We're sticking with our opinion of Douglas Emmett DEI following the release of third-quarter results. This Los Angeles office and residential landlord's results continue to be muddied by the inclusion of an investment fund in the prior year's quarter, so we focus on same-property results, which adjust for this and are therefore more comparable. For the quarter (on a year-over-year basis), same-property cash net operating income fell 1%, driven mainly by slight weakness in Douglas Emmett's office portfolio, where occupancy was 90.7% at quarter-end, down 340 basis points from the prior year. (This was, however, an 80-basis-point improvement relative to the second quarter.) Multifamily occupancy remained above 99% and also improved marginally compared with the second quarter. Despite these occupancy increases, we expect the leasing environment in Los Angeles to remain difficult for Douglas Emmett, pressuring results through at least 2010.

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