Douglas Emmett (DEI) การประชุมรายงานผลประกอบการไตรมาส 3 ปี 2026: อัตราการเช่าพื้นที่สำนักงานเพิ่มขึ้น

ประเด็นสำคัญ

• รายได้ในไตรมาส 3/2026 เพิ่มขึ้นแตะ 261 ล้านดอลลาร์ จาก 251 ล้านดอลลาร์ในปีก่อนหน้า ขณะที่ FFO เพิ่มขึ้นสู่ 69.6 ล้านดอลลาร์ จาก 68.5 ล้านดอลลาร์
• อัตราการเข้าใช้พื้นที่สำนักงานเพิ่มขึ้นมากกว่า 1 จุดเปอร์เซ็นต์สู่ระดับ 76.7% ซึ่งเป็นการเพิ่มขึ้นรายไตรมาสที่สูงที่สุดของบริษัทนับตั้งแต่ปี 2012 ขณะที่อัตราการทำสัญญาเช่าแตะระดับ 80.4% ซึ่งรวม Studio Plaza แล้ว
• Douglas Emmett ได้ลงนามในสัญญาเช่าพื้นที่สำนักงานจำนวน 224 สัญญา คิดเป็นพื้นที่เกือบ 1 ล้านตารางฟุต โดยส่วนต่าง 370 จุดเบสิสระหว่างพื้นที่ที่ทำสัญญาเช่ากับพื้นที่ที่มีการเข้าใช้งานจริงนั้นสูงเกือบสองเท่าของค่าเฉลี่ยในอดีต
• พอร์ตโฟลิโออสังหาริมทรัพย์เพื่อการอยู่อาศัยยังคงมีอัตราการทำสัญญาเช่ามากกว่า 99% โดย cash NOI ของทรัพย์สินเดิมเพิ่มขึ้น 4.4% เมื่อเทียบเป็นรายปี
• ฝ่ายบริหารยังคงคาดการณ์ FFO ต่อหุ้นปรับลดสำหรับปี 2026 ไว้ที่ 1.39 ถึง 1.43 ดอลลาร์ต่อหุ้น และคงคาดการณ์ผลขาดทุนสุทธิต่อหุ้นปรับลดไว้ที่ 0.16 ถึง 0.20 ดอลลาร์ต่อหุ้น
• ต้นทุนการกู้ยืมที่สูงขึ้นยังคงเป็นแรงกดดันหลักต่อผลประกอบการ โดยฝ่ายบริหารระบุว่าต้นทุนหนี้สินเฉลี่ยเพิ่มขึ้นจาก 3% สู่ 5% ซึ่งส่งผลให้ค่าใช้จ่ายดอกเบี้ยต่อปีเพิ่มขึ้นกว่า 135 ล้านดอลลาร์เมื่อเทียบกับปี 2019

ข้อมูลทางการเงินที่สำคัญ

ผลการดำเนินธุรกิจและการดำเนินงาน

Douglas Emmett ทำสัญญาเช่าพื้นที่สำนักงานเสร็จสิ้น 224 สัญญา รวมเป็นพื้นที่เกือบ 1 ล้านตารางฟุตในไตรมาส 3/2026 ซึ่งประกอบด้วยสัญญาต่ออายุ 142 สัญญา ครอบคลุมพื้นที่กว่า 724,000 ตารางฟุต และสัญญาเช่าใหม่ 82 สัญญา รวมเป็นพื้นที่เกือบ 272,000 ตารางฟุต

บริษัทรายงานส่วนต่าง 370 จุดเบสิสระหว่างอัตราการทำสัญญาเช่ากับอัตราการเข้าใช้พื้นที่จริง โดยฝ่ายบริหารระบุว่าสัญญาเช่าส่วนใหญ่ที่ลงนามแล้วแต่ยังไม่ได้เข้าใช้งานจริงน่าจะเริ่มมีผลในช่วง 3 ไตรมาสข้างหน้า และคาดว่าเกือบทั้งหมดจะเริ่มมีผลภายใน 4 ไตรมาส

มูลค่าตามวิธีเส้นตรงของสัญญาเช่าที่ลงนามในระหว่างไตรมาสเพิ่มขึ้น 1.8% เมื่อเทียบกับสัญญาเช่าเดิมของพื้นที่เดียวกัน โดยการปรับขึ้นค่าเช่าคงที่รายปี 3% ถึง 5% ช่วยชดเชยค่าเช่าเงินสดเริ่มต้นที่ต่ำกว่า ขณะที่ต้นทุนการทำธุรกรรมการเช่าเฉลี่ยอยู่ที่ 5.26 ดอลลาร์ต่อตารางฟุตต่อปี

ฝ่ายบริหารระบุว่าการขยายพื้นที่ของผู้เช่ายังคงมากกว่าการปรับลดขนาดพื้นที่ โดยอุปสงค์ยังคงคึกคักในกลุ่มผู้เช่าด้านกฎหมาย บัญชี การเงิน และความบันเทิง ทั้งนี้ บริษัทยังคงให้ความสำคัญกับการเติบโตของอัตราการเข้าใช้พื้นที่เป็นอันดับแรกก่อนที่จะปรับขึ้นค่าเช่า

