What changed in this filing

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Item 1A. Risk Factors

2026-02-20 compared with 2025-02-14 · 37 added, 24 removed, 477 unchanged (11% of the section changed)

7 unchanged sentences

Risks Related to Our Properties and Our Business

• S ustained or further increases in inflation could adversely impact our operating results, cash flows, financial position, our ability to pay dividends and distributions, and the market price of our common stock.

• The continuation of or further increases in inflation could adversely impact our operating results, cash flows, financial position, our ability to pay dividends and distributions, and the market price of our common stock.

• Economic and political changes could adversely affect our business, operating results, cash flows, financial position, our ability to pay dividends and distributions, and the market price of our common stock.

1 unchanged sentence

Our properties in Los Angeles County are concentrated in certain submarkets, exposing us to risks associated with those specific areas.

• Our operating performance and the market value of our securities are subject to risks associated with our investments in real estate assets and with trends in the real estate industry.

• Our operating performance and the market value of our common stock are subject to risks associated with our investments in real estate and with trends in the real estate industry.

• We have a substantial amount of debt, which exposes us to interest rate fluctuation risk and the risk of not being able to refinance our debt, which in turn could expose us to the risk of default under our debt obligations.

43 unchanged sentences

General Risks

• Security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of our IT networks and related systems could harm our business.

• Security breaches through cyber attacks, cyber intrusions or otherwise, could cause loss of confidential information, as well as significant disruptions of our IT networks and related systems, which could harm our business.

• The use of AI technologies presents certain risks that may adversely affect our business and operations.

• Litigation could have an adverse effect on our business.

2 unchanged sentences

Risks Related to Our Properties and Our Business

Sustained or further increases in inflation could adversely impact our operating results, cash flows, financial position, our ability to pay dividends and distributions, and the market price of our common stock.

Since the COVID-19 pandemic, the consumer price index has increased substantially.

Federal policies and recent global events may exacerbate increases in the consumer price index.

A sustained or further increase in inflation could have adverse impacts on our business, including:

The continuation of or further increases in inflation could adversely impact our operating results, cash flows, financial position, our ability to pay dividends and distributions, and the market price of our common stock.

In recent years, the consumer price index has increased substantially and remains elevated.

Federal policies and recent global events may exacerbate recent increases in the consumer price index.

Sustained or further increases in inflation could have adverse impacts on our business, including:

• an increase in our rental operating costs and our general and administrative costs;

3 unchanged sentences

• higher operating costs billed to our office tenants, which could reduce tenant demand for our office properties;

• higher interest rates, which could:

• elevated or increasing interest rates may:

(i) increase our borrowing costs, (ii) adversely impact our property valuations, and (iii) cause an economic recession which would adversely affect our business;

• an increase in recurring capital expenditures to maintain our properties;

• an increase in construction costs, which would increase the cost of development and respositioning projects and adversely impact our investments in real estate assets and expected yields on our development and repositioning projects, which could make investment opportunities less profitable to us;

• an increase in construction costs, which would increase the cost of development and repositioning projects and adversely impact our investments in real estate assets and expected yields on our development and repositioning projects, which could make investment opportunities less profitable to us;

• reduced cash flows, which would adversely impact our ability to pay dividends and distributions.

In addition, historically, during periods of increasing interest rates, real estate valuations have generally decreased as a result of rising capitalization rates, which tend to be positively correlated with interest rates.

Consequently, prolonged periods of higher interest rates may negatively impact the valuation of our real estate portfolio and result in a decline of the market price of our common stock and market capitalization, as well as lower sales proceeds from future property dispositions.

In addition, historically, during periods of elevated or increasing interest rates, real estate valuations have generally decreased as a result of rising capitalization rates, which tend to be positively correlated with interest rates.

Consequently, prolonged periods of elevated interest rates may negatively impact the valuation of our real estate portfolio and result in a decline of the market price of our common stock and market capitalization, as well as lower sales proceeds from future property dispositions.

Economic and political changes could adversely affect our business, operating results, cash flows, financial position, our ability to pay dividends and distributions, and the market price of our common stock.

