unconsolidated Funds, were designated as cash flow hedges:

	Number of Interest Rate Swaps	Notional   (In thousands)
Consolidated derivatives(1)(3)	27	$	3,882,400
Unconsolidated Funds' derivatives(2)(3)	4	$	510,000

___________________________________________________

(1) The notional amount reflects 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2) The notional amount reflects 100%, not our pro-rata share, of our unconsolidated Funds' derivatives.

(3) See Note 12 for our derivative fair value disclosures.

Schedule of Fair Value of Interest Rate Swap Contract Liabilities

The fair value of our interest rate swap contract liabilities, including accrued interest and excluding credit risk adjustments, were as follows:

(In thousands)	March 31, 2019		December 31, 2018
Consolidated derivatives(1)	$	5,422	$	1,681
Unconsolidated Funds' derivatives(2)	—		—

___________________________________________________

(1) Includes 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2) Our unconsolidated Funds' did not have any derivatives in a liability position.

Schedule of Fair Value of Interest Rate Swap Contract Assets

The fair value of our interest rate swap contract assets, including accrued interest and excluding credit risk adjustments, were as follows:

(In thousands)	March 31, 2019		December 31, 2018
Consolidated derivatives(1)	$	49,807	$	76,021
Unconsolidated Funds' derivatives(2)	$	7,804	$	12,576

___________________________________________________

(1) The amounts reflect 100%, not our pro-rata share, of our consolidated JVs' derivatives.

(2) The amounts reflect 100%, not our pro-rata share, of our unconsolidated Funds' derivatives.

Effect of Derivative Instruments on Consolidated Statements of Operations

The table below presents the effect of our derivatives on our AOCI and the consolidated statements of operations:

(In thousands)	Three Months Ended March 31,
	2019			2018
Derivatives Designated as Cash Flow Hedges:
Consolidated derivatives:
Gain recorded in AOCI - adoption of ASU 2017-12(1)	$	—		$	211
(Loss) gain recorded in AOCI before reclassifications(1)	$	(21,563	)	$	39,731
(Gain) loss reclassified from AOCI to Interest Expense(1)	$	(8,724	)	$	(131	)
Interest Expense presented in the consolidated statements of operations	$	(33,293	)	$	(32,900	)
Unconsolidated Funds' derivatives (our share)(2):
(Loss) gain recorded in AOCI before reclassifications(1)	$	(2,405	)	$	4,475
(Gain) loss reclassified from AOCI to Income, including depreciation, from unconsolidated real estate funds(1)	$	(616	)	$	83
Income, including depreciation, from unconsolidated real estate funds presented in the consolidated statements of operations	$	1,551		$	1,506

___________________________________________________

(1) See Note 10 for our AOCI reconciliation.

(2) We calculate our share by multiplying the total amount for each Fund by our equity interest in the respective Fund.

Schedule of Future Reclassifications from AOCI

At March 31, 2019, our estimate of the AOCI related to derivatives designated as cash flow hedges that will be reclassified to earnings during the next twelve months as interest rate swap payments are made is as follows:

	(In thousands)
Consolidated derivatives:
Gains to be reclassified from AOCI to Interest Expense	$	30,188
Unconsolidated Funds' derivatives (our share):
Gains to be reclassified from AOCI to Income, including depreciation, from unconsolidated real estate funds	$	2,090

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Equity (Tables)

3 Months Ended

Mar. 31, 2019

Stockholders' Equity Note [Abstract]

Net Income Attributable to Common Stockholders and Transfers (to) from Noncontrolling Interests

The table below presents the effect on our equity from net income attributable to common stockholders and changes in our ownership interest in our Operating Partnership:

	Three Months Ended March 31,
(In thousands)	2019			2018
Net income attributable to common stockholders	$	28,701		$	28,206
Transfers from noncontrolling interests:
Exchange of OP Units with noncontrolling interests	363			5,199
Repurchase of OP Units from noncontrolling interests	(291		)	—
Net transfers from noncontrolling interests	72			5,199
Change from net income attributable to common stockholders and transfers from noncontrolling interests	$	28,773		$	33,405

Schedule of Accumulated Other Comprehensive Income (Loss)

The table below presents a reconciliation of our AOCI, which consists solely of adjustments related to derivatives designated as cash flow hedges:

	Three Months Ended March 31,
(In thousands)	2019			2018
Beginning balance	$	53,944		$	43,099
Adoption of ASU 2017-12 - cumulative opening balance adjustment	—			211
Consolidated derivatives:
Other comprehensive (loss) income before reclassifications	(21,563		)	39,731
Reclassification of gains from AOCI to Interest Expense	(8,724		)	(131		)
Unconsolidated Funds' derivatives (our share)(2):
Other comprehensive (loss) income before reclassifications	(2,405		)	4,475
Reclassification of (gains) losses from AOCI to Income, including depreciation, from unconsolidated real estate funds	(616		)	83
Net current period OCI	(33,308		)	44,369
OCI attributable to noncontrolling interests	10,307			(13,447		)
OCI attributable to common stockholders	(23,001		)	30,922
Ending balance	$	30,943		$	74,021

___________________________________________________

(1) See Note 9 for the details of our derivatives and Note 12 for our derivative fair value disclosures.

