DEI

Douglas Emmett Inc

NYSE · REAL ESTATE · REAL ESTATE INVESTMENT TRUSTS

10.16

−0.01 −0.05%

USD · close Oct 26

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MKT CAP $1.7BP/E —DIV YIELD 7.48%FCF YIELD 10.52%REV TTM $1B +0.8%NET INCOME −$22.9M −160.7%NET DEBT $5.4B52W 9.18 – 13.32SEC XBRL · TTM TO Invalid Date

How DEI rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

54%

of sentences unchanged

Added

new sentences

Dropped

sentences removed

Length

+33

words, now 3,571

New in FY2025

Below is a summary of our risk factors: Risks Related to Our Properties and Our Business • 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. • All of our properties are located in Los Angeles County, California, and Honolulu, Hawaii, and we are therefore exposed to greater risk than if we owned a more geographically diverse portfolio.
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 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. • The rents we receive from new leases may be less than our asking rents, and we may experience rent roll-down from time to time. • 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. • In order to successfully compete against other properties, we need to maintain, repair, and renovate our properties, which reduces our cash flows. • We face intense competition, which could adversely impact the occupancy and rental rates of our properties. • Epidemics, pandemics or other outbreaks, and restrictions intended to prevent their spread, may adversely affect our business, financial position, results of operations, cash flows, our ability to service our debt, our ability to pay dividends to our stockholders, our REIT status, our ability to capitalize on business opportunities as they arise, our ability to raise capital, and/or the market price of our common stock. • Potential losses, including from adverse weather conditions, natural disasters and title claims, may not be covered by insurance. • We may be unable to renew leases or lease vacant space. • Our business strategy for our office portfolio focuses on leasing to smaller-sized tenants which may present greater credit risks. • Real estate investments are generally illiquid. • We may incur significant costs to comply with laws, regulations and covenants. • Because we own real property, we are subject to extensive environmental regulations, which create uncertainty regarding future environmental expenditures and liabilities. • Our properties may contain or develop harmful mold or suffer from other air quality issues, which could lead to liability for adverse health effects and costs of remediation. • Rent control or rent stabilization legislation and other regulatory restrictions may limit our ability to increase rents and pass through new or increased operating costs to our tenants. • We may be unable to complete acquisitions that would grow our business, or successfully integrate and operate acquired properties. • We may be unable to successfully expand our operations into new markets and submarkets. • We are exposed to risks associated with property development. • We are exposed to certain risks when we enter into JVs or issue securities of our subsidiaries, including our Operating Partnership. • If we default on the ground lease to which one of our properties is subject, our business could be adversely affected. • We may not have sufficient cash available for distribution to stockholders at expected levels in the future. • We face risks associated with contractual counterparties being designated "Prohibited Persons" by the Office of Foreign Assets Control. • Terrorism and war could harm our business and operating results.
General Risks • 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. • If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results. • New accounting pronouncements could adversely affect our operating results or the reported financial performance of our tenants.
Risks Related to Our Properties and Our Business 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; • our inability to increase rental rates at the same rate as inflation; • reduction in tenant demand for our properties if we are able to increase rental rates at the same rate as inflation; • our inability to recover higher rental operating costs from our office tenants; • higher operating costs billed to our office tenants, which could reduce tenant demand for our office properties; • 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 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 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.
If these conditions become more volatile or worsen, our business, results of operations, liquidity and financial condition and those of our tenants may be adversely affected as a result of the following consequences, among others: • 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 leasing at less favorable terms; • decreased demand for our office space if businesses, including our tenants, lay off employees; • decreased commercial real estate occupancy and rental rates resulting in decreased property values; • limitations in our ability to obtain financing on terms and conditions that we find acceptable, or at all, which could reduce our ability to refinance existing debt and obtain new debt to pursue acquisition and development opportunities; and • reduced values of our properties, which may limit our ability to obtain new debt financing secured by our properties or limit our ability to refinance our existing debt secured by our properties.
As of December 31, 2025, we had approximately $5.6 billion of debt outstanding, of which $1.6 billion is floating rate debt, which exposes us to interest rate fluctuation risk.
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 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; • our cash flows may be insufficient to meet our required principal and interest payments; • servicing our borrowings may leave us with insufficient cash to operate our properties or to pay the distributions necessary to maintain our REIT qualification; • we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to capitalize upon acquisition opportunities; • we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our existing indebtedness; • we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms; • we may violate any restrictive covenants in our loan documents, which could entitle the lenders to accelerate our debt obligations; • we may be unable to hedge floating rate debt, counterparties may fail to honor their obligations under our hedge agreements, the hedge agreements may not effectively hedge the interest rate fluctuation risk, and, upon the expiration of any hedge agreements we do have, we will be exposed to the then-existing market rates of interest and future interest rate volatility with respect to debt that is currently hedged; we could also be declared in default on our hedge agreements if we default on the underlying debt that we are hedging; • we may default on our obligations and the lenders or mortgagees may foreclose on our properties that secure their loans and receive an assignment of rents and leases; • our default under any of our indebtedness with cross default provisions could result in a default on other indebtedness; and • any foreclosure on our properties could also create taxable income without accompanying cash proceeds, which could adversely affect our ability to meet the REIT distribution requirements imposed by the Code.
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.