2 unchanged sentences

• tenant defaults under leases or tenants not renewing their leases, or renewing under less favorable terms, if the financial condition of our tenants is adversely impacted;

• reduced leasing to new tenants or at less favorable terms;

• reduced leasing to new tenants or leasing at less favorable terms;

• decreased demand for our office space if businesses, including our tenants, lay off employees;

41 unchanged sentences

Our substantial indebtedness, and the limitations and other constraints imposed on us by our debt agreements, especially during economic downturns when credit is harder to obtain, could adversely affect us, including the following:

• periods of rising and high interest rates would adversely affect:

• periods of rising or elevated interest rates may adversely affect:

(i) our results of operations, (ii) our ability to pay dividends and distributions, (iii) the market price of our common stock, (iv) our ability to borrow or to borrow on favorable terms and (v) our ability to refinance existing debt on commercially reasonable terms or at all;

13 unchanged sentences

Although we have a diverse tenant base, a large portion of our tenants operate in a concentrated group of industries and downturns in these industries could adversely affect our financial condition, results of operations and cash flows.

As of December 31, 2024, as a percentage of our annualized base rental revenue for the stabilized portfolio, 19.2% of our tenants operated in the legal industry, 16.1% in the financial services industry, 13.4% in the real estate industry and 10.0% in the entertainment industry.

As of December 31, 2025, as a percentage of our annualized base rental revenue for the stabilized portfolio, 19.7% of our tenants operated in the legal industry, 16.8% in the financial services industry, 13.3% in the real estate industry and 9.9% in the health services industry.

As we continue our development and potential acquisition activities, our tenant mix could become more concentrated, further exposing us to risks associated with those industries.

5 unchanged sentences

As a result, we may from time to time be required to incur significant capital expenditures to maintain the competitiveness of our properties.

There can be no assurances that any such expenditures would result in higher occupancy or rental rates, or deter existing tenants from relocating to properties owned by our competitors.

For additional information see “We are exposed to risks associated with property development.” There can be no assurances that any such expenditures would result in higher occupancy or rental rates, or deter existing tenants from relocating to properties owned by our competitors.

We face intense competition, which could adversely impact the occupancy and rental rates of our properties.

9 unchanged sentences

Potential losses, including from adverse weather conditions, natural disasters and title claims, may not be covered by insurance.

Our business operations in Los Angeles County, California and Honolulu, Hawaii are susceptible to, and could be significantly affected by, adverse weather conditions and natural disasters such as earthquakes, tsunamis, hurricanes, volcanoes, drought, wind, floods, landslides and fires.

The likelihood of such disasters may be increased as a result of climate change, and climate change could also have other impacts such as rising sea levels, which could impact our properties in Honolulu.

Our business operations in Los Angeles County, California and Honolulu, Hawaii are susceptible to, and could be significantly affected by, adverse weather conditions and natural disasters such as fires, earthquakes, tsunamis, hurricanes, volcano eruptions, drought, wind, floods and landslides.

The likelihood and severity of such disasters may be increased as a result of climate change, and climate change could also have other impacts such as rising sea levels, which could impact our properties in Honolulu.

Adverse weather conditions, natural disasters and climate change impacts could cause significant damage to our properties or to the economies of the regions in which they are located, the risk of which is enhanced by the concentration of our properties’ locations.

99 unchanged sentences

To the extent that we do so, we are subject to certain risks, including the following:

• We may not complete a development or redevelopment project on schedule or within budgeted amounts (as a result of risks beyond our control, such as weather, labor conditions, permitting issues, material shortages and price increases, including increases in the costs of building materials or construction services resulting from trade tensions, disruptions, tariffs, duties or restrictions);

• We may be unable to lease the developed or redeveloped properties at budgeted rental rates or lease up the property within budgeted time frames;

42 unchanged sentences

We have employment agreements with our CEO, Jordan L.

Kaplan, and our COO, Kenneth M.

Kaplan, and our President and COO, Kenneth M.

Panzer, which provide each executive with severance if they are terminated without cause or resign for good reason (including following a change of control).

151 unchanged sentences

General Risks

Security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of our IT networks and related systems could harm our business.

