Previous Statements by DEI
» Douglas Emmett's CEO Discusses Q1 2012 Results - Earnings Call Transcript
» Douglas Emmett's CEO Discusses Q4 2011 Results - Earnings Call Transcript
» Douglas Emmett's CEO Discusses Q3 2011 Results - Earnings Call Transcript
» Douglas Emmett's CEO Presents at the Annual Analyst and Investor Event - Conference Call Transcript
Although, we believe that our assumptions are reasonable, they are not guarantees of future performance, and some will prove to be incorrect. Therefore, our actual future results can be expected to differ from our expectations and those differences may be material.For a more detailed description on some potential risks, please refer to our SEC filings which can be found in the Investor Relations section of our website. When we reach the question-and-answer portion in consideration of others, please limit yourselves up to one question and one follow-up. I will now turn the call over to Jordan Kaplan, President and CEO of Douglas Emmett. Jordan? Jordan Kaplan Thanks Stuart. Good morning, everyone. Thank you for joining us. Our recent fundamentals during the second quarter exceeded our expectations. With a tough 2011 comparison quarter, our same property cash NOI grew by 2.8%. We leased more new office space last quarter than in any other quarter since our IPO. We achieved our sixth consecutive quarter of positive absorption getting 52,000 square feet of additional leasing, and have not seen any slowdown despite well-publicized national and global economic concerns. Our total office leased rate now stands at 90.1%. I am pleased to say that we now have four submarkets with increasing office rental rates as Century City joined Santa Monica, Beverly Hills and Encino Sherman Oaks markets. Our multi-family portfolio remains fully leased with continuing strong rental rate increases. We believe that our multi-family portfolio still has significant additional running room. As a result of our improving fundamentals, we are increasing our 2012 estimates for same property NOI and occupancy growth although as we’ve said before both measures are subject to quarterly variations. As we announced a couple of weeks ago, we closed a seven-year 3.85% fixed rate loan. We believe that the long-term benefits of locking in historically low rates outweigh the negative impact on short-term earnings. We continue to work on a variety of potential office and apartment acquisitions, a few sellers have begun to bring product to market although it remains to be seen whether those properties will actually trade. We still hope that this part of the cycle will provide real opportunities for external growth.
Before I turn the call over to Ted, I want to mention one more thing even though it may be old news at this point. After our first quarter call, the Los Angeles Times published an article about our property tax appeals following the market crash. The Times said it looked at 3,000 buildings in Los Angeles County that traded during the five year period between 2005 and 2009 which assumed were similar to ours.They calculated that the average reduction in appraised values for those buildings was 16%. Because that was somewhat less than the 27% reduction we got on a few properties we purchased in 2007 and 2008, the article implied that we must have received special treatment. Their story is just wrong. They inflated our average by exceeding over half of our appeals by excluding – they inflated our average by excluding over half of our appeals that resulted in smaller or no reductions. At the same time, they drove down their calculated average for comparable properties by including properties with base value set in 2005, which missed the three years of price run-up prior to the crash and properties with base value set in 2009 after the market crash had already occurred. In addition, their choice of comparable buildings seems debatable. Since they included 3,000 sales from a period with less than 100 Class A offices, a period when less than 100 Class A office buildings actually traded. In reality, the reductions we received were less than the actual peak to trough declines in our markets that independent experts such as Moody’s, Costar and many of the analysts on this call estimate to be between 30% and 40%. Read the rest of this transcript for free on seekingalpha.com