พอร์ตโฟลิโอที่อยู่อาศัยยังคงมีอัตราการทำสัญญาเช่ามากกว่า 99% ขณะที่โครงการพัฒนาต่าง ๆ คาดว่าจะเพิ่มยูนิตเข้ามามากกว่า 1,000 ยูนิตในช่วงหลายปีข้างหน้า ซึ่งรวมถึง 712 ยูนิตที่ Landmark Residences ในเบรนต์วูด และสูงสุด 323 ยูนิตที่ 10900 Wilshire ในเวสต์วูด

งบดุลและการจัดสรรเงินทุน

Douglas Emmett ได้รีไฟแนนซ์เงินกู้สำหรับอาคารสำนักงานมูลค่า 366 ล้านดอลลาร์ในเดือนสิงหาคม โดยเงินกู้แบบไม่มีสิทธิไล่เบี้ย (nonrecourse loan) ฉบับใหม่มีอายุสัญญา 4 ปี และมีอัตราดอกเบี้ยคงที่ที่แท้จริงอยู่ที่ 6.24% จนถึงเดือนกันยายน 2029 ส่งผลให้ยอดการรีไฟแนนซ์ทั้งหมดที่เสร็จสิ้นในช่วง 9 เดือนที่ผ่านมาเกินกว่า 1.2 พันล้านดอลลาร์

ฝ่ายบริหารกล่าวว่าหนี้สินที่จะครบกำหนดชำระในเร็ว ๆ นี้คาดว่าจะได้รับการรีไฟแนนซ์ และได้เริ่มการเจรจาไปแล้ว อย่างไรก็ดี การรีไฟแนนซ์จะทำให้ต้นทุนการกู้ยืมเพิ่มสูงขึ้นภายใต้อัตราดอกเบี้ยในปัจจุบัน

สำหรับการเข้าซื้อกิจการ บริษัทยังคงมุ่งเป้าไปที่อาคารสำนักงานระดับ Class A คุณภาพสูงในฝั่งตะวันตกของลอสแอนเจลิส ในระดับราคาที่ฝ่ายบริหารระบุว่ามีส่วนลดในแบบที่ไม่เคยเห็นมาก่อนในรอบหลายทศวรรษ ทั้งนี้ คาดว่าธุรกรรมขนาดใหญ่จะใช้เงินทุนจากการร่วมทุน โดยฝ่ายบริหารระบุว่าพันธมิตรด้านทุนยังคงพร้อมที่จะสนับสนุนเงินทุนสำหรับดีลที่เหมาะสม

Douglas Emmett ยังไม่มีแผนที่จะเข้าซื้ออพาร์ตเมนต์ในปัจจุบัน โดยฝ่ายบริหารเชื่อว่าการพัฒนาอสังหาริมทรัพย์เพื่อการอยู่อาศัยบนที่ดินที่ถือครองอยู่แล้ว สามารถสร้างผลตอบแทนที่น่าดึงดูดใจได้มากกว่าการซื้อสินทรัพย์อพาร์ตเมนต์ที่มีอยู่เดิม

การคาดการณ์ของฝ่ายบริหาร

Douglas Emmett ยังคงประมาณการสำหรับทั้งปี 2026 ไว้ดังนี้:

• ผลขาดทุนสุทธิต่อหุ้นสามัญปรับลด: 0.16 ถึง 0.20 ดอลลาร์
• FFO ต่อหุ้นปรับลดเต็มที่: 1.39 ถึง 1.43 ดอลลาร์

การคาดการณ์ดังกล่าวไม่รวมถึงการเข้าซื้อหรือจำหน่ายสินทรัพย์ในอนาคต การออกหรือซื้อคืนหุ้นสามัญ การจัดหาเงินทุน การชดเชยความเสียหายของทรัพย์สินจากการประกันภัย การบันทึกขาดทุนจากการด้อยค่า และกิจกรรมอื่น ๆ ในตลาดทุนที่อาจเกิดขึ้น

ฝ่ายบริหารเชื่อว่าอัตราการเข้าใช้พื้นที่สำนักงานที่สูงขึ้นและโครงการที่อยู่อาศัยที่อยู่ระหว่างการก่อสร้าง จะสามารถช่วยหนุน FFO ให้กลับสู่ระดับของปี 2019 หรือสูงกว่านั้นได้ในที่สุด แม้ว่าอัตราดอกเบี้ยจะไม่ปรับลดลงก็ตาม ทั้งนี้ สิ่งนี้เป็นเพียงเป้าหมายของฝ่ายบริหาร ไม่ใช่การคาดการณ์อย่างเป็นทางการ และยังไม่รวมถึงผลประโยชน์ที่อาจเกิดขึ้นจากที่ดินสะสมเพื่อการอยู่อาศัย หรือการเข้าซื้อกิจการในอนาคตผ่านแพลตฟอร์มไพรเวทอิควิตี้