We face risks associated with security breaches, whether through cyber attacks or cyber intrusions over the Internet, malware (including ransomware), computer viruses, social engineering and phishing e-mails, exploitation of vulnerabilities in software used in our business, malfeasance by insiders or persons with access to systems inside our organization, human or technological error, and other significant disruptions of our IT networks and related systems.

The risk of a security breach or disruption, particularly through cyber attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, is expected to increase as the number, intensity and sophistication of attacks and intrusions from around the world is escalating.

Security breaches through cyber attacks, cyber intrusions or otherwise, could cause loss of confidential information, as well as significant disruptions of our IT networks and related systems, which could harm our business.

We face risks associated with security breaches that impact our IT networks and information, whether through cyber attacks or cyber intrusions over the Internet, malware (including ransomware), computer viruses, social engineering and phishing e-mails, exploitation of vulnerabilities in software used in our business, malfeasance by insiders or malicious persons with access to systems inside our organization, vulnerabilities in our or third party software, human or technological error, and other security issues with our and third party IT systems.

The risk of a security breach or disruption, particularly through cyber attack or cyber intrusion, including by computer hackers (individuals or hacking organizations), foreign governments and cyber terrorists, is expected to increase as the number, intensity and sophistication of attacks and intrusions from around the world is escalating, especially given the use of more advanced hacking tools and techniques and use of AI that can circumvent controls, evade detection and even remove forensic evidence.

Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations (including managing our building systems) and, in some cases, may be critical to the operations of certain of our tenants.

2 unchanged sentences

There can be no assurance that our security measures, or those of third parties on whom we rely, will effectively protect the confidentiality, integrity and availability of our networks, systems and data from security breaches or disruptions.

While to date we have experienced no cyberattacks or incidents that have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.

Our information, networks, systems and facilities remain vulnerable because the techniques used by attackers are constantly evolving (including their use of tools like artificial intelligence) and generally are not recognized until launched against a target, and in some cases are designed not be detected and, in fact, may not be detected.

While to date we have experienced no cyber attacks or incidents that have had a material impact on our operations or financial results, we cannot guarantee that material incidents will not occur in the future.

Our information, networks, systems and facilities remain vulnerable as techniques and sophistication used to conduct cybersecurity attacks and breaches of IT systems, as well as the sources and targets of these attacks, change frequently and are often not recognized until such attacks are launched or have been in place for a period of time and in some cases are designed not be detected and, in fact, may not be detected.

Remote and hybrid working arrangements at many third party providers also increase cybersecurity risks due to the challenges associated with managing remote computing assets and security vulnerabilities that are present in many non-corporate and home networks.

The use of AI has further enhanced malicious actors’ ability to conduct sophisticated attacks, often at a low cost, including through the use of deepfake and similar social engineering techniques and technologies.

Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.

10 unchanged sentences

We cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.

The use of AI technologies presents certain risks that may adversely affect our business and operations.

We are beginning to use AI, machine learning, and automated decision-making technologies, including proprietary AI and machine learning algorithms and models, (collectively, “AI Technologies”) in our business.

For example, we are exploring the use of AI Technologies in reviewing lease documents.

We expect that increased investment could be required in the future to continuously improve our use of AI Technologies.

As with many technological innovations, there are significant risks involved in developing, maintaining and deploying these technologies and there can be no assurance that the usage of our investments in such technologies will always enhance our products or services or be beneficial to our business, including our efficiency or profitability.

In particular, if the models underlying our AI Technologies are:

incorrectly designed or implemented;

trained or reliant on incomplete, inadequate, inaccurate, biased or otherwise poor quality data, or on data to which we do not have sufficient rights or in relation to which we and/or the providers of such data have not implemented sufficient legal compliance measures;

used without sufficient oversight and governance to ensure their responsible use;

and/or adversely impacted by unforeseen defects, technical challenges, cybersecurity threats or material performance issues, the performance of our business, as well as our reputation, could suffer or we could incur liability resulting from the violation of laws or contracts to which we are a party or civil claims.

Litigation could have an adverse effect on our business.

14 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors