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Item 7. Management’s Discussion and Analysis

2026-02-20 compared with 2025-02-14 · 104 added, 129 removed, 263 unchanged (47% of the section changed)

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The following discussion should be read in conjunction with our Forward Looking Statements disclaimer and our consolidated financial statements and related notes in Item 15 of this Report.

During 2024, our results of operations were impacted by various transactions - see "Debt and Equity Transactions, Development and Repositioning Projects, and Other Transactions" further below.

During 2025, our results of operations were impacted by:

(i) various transactions - see "Acquisitions, Debt and Equity Transactions, Development and Repositioning Projects, and Other Transactions" further below, and (ii) the consolidation of Partnership X.

See Note 3 to our consolidated financial statements in Part IV, Item 15 of this Report.

Business Description

Douglas Emmett, Inc.

is a fully integrated, self-administered and self-managed REIT.

Through our interest in our Operating Partnership and its subsidiaries, our consolidated JVs and our unconsolidated Fund, we are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and in Honolulu, Hawaii.

Through our interest in our Operating Partnership and its subsidiaries and our consolidated JVs, we are one of the largest owners and operators of high-quality office and multifamily properties in Los Angeles County, California and in Honolulu, Hawaii.

We focus on owning, acquiring, developing and managing a substantial market share of top-tier office properties and premier multifamily communities in neighborhoods that possess significant supply constraints, high-end executive housing and key lifestyle amenities.

For the purpose of reporting key operating metrics, commencing with the fourth quarter of 2024, we are focused on the properties in our In-Service Portfolio.

The In-Service Portfolio in the fourth quarter of 2024 consisted of our Total Portfolio excluding our Development Portfolio.

The Development Portfolio consists of one office property and one multifamily property whose operations are significantly limited by the development activity and are excluded from our In-Service Portfolio statistics and operating metrics.

Our In-Service Portfolio consists of our Total Portfolio excluding our Development Portfolio.

The Development Portfolio consists of two multifamily properties and one office property whose operations are significantly limited by the development activity and are excluded from our In-Service Portfolio statistics and operating metrics.

Our portfolio statistics and operating metrics as of December 31, 2025 were as follows:

In-Service Portfolio Development Portfolio Total

In-Service Portfolio Development Portfolio Total Portfolio

Office Portfolio

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Revenues by Segment and Location

During 2024, revenues from our Consolidated Portfolio were derived as follows:

Debt and Equity Transactions, Development and Repositioning Projects, and Other Transactions

Debt and Equity Transactions

During 2025, revenues from our Total Portfolio were derived as follows:

Acquisitions, Debt and Equity Transactions, and Development and Repositioning Projects

Acquisitions, Debt and Equity Transactions

During the first quarter of 2025 :

• We acquired an additional 20.2% of the equity in our unconsolidated Fund, Partnership X, which increased our ownership interest in the Fund to 74.0% .

• We acqui red 166 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units.

• We acquired 461 OP Un its for $6 thousand in cash.

• In connection with the Barrington Plaza loan, w e signed a construction completion guarantee.

See "Development Portfolio" further below for more information about Barrington Plaza.

• A consolidated JV that we manage, and in which we own a 30% interest, acquired a 17-story 247,000 square foot office property located at 10900 Wilshire Boulevard in Westwood.

Title to the property was transferred following the purchase of a secured note by the respective JV.

• We modified and extended a $335.0 million term loan for seven years, effective March 3, 2025.

The loan is secured by an office property.

The loan consists of a $200 million note that bears interest at 4.5%, of which 2.825% is accrued, and a $135 million note that accrues interest at 6.0%.

The accrued interest for both notes is due at maturity and is not subject to compounding.

The weighted average face rate on the principal balance is 5.10%, and the effective rate as a result of the non-compounding is 4.57%.

• During March 2025, we closed a $127.2 million loan and used part of the proceeds to pay off a $102.4 million loan.

The interest rate is fixed at 4.99% and the loan matures in April 2030.

During the second quarter of 2025 :

• We acquired 27 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units.

• We acquired 703 OP Units for $10 thousand in cash.

• In May 2025, one of our consolidated JVs made a $70.0 million loan principal payment to extend a term loan for up to two years.

The related loan's interest rate swaps expired in April 2025, and in May 2025, the JV purchased an interest rate cap which capped the interest rate at 7.45% until May 2026.

• In June 2025, one of our consolidated JVs raised $12.0 million of additional capital.

We contributed $6.6 million of cash to the JV and another investor contributed $5.4 million of cash to the JV .

During the third quarter of 2025 :

• We acquired 20 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units.

• We acquired 6,798 OP Units for $105 thousand in cash.

• Inte rest rate swaps, which fixed the interest rate on a $400 million interest-only, floating-rate loan that matures in September 2026 for one of our wholly-owned subsidiaries, expired during September 2024, and the interest rate on the respective loan is now floating.

W e also paid the respective loan principal down by $34.0 million in order to meet a minimum financial threshold to exercise an extension option.

• In July 2025, we refinanced a $200.0 million office term loan that was scheduled to mature in September 2026.

The new, non-recourse, interest-only term loan has a floating interest rate of SOFR + 2%, which we swapped to a fixed rate of 5.60% through 2030.

The new loan matures in July 2032.

• In August 2025, we closed eight new residential term loans.

The new secured, non-recourse, interest-only loans total approximately $941.5 million, mature in September 2030, and bear interest at a fixed-rate of 4.80%.

The new loans replace four loans aggregating $550.0 million that were scheduled to mature on June 1, 2027 and five loans aggregating $380.0 million that were scheduled to mature on June 1, 2029.

The debt encumbering The Landmark Residences (formerly Barrington Plaza) was repaid.

During the fourth quarter of 2025 :

• We acquired 17 thousand OP Units in exchange for issuing an equal number of shares of our common stock to the holders of the OP Units.

• We acquired 872 OP Units for $17 thousand in cash.

• Interest rate swaps, which fixed the interest rate on a $200.0 million interest-only, floating-rate loan that matures in September 2026 for one of our wholly-owned subsidiaries, expired during October 2024, and the interest rate on the respective loan is now floating.

• Interest rate swaps, which fixed the interest rate on a $400.0 million interest-only, floating-rate loan that matures in November 2026 for one of our wholly-owned subsidiaries, expired during October 2024, and the interest rate on the respective loan is now floating.

• During December 2024, we closed a new $325.0 million loan for one of our JVs.

The loan is secured by the JV's five office properties and matures in December 2028.

The interest rate is SOFR + 2.5% and we used interest rate swaps to swap fix the rate at 6.36%.

The swaps are effective on January 6, 2025.

The loan requires monthly payments of principal and interest commencing on January 5, 2028 for twelve months based upon a 25-year principal amortization schedule.

The loan replaced a $400.0 million loan which we paid off using proceeds from the new loan as well as cash on hand in the joint venture.

• We entered into a new consolidated JV in December 2024 that we manage and in which we own a 30% interest.

The JV purchased a note receivable secured by a property.

To fund the purchase of the secured note, the JV obtained a $61.8 million loan.

The secured loan matures in January 2030.

The interest rate is fixed at 6.0% until July 2027 and then increases to 6.25% for the remaining loan term.

During January 2025

• A consolidated JV that we manage, and in which we own a 30% interest, acquired a 17-story 247,000 square foot office property located at 10900 Wilshire Boulevard in Westwood.

Title to the property was transferred following the purchase of a secured note by the respective JV.

See Note 18 to our consolidated financial statements in Item 15 of this Report for more information regarding subsequent events.

See Notes 6, 8, 10 and 11 to our consolidated financial statements in Item 15 of this Report for more information regarding our unconsolidated Fund, debt, derivatives and equity, respectively.

• In November 2025, one of our consolidated JVs made a $60.0 million loan principal payment, which reduced the term loan principal balance to $565.0 million, and entered into an interest rate swap to swap-fix the interest rate at 4.79% through December 5, 2027.

The loan matures on August 19, 2028.

• In December 2025, we closed a non-recourse construction loan for up to $375.0 million for The Landmark Residences (formerly Barrington Plaza).

The loan has a floating interest rate of SOFR + 2.45%.

We entered into accreting swaps starting January 2, 2026 that mature January 1, 2030 to effectively fix the interest rate on 75% of the increasing estimated balance outstanding under this loan at 5.80%.

