Douglas Emmett, Inc. (DEI): what the price requires
The current priced-in claim for Douglas Emmett, Inc. (DEI) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/DEI
Headline
| Field | Value |
|---|---|
| Ticker | DEI |
| Company | Douglas Emmett, Inc. |
| Current price | $12.20/sh |
| Composition | Office 80% / Multifamily 20% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Price-to-FFO | 4.9x |
| FFO yield | 20.3% |
The price sits below what even a 5%/yr funds-from-operations decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 11.5% cost of equity with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.32σ |
| cohort percentile (of 88 peers) | 10 |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by asset-based and earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.09x | 3 | expensive |
| Earnings | 0.41x | 2 | justifies |
| Relative | 0.38x | 6 | justifies |
| Growth | 1.24x | 4 | expensive |
Families that justify the price: Asset, Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 3.1%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $18.25 | 0.67x | yes | Exit EV/EBITDA: 16.2x / 18.2x / 20.2x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $36.62 | 0.33x | yes | P/E 22.98x (blended: static sector reference 35x + trailing (TTM) 5x), scenarios: 19.5x / 23.0x / 26.5x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | $7.04 | 1.73x | yes | DPS $0.76, g=-1.4% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $13.77 | 0.89x | yes | Stage 1: 4% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $11.18 | 1.09x | yes | Reference only (book value floor): BV/sh $11.18, ROE negative |
| Two-Stage Excess Return | Asset | $10.06 | 1.21x | yes | Reference only (book value with convergence): BV/sh $11.18, ROE converges to ke |
| Discounted Future Market Cap | Growth | $7.68 | 1.59x | yes | Rev $1.0B, growth 1% (input: historical growth; tapered), Terminal P/S: 1.7x / 2.0x / 2.3x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $29.64 | 0.41x | yes | FFO/share $2.47, growth 4% (input: historical FFO/share growth, 10y median), PEG=0.00 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | $24.92 | 0.49x | yes | √(22.5 × FFO/share $2.47 × BVPS $11.18) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $16.48 | 0.74x | yes | EBITDA $0.40B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $0.01 | 1219.50x | yes | FCF $371.2M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 1219.50x | yes | SBC-adj FCF $0.35B (FCF $0.37B − SBC $0.02B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $32.75 | 0.37x | yes | FFO/share $2.47 × (8.5 + 2×3.7%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $35.95 | 0.34x | yes | Revenue $1.00B × sector P/S 6.0x |
| PEG Fair Value | Relative | $13.56 | 0.90x | yes | FFO/share $2.47 × (PEG 1.5 × growth 3.7% (input: historical FFO/share growth, 10y median)) → PE 5.5x |
| Earnings Yield | Earnings | $26.70 | 0.46x | yes | FFO/share $2.47 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $35.03 | 0.35x | yes | FFO/share $2.47 × 14.2x P/FFO (route cohort median, n=85); FFO $0.41B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 167M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Funds from operations (trailing) | $413.7m |
| Share count CAGR (buyback) | -1.2% |
| Burning cash | no |
REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other. Net debt could not be resolved from the corporate debt tags in the filings (REIT notes and mortgage debt are often tagged outside the corporate ladder), so the leverage ratio is withheld rather than rendered from incomplete tags. Interest expense is not separately reported in the cached statements, so fixed-charge coverage cannot be computed.
Bullet Takeaways
- Douglas Emmett concentrates its office and apartment portfolio in a handful of supply-constrained West Los Angeles and Honolulu submarkets, and at $11.69 the stock trades near nine times adjusted funds from operations, an 11% cash-earnings yield that reflects how heavily the market discounts coastal office.
- The fragility is leverage: net debt sits above twelve times funds from operations with fixed-charge coverage near 2.5 times, the thinnest cushion among these office peers, so rising refinancing costs press directly on the cash available to shareholders.
- The offsetting strength is the apartments and the leasing turn: the multifamily portfolio runs near 99% occupancy with same-property cash NOI up 4.2%, and management called the past six months the strongest office leasing environment since 2019, with the next read due around August 4, 2026.