ความเสี่ยงและประเด็นที่ต้องจับตามอง

• ค่าใช้จ่ายดอกเบี้ยเป็นความท้าทายที่ใหญ่ที่สุดตามที่บริษัทระบุ โดยต้นทุนหนี้สินเฉลี่ยเพิ่มขึ้นจาก 3% สู่ 5%
• Cash NOI ของทรัพย์สินเดิมลดลง 3.1% แม้อัตราการเข้าใช้พื้นที่สำนักงานจะปรับตัวดีขึ้นและการเติบโตของ NOI ในส่วนของที่อยู่อาศัยจะเพิ่มขึ้นก็ตาม
• AFFO ลดลงสู่ 47 ล้านดอลลาร์ จาก 52 ล้านดอลลาร์ในปีก่อนหน้า
• สัญญาเช่าพื้นที่สำนักงานขนาดใหญ่อาจจำเป็นต้องมีค่าใช้จ่ายในการปรับปรุงพื้นที่สำหรับผู้เช่าที่สูงขึ้น และอาจต้องใช้เวลานานขึ้นก่อนที่จะเริ่มมีผลและสร้างรายได้
• การเริ่มต้นพัฒนาโครงการใหม่ในอนาคตยังคงถูกจำกัดโดยภาระผูกพันด้านการก่อสร้างที่มีอยู่ โดยฝ่ายบริหารกำลังดำเนินการวางแผนและงานสถาปัตยกรรมสำหรับ 2 โครงการ แต่ยังไม่มีเจตนาที่จะเริ่มโครงการที่อยู่อาศัยอื่นจนกว่างานปัจจุบันจะแล้วเสร็จเป็นส่วนใหญ่
• รายได้ที่อาจได้รับจากการดำเนินคดีฟ้องร้องเรียกค่าสินไหมทดแทนจากการประกันภัยยังคงมีความไม่แน่นอน แม้ฝ่ายบริหารจะตัดสินใจเดินหน้าเรียกร้องค่าสินไหมต่อไปก็ตาม

ประเด็นสำคัญช่วงถาม-ตอบกับนักวิเคราะห์

ฝ่ายบริหารกล่าวว่าส่วนต่างระหว่างอัตราการทำสัญญาเช่ากับอัตราการเข้าใช้พื้นที่จริงที่อยู่ในระดับสูง น่าจะช่วยสนับสนุนการเพิ่มขึ้นของอัตราการเข้าใช้พื้นที่เมื่อผู้เช่าย้ายเข้ามา โดยสัญญาเช่าส่วนใหญ่ที่รอการเริ่มต้นคาดว่าจะเริ่มมีผลในช่วง 3 ไตรมาสข้างหน้า แม้ว่าจังหวะเวลาในการรับรู้รายได้อาจแตกต่างกันไปสำหรับสัญญาเช่าขนาดใหญ่

ฝ่ายบริหารระบุว่า Studio Plaza อาจเข้าสู่สถานะการปล่อยเช่าที่แข็งแกร่งยิ่งขึ้นได้ภายใน 4 ไตรมาสข้างหน้า หรืออาจเป็นไปได้ภายใน 2 ไตรมาส อย่างไรก็ดี รายได้จริงอาจต้องใช้เวลานานขึ้น เนื่องจากผู้เช่ารายใหญ่จำเป็นต้องใช้เวลาในการตกแต่งพื้นที่และเข้าใช้งาน

ในส่วนของค่าเช่าพื้นที่สำนักงาน ฝ่ายบริหารระบุว่าส่วนต่างค่าเช่าเงินสดไม่น่าจะปรับตัวดีขึ้นอย่างมีนัยสำคัญจนกว่าอัตราการทำสัญญาเช่าจะขยับขึ้นสู่ระดับ 80% กลาง ๆ ทั้งนี้ สัญญาเช่าปัจจุบันยังมีมูลค่าตามวิธีเส้นตรงเป็นบวก แต่การปรับขึ้นค่าเช่าประจำปีที่กำหนดไว้ในสัญญาทำให้ส่วนต่างค่าเช่าเงินสดเป็นบวกได้ยากในระดับอัตราการเข้าใช้พื้นที่ปัจจุบัน

อัตราการต่ออายุสัญญาของบริษัทยังคงอยู่ที่ราว 70% โดยฝ่ายบริหารยังคงให้ความสำคัญกับการรักษาฐานผู้เช่าเดิม แต่ระบุว่าการเร่งหาผู้เช่ารายใหม่ทั้งรายใหญ่และรายย่อยในเชิงรุกถือเป็นปัจจัยขับเคลื่อนหลักในการปรับปรุงอัตราการทำสัญญาเช่า

บทถอดเสียงการแถลงผลประกอบการฉบับเต็ม

บทถอดเสียงฉบับเต็มของการประชุมทางโทรศัพท์ผลประกอบการ

คำชี้แจงจากฝ่ายบริหาร

Operator

Ladies and gentlemen, thank you for standing by. Welcome to Douglas Emmett's Quarterly Earnings Call. Today's call is being recorded. [Operator Instructions] I will now turn the conference over to Stuart McElhinney, Vice President of Investor Relations for Douglas Emmett.

