Getting to Know Douglas Emmett: An REIT Heavy Hitter Worth Watching



The roots of Douglas Emmett

Douglas Emmett (DEI) was founded in 2005 by Dan Emmett. Headquartered in Santa Monica, California, the company is structured as an REIT (real estate investment trust) and completed an initial public offering in 2006. The company is now the fifth-largest publicly traded office REIT in the United States and is a part of the S&P 400 index.

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A drive-by business overview

Douglas Emmett is also a fully-integrated, self-administered, and self-managed REIT. The company’s core business is the ownership of high-quality commercial properties and luxury apartment communities. The company is primarily engaged in the ownership, development, acquisitions, and management of real estate assets consisting primarily of class A properties. The company is currently focused on the premier coastal submarkets of Los Angeles and Honolulu.

Who’s Douglas Emmett up against?

Douglas Emmett is the largest office REIT companies in the US with a market capitalization of $4.5 billion. The company competes with a number of other office REITs for rental properties. More specifically, Douglas Emmett sees competition from the following:

  • real estate companies
  • private real estate funds
  • financial institutions
  • pension trusts

We should note here that competition for office leasing space is mainly driven by the following factors:

  • quality of properties and services provided to tenants
  • attractiveness of leasing terms
  • location
  • reputation of a company operating office properties

Competition with the company’s multifamily properties comes from the presence of other multifamily properties, as well as single-family homes, condominiums, and other residential properties. Most of Douglas Emmett’s multifamily properties are located in developed areas that have a substantial presence of properties owned and operated by other companies.

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Major competitors of Douglas Emmett in the office REIT space includes Boston Properties (BXP), Alexandria Real Estate Equities (ARE), SL Green Realty Corporation (SLG), Kilroy Realty Corporation (KRC), BioMed Realty Trust (BMR), Highwoods Properties (HIW), Paramount Group (PGRE), Equity Commonwealth (EQC), and Columbia Property Trust (CXP). The iShares Cohen & Steers REIT ETF (ICF) invests approximately 1% of its portfolio in Douglas Emmett.

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