Brookfield DTLA Fund Office Trust Investor Inc. (“Brookfield DTLA” or the “Company”) is a Maryland corporation and was incorporated on April 19, 2013. Brookfield DTLA was formed for the purpose of consummating the transactions contemplated in the Agreement and Plan of Merger dated as of April 24, 2013, as amended (the “Merger Agreement”), and the issuance of shares of 7.625% Series A Cumulative Redeemable Preferred Stock (the “Series A preferred stock”) in connection with the acquisition of MPG Office Trust, Inc. and MPG Office, L.P. (together, “MPG”). Brookfield DTLA is a direct subsidiary of Brookfield DTLA Holdings LLC, a Delaware limited liability company (“DTLA Holdings”, and together with its affiliates excluding the Company and its subsidiaries, the “Manager”). DTLA Holdings is an indirect partially-owned subsidiary of Brookfield Property Partners L.P., an exempted limited partnership under the Laws of Bermuda (“BPY”), which in turn is the flagship commercial property entity and the primary vehicle through which Brookfield Asset Management Inc., a corporation under the Laws of Canada (“BAM”) invests in real estate on a global basis.

Brookfield DTLA owns BOA Plaza, EY Plaza, Wells Fargo Center–North Tower, Wells Fargo Center–South Tower, Gas Company Tower and 777 Tower, each of which is a Class A office property, and 755 S. Figueroa, LLC, a residential development property, all of which are located in the Los Angeles Central Business District (the “LACBD”).

Brookfield DTLA receives its income primarily from rentallease income (including tenant reimbursements) generated from the operations of its office and retail properties, and to a lesser extent, income from its parking garages.

As used in these condensed consolidated financial statements and related notes, unless the context requires otherwise, the terms “Brookfield DTLA,” the “Company,” “us,” “we” and “our” refer to Brookfield DTLA Fund Office Trust Investor Inc.

The accompanying unaudited condensed consolidated financial statements and related disclosures have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) applicable to interim financial information and with the instructions to Form 10‑Q and Rule 10-01 of Regulation S-X. In the opinion of management, all adjustments, consisting of only those of a normal and recurring nature, considered necessary for a fair presentation of the financial position and interim results of Brookfield DTLA as of and for the periods presented have been included. The results of operations for interim periods are not necessarily indicative of those that may be expected for a full fiscal year.

The condensed consolidated balance sheet data as of December 31, 20172018 has been derived from Brookfield DTLA’s audited financial statements; however, the accompanying notes to the condensed consolidated financial statements do not include all disclosures required by GAAP.

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. For example, estimates and assumptions have been made with respect to fair values of assets and liabilities for purposes of applying the acquisition method of accounting, the useful lives of assets, recoverable amounts of receivables, impairment of long-lived assets and the fair value of debt. Actual results could ultimately differ from such estimates.

Brookfield DTLA’s intangible assetsDTLA leases its office properties to lessees in exchange for payments from tenants comprised of monthly payments that cover rent, property taxes, insurance and liabilitiescertain cost recoveries. Payments from tenants for reimbursement are summarizedconsidered nonlease components that are separated from lease components and are generally accounted for in accordance with the revenue recognition standard. However, the Company qualified for and elected the practical expedient related to combining the components because the lease component is classified as follows (in thousands):an operating lease and the timing and pattern of transfer of tenant reimbursements, which is not the predominant component, is the same as the lease component. As such, consideration for tenant reimbursements is accounted for as part of the overall consideration in the lease. Lease income related to variable payments includes fixed and contingent rental payments and tenant recoveries. Tenant recoveries, including reimbursements of utilities, repairs and maintenance, common area expenses, real estate taxes and insurance, and other operating expenses, are recognized as part of lease income in the period during which the applicable expenses are incurred and the tenant’s obligation to reimburse us arises. Such payments from customers are considered nonlease components of the lease and therefore no consideration is allocated to them because they do not transfer a good or service to the customer. Fixed contractual payments from the Company’s leases are recognized on a straight-line basis over the terms of the respective leases. This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of lease income recognized during the period. Straight-line rental revenue is commenced when the customer assumes control of the leased premises. Deferred rent receivables represent the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements.