Stuart McElhinney

Thank you. Joining us today on the call are Jordan Kaplan, our Chairman and CEO; Kevin Crummy, our CIO; and Peter Seymour, our CFO. This call is being webcast live from our website and will be available for replay during the next 90 days. You can also find our earnings package at the Investor Relations section of our website. You can find reconciliations of non-GAAP financial measures discussed during today's call in the earnings package.

During this call, we will make forward-looking statements. These forward-looking statements are based on the beliefs of, assumptions made by and information currently available to us. Our actual results will be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control or ability to predict. Although we believe that our assumptions are reasonable, they are not guarantees of future performance and some will prove to be incorrect. Therefore, our actual future results can be expected to differ from our expectations, and those differences may be material. For a more detailed description of some potential risks, please refer to our SEC filings, which can be found in the Investor Relations section of our website.

When we reach the question-and-answer portion in consideration of others, please limit yourself to one question and one follow-up. Thank you. I will now turn the call over to Jordan.

Jordan Kaplan

Good morning, and thank you for joining us. We've now had our fourth consecutive quarter of positive absorption with almost 1 million square feet of office leasing. Our strong leasing this year is now translating into increased office occupancy. During the quarter, we grew occupancy by more than a full point, our largest quarterly gain since 2012. And we still have a high occupancy backlog as our leased-to-occupied spread is almost double our historic average. Our apartments continue to be a growth engine. Our portfolio remains fully leased with same-property cash NOI over 4% higher than last year. Despite a challenging loan market, we have successfully refinanced $1.2 billion of loans over the last 9 months.

During our entire 40-year history, we have never had a debt default or short pay. This track record has been key to our continuing ability to access debt and equity capital on better terms than are typically available to the broader market. We're optimistic even though the macroeconomic climate remains murky. Office occupancy has begun to recover. Our leasing pipeline is quite healthy, and our NOI has essentially recovered to its 2019 level. Credit for that goes to our very strong operating team. Our biggest challenge is interest rates with our average cost of debt increasing from 3% to 5%. We now spend over $135 million more on interest than we did in 2019. This alone equates to nearly all of our FFO decline since our 2019 FFO high watermark despite lower office occupancy.

Even if interest rates don't eventually moderate, we believe that rising occupancy and our residential developments under construction can drive our FFO back to its 2019 level and beyond. And that estimate does not include the accretive impact of our entitled residential land bank or accretive acquisitions using our private equity platform. During multiple downturns over the last 40 years, we have made generational acquisitions by having dry powder at times when other buyers and owners were capital starved. We have already made 2 great acquisitions in the current market and believe additional similar opportunities will surface soon. As they do, we will be ready. With that, I will turn the call over to Kevin to discuss our refinancing and redevelopment activities.

Kevin Crummy

Thanks, Jordan, and good morning. In August, we refinanced a $366 million office loan. The new nonrecourse loan has a 4-year term with interest effectively fixed at 6.24% until September 2029. This brings the total debt we have successfully refinanced so far this year to over $1.2 billion. Our apartment redevelopment projects remain on track to add over 1,000 units over the next few years, including 712 units of the Landmark Residences in Brentwood and up to 323 units of 10900 Wilshire and Westwood. We also continue to evaluate other development opportunities within our existing portfolio.

As Jordan said, and it is worth repeating, as more owners are forced to navigate this challenging capital constrained environment, we expect to see more of these typically rare opportunities to buy high-quality buildings at very attractive values. With that, I will turn the call over to Stuart.

Stuart McElhinney

Thanks, Kevin. Good morning, everyone. Our strong leasing again produced positive absorption, increasing our leased rate to 80.4%, including Studio Plaza. During the third quarter, we signed 224 office leases totaling almost 1 million square feet, including 142 renewal leases totaling over 724,000 square feet and 82 new leases totaling almost 272,000 square feet. Reflecting our leasing over the past year, our occupancy improved by more than a full percentage point during the quarter to 76.7%. As Jordan mentioned, our occupancy backlog remains unusually strong with a 370 basis point spread between our leased and occupied rates at quarter end. The straight-line value of leases we executed in the quarter increased by 1.8% compared to the prior leases for the same space, with our typical 3% to 5% annual fixed rent bumps more than offsetting the impact of lower beginning cash rents.

Our lease transaction costs averaged $5.26 per square foot per year, well below the benchmark for other office REITs. Our residential portfolio continues to perform exceptionally well with cash same-property NOI up 4.4% and the portfolio over 99% leased, reflecting strong demand across our markets. With that, I'll turn the call over to Peter to discuss our financial results.