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EPS (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The table below presents the calculation of basic and diluted EPS:

	Three Months Ended March 31,
	2019			2018
Numerator (In thousands):
Net income attributable to common stockholders	$	28,701		$	28,206
Allocation to participating securities: Unvested LTIP Units	(126		)	(117		)
Numerator for basic and diluted net income attributable to common stockholders	$	28,575		$	28,089
Denominator (In thousands):
Weighted average shares of common stock outstanding - basic	170,221			169,601
Effect of dilutive securities: Stock options(1)	—			24
Weighted average shares of common stock and common stock equivalents outstanding - diluted	170,221			169,625
Basic EPS:
Net income attributable to common stockholders per share	$	0.17		$	0.17
Diluted EPS:
Net income attributable to common stockholders per share	$	0.17		$	0.17

____________________________________________________

(1) There were no outstanding options during the three months ended March 31, 2019. The following securities were excluded from the calculation of diluted EPS because including them would be anti-dilutive to the calculation:

	Three Months Ended March 31,
(In thousands)	2019	2018
OP Units	26,340	26,943
Vested LTIP Units	1,831	800

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of Estimated Fair Value and Carrying Value of Liabilities

The table below presents the estimated fair value and carrying value of our secured notes payable (excluding our revolving credit facility), the carrying value includes unamortized loan premium and excludes unamortized deferred loan fees:

(In thousands)	March 31, 2019		December 31, 2018
Fair value	$	4,100,464	$	4,087,979
Carrying value	$	4,062,741	$	4,062,968

The table below presents the estimated fair value and carrying value of our ground lease liability:

(In thousands)	March 31, 2019
Fair value	11,350
Carrying value	10,887

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The table below presents the estimated fair value of our derivatives:

(In thousands)	March 31, 2019		December 31, 2018
Derivative Assets:
Fair value - consolidated derivatives(1)	$	46,880	$	73,414
Fair value - unconsolidated Funds' derivatives(2)	$	7,416	$	12,228
Derivative Liabilities:
Fair value - consolidated derivatives(1)	$	5,283	$	1,530
Fair value - unconsolidated Funds' derivatives(2)	$	—	$	—

____________________________________________________

(1) Consolidated derivatives, which include 100%, not our pro-rata share, of our consolidated JVs' derivatives, are included in interest rate contracts in our consolidated balance sheets. The fair values exclude accrued interest which is included in interest payable in the consolidated balance sheets.

(2) Reflects 100%, not our pro-rata share, of our unconsolidated Funds' derivatives. Our pro-rata share of the amounts related to the unconsolidated Funds' derivatives is included in our Investment in unconsolidated real estate funds in our consolidated balance sheets. See Note 15 regarding our unconsolidated Funds debt and derivatives.

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Segment Reporting (Tables)

3 Months Ended

Mar. 31, 2019

Segment Reporting [Abstract]

Summary of Operating Activity of Reportable Segments

The table below presents the operating activity of our reportable segments:

(In thousands)	Three Months Ended March 31,
	2019			2018
Office Segment
Total office revenues	$	197,290		$	187,333
Office expenses	(63,449		)	(60,356		)
Office segment profit	133,841			126,977
Multifamily Segment
Total multifamily revenues	26,896			24,914
Multifamily expenses	(7,555		)	(6,698		)
Multifamily segment profit	19,341			18,216
Total profit from all segments	$	153,182		$	145,193

Reconciliation of Segment Profit to Net Income Attributable to Common Stockholders

The table below presents a reconciliation of the total profit from all segments to net income attributable to common stockholders:

(In thousands)	Three Months Ended March 31,
	2019			2018
Total profit from all segments	$	153,182		$	145,193
General and administrative expenses	(9,832		)	(9,567		)
Depreciation and amortization	(79,873		)	(72,498		)
Other income	2,898			2,630
Other expenses	(1,845		)	(1,733		)
Income, including depreciation, from unconsolidated real estate funds	1,551			1,506
Interest expense	(33,293		)	(32,900		)
Net income	32,788			32,631
Less: Net income attributable to noncontrolling interests	(4,087		)	(4,425		)
Net income attributable to common stockholders	$	28,701		$	28,206

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Future Minimum Lease Rental Receipts (Tables)

3 Months Ended

Mar. 31, 2019

Lessor Disclosure [Abstract]

Schedule of Future Minimum Base Rentals on Non-Cancelable Office and Ground Operating Leases

The table below presents the future minimum base rentals on our non-cancelable office tenant and ground leases at March 31, 2019:

Twelve months ending March 31:	(In thousands)
2020	$	648,328
2021	579,740
2022	476,073
2023	384,943
2024	290,637
Thereafter	687,219
Total future minimum base rentals(1)	$	3,066,940

_____________________________________________________

(1) Does not include (i) residential leases, which typically have a term of one year or less, (ii) holdover rent, (iii) other types of rent such as storage and antenna rent, (iv) tenant reimbursements, (v) straight- line rent, (vi) amortization/accretion of acquired above/below-market lease intangibles and (vii) percentage rents.  The amounts assume that early termination options held by tenants are not exercised.

