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Douglas Emmett, one of the largest owners of office buildings and apartment properties in Los Angeles, plans to raise as much as $1.3 billion in an initial public offering later this year.

The deal would represent the largest-ever IPO for an equity REIT, according to SNL Financial.

The offering has been in the works for some time and should fare well, given the strong demand for commercial real estate properties in the Los Angeles area.

Douglas Emmett owns 46 office properties with about 11.6 million rentable square feet, mostly in Los Angeles, along with some in Honolulu. The company also owns nine apartment buildings in Los Angeles. At the end of the first quarter, the office portfolio was 92.1% leased, and the apartment properties were 99.3% leased, according to the company's prospectus, which was filed Friday. The office portfolio contributed about 84.8% of the company's annualized rent as of March 31.

Los Angeles' office market has been one of the country's best performers, as vacancy rates in the city dropped to 10.1% in the first quarter from 12.4% a year earlier, according to CB Richard Ellis. This has

fueled demand for property owners in the city. Last year, office landlord Arden Realty was taken private at a significant premium by

General Electric's


real estate division.

Trizec Properties

( TRZ), which has a heavy focus on the city, recently agreed

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to be purchased at a premium by

Brookfield Properties


and the Blackstone Group.

This year, apartment rents are set to rise 6% to 7% in Southern California, according to the USC Lusk Center for Real Estate. Such demand has

helped fundamentals at

BRE Properties



Barry Vinocur, editor of REIT Zone publications, says that on the basis of the initial feedback he's hearing, the IPO should be "very eagerly received."

"A long list of buy-siders have already seen the company's properties, and the assets were included on a recent SoCal property tour hosted by GreenStreet Advisors," Vinocur says.