Baron Funds Comments on Douglas Emmett Inc.

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Nov 20, 2013
Douglas Emmett, Inc. (DEI, Financial) decreased 5.9% in the third quarter. Douglas Emmett is a REIT that owns and manages office and apartment buildings in attractive West Los Angeles submarkets, the San Fernando Valley, and Honolulu. Its shares, along with REITs more broadly, corrected in the third quarter due to concerns about rising interest rates and their potential impact on acquisition and development returns as well as real estate valuations. We think a good portion of these concerns are already priced into the stock. We continue to have a favorable long-term view of the company because of its dominant market share, significant barriers to new construction, high quality of its portfolio, and the potential for rent increases. (David Kirshenbaum)

From Baron Funds' third quarter commentary.