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Commitments, Contingencies and Guarantees (Tables)

3 Months Ended

Mar. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of Debt Related to Unconsolidated Funds

The table below summarizes our Funds' debt as of March 31, 2019. The amounts represent 100% (not our pro-rata share) of the amounts related to our Funds:

Fund(1)	Loan Maturity Date	Principal Balance (In Millions)		Variable Interest Rate	Swap Fixed Interest Rate	Swap Maturity Date
Partnership X(2)(4)	3/1/2023	$	110.0	LIBOR + 1.40%	2.30%	3/1/2021
Fund X(3)(4)	7/1/2024	400.0		LIBOR + 1.65%	3.44%	7/1/2022
		$	510.0

___________________________________________________

(1) See Note 5 for more information regarding our unconsolidated Funds.

(2) Floating rate term loan, swapped to fixed, which is secured by two properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of March 31, 2019, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $1.9 million.

(3) Floating rate term loan, swapped to fixed, which is secured by six properties and requires monthly payments of interest only, with the outstanding principal due upon maturity. As of March 31, 2019, assuming a zero-percent LIBOR interest rate during the remaining life of the swap, the maximum future payments under the swap agreement were $23.6 million. Loan agreement includes the requirement to purchase an interest rate cap if one-month LIBOR equals or exceeds 3.56% for fourteen consecutive days after the related swap matures.

(4) Loan agreement includes a zero-percent LIBOR floor. The corresponding swaps do not include such a floor.

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Overview - Narrative (Details) ft² in Millions, $ in Millions	Mar. 31, 2019 USD ($) ft² land_parcel unit
Real Estate Properties [Line Items]
Variable interest entity, assets	$ 8,220
Variable interest entity, assets related to real estate held for investment	7,750
Variable interest entity, liabilities	4,430
Variable interest entity, equity	3,790
Variable interest entity, equity, portion attributable to noncontrolling interest	$ 1,430
Wholly owned and Consolidated properties
Real Estate Properties [Line Items]
Number of land parcels subject to ground lease | land_parcel	2
Wholly owned and Consolidated properties | Office
Real Estate Properties [Line Items]
Area of real estate portfolio (sq ft) | ft²	16.5
Wholly owned and Consolidated properties | Multifamily
Real Estate Properties [Line Items]
Number of multifamily apartment units | unit	3,642
Unconsolidated Fund properties | Office
Real Estate Properties [Line Items]
Area of real estate portfolio (sq ft) | ft²	1.8

XML

Overview - Schedule of Properties Portfolio (Details)	Mar. 31, 2019 property
Real Estate Properties [Line Items]
Number of properties	81
Office
Real Estate Properties [Line Items]
Number of properties	71
Office | Wholly-owned properties
Real Estate Properties [Line Items]
Number of properties	53
Office | Consolidated JV properties
Real Estate Properties [Line Items]
Number of properties	10
Office | Unconsolidated Fund properties
Real Estate Properties [Line Items]
Number of properties	8
Multifamily | Wholly-owned properties
Real Estate Properties [Line Items]
Number of properties	10
Consolidated Portfolio
Real Estate Properties [Line Items]
Number of properties	73
Consolidated Portfolio | Office
Real Estate Properties [Line Items]
Number of properties	63
Consolidated Portfolio | Office | Wholly-owned properties
Real Estate Properties [Line Items]
Number of properties	53
Consolidated Portfolio | Office | Consolidated JV properties
Real Estate Properties [Line Items]
Number of properties	10
Consolidated Portfolio | Office | Unconsolidated Fund properties
Real Estate Properties [Line Items]
Number of properties	0
Consolidated Portfolio | Multifamily | Wholly-owned properties
Real Estate Properties [Line Items]
Number of properties	10

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Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended
	Jan. 01, 2019	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Accounting Policies [Abstract]
Office parking revenue		$ 26,400	$ 25,200
Office parking receivables		1,200		$ 1,100
New Accounting Pronouncements [Line Items]
Leasing costs related to tenant leases expensed		1,100
Lease liability		10,887
Above-market ground lease intangible liability offset against right-of-use asset		3,408
Right-of-use asset		$ 7,483
ASU No. 2016-02
New Accounting Pronouncements [Line Items]
Cumulative adjustment upon adoption of new accounting standard	$ 2,499
Lease liability	10,900
Above-market ground lease intangible liability offset against right-of-use asset	3,400
Right-of-use asset	$ 7,500

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Ground Lease - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Lessee Disclosure [Abstract]
Fixed rent payments due per year on ground lease	$ 733
Ground lease right-of-use asset	7,483
Ground lease liability	10,887
Ground rent expense	$ 180
Ground rent expense		$ 183