The loan matures on December 10, 2030.

As of December 31, 2025 we had borrowed $49.5 million to fund the associated development project.

See Notes 3 8, 10 and 11 to our consolidated financial statements in Item 15 of this Report for more information regarding our acquisitions, debt, derivatives contracts, and equity, respectively.

Development Portfolio

Studio Plaza is a 456,000 square foot office property located in Burbank.

Following the move-out of a long-term single tenant, we have begun extensive redevelopment of the property to convert it into a multi-tenant building.

The development process is ongoing and we have begun leasing space to be occupied when the common areas and the related floors are completed.

Following the move-out of a long-term single tenant, we are converting the property into a multi-tenant office building.

The extensive common area upgrades are now complete and the construction of new tenant suites is ongoing.

Commencing with the fourth quarter of 2024, we classified this property as part of our Development Portfolio and exclude it from our In-Service Portfolio statistics and operating metrics.

Barrington Plaza

During the second quarter of 2023, we removed our Barrington Plaza Apartments property in Los Angeles from the rental market.

The Landmark Residences (Formerly Barrington Plaza)

During the second quarter of 2023, we removed The Landmark Residences residential property in Los Angeles from the rental market.

A reconstruction of this property is expected to take a number of years at a cost of several hundred million dollars.

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See "Legal Proceedings" in Note 17 to our consolidated financial statements in Item 15 of this Report.

We accelerated and re corded additional depreciation expense of $82.1 million for the year ended December 31, 2023 , which is included in Depreciation and amortization on our consolidated stateme nts of operations.

Commencing with the fourth quarter of 2024, we classified this property as part of our Development Portfolio and exclude it from our In-Service Portfolio statistics and operating metrics.

10900 Wilshire Boulevard

See "Acquisitions, Debt and Equity Transactions" above regarding the acquisition of 10900 Wilshire Boulevard in Westwood.

We are developing a mixed-use community featuring up to 323 apartment units.

We will convert the existing 247,000 square foot office tower into a residential and office building with up to 200 units, integrating it with a new residential building that we are constructing on the property.

The conversion of the office tower will occur in phases over a number of years as the office space in the building is vacated.

Commencing with the first quarter of 2025, we classified this property as part of our Development Portfolio and exclude it from our In-Service Portfolio statistics and operating metrics.

Repositionings

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During the repositioning, the affected property may display depressed rental revenues and occupancy levels that impact our operating results and, therefore, comparisons of our performance from period to period.

Rental Rate Trends - Total Portfolio

Office Rental Rates

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(2) Reflects the weighted average straight-line Annualized Rent.

Excludes leases with a term of twelve months or less, leases where the prior lease was terminated more than a year before signing of the new lease, leases for tenants relocated at the landlord's request, leases in acquired buildings where we believe the information about the prior agreement is incomplete or where we believe the base rent reflects other off-market inducements to the tenant, and other non-comparable leases, such as retail leases.

(3) Reflects the weighted average leasing commissions and tenant improvement allowances divided by the weighted average number of years for the leases.

Excludes leases substantially negotiated by the seller in the case of acquired properties, leases for tenants relocated from space at the landlord's request, and non-comparable leases, such as retail leases.

(4) Our office rental rates were adversely impacted by the COVID-19 pandemic during 2020, 2021 and 2022, although the lower rental rates for the respective periods were partly offset by lower tenant improvement costs.

(5) Our office rental rates and lease transaction costs for the year ended December 31, 2024 were higher than historical periods as a result of a large tenant lease renewal during the three months ended March 31, 2024.

(4) Our office rental rates and lease transaction costs were impacted by a large tenant lease renewal during 2024.

Office Rent Roll

The table below presents the rent roll for new and renewed leases per leased square foot executed in our total office portfolio.

Commencing with the fourth quarter of 2024, the table below presents only our In-Service Portfolio.

The table below presents only our In-Service Portfolio.

Year Ended December 31, 2025

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(2) Our office rent roll can fluctuate from period to period as a result of changes in our submarkets, buildings and term of the expiring leases, making these metrics difficult to predict.

(3) Our office cash rent and straight-line rent roll were impacted by a large tenant lease renewal during the three months ended March 31, 2024.

