Key Highlights

  • Revenues were USD 261 million versus USD 251 million, and FFO per fully diluted share was unchanged at USD 0.34.
  • Office occupancy rose to 76.7%, the largest quarterly gain since 2012, with positive absorption for a fourth straight quarter.
  • AFFO fell to USD 47 million from 52 million, while same property cash NOI fell to USD 148 million.
  • 2026 FFO guidance is USD 1.39 to USD 1.43 per share, and the quarterly Dividend was USD 0.19.

Occupancy Recovery Under Way

Douglas Emmett, Inc. (NYSE:DEI) owns a portfolio in the coastal submarkets of Los Angeles and Honolulu, with 18.2 million square feet of Class A office space and 4,410 apartment units in service, plus 1,035 units in development. Third-quarter 2026 revenues were USD 261 million compared with USD 251 million, and the net loss attributable to common stockholders narrowed to USD 9 million from USD 11 million. FFO per fully diluted share was USD 0.34 in both periods.

The company achieved positive absorption for the fourth consecutive quarter, with office leasing, and grew office occupancy by more than a full percentage point to 76.7%. Leases signed were 1.8% more valuable than the expiring leases they replaced. Management said the leased-to-occupied spread is above its historical average, which creates a Backlog for future occupancy growth.

Analyst estimates were EPS of negative USD 0.05 against reported EPS of negative USD 0.05, and Revenue of USD 256.8 million against reported revenue of USD 260.9 million.

Cash Flow Measures and Interest Costs

AFFO was USD 47 million against USD 52 million, and same property cash NOI was USD 148 million against USD 153 million. The company said its NOI has essentially recovered to its 2019 level even with office occupancy still down more than 10%.

Management cited interest rates as a key issue. The average cost of Debt rose from 3% to 5%, so the company now spends over USD 135 million more on interest than in 2019. On the multifamily side the portfolio stayed fully leased, and same property cash NOI rose 4.4%.

Development, Cash and Guidance

In Brentwood, the multi-year redevelopment of the 712-unit Landmark Residences continues, and at 10900 Wilshire in Westwood the company is developing a mixed-use community. Recent changes to state and municipal zoning mean entitled residential sites can now accommodate 8,000 to 10,000 new units.

Cash and cash equivalents were USD 311 million at quarter end, and on October 15, 2026 the company paid a quarterly dividend of USD 0.19 per share, or USD 0.76 annualized. For 2026 the company guided diluted net loss per share to between USD 0.20 and USD 0.16 and FFO per fully diluted share to between USD 1.39 and USD 1.43.

Consolidated debt principal was USD 5,774.7 million, of which the company's share was USD 4,680.9 million.

Items to Follow

Further office occupancy gains, the cost of refinancing debt and progress on residential development are the items to follow. Management said that rising occupancy and the residential projects under construction can lift FFO back to its 2019 level and beyond, even if interest rates do not moderate.