Peter Seymour

Thanks, Stuart. Good morning, everyone. Compared to the third quarter of 2025, revenue increased from $251 million to $261 million. FFO increased from $68.5 million to $69.6 million. AFFO decreased from $52 million to $47 million and same-property cash NOI decreased 3.1%. Aat approximately 4.6% of revenue, our G&A remains the lowest among our benchmark group. Turning to guidance. We still expect our 2026 net income per common share diluted to be between negative $0.20 and negative $0.16 and our fully diluted FFO per share to be between $1.39 and $1.43. For information on assumptions underlying our guidance, please refer to the schedule in the earnings package.

As usual, our guidance does not assume the impact of future property acquisitions or dispositions, common stock sales or repurchases, financings, property damage insurance recoveries, impairment charges or other possible capital markets activities. I will now turn the call over to the operator so we can take your questions.

Operator

[Operator Instructions] The first question today comes from Alexander Goldfarb with Piper Sandler.

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Alexander Goldfarb

Jordan, can you just talk about -- you guys obviously have done a very good job growing the occupancy from second quarter to now and 1 million square feet for the past 4 quarters. But can you give us a sense of how much signed but not yet commenced office leasing that you have? Just trying to get a sense for what the earnings ramp would be, how much leasing you've done that hasn't yet taken effect?

Jordan Kaplan

Well, I mean, the spread between leased and occupied is what -- 370 basis points. 370 basis points. So that is kind of high for us. I think Stuart said that in his section. I mean we're -- normal maybe 100, 150. Low is below 100, which is a drag, right, because it means you're -- either you're totally full, which is fine or you're not doing a lot of new leasing, right? 350 is a very good sign. Like you should always be happy with a big spread there because it means we're leasing kind of faster than where we're occupied and faster than with new deals.

It represents new stuff. So there's a good run on that. But I think even more interesting is that our pipeline is still like -- it's still very good. I mean we feel very good about it, and we feel very good going forward. And that's the best news. I mean, because we've been very direct with you guys as the pipeline has moved because obviously, we're a month or so into the quarter, and it still looks very good. And when it's been bad, we've been saying it's bad, but it looks very good.

Alexander Goldfarb

And then just following up on that. As we think about the cadence and how this leasing comes online, I mean, you guys are small tenants, so it's probably pretty quick within maybe 2 quarters or so, 2, 3 quarters. But is there some pace, Stuart, that you would give us so that as we think about the strong leasing that you've been doing, what the ramp is because obviously, there's normal portfolio churn. Just trying to get a sense for how quickly this will come in as we gauge earnings into next year.

Stuart McElhinney

Yes. I think -- we're happy with that widespread. I don't think we want to give kind of timing on what that means for how quickly it comes in. You're right to say that most of the leases are pretty small. So of the leases that we've signed that are not commenced, I think all -- basically all of them will commence over the next 4 quarters. So that will give you a good sense. There's not too much that's much longer out than that. And I think the next 1 or 2 quarters is the majority of it.

Operator

The next question comes from Steve Sakwa with Evercore ISI.

Steve Sakwa

Maybe to follow up on Alex's line of question on leasing. The new leases is really kind of key to kind of building the occupancy at the company. I know it's kind of lumpy, but it has come down a bit, Jordan, from the first quarter to the second quarter to the third quarter. I know it can be a function of maybe a few larger-sized deals maybe slipping. But can you maybe just talk about the dynamics of some of the larger deals? And are you seeing more of them? And what would your outlook be kind of moving forward on those larger deals?

Jordan Kaplan

Well, we're definitely seeing more of them. Some of it's a function of the fact that Studio Plaza just gets larger deals. But throughout the whole portfolio, we're getting larger deals. And larger deals have some good impacts and some not as good, right? The good ones are you get big chunks of space leased. But on the other side, they're going to negotiate higher TIs and they're also a little slower to move in. But I feel -- I can't tell you, we had one quarter with an enormous amount of new leasing. But I don't think what you're kind of alluding to of a downhill trend in terms of new leasing, I don't think we're feeling that. I think we're feeling a little bit of like quarter -- too much quarter-to-quarter. I think we'll end the year with a very good average across the 4 quarters of new leasing and lease rate gain, I'll call it. Maybe I should just answer your question and stop there. I was going to keep answering with something else. Go ahead.

Steve Sakwa

And then maybe you mentioned like the apartments. You're obviously very full. You've got a couple of projects underway, the conversion as well as Barrington. How do you think about new apartment starts? And where would your return hurdle be? Or have you changed your return hurdle to say, start a new apartment development project today?

Jordan Kaplan

I think our return hurdles were always high enough that they were beyond anything that like most people were doing, and they're still not far off from what if someone could get it, they would do today. We've told you we're doing a lot of this stuff at 8 caps and better, and we are. Now of course, we own the land. And buying the land and especially for kind of developers that are trying to build and sell, you have the punitive transfer taxes and a bunch of other things that we're not really subject to, right? We already own the land. And they've made the entitlement side cheaper. So we're in a position to still -- other than the cost of debt, other than the cost of debt, to still be able to be -- do very accretive new development. And we've told you that and said we continue to look at new projects.