Multifamily Rental Rates

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(1) These average rental rates are not directly comparable from year to year because of changes in the properties and units included.

(i) During 2020, the average was impacted by the addition of a significant number of units at our Bishop Place development in Honolulu, where the rental rates were higher than the average in our portfolio, and

(ii) During 2022, the average was impacted by the acquisition of 1221 Ocean Avenue, where the rental rates were higher than the average in our portfolio.

(iii) During 2023, the average was impacted by leasing of units at our newly developed West Los Angeles property, where the rental rates were higher than the average in our portfolio.

Barrington Plaza was removed from this metric beginning with the third quarter of 2023.

(iv) During 2024, the average was impacted by leasing of units at our newly developed West Los Angeles property, where the rental rates were higher than the average in our portfolio.

(2) Our multifamily rental rates were adversely impacted by the COVID-19 pandemic in 2020 but improved in 2021 and 2022.

(i) During 2022, the average was impacted by the acquisition of 1221 Ocean Avenue, where the rental rates were higher than the average in our portfolio.

(ii) During 2023, the average was impacted by leasing of units at our newly developed West Los Angeles property, The Landmark Los Angeles, where the rental rates were higher than the average in our portfolio.

The Landmark Residences (formerly Barrington Plaza) was removed from this metric beginning with the third quarter of 2023.

(iii) During 2024, the average was impacted by leasing of units at our newly developed West Los Angeles property, The Landmark Los Angeles, where the rental rates were higher than the average in our portfolio.

Multifamily Rent Roll

The rent on leases subject to rent change during 2025 (new tenants and existing tenants undergoing annual rent review) was 2.6% higher on average than the prior rent for the same unit after adjusting for rent concessions.

Commencing with the fourth quarter of 2024, the rent change includes only our In-Service Portfolio.

Occupancy Rates - Total Portfolio

The tables below present the occupancy rates for our total office portfolio and multifamily portfolio.

The rent change includes only our In-Service Portfolio.

Office and Multifamily Occupancy Rates

The tables below present the occupancy rates for our office portfolio and multifamily portfolio.

Our Occupancy Rates may not be directly comparable from year to year, as they can be impacted by acquisitions, dispositions, and development and redevelopment projects.

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Office portfolio 78.0 % 79.2 % 81.0 % 83.7 % 84.9 %

79.2 % 81.0 % 83.7 % 84.9 % 87.4 %

Multifamily portfolio (1)

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Office portfolio 78.2 % 80.1 % 82.6 % 84.2 % 85.7 %

80.1 % 82.6 % 84.2 % 85.7 % 89.5 %

Multifamily portfolio (1)

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(1) Our office occupancy rate for 2024 was impacted by a large tenant lease expiration during the three months ended December 31, 2024.

Our office occupancy rates were adversely impacted by the COVID-19 pandemic during 2020, 2021 and 2022.

(2) Excludes units vacated as part of removing Barrington Plaza from the rental market until June of 2023 and excludes the impact of Barrington Plaza entirely starting in July 2023.

Our multifamily occupancy rates were adversely impacted by the COVID-19 pandemic during 2020 but recovered during 2021 and 2022.

(1) Excludes units vacated as part of removing The Landmark Residences (formerly Barrington Plaza) from the rental market until June of 2023 and excludes the impact of The Landmark Residences entirely starting in July 2023.

(2) Average occupancy rates are calculated by averaging the occupancy rates at the end of each of the quarters in the period and at the end of the quarter immediately prior to the start of the period.

In-Service Office Portfolio Lease Expirations

Office Portfolio Lease Expirations

As of December 31, 2025, assuming non-exercise of renewal options and early termination rights, we expect to see expiring square footage for our In-Service office portfolio as follows:

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(1) Average of the percentage of leases at December 31, 2022, 2023, and 2024 with the same remaining duration as the leases for the labeled year had at December 31, 2025.

Acquisitions are included in the prior year average commencing in the quarter after the acquisition.

Results of Operations

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(In thousands)

Office rental revenue and tenant recoveries $ 683,901 $ 714,742 $ (30,841) (4.3) % The decrease was primarily due to a decrease in rental revenues due to lower occupancy, and lower tenant recoveries.