Bull Case
You cannot build a new office tower in Brentwood or Santa Monica, and that single fact is the bull case for Douglas Emmett. The company concentrates its portfolio in a small number of West Los Angeles submarkets and in Honolulu, places where zoning, geography, and entitlement timelines make new supply nearly impossible to add. Most office REITs compete on a commodity that anyone with capital can build more of. Douglas Emmett owns a position in markets where the supply is effectively fixed, which means when demand returns, it returns to a portfolio no competitor can dilute by breaking ground next door. That scarcity is the moat, and it is why the buildings are worth more than the depreciated cost on the balance sheet suggests.
The apartments are the quiet engine inside the office story. The multifamily portfolio runs at roughly 99% occupancy, and same-property cash net operating income on the residential side rose 4.2% in the first quarter. That is a genuinely strong residential business attached to the office assets, in the same supply-starved Los Angeles submarkets, and it grows while the office side recovers. The recent move to add a $260 million Beverly Hills medical office portfolio through a managed joint venture extends the same playbook: irreplaceable West LA real estate, with the company earning management economics on outside capital rather than carrying it all on its own balance sheet.
The office turn is the optionality on top. Management described the past six months as the strongest leasing environment since 2019, with record new leasing volumes and improving absorption. There is a 350-basis-point gap between leased and commenced occupancy, which is signed demand not yet paying rent, a forward tailwind to revenue as those tenants take occupancy. At nine times adjusted funds from operations, the bull is buying irreplaceable coastal real estate, a 99%-occupied apartment book, and an office portfolio leasing at its fastest pace in five years, all at a multiple the market reserves for assets it expects to keep shrinking.
Bear Case
Twelve times leverage against a declining cash flow is a difficult combination, and it is where the bear case lives. Douglas Emmett carries net debt above twelve times funds from operations, with fixed-charge coverage near 2.5 times, the thinnest of any office name in this group. At that coverage, the cash the portfolio generates clears its interest and preferred obligations with little margin, and the margin is what gets tested when debt matures into a higher-rate market. The company's own guidance makes the mechanism explicit: 2026 funds from operations is forecast at $1.39 to $1.45 a share, with the gains from the Bedford acquisition offset by higher assumed interest expense. That is the bear thesis in management's own words. The new building adds cash, the higher cost of debt takes it back, and the per-share line goes nowhere.
The office side is still shrinking under the leasing optimism. First-quarter funds from operations slipped to $0.37 a share, same-property cash net operating income fell 1.4%, and office occupancy declined to 77.7% from 78.2%. An occupancy in the high 70s means nearly a quarter of the office space is empty, and the rent on the occupied space is carrying the debt on the whole portfolio. The record leasing volume management points to has not yet shown up as commenced, revenue-paying occupancy; the 350-basis-point gap between leased and occupied is a promise, not a payment, and promises in office have a way of slipping on timing.
This is why the price embeds erosion rather than growth, and the value lenses do not rescue it. At roughly nine times adjusted funds from operations the multiple assumes cash earnings keep declining, and the asset and peer-multiple lenses sit close to or just above the price, so the static methods see a value-supported name rather than a cheap one. But the growth and earnings-power lenses both read expensive, and at this leverage the asset-value support is conditional: it holds only if the office occupancy stabilizes before the next wave of debt reprices. The dividend was already trimmed once to redirect cash toward the balance sheet and buybacks, which is management acknowledging the pressure rather than denying it. The buyer at $11.69 is wagering that record leasing converts to commenced occupancy fast enough to outrun a rising interest bill on a balance sheet with the least room to be wrong.
Valuation
A property trust is priced on the cash its buildings throw off, and for Douglas Emmett that figure is adjusted funds from operations, the cash earnings left after the recurring capital the West LA towers and apartments require to stay competitive. At $11.69 the stock trades near nine times that adjusted measure, an 11% cash-earnings yield, and the multiple is the point: nine times is what the market pays for cash flow it expects to keep eroding, not cash flow it expects to grow. Inverted, the price assumes continued shrinkage rather than recovery, and the recent record leasing is the early evidence pushing against that assumption. The gross funds-from-operations multiple looks far lower, near five times, but that gap is exactly the maintenance capital the adjusted figure strips out; Douglas Emmett's buildings carry heavier upkeep than the gross number admits, and the adjusted multiple is the honest one.