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Investment in Real Estate - Purchase Price Allocation for Acquisitions (Details) - Consolidated JV ft² in Thousands, $ in Thousands			3 Months Ended
	Jul. 20, 2017 USD ($) ft²	Apr. 25, 2017 USD ($) ft²	Mar. 31, 2019 property
1299 Ocean
Real Estate Acquisition [Line Items]
Contract price		$ 275,800
Building square footage | ft²		206
Investment in real estate:
Land		$ 22,748
Buildings and improvements		260,188
Tenant improvements and lease intangibles		5,010
Acquired above- and below-market leases, net		(10,683)
Net assets and liabilities acquired		277,263
429 Santa Monica
Real Estate Acquisition [Line Items]
Contract price		$ 77,000
Building square footage | ft²		87
Investment in real estate:
Land		$ 4,949
Buildings and improvements		69,286
Tenant improvements and lease intangibles		3,248
Acquired above- and below-market leases, net		(722)
Net assets and liabilities acquired		$ 76,761
9665 Wilshire
Real Estate Acquisition [Line Items]
Contract price	$ 177,000
Building square footage | ft²	171
Investment in real estate:
Land	$ 5,568
Buildings and improvements	175,960
Tenant improvements and lease intangibles	1,112
Acquired above- and below-market leases, net	(4,339)
Net assets and liabilities acquired	$ 178,301
Office
Real Estate Acquisition [Line Items]
Number of properties acquired | property			3

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Ground Lease - Future Minimum Ground Lease Payments (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Future Minimum Ground Lease Payments
2020	$ 733
2021	733
2022	733
2023	733
2024	733
Thereafter	45,995
Total future minimum lease payments	$ 49,660

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Acquired Lease Intangibles - Summary of Acquired Lease Intangibles (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Acquired Finite-Lived Intangible Assets [Line Items]
Acquired lease intangible assets, net	$ 3,092	$ 3,251
Acquired lease intangible liabilities, net	44,883	52,569
Above Market Tenant Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Off-market lease, assets	3,809	5,595
Accumulated amortization	(1,658)	(3,289)
Below Market Tenant Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Off-market lease, liabilities	111,302	112,175
Accumulated accretion	(66,419)	(63,013)
Above Market Ground Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Off-market lease, assets	1,152	1,152
Accumulated amortization	(211)	(207)
Off-market lease, liabilities	0	4,017
Accumulated accretion	$ 0	$ (610)

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Acquired Lease Intangibles - Impact on Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization/accretion of above/below-market leases	$ 4,120	$ 6,152
Rental revenues | Tenant Lease
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization/accretion of above/below-market leases	4,124	6,144
Office parking and other income | Above Market Ground Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization/accretion of above/below-market leases	(4)	(4)
Office expenses | Above Market Ground Leases
Acquired Finite-Lived Intangible Assets [Line Items]
Amortization/accretion of above/below-market leases	$ 0	$ 12

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Investments in Unconsolidated Real Estate Funds - Narrative (Details) ft² in Millions	3 Months Ended
	Mar. 31, 2019 ft² fund property
Schedule of Equity Method Investments [Line Items]
Number of properties	81
Percentage of amounts related to the Fund	100.00%
Opportunity Fund
Schedule of Equity Method Investments [Line Items]
Equity interest of the Fund, percent	6.20%
Fund X
Schedule of Equity Method Investments [Line Items]
Equity interest of the Fund, percent	71.30%
Partnership X
Schedule of Equity Method Investments [Line Items]
Equity interest of the Fund, percent	24.50%
Unconsolidated Fund properties
Schedule of Equity Method Investments [Line Items]
Number of real estate funds owned and managed | fund	3
Office Buildings
Schedule of Equity Method Investments [Line Items]
Number of properties	71
Office Buildings | Unconsolidated Fund properties
Schedule of Equity Method Investments [Line Items]
Number of properties	8
Area of real estate portfolio (sq ft) | ft²	1.8

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Investments in Unconsolidated Real Estate Funds - Summary of Cash Distributions Received from Funds (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Real Estate Investments, Net [Abstract]
Operating distributions received	$ 1,551	$ 1,506
Capital distributions received	2,225	1,953
Total distributions received	$ 3,776	$ 3,459

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Investments in Unconsolidated Real Estate Funds - Summary of Statement of Financial Position for Investments in Unconsolidated Real Estate Funds (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Real Estate Investments, Net [Abstract]
Total assets	$ 688,590	$ 694,713
Total liabilities	528,032	525,483
Total equity	$ 160,558	$ 169,230

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Investments in Unconsolidated Real Estate Funds - Summary of Statement of Operations for Investments in Unconsolidated Real Estate Funds (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Real Estate Investments, Net [Abstract]
Total revenues	$ 20,159	$ 19,147
Operating income	5,395	5,566
Net income	$ 1,332	$ 1,434

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Other Assets - Summary of Other Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Other Assets [Abstract]
Restricted cash	$ 121	$ 121
Prepaid expenses	8,383	7,830
Other indefinite-lived intangibles	1,988	1,988
Furniture, fixtures and equipment, net	2,441	1,101
Other	4,154	3,719
Total other assets	$ 17,087	$ 14,759