The lower tenant recoveries were primarily due to lower property taxes.

Office parking and other income $ 112,503 $ 115,203 $ (2,700) (2.3) % The decrease was primarily due to a one-time

catch-up payment related to a ground lease

reset dispute in 2023, partly offset by an increase in parking income due to higher parking rates.

Multifamily revenue $ 190,074 $ 190,543 $ (469) (0.2) % The decrease was primarily due to:

(i) a decrease in revenues at our Barrington Plaza property, which we removed from service during the second quarter of 2023, (ii) lower accretion from below-market leases, and (iii) insurance proceeds received during the first quarter of 2023 for the 2020 Barrington Plaza fire.

The decrease was partly offset by (i) an increase in revenues from new units at our Landmark Los Angeles development project and our Residences at Bishop Place conversion project, and (ii) higher rental rates.

Office rental revenue and tenant recoveries $ 686,208 $ 683,901 $ 2,307 0.3 % The increase was primarily due to:

(i) rental revenues and tenant recoveries from a JV we commenced consolidating on January 1, 2025, (ii) rental revenues and tenant recoveries from an office property we acquired in January 2025, and (iii) higher tenant recoveries, partly offset by (iv) a decrease in rental revenues and tenant recoveries from an office property we commenced repositioning to a multi-tenant building during the fourth quarter of 2024, and (v) lower rental revenues due to lower occupancy.

Office parking and other income $ 119,308 $ 112,503 $ 6,805 6.0 % The increase was primarily due to:

(i) higher parking rates, (ii) parking and other income from a JV we commenced consolidating on January 1, 2025, and (iii) parking and other income from an office property we acquired in January 2025, partly offset by (iv) a decrease in parking and other income from an office property we commenced repositioning to a multi-tenant building during the fourth quarter of 2024.

Multifamily revenue $ 198,466 $ 190,074 $ 8,392 4.4 % The increase was primarily due to higher occupancy and higher rental rates, partly offset by lower below-market lease accretion.

Operating expenses

Office rental expenses $ 285,352 $ 294,310 $ 8,958 3.0 % The decrease was primarily due to lower property taxes and lower repairs and maintenance expenses, partly offset by higher personnel and security expenses.

Multifamily rental expenses $ 64,906 $ 67,323 $ 2,417 3.6 % The decrease was primarily due to a decrease in multifamily expenses at our Barrington Plaza property, which we removed from service during the second quarter of 2023, partly offset by an increase in multifamily expenses from new units at our Residences at Bishop Place conversion project.

General and administrative expenses $ 45,356 $ 49,236 $ 3,880 7.9 % The decrease was primarily due to lower advocacy, legal and personnel expenses.

Depreciation and amortization $ 384,048 $ 459,949 $ 75,901 16.5 % The decrease was primarily due to accelerated depreciation during 2023 related to removing units from service at our Barrington Plaza property.

Office rental expenses $ 301,276 $ 285,352 $ (15,924) (5.6) % The increase was primarily due to:

(i) rental expenses from a JV we commenced consolidating on January 1, 2025, (ii) rental expenses from an office property we acquired in January 2025, and (iii) higher scheduled services expenses, partly offset by (iv) a decrease in rental expenses from an office property we commenced repositioning to a multi-tenant building during the fourth quarter of 2024, and (v) lower insurance expenses.

Multifamily rental expenses $ 66,661 $ 64,906 $ (1,755) (2.7) % The increase was primarily due to an increase in property taxes, scheduled services expenses, and repairs and maintenance expenses, partly offset by a decrease in insurance expenses and professional fees.

General and administrative expenses $ 46,664 $ 45,356 $ (1,308) (2.9) % The increase was primarily due to higher advocacy expenses and personnel expenses.

Comparison of 2025 to 2024 (continued)

Year Ended December 31, Favorable (Unfavorable)

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(In thousands)

Depreciation and amortization $ 398,932 $ 384,048 $ (14,884) (3.9) % The increase was primarily due to:

(i) depreciation and amortization from a JV we commenced consolidating on January 1, 2025, and (ii) depreciation and amortization from an office property we acquired in January 2025, partly offset by (iii) a decrease in depreciation and amortization from an office property we commenced repositioning to a multi-tenant building during the fourth quarter of 2024.