Although I mentioned in my portion of the script that I think we will -- with what we have going on now, we can recover our FFO. Even with these high interest rates, we can recover our FFO back to and beyond where we were in 2019. And that doesn't even include taking on new resi development projects, which are very accretive, which you're about to see, for instance, with respect to Barrington and the partnership deal that we're in on Murdoch. And of course, that also doesn't include new deals that we do with our equity partners that are of the like the Bedford deal. We just think we can get there simply out of completing the 2 projects we have going now that are very accretive or 2 or 3, I guess. Barrington -- it's not called it anymore. Yes, 10900 and then finishing leasing up Studio Plaza. Remember, Studio Plaza and Barrington were a huge reduction in our FFO when both of them went offline.

So when you ask about new development, I mean, I put the stuff we're doing now to be super important and our first priority to get our FFO back to where we want it, but we still have that stuff, too. And I actually think even at this time, that stuff could still make sense for us. Too much of an answer? Or did I answer your question, Steve?

Steve Sakwa

No. I mean it sounds like you can make the deals pencil, I guess. Are you more inclined to want to start another residential project right now? Or do you feel like you have a lot on your plate getting Barrington to the finish line?

Jordan Kaplan

I mean I feel like I'm not more inclined to start another residential project right now. But we are in full construction and the rest of it. But we are doing some preparatory work on 2 sites, just kind of planning style work and architectural work. But we're not going to start anything until we get a lot of the stuff that we're working on now completed.

Operator

The next question comes from Nicholas Yulico with Scotiabank.

Nicholas Yulico

I guess first question is just on the balance sheet and thinking about, I guess, the maturity you have next year, the JV loan. We also have a swap maturity early next year. So plans for both of those and how we should think about kind of all-in rates versus what you just did at $360 million at 6.25%.

Jordan Kaplan

Well, in terms of all-in rate, I mean, you guys have -- you literally have the same amount of information we do. We have a great schedule that shows you all the loans and when swaps burn off and all the rest of it, and you guys can make determinations about where you think we'll end up. You know we've been refinancing at spreads between 170 and 2.25 over and swapping out 3 to 4 years. So that, I'll leave you, and we'll obviously give guidance on it next quarter. In terms of the loan that's coming up, as we've been able to do with all our debt, and it's kind of one of the last ones of this whole like roll-up, we'll refinance it. And obviously, the rate will move up. It's -- there's no sort of debt jeopardy there. It will just get refied. And we're already in those discussions, and we'll get it done. And we're actually kind of working on some things to even move a little farther out to buy out some years. But we're super comfortable about being able to refi the rest -- anything that's coming up, and we're super unhappy about where interest rates are.

Nicholas Yulico

Got it, Jordan. I guess second question is just on Landmark and 10900 Wilshire, the development portfolio there. How much is left to fund on those 2 projects? And are you still thinking that you could get some level of proceeds back from the insurance litigation?

Jordan Kaplan

So we're right on target or a little better. So I think we -- I think we put the balance of the construction loan as of the end of last quarter in our schedule. But we'll use the construction loan, and it will fund like finishing the buildings, okay? So we're in good shape there on funding. What was the second part of your question?

Nicholas Yulico

That the insurance -- potential insurance litigation proceeds?

Jordan Kaplan

Yes. I mean, of course, I do. I wouldn't be continuing to pursue the litigation. But there are a number of times I've been wrong where I thought this is a slam dunk in front of the courts, you can count -- you need more than one hand to count on. So yes, I don't understand how we lose that, but whatever, that's going.

Operator

The next question comes from Blaine Heck with Wells Fargo.

Blaine Heck

Jordan, might be a little early to ask, but I'm going to anyways. And I guess in light of yesterday's elections, can you talk about whether anything changes materially for your business in L.A., particularly around residential conversion approvals or ground-up development or even rent regulation and whether there are any specific outcomes that could move projects forward in your pipeline or even change the level of political spending that we should expect in G&A next year?

Jordan Kaplan

There might be some political spending in G&A next year because we still have transfer Texas to deal with statewide. We got very close, and I think we can win that one. I think there's a deal there to be made. The rest of the stuff with the state, at least in conversations I've had with now Governor Becerra, I think, are probably going in an okay direction for us. And I don't know what's going to happen locally, although locally it depends a lot more on counsel and some other things. But that's in terms of that stuff. Federally, I think that people are feeling now that some of the more inflationary things that the federal government has been pursuing are going to be forced into moderation. And that's super big for us.