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Secured Notes Payable and Revolving Credit Facility, Net - Schedule of Secured Notes Payable and Revolving Credit Facility (Details) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Principal Balance	$ 4,158,806,000	$ 4,163,982,000
Unamortized loan premium, net	3,935,000	3,986,000
Unamortized deferred loan costs, net	(33,470,000)	(33,938,000)
Total Consolidated Debt, Net	4,129,271,000	4,134,030,000
Revolving Credit Facility With Maturity Date of August 21, 2020
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 400,000,000
Revolving Credit Facility With Maturity Date of August 21, 2020 | Minimum
Debt Instrument [Line Items]
Unused commitment fees (as a percent)	0.15%
Revolving Credit Facility With Maturity Date of August 21, 2020 | Maximum
Debt Instrument [Line Items]
Unused commitment fees (as a percent)	0.10%
Secured Debt | LIBOR | Minimum
Debt Instrument [Line Items]
Basis Spread on Variable Rate	0.00%
Secured Debt | Term Loan With Maturity Date of June 1, 2038
Debt Instrument [Line Items]
Fixed Rate Debt Amortization Period	30 years
Wholly Owned Subsidiaries
Debt Instrument [Line Items]
Principal Balance	$ 3,178,806,000	3,183,982,000
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan With Maturity Date of October 1, 2019
Debt Instrument [Line Items]
Maturity Date	Oct. 01, 2019
Principal Balance	$ 145,000,000	145,000,000
Variable Interest Rate	LIBOR + 1.25%
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan With Maturity Date of October 1, 2019 | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.25%
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.77%
Debt Instrument [Line Items]
Maturity Date	Apr. 15, 2022
Principal Balance	$ 340,000,000	340,000,000
Variable Interest Rate	LIBOR + 1.40%
Fixed Interest Rate	2.77%
Swap Maturity Date	Apr. 01, 2020
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.77% | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.40%
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.06%
Debt Instrument [Line Items]
Maturity Date	Jul. 27, 2022
Principal Balance	$ 180,000,000	180,000,000
Variable Interest Rate	LIBOR + 1.45%
Fixed Interest Rate	3.06%
Swap Maturity Date	Jul. 01, 2020
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.06% | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.45%
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.64%
Debt Instrument [Line Items]
Maturity Date	Nov. 01, 2022
Principal Balance	$ 400,000,000	400,000,000
Variable Interest Rate	LIBOR + 1.35%
Fixed Interest Rate	2.64%
Swap Maturity Date	Nov. 01, 2020
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.64% | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.35%
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.57%
Debt Instrument [Line Items]
Maturity Date	Jun. 23, 2023
Principal Balance	$ 360,000,000	360,000,000
Variable Interest Rate	LIBOR + 1.55%
Fixed Interest Rate	2.57%
Swap Maturity Date	Jul. 01, 2021
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 2.57% | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.55%
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.62%
Debt Instrument [Line Items]
Maturity Date	Dec. 23, 2023
Principal Balance	$ 220,000,000	220,000,000
Variable Interest Rate	LIBOR + 1.70%
Fixed Interest Rate	3.62%
Swap Maturity Date	Dec. 23, 2021
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.62% | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.70%
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.46%
Debt Instrument [Line Items]
Maturity Date	Jan. 01, 2024
Principal Balance	$ 300,000,000	300,000,000
Variable Interest Rate	LIBOR + 1.55%
Fixed Interest Rate	3.46%
Swap Maturity Date	Jan. 01, 2022
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.46% | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.55%
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.84%
Debt Instrument [Line Items]
Maturity Date	Mar. 03, 2025
Principal Balance	$ 335,000,000	335,000,000
Variable Interest Rate	LIBOR + 1.30%
Fixed Interest Rate	3.84%
Swap Maturity Date	Mar. 01, 2023
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Effective Annual Fixed Interest Rate At 3.84% | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.30%
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan With Maturity Date of April 1, 2025
Debt Instrument [Line Items]
Maturity Date	Apr. 01, 2025
Principal Balance	$ 102,400,000	102,400,000
Variable Interest Rate	LIBOR + 1.25%
Fixed Interest Rate	2.84%
Swap Maturity Date	Mar. 01, 2020
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loan With Maturity Date of April 1, 2025 | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.25%
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of December 1, 2025
Debt Instrument [Line Items]
Maturity Date	Dec. 01, 2025
Principal Balance	$ 115,000,000	115,000,000
Variable Interest Rate	LIBOR + 1.25%
Fixed Interest Rate	2.76%
Swap Maturity Date	Dec. 01, 2020
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of December 1, 2025 | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.25%
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of June 1, 2027
Debt Instrument [Line Items]
Maturity Date	Jun. 01, 2027
Principal Balance	$ 550,000,000	550,000,000
Variable Interest Rate	LIBOR + 1.37%
Fixed Interest Rate	3.16%
Swap Maturity Date	Jun. 01, 2022
Wholly Owned Subsidiaries | Secured Debt | Fannie Mae Loans With Maturity Date of June 1, 2027 | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.37%
Wholly Owned Subsidiaries | Secured Debt | Term Loan With Maturity Date of June 1, 2038
Debt Instrument [Line Items]
Maturity Date	Jun. 01, 2038
Principal Balance	$ 31,406,000	31,582,000
Fixed Interest Rate	4.55%
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility With Maturity Date of August 21, 2020
Debt Instrument [Line Items]
Maturity Date	Aug. 21, 2023
Principal Balance	$ 100,000,000	105,000,000
Variable Interest Rate	LIBOR + 1.15%
Wholly Owned Subsidiaries | Line of Credit | Revolving Credit Facility With Maturity Date of August 21, 2020 | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.15%
Consolidated JV | Secured Debt | Term Loan With Maturity Date of February 28, 2023
Debt Instrument [Line Items]
Maturity Date	Feb. 28, 2023
Principal Balance	$ 580,000,000	580,000,000
Variable Interest Rate	LIBOR + 1.40%
Fixed Interest Rate	2.37%
Swap Maturity Date	Mar. 01, 2021
Consolidated JV | Secured Debt | Term Loan With Maturity Date of February 28, 2023 | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.40%
Consolidated JV | Secured Debt | Term Loan With Maturity Date of December 19, 2024
Debt Instrument [Line Items]
Maturity Date	Dec. 19, 2024
Principal Balance	$ 400,000,000	$ 400,000,000
Variable Interest Rate	LIBOR + 1.30%
Fixed Interest Rate	3.47%
Swap Maturity Date	Jan. 01, 2023
Consolidated JV | Secured Debt | Term Loan With Maturity Date of December 19, 2024 | LIBOR
Debt Instrument [Line Items]
Basis Spread on Variable Rate	1.30%