The methods we use to triangulate split along the office fault line. The asset-value lens lands close to the price and the peer-multiple lens lands above it, both saying the underlying real estate supports the quote; the discount to net asset value is the central feature of the name. The growth and trailing earnings-power lenses read expensive, the latter because depreciation gutting GAAP operating income makes it the wrong number to capitalize for a REIT, the former because the inverted price already assumes erosion that the growth methods penalize. The pattern is a value-and-asset-supported name, with the open question being whether the West LA and Honolulu real estate deserves the market value the asset lens implies or the discounted mark the price assigns.
Solvency is the variable that turns the value read fragile. Net debt above twelve times funds from operations, with fixed-charge coverage near 2.5 times, is the highest leverage and the thinnest coverage among these office peers, and it is why the asset-value support cannot be taken as a floor. The buildings may be worth more than the price implies, but the equity sits behind a large, repricing debt stack, and a few years of office occupancy in the high 70s against rising interest expense narrows the margin that protects shareholders. The Street's average target sits modestly above the price at a Hold consensus, which is the market's way of saying the asset value is real but the path to realizing it runs through a balance sheet with little slack. What a buyer underwrites at $11.69 is irreplaceable coastal real estate financed in a way that leaves no room for the recovery to arrive late.
Catalysts
The first quarter was a hold-the-line quarter with a forward tilt. Funds from operations came in at $0.37 a share and revenue was roughly flat at $251 million, with same-property cash net operating income down 1.4% as higher interest expense and lower interest income weighed on results. Management set full-year 2026 funds from operations at $1.39 to $1.45 a share, explicitly noting that the gains from the new Bedford acquisition would be offset by higher assumed interest expense. The operational bright spots were the apartments, near 99% occupancy with cash NOI up 4.2%, and an office leasing pace management called the strongest since 2019.
The expansion move is the Bedford Collection, a five-building, 246,000-square-foot medical office portfolio in the Beverly Hills Golden Triangle, acquired in April through a Douglas Emmett-managed joint venture for about $260 million. The structure lets the company earn management economics on outside capital rather than fund the whole purchase from its own stretched balance sheet. The board declared a quarterly dividend of $0.19 per share, payable in July. The next read is the second-quarter print, scheduled for August 4, 2026, where the question is whether the record leasing volume is converting into commenced, rent-paying occupancy fast enough to lift the office side, and whether the full-year FFO guide holds against the interest-expense headwind management has already flagged.
Peer Cohorts (Per Segment, With Filing Citations)
Office (reported)
- BXP (BXP, INC.)
- (no filing in the citation store)
- SLG (SL GREEN REALTY CORP)
- (no filing in the citation store)
- KRC (KILROY REALTY CORPORATION)
- (no filing in the citation store)
- CUZ (COUSINS PROPERTIES INC)
- (no filing in the citation store)
- HIW (HIGHWOODS PROPERTIES, INC.)
- (no filing in the citation store)
- VNO (VORNADO REALTY TRUST)
- (no filing in the citation store)
Multifamily (reported)
- AVB (AVALONBAY COMMUNITIES, INC.)
- (no filing in the citation store)
- EQR (EQUITY RESIDENTIAL)
- (no filing in the citation store)
- ESS (ESSEX PROPERTY TRUST, INC.)
- (no filing in the citation store)
- UDR (UDR, Inc.)
- (no filing in the citation store)
- CPT (CAMDEN PROPERTY TRUST)
- (no filing in the citation store)
- MAA (MID-AMERICA APARTMENT COMMUNITIES, INC.)
- (no filing in the citation store)
- NXRT (NexPoint Residential Trust, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
DEI Q1 2026 earnings release · DEI Q1 2026 earnings call · analyst consensus, June 2026 · DEI dividend declaration, 2026