Douglas Emmett Inc
For the period ended Dec 31, 2023. Filed Feb 16, 2024.
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FY2023 · Filed Feb 16, 2024
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Secured Notes Payable, Net
- Secured Notes Payable, Net
| Description · MaturityDate(1) · Principal Balance as of December 31, 2023 · Principal Balance as of December 31, 2022 · Variable Interest Rate(2) · Fixed InterestRate(3) · Swap Maturity Date | |||||||
|---|---|---|---|---|---|---|---|
| (In thousands) | |||||||
| Consolidated Wholly-Owned Subsidiaries | |||||||
| Term loan(4)(5) | 3/3/2025 | $335,000 | $335,000 | SOFR + 1.41% | N/A | N/A | |
| Fannie Mae loan(4)(5) | 4/1/2025 | 102,400 | 102,400 | SOFR + 1.36% | N/A | N/A | |
| Term loan(4) | 8/15/2026 | 415,000 | 415,000 | SOFR + 1.20% | 3.07% | 8/1/2025 | |
| Term loan(4) | 9/19/2026 | 400,000 | 400,000 | SOFR + 1.25% | 2.44% | 9/1/2024 | |
| Term loan(4) | 9/26/2026 | 200,000 | 200,000 | SOFR + 1.30% | 2.36% | 10/1/2024 | |
| Term loan(4) | 11/1/2026 | 400,000 | 400,000 | SOFR + 1.25% | 2.31% | 10/1/2024 | |
| Fannie Mae loan(4)(6) | 6/1/2027 | 550,000 | 550,000 | SOFR + 1.48% | N/A | N/A | |
| Term loan(4) | 5/18/2028 | 300,000 | 300,000 | SOFR + 1.51% | 2.21% | 6/1/2026 | |
| Term loan(4) | 1/1/2029 | 300,000 | 300,000 | SOFR + 1.56% | 2.66% | 1/1/2027 | |
| Fannie Mae loan(4) | 6/1/2029 | 255,000 | 255,000 | SOFR + 1.09% | 3.26% | 6/1/2027 | |
| Fannie Mae loan(4) | 6/1/2029 | 125,000 | 125,000 | SOFR + 1.09% | 3.25% | 6/1/2027 | |
| Fannie Mae loan(4)(7) | 8/1/2033 | 350,000 | — | SOFR + 1.37% | N/A | N/A | |
| Term loan(8) | 6/1/2038 | 27,640 | 28,502 | N/A | 4.55% | N/A | |
| Total Wholly-Owned Subsidiary Debt | 3,760,040 | 3,410,902 | |||||
| Consolidated JVs | |||||||
| Term loan(4)(9) | 12/19/2024 | 400,000 | 400,000 | SOFR + 1.40% | N/A | N/A | |
| Term loan(4) | 5/15/2027 | 450,000 | 450,000 | SOFR + 1.45% | 2.26% | 4/1/2025 | |
| Term loan(4) | 8/19/2028 | 625,000 | 625,000 | SOFR + 1.45% | 2.12% | 6/1/2025 | |
| Term loan(4)(10) | 4/26/2029 | 175,000 | 175,000 | SOFR + 1.25% | 3.90% | 5/1/2026 | |
| Fannie Mae loan(4) | 6/1/2029 | 160,000 | 160,000 | SOFR + 1.09% | 3.25% | 7/1/2027 | |
| Total Consolidated Debt(11) | 5,570,040 | 5,220,902 | |||||
| Unamortized loan premium, net(12) | 3,087 | 3,547 | |||||
| Unamortized deferred loan costs, net(13) | (29,956) | (32,556) | |||||
| Total Consolidated Debt, net | $5,543,171 | $5,191,893 | |||||
Except as noted below, our loans: (i) are non-recourse, (ii) are secured by separate collateral pools consisting of one or more properties, (iii) require interest-only monthly payments with the outstanding principal due upon maturity, and (iv) contain certain financial covenants which could require us to deposit excess cash flow with the lender under certain circumstances unless we (at our option) either provide a guarantee or additional collateral or pay down the loan within certain parameters set forth in the loan documents. Certain loans with maturity date extension options require us to meet minimum financial thresholds in order to extend the loan maturity date.
(1)Maturity dates include extension options.