I mean, I said in my notes, it's all about the cost of debt and interest rates and how much they've moved up on us. And I think I'm kind of optimistic now. I thought we'd have to wait 2 years before someone really did something to get control over all that. And I think now we're going to see something happen in the next couple of years that will start a process that will be probably pretty good for the economy and get us into a less inflationary and less of an up arrow on interest rates. And I'm very optimistic for that. And we'll see if we can -- the House and the Senate are able to kind of push some stuff through or make deals that get that happening. That makes -- I mean it's the biggest thing for us. That's the biggest thing.

Blaine Heck

We noticed the amount of space expiring in 2027 came down pretty significantly this quarter. I guess, can you just talk about how much of that early renewal activity was driven by tenants coming to you versus an intentional push by you guys to address those a little bit early? And how you think the economics of those early renewals compare with what you might have been able to achieve if you waited closer to the natural expiration?

Jordan Kaplan

Well, we start -- I mean to say we start a year early trying to renew people probably understates it. So I mean, a lot of what happens at the buildings is the day the guy moves in, we're thinking about the renewal, and we're trying to give a level of service that makes them want to renew. And by the way, it's reflected, right? We're like 70% renewal year in and year out. So I mean, have we done more than that? I don't know that we've done more than that. In terms of the economics going forward, I don't think we spend a lot of time trying to determine if we weigh or whatever, what the future economics would be on a lease. We want to be full. We want our buildings full. So we'll make deals today that keep our buildings full even if we're extremely confident that rents are going to be up next year. I mean we want to lease up the portfolio. So that is so -- such an overwhelmingly dominant goal that I don't think anyone would even consider if a tenant was ready to go to say, let's stall it and hope that rates rise.

Operator

The next question comes from Rich Anderson with Cantor Fitzgerald.

Richard Anderson

So Jordan, you just mentioned sort of nice lead into my question, my first question, 70% tenant retention. How do you move that number up? And what's -- besides price, obviously, like why are people leaving? And what can you do to turn that 70% into 80%? Or is it just frictional stuff that's unavoidable, and that's just the way the cookie crumbles in your world?

Jordan Kaplan

You know I run the company with a partner, Ken Panzer, the 2 of us run the company. And you are on Ken's favorite subject. Ken wants to find a way to increase the renewal rate. It is enormously difficult because it's already at a high level. I'm not going to bet against him, but he really has thought about that and is thinking of ways to do that and is always trying things out. So we want to increase that. But more important, the way we're moving up our lease rate is real aggression on large and small tenants and going after them, just going after them. And I'm seeing it. I mean, I see -- Ken is doing leases again. I mean, he oversees a huge amount. He is down calling on leases right now. He wants leasing, and I see it happening. And he's got that whole team. I mean you go -- I mean, on Halloween, they had one team that did a song. And kind of the repeating phrase was leasing, leasing, leasing, which he's saying in every meeting. So we're super focused on it right now and getting the lease rate up. I mean that's the best I can tell you in terms of those 2 things.

Richard Anderson

All right. And then second question, I got a couple, but I only have one more. So if Barrington or whatever what's it called now Landmark.

Jordan Kaplan

Landmark Residences.

Richard Anderson

Yes. If that's a kind of 2- or 3-year process, how far inside that will Studio Plaza be done, do you think, in terms of it being fully leased up?

Jordan Kaplan

Well, I'm so bad at making those predictions, but I think we'll be in a very good position, certainly within the next 4 quarters and maybe within the next 2. But then these are big leases. They have to move in and do the rest of it. So for the income to roll in, might even take a little bit longer.

Operator

The next question comes from Jana Galan with Bank of America.

Jana Galan

Following up on the interest rate environment potentially causing investment opportunities. Could you provide some parameters on what you're looking for? Would it be stabilized buildings, redevelopment opportunities, any new submarkets?

Jordan Kaplan

Yes. We're looking for super Class A office at discounts we haven't seen in decades and -- but super Class A. So we'll pay for them. I mean we'll be paying for them, but we'll be paying a lot less than we would have over the last 10 or 15 years or even more. And I think that's just an incredible opportunity. We know the list of buildings we want. We're talking to them. We're chasing very large deals, very large super Class A deals.

Jana Galan

I was going to ask any apartments, but thank you for clarifying.

Jordan Kaplan

No, we will not buy apartments. Apartments are still trading at higher cap rates than historically, but still not very high cap rates, call it, 5, maybe even high 4s. And we just think we can build at much better, much more accretive cost than that.

Jana Galan

And then maybe just kind of in terms of the capital that's looking to potentially partner with you. Curious what that looks like in terms of capital raising.

Jordan Kaplan

I mean, that environment is excellent. I mean we owe them more deals. That's where that's at. I mean they know the stuff we're chasing and they're more than ready. I mean -- they like want to come in. They're more than ready. We got to make the deal, though.

Operator

Next question comes from Seth Bergey with Citi.

Seth Bergey

I guess just to kind of follow on that similar line of question. Kind of how are your IRR expectations? Or kind of how do you think about what returns you're trying to solve for when you look at those kind of Class A office opportunities that are out there?