Non-Operating Income and Expenses

Other income $ 28,019 $ 19,633 $ 8,386 42.7 % The increase was primarily due to an increase in interest income due to higher cash and cash equivalent balances during the year.

Other expenses $ (398) $ (1,032) $ 634 61.4 % The decrease was primarily due to transaction costs during the first quarter of 2023 and lower expenses related to property management and other services provided to our unconsolidated fund.

Income (loss) from unconsolidated Fund $ 2,593 $ (34,643) $ 37,236 107.5 % The increase was primarily due to an impairment

charge of $36.2 million in 2023 related to our

investment in our Fund.

Interest expense $ (229,442) $ (209,468) $ (19,974) (9.5) % The increase was primarily due to higher interest rates on our floating rate debt.

The increase was partly offset by interest capitalized related to development activity.

Other income $ 18,021 $ 28,019 $ (9,998) (35.7) % The decrease was primarily due to a decrease in interest income due to lower cash and cash equivalent balances and lower interest rates.

Other expenses $ (437) $ (398) $ (39) (9.8) % Other expenses did not change significantly compared to the prior period.

Income from unconsolidated Fund $ — $ 2,593 $ (2,593) (100.0) % On January 1, 2025, we commenced consolidating Partnership X, one of our joint ventures.

The results of Partnership X are included in our operating results from January 1, 2025.

Before January 1, 2025, Partnership X was accounted for using the equity method, and our share of Partnership X's net income was included in our statements of operations in Income from unconsolidated Fund.

See Note 3 to our consolidated financial statements in Part IV, Item 15 of this Report regarding the consolidation of Partnership X.

Interest expense $ (266,675) $ (229,442) $ (37,233) (16.2) % The increase was primarily due to:

(i) higher floating rate debt, (ii) interest expense from a JV we commenced consolidating on January 1, 2025, and (iii) interest expense on a loan related to the office property we acquired in January 2025.

Comparison of 2024 to 2023

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FFO Reconciliation to GAAP

The table below reconciles our FFO (the FFO attributable to our common stockholders and noncontrolling interests in our Operating Partnership - which includes our share of our consolidated JVs and our unconsolidated Fund's FFO) to net income (loss) attributable to common stockholders (the most directly comparable GAAP measure).

The table below reconciles our FFO (the FFO attributable to our common stockholders and noncontrolling interests in our Operating Partnership - which includes our share of our consolidated JVs and our unconsolidated Fund's FFO) to net income attributable to common stockholders (the most directly comparable GAAP measure).

Our FFO was adversely impacted by the effects of inflation and higher interest rates during 2025 and 2024 .

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(In thousands) 2025 2024

Net income (loss) attributable to common stockholders (1)

$ 23,517 $ (42,706)

Net income attributable to common stockholders $ 16,267 $ 23,517

Depreciation and amortization of real estate assets 398,932 384,048

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(45,000) (50,687)

Gain from consolidation of JV (47,212) —

FFO $ 295,290 $ 345,528

___________________________________________________

(1) Our net loss for the year ended December 31, 2023 includes a $36.2 million impairment charge related to our investment in our unconsolidated Fund.

Adjustments attributable to our unconsolidated Fund include an adjustment to exclude the respective impairment loss.

We excluded this impairment charge from our calculation of FFO because the impairment charge relates directly to the real estate held by the Fund.

(1) Adjusts for our share of Partnership X's depreciation and amortization of real estate assets.

We commenced consolidating Partnership X on January 1, 2025.

See Note 3 to our consolidated financial statements in Part IV, Item 15 of this Report .

(2) Adjusts for the net income (loss) and depreciation and amortization of real estate assets that is attributable to the noncontrolling interests in our consolidated JVs.

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The decrease was primarily due to:

(i) lower office occupancy and tenant recoveries, (ii) higher interest expense, and (iii) the removal of our Barrington Plaza property from service during the second quarter of 2023.

The decrease was partly offset by (i) higher interest income, (ii) lower office property taxes, (iii) new units from our multifamily development projects, (iv) higher multifamily rental rates, and (v) lower general and administrative expenses.

(i) lower office occupancy, (ii) higher office expenses, (iii) higher interest expense, and (iv) lower interest income, which was partly offset by higher multifamily rental revenues due to higher occupancy and rental rates.

