Dougals Emmett 4Q14 Earnings Call Notes

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Each week I read dozens of transcripts from earnings calls and presentations as part of my investment process. Below are some of the most important quotes about the economy and industry trends from the transcripts that I read this week. Full notes can be found here.

Highest leased since recession

“At year end, our office assets were 92.5% leased, our highest since the recession. Occupancy at the properties we own throughout the fourth quarter increased 93 basis points to 90.6%.”

2014 was the warmest year on record in LA

“2014 was the warmest year on record in Los Angeles County. Degree days a key measure of cooling requirements were up an incredible 141% at the measuring station in Santa Monica and up 69% at the measuring station at LAX.’

Optimism in SoCal

“We continue to see growth in our Los Angeles markets with optimism over the Southern California economy and real estate markets driven by improving employment numbers and strong demand from our regions diverse industries.”

Silicon beach

“Most of you have seen the headlines about the impact of the convergence of the technology, media and advertising industries in Silicon Beach and about Los Angeles emerging as the world’s leading producer of digital content.”

Eye popping sales prices bring sellers to market

“I would say that look 2014 was better than 2013. And there were some transactions that had some pretty eye-popping dollars per square foot. And that always brings up more sellers who want to take advantage of that market. And so I would say that our pipeline, I’m pretty optimistic of things in the pipeline that we’re looking at and at things that will be coming out later this year.”

Hawaii has a workforce shortage

“you can’t almost go to Hawaii and read the local paper and not hear about their need for workforce housing or about the legislature or the city or the county, trying to put programs for workforce housing. Now, you know what, they are not super wealthy and therefore, their programs need to get funded for them to be effective and a lot of times they have problem funding the programs. But they want it to happen.”

The whole market is seeing strong leasing

” I can tell you that I think it’s a variety of industries. There are tenants coming into the market. So it’s not just trading actually market and overall the market lease rates in Warner center are going up. And if you really — I mean I hate to even say this, but if you look at the market overall, it’s better leased than our particular portfolio and it’s the only market where our portfolio is underperforming the overall market lease rate.'”

Buying back stock takes away from reinvesting in the business

“we are a lot more confident in the underlying value of the buildings than to say the stock is going up, down, or all around and becoming a trader in our stock. I will say this to give you an opportunity to do it, during the recession we were one of only four REITs that bought back our stock, okay. So we are not unwilling to do it.

But I also want to buy buildings. Buying back our stock takes away — uses cash and takes away the opportunity to buy buildings.”