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Secured Notes Payable and Revolving Credit Facility, Net - Schedule of Debt Statistics (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Debt Disclosure [Abstract]
Principal balance of consolidated fixed rate debt	$ 3,910,000
Weighted average remaining life (including extension options) of consolidated fixed rate debt (in years)	5 years 2 months
Weighted average remaining fixed interest period of consolidated fixed rate debt (in years)	2 years 6 months
Weighted average annual interest rate of consolidated fixed rate debt (as a percent)	3.07%
Debt Instrument [Line Items]
Principal Balance	$ 4,158,806	$ 4,163,982
Aggregate Swapped to Fixed Rate Loans
Debt Instrument [Line Items]
Principal Balance	3,882,400	3,882,400
Aggregate Fixed Rate Loans
Debt Instrument [Line Items]
Principal Balance	31,406	31,582
Aggregate Floating Rate Loans
Debt Instrument [Line Items]
Principal Balance	$ 245,000	$ 250,000

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Secured Notes Payable and Revolving Credit Facility, Net - Schedule of Minimum Future Principal Payments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Excluding Maturity Extension Options
2020	$ 145,727
2021	295,760
2022	300,796
2023	1,655,833
2024	680,871
Thereafter	1,079,819
Total future principal payments	4,158,806	$ 4,163,982
Including Maturity Extension Options
2020	145,727
2021	760
2022	796
2023	1,500,833
2024	980,871
Thereafter	1,529,819
Total future principal payments	$ 4,158,806	$ 4,163,982

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Secured Notes Payable and Revolving Credit Facility, Net - Schedule of Loan Costs and Accumulated Amortization (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Debt Disclosure [Abstract]
Accumulated amortization on deferred loan costs	$ 26,100		$ 24,200
Loan Costs Included In Interest Expense
Deferred loan cost amortization	1,917	$ 2,309
Interest Expense
Loan Costs Included In Interest Expense
Loan costs expensed	0	404
Deferred loan cost amortization	1,917	1,905
Total	$ 1,917	$ 2,309

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Interest Payable, Accounts Payable and Deferred Revenue - Summary of Balances (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accounts Payable and Accrued Liabilities [Abstract]
Interest payable	$ 11,023	$ 10,657
Accounts payable and accrued liabilities	88,585	75,111
Deferred revenue	42,731	44,386
Total interest payable, accounts payable and deferred revenue	$ 142,339	$ 130,154

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Derivative Contracts - Summary of Derivatives (Details) - Interest Rate Swap - Derivatives Designated as Cash Flow Hedges - Cash Flow Hedging $ in Thousands	Mar. 31, 2019 USD ($) instrument
Derivative [Line Items]
Number of Interest Rate Swaps | instrument	27
Notional | $	$ 3,882,400
Percent of notional amount related to the Fund	100.00%
Unconsolidated Funds
Derivative [Line Items]
Number of Interest Rate Swaps | instrument	4
Notional | $	$ 510,000
Percent of notional amount related to the Fund	100.00%

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Derivative Contracts - Credit-risk related Contingent Features (Details) - Interest Rate Swap - Derivatives Designated as Cash Flow Hedges - Cash Flow Hedging - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Fair value derivatives in net liability position	$ 5,422	$ 1,681
Percent of notional amount related to the Fund	100.00%
Unconsolidated Funds
Derivative Instruments, Gain (Loss) [Line Items]
Fair value derivatives in net liability position	$ 0	$ 0
Percent of notional amount related to the Fund	100.00%

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Derivative Contracts - Counterparty Credit Risk (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Derivative Instruments, Gain (Loss) [Line Items]
Fair value of derivatives in an asset position	$ 46,880	$ 73,414
Interest Rate Swap | Derivatives Designated as Cash Flow Hedges | Cash Flow Hedging
Derivative Instruments, Gain (Loss) [Line Items]
Fair value of derivatives in an asset position	$ 49,807	76,021
Percent of notional amount related to the Fund	100.00%
Interest Rate Swap | Derivatives Designated as Cash Flow Hedges | Cash Flow Hedging | Unconsolidated Funds
Derivative Instruments, Gain (Loss) [Line Items]
Fair value of derivatives in an asset position	$ 7,804	$ 12,576
Percent of notional amount related to the Fund	100.00%