Comparison of 2024 to 2023

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(In thousands)

Office revenues $ 769,882 $ 795,768 $ (25,886) (3.3) % The decrease was primarily due to a decrease in rental revenues due to lower occupancy, and lower tenant recoveries.

The decrease in tenant recoveries was primarily due to lower property taxes.

The decrease was partly offset by higher parking income, due to higher parking rates.

Office expenses (282,634) (291,061) 8,427 2.9 % The decrease was primarily due to lower property taxes and repairs and maintenance expenses.

The decrease was partly offset by higher personnel and security expenses.

Office revenues $ 767,877 $ 769,871 $ (1,994) (0.3) % The decrease was primarily due to lower rental revenues due to lower occupancy, partly offset by higher tenant recoveries, and higher parking income due to higher parking rates.

Office expenses (289,684) (282,634) (7,050) (2.5) % The increase was primarily due to higher scheduled services expenses, utility expenses, professional fees and repairs and maintenance expenses, partly offset by lower insurance expenses.

Office NOI 478,193 487,237 (9,044) (1.9) %

Multifamily revenues 144,084 141,640 2,444 1.7 % The increase was primarily due to an increase in rental revenues due to higher rental rates, partly offset by lower accretion from below-market leases.

Multifamily expenses (44,894) (44,547) (347) (0.8) % The increase was primarily due to higher personnel expenses and professional fees.

The increase was partly offset by lower utility expenses and lower property taxes.

Multifamily revenues 196,530 187,056 9,474 5.1 % The increase was primarily due to higher occupancy and higher rental rates, partly offset by lower below-market lease accretion.

Multifamily expenses (65,735) (63,616) (2,119) (3.3) % The increase was primarily due to higher scheduled services expenses, property taxes, repairs and maintenance expenses and utility expenses, partly offset by lower insurance expenses.

Multifamily NOI 130,795 123,440 7,355 6.0 %

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Reconciliation to GAAP

The table below presents a reconciliation of Net income (loss) attributable to common stockholders (the most directly comparable GAAP measure) to NOI and Same Property NOI:

The table below presents a reconciliation of Net income attributable to common stockholders (the most directly comparable GAAP measure) to NOI and Same Property NOI:

Year Ended December 31,

(In thousands) 2025 2024

Net income (loss) attributable to common stockholders $ 23,517 $ (42,706)

Net income attributable to common stockholders $ 16,267 $ 23,517

Net loss attributable to noncontrolling interests (27,697) (15,929)

Net income (loss) 7,588 (75,840)

Net (loss) income (11,430) 7,588

General and administrative expenses 46,664 45,356

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Other expenses 437 398

(Income) loss from unconsolidated Fund (2,593) 34,643

Income from unconsolidated Fund — (2,593)

Interest expense 266,675 229,442

Impairment losses — —

Gain on sale of investment in real estate — —

Gain from consolidation of JV (47,212) —

NOI $ 636,045 $ 636,220

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Short-term liquidity

Our short-term liquidity needs consist primarily of funds necessary for our operating activities, development, repositioning projects, dividends, distributions, and discretionary share repurchases.

Our short-term liquidity needs consist primarily of funds necessary for our operating activities, development, repositioning projects, debt refinancings, dividends, distributions, and discretionary share repurchases.

During 2025, we generated cash from operations of $386.9 million.

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Excluding acquisitions and debt refinancings, we expect to meet our short-term liquidity requirements through cash on hand and cash generated by operations.

With respect to our short-term debt maturities, we expect to refinance or extend them prior to maturity.

We are currently in the process of negotiating an amendment and extension of a $335.0 million loan secured by a wholly-owned office property that matures on March 03, 2025.

If the amendment and extension is not finalized by the due date, the holding period and carrying value for the asset encumbered by the loan may be affected.

Long-term liquidity

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Off-Balance Sheet Arrangements

Unconsolidated Fund Debt

Our Fund, Partnership X, has its own secured non-recourse debt and interest rate swaps.

We have made certain environmental and other limited indemnities and guarantees covering customary non-recourse carve-outs related to that loan, and we have also guaranteed the interest rate swaps.

