Douglas Emmett reports today carrying one of the most elevated short positions in the office REIT space — and the data shows that conviction has barely shifted heading into the print.
Short interest is running at 17.4% of the free float, a level that places DEI firmly in the high-conviction-bear camp. That position has been broadly stable over the past month, edging up just 1.6%, with a slight uptick of 0.8% on the week. The lending market offers bears no friction: availability is loose at roughly 536% — meaning shares available to borrow far exceed those already on loan — and the cost to borrow sits at just 0.5%, barely changed over the month. There is no squeeze pressure here. Options positioning reinforces the bull lean among derivatives traders, with the put/call ratio at 0.26, meaningfully below its 20-day average of 0.30, suggesting call-side demand is running above recent norms. The stock itself has drifted lower, down 4.4% over the past month to close at $11.96, though it caught a 0.5% bounce on Tuesday.
The debate between bulls and bears centers on whether Los Angeles and Honolulu office fundamentals are stabilising fast enough to justify a re-rating. Bulls point to target upgrades from Scotiabank and Piper Sandler in mid-July — Piper Sandler's Alexander Goldfarb lifted his target from $11 to $14, a 27% jump — alongside Wells Fargo's ongoing Overweight rating with a $14 target. The consensus mean target of $13.20 implies roughly 10% upside from current levels. Bears counter with EPS momentum that ranks in the bottom fifth of the universe across both 30- and 90-day windows, an ORTEX short score of 68 (placing it in the bottom quarter on that metric), and a business concentrated in West Coast submarkets that have lagged the Sun Belt recovery. Evercore ISI trimmed its target back in June, keeping an In-Line rating, a signal that even neutral analysts are not confident the recovery is accelerating.
One notable ownership angle cuts against the bearish narrative. The CEO, Jordan Kaplan, appears in the holder list with 1.76% of shares, and he added to that position earlier this year. BlackRock added roughly 538,000 shares as of June 30, lifting its stake to 14.6% of shares outstanding. First Eagle holds 8.3%, and First Pacific Advisors has been a meaningful buyer. Against 17.4% short interest, this concentration of long-term holders alongside insider ownership at least limits the free float available to shorts — even if the borrow market remains untroubled.
The print will test whether management can demonstrate stabilising occupancy or funds-from-operations trends sufficient to narrow the gap between the $11.96 price and the $13–14 range where most analysts have anchored their targets — or whether the bears, who have held their ground for months, find new cause to press the position.
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