(2)LIBOR loans converted to SOFR during 2023 include a small SOFR adjustment to calculate the interest payable to the lender, which are included in the spreads. The SOFR conversion did not change the swap-fixed interest rates for our swap-fixed loans.
(3)Effective rate as of December 31, 2023. Includes the effect of interest rate swaps (if applicable) and excludes the effect of prepaid loan fees and loan premiums. See Note 10 for details of our interest rate swaps. See further below for details of our loan costs and premiums.
(4)The loan agreement includes azero-percent SOFR floor. If the loan is swap-fixed then the related swaps do not include such a floor.
(5)The swaps expired on March 1, 2023.
(6)The loan is secured byfour residential properties. A portion of the loan totaling $472.0 million has a lender-required out-of-the-money interest rate cap at a weighted average of 8.99% until July 2026. Barrington Plaza Apartments have been removed from the rental market. See Note 3, "Property to be removed from service." For the portion of the loan relating to Barrington Plaza, the lender is treating the debt as a construction loan. They required a $13.3 million cash deposit, which we placed in an interest-bearing collateral account during the third quarter of 2023, and we signed a construction completion guarantee in January 2024. The lender will return the deposit at the earlier of August 2026 or when the loan is paid in full. The deposit is included in Other assets in our balance sheet. See Note 7.
F- 24
(7)We closed the loan during the third quarter of 2023. The loan has a lender-required out-of-the-money interest rate cap at an interest rate of 7.84% until August 2026. We used part of the proceeds from the loan to pay off the balance on our revolving credit facility, which expired in August 2023. There was no balance outstanding on the credit facility as of December 31, 2022.
(8)The loan requires monthly payments of principal and interest. The principal amortization is based upon a 30-year amortization schedule.
(9)The swaps expired on January 1, 2023.
(10)During the fourth quarter of 2023, we entered into a guarantee for this loan which guarantees the portion of the loan principal that would need to be paid down in order to meet the minimum debt yield in the loan agreement. See Note 17.
(11)The table does not include our unconsolidated Fund's loan - see Note 17. See Note 14 for our fair value disclosures.
(12)Balances are net of accumulated amortization of $4.1 million and $3.7 million at December 31, 2023 and December 31, 2022, respectively.
(13)Balances are net of accumulated amortization of $56.0 million and $54.1 million at December 31, 2023 and December 31, 2022, respectively.
Debt Statistics
The table below summarizes our consolidated fixed and floating rate debt:
| (In thousands) | Principal Balance as of December 31, 2023 | Principal Balance as of December 31, 2022 |
|---|---|---|
| Aggregate swapped to fixed rate loans | $3,805,000 | $4,642,400 |
| Aggregate fixed rate loans | 27,640 | 28,502 |
| Aggregate capped rate loans | 822,000 | — |
| Aggregate floating rate loans | 915,400 | 550,000 |
| Total Debt | $5,570,040 | $5,220,902 |
The table below summarizes certain consolidated debt statistics as of December 31, 2023:
| Statistics for consolidated loans with interest fixed under the terms of the loan or a swap | |
|---|---|
| Principal balance (in billions) | $3.83 |
| Weighted average remaining life (including extension options) | 4.0 years |
| Weighted average remaining fixed interest period | 1.9 years |
| Weighted average annual interest rate | 2.65% |
Future Principal Payments
At December 31, 2023, the minimum future principal payments due on our consolidated secured notes payable were as follows:
| Year ending December 31: | Including Maturity Extension Options(1) |
|---|---|
| (In thousands) | |
| 2024 | $400,902 |
| 2025 | 438,343 |
| 2026 | 1,415,987 |
| 2027 | 1,001,033 |
| 2028 | 926,081 |
| Thereafter | 1,387,694 |
| Total future principal payments | $5,570,040 |
(1) Some of our loan agreements require that we meet certain minimum financial thresholds to be able to extend the loan maturity.
F- 25
Loan Premium and Loan Costs
The table below presents loan premium and loan costs, which are included in Interest expense on our consolidated statements of operations:
| Year Ended December 31, | |||
|---|---|---|---|
| (In thousands) | 2023 | 2022 | 2021 |
| Loan premium amortized and written off | $(460) | $(460) | $(460) |
| Deferred loan costs amortized and written off | 8,858 | 7,943 | 10,902 |
| Loan costs expensed | 210 | 117 | 408 |
| Total | $8,608 | $7,600 | $10,850 |
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