Partnership X has agreed to indemnify us for any amounts that we would be required to pay under these agreements.

As of December 31, 2024, all of the obligations under the respective loan and swap agreements have been performed in accordance with the terms of those agreements.

See "Guarantees" in Note 17 to our consolidated financial statements in Item 15 of this Report for more information about our Fund's debt and swaps, and the respective guarantees.

Comparison of 2025 to 2024

Our operating cash flows were adversely impacted by the effects of inflation and higher interest rates during 2024 and 2023.

Our operating cash flows were adversely impacted by the effects of interest rates on floating rate debt and inflation during 2025 and 2024.

Year Ended December 31, Increase (Decrease)

4 unchanged sentences

$ (265,343) $ (240,761) $ (24,582) (10.2) %

Net cash (used in) provided by financing activities (3)

Net cash used in financing activities (3)

$ (225,344) $ (246,463) $ 21,119 8.6 %

2 unchanged sentences

The decrease in cash from operating activities of $21.8 million was primarily due to:

(i) lower office occupancy and tenant recoveries, (ii) higher interest expense, and (iii) the removal of our Barrington Plaza property from service during the second quarter of 2023.

The decrease was partly offset by (i) higher cash provided by working capital, (ii) higher interest income, (iii) lower office property taxes, (iv) new units from our multifamily development projects, (v) higher multifamily rental rates, and (vi) lower general and administrative expenses.

(i) lower office occupancy, (ii) higher office expenses, (iii) higher interest expense, and (iv) lower interest income, which was partly offset by a deposit we received related to a loan we paid off, and higher multifamily rental revenues due to higher occupancy and rental rates.

(2) Our cash flows from investing activities is generally used to fund property acquisitions, developments and redevelopment projects, and Recurring and non-Recurring Capital Expenditures.

The decrease in cash from investing activities of $7.2 million was primarily due to the purchase of a note receivable partly offset by a decrease in capital expenditures for improvements to real estate.

The decrease in cash from investing activities of $24.6 million was primarily due to an increase in capital expenditures for developments of $30.4 million, and an increase in capital expenditures for improvements to real estate of $25.1 million, partly offset by $25.6 million of cash and cash equivalents from the consolidation of Partnership X on January 1, 2025, and the acquisition of an additional interest in an unconsolidated fund in February 2024, for $5.2 million.

(3) Our cash flows from financing activities are generally impacted by our borrowings and capital activities, as well as dividends and distributions paid to common stockholders and noncontrolling interests, respectively.

The decrease in cash from financing activities of $307.3 million was primarily due to lower proceeds from borrowings and higher repayments of borrowings, partly offset by the repurchase of common stock during the prior period and higher contributions from noncontrolling interests in consolidated JVs during the current period.

The increase in cash from financing activities of $21.1 million was primarily due to a higher net borrowings of $66.4 million and lower distributions paid to noncontrolling interests of $3.2 million, partly offset by higher loan cost payments of $25.6 million and lower contributions from noncontrolling interests in consolidated JVs of $22.6 million.

Comparison of 2024 to 2023

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The impact of changing our current year tenant recovery billings by 5% would result in a change to our tenant recovery revenues and net income of $2.4 million, $2.5 million and $2.6 million during 2025, 2024 and 2023, respectively.

Stock-Based Compensation

We award stock-based compensation to certain employees and non-employee directors in the form of LTIP Units.

We recognize the fair value of the awards over the requisite vesting period, which is based upon service.

The fair value of the awards is based upon the market value of our common stock on the grant date and a discount for post-vesting restrictions.

Our estimate of the discount for post-vesting restrictions requires judgment.

If our estimate of the discount is too high or too low, it would result in the fair value of the awards that we make being too low or too high, respectively, which would result in an under- or over-expense of stock-based compensation, respectively, and this under- or over-expensing of stock-based compensation would result in our net income being overstated or understated, respectively.

Stock-based compensation expense was $21.0 million, $19.8 million and $21.0 million for 2024, 2023 and 2022, respectively.

The impact of changing the discount rate by 5% would result in a change to our stock-based compensation expense and net income of $1.1 million, $1.0 million and $1.1 million during 2024, 2023 and 2022, respectively.

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 7. Management’s Discussion and Analysis