Douglas Emmett Records Largest Occupancy Gain Since 2012

The Tip Desk · November 4, 2026 · 3 min read

Office occupancy rose more than a full percentage point to 76.7% as leasing reached almost 1 million square feet.

Douglas Emmett (DEI), the coastal office and apartment REIT, posted office occupancy of 76.7% at the end of the third quarter, a gain of more than a full percentage point that the company said was its largest quarterly increase since 2012.

The company said it achieved positive absorption for the fourth consecutive quarter, with almost 1 million square feet of office leasing. The leased rate stood at 80.4% and net absorption at 0.1% as of September 30. The company said the leased-to-occupied spread was almost double its historical average. New leases were 1.8% more valuable than the expiring leases they replaced, after a 3.2% premium in the second quarter.

Revenue rose to $261 million in the third quarter from $257 million in the second quarter. Net loss attributable to common stockholders was $9 million, or $0.05 a share, versus a $11 million loss, or $0.07 a share, a year earlier. FFO per fully diluted share was $0.34, matching the year-ago quarter after $0.37 in each of the two prior quarters. AFFO was $47 million.

Same property cash NOI declined to $148 million from $152 million in the second quarter. Same property office cash NOI fell 5.0% year over year to $115.4 million. Same property multifamily cash NOI rose 4.4% to $33.0 million, after a 2.0% increase in the prior quarter. The company said multifamily demand and higher rents kept the portfolio fully leased.

The company said NOI has essentially recovered to its 2019 level even with office occupancy still down more than 10%, and that its biggest challenge is interest rates. It said the average cost of debt has increased from 3% to 5%, and that it now spends over $135 million more on interest than in 2019, which alone equates nearly all of its FFO decline since 2019’s FFO high-water mark. It said that even if interest rates do not moderate, rising occupancy and residential developments under construction can drive FFO back to its 2019 level and beyond.

In August the company refinanced a $366 million office loan with new non-recourse four-year debt, effectively fixed for three years at 6.24% per annum. It said it had successfully refinanced $1.2 billion of loans over the last nine months. Cash and cash equivalents were $311 million at quarter end, down from $355 million at the end of the second quarter.

The in-service portfolio includes 18.2 million square feet of Class A office properties and 4,410 apartment units, plus 1,035 apartment units in the development portfolio. Entitled residential sites can accommodate 8,000 to 10,000 new units after zoning changes. The company said the 712-unit Landmark Residences redevelopment in Brentwood continues and that it is developing a mixed-use community at 10900 Wilshire in Westwood.

The company reiterated 2026 guidance of a net loss per diluted share between $(0.20) and $(0.16) and FFO per fully diluted share between $1.39 and $1.43. In the second quarter it had lowered the FFO range’s upper endpoint from $1.45 to $1.43, leaving the lower endpoint at $1.39, and lowered office occupancy guidance to 75% to 77% after including Studio Plaza. On October 15 it paid a quarterly cash dividend of $0.19 a share, or $0.76 annualized. The AFFO payout ratio for the three months ended September 30 was 84.5%.