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Derivative Contracts - Impact of Hedges on AOCI and Consolidated Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Derivative [Line Items]
Gain recorded in AOCI - adoption of ASU 2017-12	$ 0	$ 211
(Loss) gain recorded in AOCI before reclassifications	(21,563)	39,731
Interest Expense presented in the consolidated statements of operations	(33,293)	(32,900)
Income, including depreciation, from unconsolidated real estate funds	1,551	1,506
Unconsolidated Funds
Derivative [Line Items]
(Loss) gain recorded in AOCI before reclassifications	(2,405)	4,475
Cash Flow Hedging | Derivatives Designated as Cash Flow Hedges
Derivative [Line Items]
Gain recorded in AOCI - adoption of ASU 2017-12		211
(Loss) gain recorded in AOCI before reclassifications	(21,563)	39,731
(Gain) loss reclassified from AOCI to Interest Expense	(8,724)	(131)
Cash Flow Hedging | Derivatives Designated as Cash Flow Hedges | Unconsolidated Funds
Derivative [Line Items]
(Loss) gain recorded in AOCI before reclassifications	(2,405)	4,475
(Gain) loss reclassified from AOCI to Interest Expense	$ (616)	$ 83

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Derivative Contracts - Future Reclassifications from AOCI (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative designated as cash flow hedge to be reclassified	$ 30,188
Unconsolidated Funds
Derivative Instruments, Gain (Loss) [Line Items]
Derivative designated as cash flow hedge to be reclassified	$ 2,090

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Equity - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Schedule of Equity Method Investments [Line Items]
Number of OP Units converted to shares of common stock (shares)	22,000	322,000
Number of OP units redeemed (shares)	13,000
OP Units redeemed with cash	$ 507	$ 0
Shares of common stock issued for exercise of stock options (shares)		14,000
Number of stock options exercised (shares)		32,000
Common stock, outstanding (in shares)	170,237,122		170,214,809
Number of OP units and fully-vested LTIP units outstanding (shares)	28,200,000
Number of shares of common stock issued upon redemption of one OP unit (shares)	1
Partnership Interest | Operating Partnership
Schedule of Equity Method Investments [Line Items]
Investors' ownership in joint venture (percent)	14.00%

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Equity - Changes in Ownership Interest in Operating Partnership (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stockholders' Equity Note [Abstract]
Net income attributable to common stockholders	$ 28,701	$ 28,206
Transfers from noncontrolling interests:
Exchange of OP Units with noncontrolling interests	363	5,199
Repurchase of OP Units from noncontrolling interests	(291)	0
Net transfers from noncontrolling interests	72	5,199
Change from net income attributable to common stockholders and transfers from noncontrolling interests	$ 28,773	$ 33,405

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Equity - AOCI Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Jan. 01, 2018
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	$ 3,848,430	$ 3,902,049
Other comprehensive (loss) income before reclassifications	(21,563)	39,731
Reclassification of (gains) losses from AOCI	(8,724)	(131)
Net current period OCI	(33,308)	44,369
OCI attributable to noncontrolling interests	10,307	(13,447)
OCI attributable to common stockholders	(23,001)	30,922
Ending balance	3,788,182	3,926,467
Fund X
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Other comprehensive (loss) income before reclassifications	(2,405)	4,475
Reclassification of (gains) losses from AOCI	(616)	83
AOCI
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward]
Beginning balance	53,944	43,099
Beginning balance adjustment - cumulative effect of new accounting principle			$ 211
Ending balance	$ 30,943	$ 74,021

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Equity - Equity Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Stockholders' Equity Note [Abstract]
Net stock-based compensation expense	$ 2,630	$ 3,051
Capitalized stock-based compensation	$ 670	452
Intrinsic value of options exercised		$ 800
Options outstanding (shares)	0

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EPS - Calculation of Basic and Diluted EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share [Abstract]
Net income attributable to common stockholders	$ 28,701	$ 28,206
Allocation to participating securities: Unvested LTIP Units	(126)	(117)
Numerator for basic and diluted net income attributable to common stockholders	$ 28,575	$ 28,089
Weighted average shares of common stock outstanding - basic (in shares)	170,221,000	169,601,000
Effect of dilutive securities: Stock options (in shares)	0	24,000
Weighted average shares of common stock and common stock equivalents outstanding - diluted (in shares)	170,221,000	169,625,000
Basic EPS:
Net income attributable to common stockholders per share (usd per share)	$ 0.17	$ 0.17
Diluted EPS:
Net income attributable to common stockholders per share (usd per share)	$ 0.17	$ 0.17
Options outstanding (shares)	0
OP Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from the computation of weighted average diluted shares (in shares)	26,340,000	26,943,000
Vested LTIP Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from the computation of weighted average diluted shares (in shares)	1,831,000	800,000

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Fair Value of Financial Instruments - Financial Instruments Disclosed at Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Ground lease liability	$ 10,887
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Secured notes payable	4,100,464	$ 4,087,979
Ground lease liability	11,350
Carrying Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Secured notes payable	4,062,741	$ 4,062,968
Ground lease liability	$ 10,887