Gone since FY2024

Below is a summary of our risk factors: 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. • 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. • All of our properties are located in Los Angeles County, California, and Honolulu, Hawaii, and we are therefore exposed to greater risk than if we owned a more geographically diverse portfolio.
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. • 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. • The rents we receive from new leases may be less than our asking rents, and we may experience rent roll-down from time to time. • 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. • In order to successfully compete against other properties, we need to maintain, repair, and renovate our properties, which reduces our cash flows. • We face intense competition, which could adversely impact the occupancy and rental rates of our properties. • Epidemics, pandemics or other outbreaks, and restrictions intended to prevent their spread, may adversely affect our business, financial position, results of operations, cash flows, our ability to service our debt, our ability to pay dividends to our stockholders, our REIT status, our ability to capitalize on business opportunities as they arise, our ability to raise capital, and/or the market price of our common stock. • Potential losses, including from adverse weather conditions, natural disasters and title claims, may not be covered by insurance. • We may be unable to renew leases or lease vacant space. • Our business strategy for our office portfolio focuses on leasing to smaller-sized tenants which may present greater credit risks. • Real estate investments are generally illiquid. • We may incur significant costs to comply with laws, regulations and covenants. • Because we own real property, we are subject to extensive environmental regulations, which create uncertainty regarding future environmental expenditures and liabilities. • Our properties may contain or develop harmful mold or suffer from other air quality issues, which could lead to liability for adverse health effects and costs of remediation. • Rent control or rent stabilization legislation and other regulatory restrictions may limit our ability to increase rents and pass through new or increased operating costs to our tenants. • We may be unable to complete acquisitions that would grow our business, or successfully integrate and operate acquired properties. • We may be unable to successfully expand our operations into new markets and submarkets. • We are exposed to risks associated with property development. • We are exposed to certain risks when we enter into JVs or issue securities of our subsidiaries, including our Operating Partnership. • If we default on the ground lease to which one of our properties is subject, our business could be adversely affected. • We may not have sufficient cash available for distribution to stockholders at expected levels in the future. • We face risks associated with contractual counterparties being designated “Prohibited Persons” by the Office of Foreign Assets Control. • Terrorism and war could harm our business and operating results.
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. • Litigation could have an adverse effect on our business. • If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results. • New accounting pronouncements could adversely affect our operating results or the reported financial performance of our tenants.
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: • an increase in our rental operating costs and our general and administrative costs; • our inability to increase rental rates at the same rate as inflation; • reduction in tenant demand for our properties if we are able to increase rental rates at the same rate as inflation; • our inability to recover higher rental operating costs from our office tenants; • higher operating costs billed to our office tenants, which could reduce tenant demand for our office properties; • higher interest rates, which could: (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; • 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.
If these conditions become more volatile or worsen, our business, results of operations, liquidity and financial condition and those of our tenants may be adversely affected as a result of the following consequences, among others: • 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; • decreased demand for our office space if businesses, including our tenants, lay off employees; • decreased commercial real estate occupancy and rental rates resulting in decreased property values; • limitations in our ability to obtain financing on terms and conditions that we find acceptable, or at all, which could reduce our ability to refinance existing debt and obtain new debt to pursue acquisition and development opportunities; and • reduced values of our properties, which may limit our ability to obtain new debt financing secured by our properties or limit our ability to refinance our existing debt secured by our properties.
As of December 31, 2024, we had approximately $5.5 billion of debt outstanding, of which $2.3 billion is floating rate debt, which exposes us to interest rate fluctuation risk.
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: (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; • our cash flows may be insufficient to meet our required principal and interest payments; • servicing our borrowings may leave us with insufficient cash to operate our properties or to pay the distributions necessary to maintain our REIT qualification; • we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to capitalize upon acquisition opportunities; • we may be unable to refinance our indebtedness at maturity or the refinancing terms may be less favorable than the terms of our existing indebtedness; • we may be forced to dispose of one or more of our properties, possibly on disadvantageous terms; • we may violate any restrictive covenants in our loan documents, which could entitle the lenders to accelerate our debt obligations; • we may be unable to hedge floating rate debt, counterparties may fail to honor their obligations under our hedge agreements, the hedge agreements may not effectively hedge the interest rate fluctuation risk, and, upon the expiration of any hedge agreements we do have, we will be exposed to the then-existing market rates of interest and future interest rate volatility with respect to debt that is currently hedged; we could also be declared in default on our hedge agreements if we default on the underlying debt that we are hedging; • we may default on our obligations and the lenders or mortgagees may foreclose on our properties that secure their loans and receive an assignment of rents and leases; • our default under any of our indebtedness with cross default provisions could result in a default on other indebtedness; and • any foreclosure on our properties could also create taxable income without accompanying cash proceeds, which could adversely affect our ability to meet the REIT distribution requirements imposed by the Code.
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.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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