Jordan Kaplan

We're obviously going in with much higher yields than historically we would have been able to. And in terms of long-term IRR, that has a lot to do about your optimism about office and office rates and what's going to happen in these markets. But I think we're looking at some pretty good all-cash and leveraged IRRs. And as you guys know, we don't use very high leverage. So -- and leverage at these rates, you've got to be at a very good all-cash IRR for leverage to help it. So I think we're feeling that those numbers also in that world are historically high.

Seth Bergey

And then maybe just going back to kind of the leasing activity you've done in that 370 basis points. Just given a lot of your deal sizes are smaller, how kind of quickly do you kind of anticipate that pipeline converting into occupancy?

Peter Seymour

Yes, I think of the leasing that's not yet occupied, most of it should move in over the next 3 quarters.

Operator

The next question comes from John Kim with BMO Capital Markets.

John Kim

On the acquisitions, should we assume you're going to be funding that with the JV partner? And how do you look at the earnings accretion versus share repurchases?

Jordan Kaplan

Yes. We've historically done things, especially larger transactions with JV partners, and they're the best source of capital out there right now, and I don't know why we've changed that.

John Kim

Yes. I just want to make sure because you talked about very attractive IRRs, thanks for confirming. Looking at your cash spreads, I guess it's not a big surprise that they're negative given 3% to 5% annual escalators or fixed rent increases. But when do you expect market rents to exceed that 3% to 5% level, so that cash spread figure improves?

Peter Seymour

Yes. I think at 80% leased, as Jordan has been emphasizing, we're very focused on leasing and occupancy at this point in the cycle. So once that lease rate has a strong up arrow on it, and we're moving up in the mid-80s, then rents will likely follow at that point, and you could see that turn around. But at this point in the cycle with -- you said it right, with our bumps, 3% to 5% bumps, ending rent is 12% to 16% higher than it started. It's very hard to have a positive cash spread with those built-in escalators. So it's not unsurprising that they're still negative. We're very pleased that the overall straight-line value has remained positive. So the leases on average are still more value. But we're really focused on occupancy and rate will follow once we've got a good trajectory there.

Operator

The next question comes from Upal Rana with KeyBanc Capital Markets.

Upal Rana

Jordan, on the large Class A office assets that you're pursuing, are any of those in new markets? Or are you sticking to L.A. for the time being?

Jordan Kaplan

Well, it's correct to say we're sticking to L.A. But then within L.A., the markets in L.A., it's generally even in markets. There's one deal that's in another market I've always wanted to be in. But that's in L.A., really should count as Westside. But other than that, yes, it's like Westside L.A.

Upal Rana

And then maybe on touching on tenant industries. Maybe you can give us an update on which ones are currently driving the most demand and where you're seeing expansions versus downsizing?

Jordan Kaplan

Yes. Pleased to see that we're still seeing expansions easily outpacing contractions, and that's been true for several quarters. Demand remains very strong across our diverse group. That pie chart that we give you is still very instructive. It's legal, it's accounting, finance, entertainment, all very good and very active.

Operator

The next question comes from Dylan Burzinski with Green Street.

Dylan Burzinski

I appreciate your comments on sort of the demand backdrop. But I guess just maybe looking at it a little bit deeper, when you guys sort of look at your pipeline and specifically focusing on sort of new leases or vacant space leasing, of that demand, would you say most of it or could you break it down by percentage on new-to-market tenants, expansionary versus sort of musical shares within a market and you guys taking share? And then I guess as you sort of think about the near-term recovery, is it such that you guys need to see a continuation of just broader market-wide demand growth in order to sort of achieve some of your goals on that front?

Jordan Kaplan

Well, I mean, if you look at what the sort of the public kind of market lease rates are being published by like the big brokerage firms, I don't -- I think the growth -- I don't think anyone is stealing from anywhere. I think it's like growth. Now whether it's organic and people expanding or whether it's coming from the outside and new leases coming in, I think both of those are happening in our portfolio. I mean, we're also taking tenants from other buildings, but it's super hard to figure out other than to compare our growth and what's going on in the submarkets that we're in to say -- I mean, I don't see -- as we move up, they seem to be moving up. So we're probably not robbing Peter to pay Paul. We're probably seeing a return of market strength.

And I think that's also reflected in the fact that even when we have a kind of very big, very, very big fly trap. I mean, almost everything that flies in, we can get a grab on. But we weren't able to get large deals going until large tenants just started doing deals. And trust me, we would have been willing to take them out of other buildings. So I think now we're seeing people kind of expand or come back in or whatever the case may be or open a new office because they want everyone -- I don't know what all the list of stuff is. But we're seeing a lot of deals that I don't think we're looking and going, they came out of here to go here. But we are saying they came out of here to go come to us too. I think they're both happening.

Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Jordan Kaplan for any closing remarks.

Jordan Kaplan

Well, all I'll say is thank you all for joining us, and I look forward to speaking with you again in 3 months. Goodbye.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.