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Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Derivative Assets:
Fair value - derivatives	$ 46,880	$ 73,414
Derivative Liabilities:
Fair value - derivatives	$ 5,283	1,530
Fund X | Interest Rate Swap
Derivative Liabilities:
Percent of notional amount related to the Fund	100.00%
Level 2
Derivative Assets:
Fair value - derivatives	$ 46,880	73,414
Derivative Liabilities:
Fair value - derivatives	5,283	1,530
Level 2 | Fund X
Derivative Assets:
Fair value - unconsolidated Funds' derivatives	7,416	12,228
Derivative Liabilities:
Fair value - unconsolidated Funds' derivatives	$ 0	$ 0

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Segment Reporting - Narrative (Details)	3 Months Ended
	Mar. 31, 2019 segment
Segment Reporting [Abstract]
Number of reportable business segments	2

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Segment Reporting - Operating Activity Within Reportable Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting Information [Line Items]
Total revenues	$ 224,186	$ 212,247
Segment profit	153,182	145,193
Office Segment
Segment Reporting Information [Line Items]
Total revenues	197,290	187,333
Operating expenses	(63,449)	(60,356)
Segment profit	133,841	126,977
Multifamily Segment
Segment Reporting Information [Line Items]
Total revenues	26,896	24,914
Operating expenses	(7,555)	(6,698)
Segment profit	$ 19,341	$ 18,216

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Segment Reporting - Reconciliation of Segment Profit to Net Income Attributable to Common Stockholders (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Segment Reporting [Abstract]
Total profit from all segments	$ 153,182	$ 145,193
General and administrative expenses	(9,832)	(9,567)
Depreciation and amortization	(79,873)	(72,498)
Other income	2,898	2,630
Other expenses	(1,845)	(1,733)
Income, including depreciation, from unconsolidated real estate funds	1,551	1,506
Interest expense	(33,293)	(32,900)
Net income	32,788	32,631
Less: Net income attributable to noncontrolling interests	(4,087)	(4,425)
Net income attributable to common stockholders	$ 28,701	$ 28,206

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Future Minimum Lease Rental Receipts - Summary of Minimum Rental Receipts (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) land_parcel
Future Minimum Base Rentals
2020	$ 648,328
2021	579,740
2022	476,073
2023	384,943
2024	290,637
Thereafter	687,219
Total future minimum base rentals	$ 3,066,940
Maximum term of residential leases not included in total future minimum base rentals	1 year
Wholly-owned properties
Future Minimum Base Rentals
Number of land parcels subject to ground lease | land_parcel	2

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Commitments, Contingencies and Guarantees - Narrative (Details) ft² in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) ft² apartment building
Other Commitments [Line Items]
Number of properties containing Asbestos | building	28
Percentage of amounts related to the Fund	100.00%
Unconsolidated Funds
Other Commitments [Line Items]
Number of properties containing Asbestos | building	4
Maximum
Other Commitments [Line Items]
Amount accounts are insured for by Federal Deposit Insurance Corporation	$ 250,000
Development Projects
Other Commitments [Line Items]
Aggregate remaining contractual commitment	$ 192,000,000
Development Projects | California
Other Commitments [Line Items]
Number of apartments under construction | apartment	376
Development Projects | Hawaii
Other Commitments [Line Items]
Number of apartments under construction | apartment	500
Square footage of office tower conversion (sq ft) | ft²	490
Repositionings, Capital Expenditure Projects, And Tenant Improvements
Other Commitments [Line Items]
Aggregate remaining contractual commitment	$ 40,200,000

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Commitments, Contingencies and Guarantees - Schedule of Debt Related to Unconsolidated Funds (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) property	Dec. 31, 2018 USD ($)
Debt Instrument [Line Items]
Principal Balance	$ 4,129,271	$ 4,134,030
Partnership X
Debt Instrument [Line Items]
Loan Maturity Date	Mar. 01, 2023
Principal Balance	$ 110,000
Collateral, number of properties | property	2
Maximum future payments under the swap agreement	$ 1,900
Partnership X | Interest Rate Swap
Debt Instrument [Line Items]
Variable Interest Rate - basis spread	1.40%
Swap Fixed Interest Rate	2.30%
Swap Maturity Date	Mar. 01, 2021
Fund X
Debt Instrument [Line Items]
Loan Maturity Date	Jul. 01, 2024
Principal Balance	$ 400,000
Collateral, number of properties | property	6
Maximum future payments under the swap agreement	$ 23,600
Loan agreement, one month LIBOR maximum for interest rate cap requirement	3.56%
Loan agreement, number of consecutive days	14 days
Fund X | Interest Rate Swap
Debt Instrument [Line Items]
Variable Interest Rate - basis spread	1.65%
Swap Fixed Interest Rate	3.44%
Swap Maturity Date	Jul. 01, 2022
Unconsolidated Funds
Debt Instrument [Line Items]
Principal Balance	$ 510,000
LIBOR | Partnership X
Debt Instrument [Line Items]
Loan agreement LIBOR floor	0.00%
LIBOR | Fund X
Debt Instrument [Line Items]
Loan agreement LIBOR floor	0.00%

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Label	Element	Value
Accounting Standards Update 2017-12 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (211,000)
Accounting Standards Update 2017-12 [Member] | Accumulated Distributions in Excess of Net Income [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(211,000)
Accounting Standards Update 2016-02 [Member] | Noncontrolling Interest [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	(355,000)
Accounting Standards Update 2016-02 [Member] | Accumulated Distributions in Excess of Net Income [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (2,144,000)