The impactelection of the amortizationpackage of acquired below-marketpractical expedients described above permits the Company to continue to account for its leases that commenced before January 1, 2019 under the previous lease accounting guidance for the remainder of their lease terms, and to apply the new lease accounting guidance to leases commencing or modified after January 1, 2019. The Company recorded no net cumulative effect adjustment to the accumulated deficit in the condensed consolidated balance sheet on January 1, 2019 as a result of acquired above-market leases, onthe adoption of this guidance as there were no indirect leasing costs that were required to be written off.

As described above, rental income and tenant reimbursements related to our operating leases for which Brookfield DTLA is the lessor qualified for the single component practical expedient and are classified as lease income in our condensed consolidated statement of acquired in-place leasesoperations. Prior to the adoption of ASC Topic 842, the Company reported rental income and tenant relationshipsreimbursements separately in the condensed consolidated statement of operations, in accordance with ASC Topic 840. Upon adoption of the new lease accounting standard, the comparative statements of operations for prior years have been reclassified to conform to the new single component presentation of rental income and tenant reimbursements, classified within lease income in the Company’s condensed consolidated statement of operations.

As of March 31, 2019, all of the leases in which the Company is the lessor are classified as operating leases. Our leases generally contain options to extend lease terms at prevailing market rates at the time of expiration. Certain leases with retail tenants also provide for the payment by the lessee of additional rent based on depreciationa percentage of the tenant’s sales. Percentage rents are recognized only after the tenant sales thresholds have been achieved.

A reconciliation of the revenue line items that were reclassified in Brookfield DTLA’s condensed consolidated statements of operations to conform to the current period presentation pursuant to the adoption of ASC Topic 842 and amortization expensethe election of the single component practical expedient is as follows (in thousands):

As of September 30,March 31, 2019, the undiscounted cash flows for future minimum base rents to be received from tenants under executed noncancelable operating leases during the remainder of 2019, the next five years and thereafter are as follows (in thousands):

As of December 31, 2018, the undiscounted cash flows for future minimum base rents to be received from tenants under executed noncancelable operating leases during the next five years and thereafter are as follows (in thousands):

As of March 31, 2019, the estimate of the amortization/accretion of intangible assets and liabilities during the remainder of 2018,2019, the next fourfive years and thereafter is as follows (in thousands):

Brookfield DTLA’s debt is as follows (in thousands, except dates and percentage amounts):

All of Brookfield DTLA’s $2.1$2.2 billion of mortgage debt is subject to “non-recourse carve out” guarantees that expire upon elimination of the underlying loan obligations. In connection with all of these loans, Brookfield DTLA entered into “non-recourse carve out” guarantees, which provide for these otherwise non-recourse loans to become partially or fully recourse against DTLA Holdings or one of its subsidiaries, if certain triggering events (as defined in the loan agreements) occur.

Pursuant to the terms of certain of our mortgage loan agreements, Brookfield DTLA is required to report a debt service coverage ratio (“DSCR”) calculated using the formulas specified in the underlying loan agreements. We have submitted the required reports to the lenders for the measurement periods ended September 30, 2018March 31, 2019 and were in compliance with the amounts required by the loan agreements.

Mezzanine equity in the condensed consolidated balance sheets is comprised of the Series A preferred stock, a Series A-1 preferred interest, a senior participating preferred interest, and a Series B preferred interest (collectively, the “Preferred Interests”). The Series A-1 preferred interest, senior participating preferred interest and Series B preferred interest are held by a noncontrolling interest holder. The Preferred Interests are classified in mezzanine equity because they are callable, and the holder of the Series A-1 preferred interest, senior participating preferred interest, Series B preferred interest, and some of the Series A preferred stock indirectly controls the ability to elect to redeem such instruments, through its controlling interest in the Company and its subsidiaries. There is no commitment or obligation on the part of Brookfield DTLA or DTLA Holdings to redeem the Preferred Interests.

The Preferred Interests included within mezzanine equity were recorded at fair value on the date of issuance and have been adjusted to the greater of their carrying amount or redemption value as of September 30, 2018March 31, 2019 and December 31, 2017. Adjustments2018.

During the three months ended March 31, 2019, the Company received cash contributions totaling $6.4 million from DTLA Holdings, which are entitled to increasea 9.0% preferred return as part of the carrying amountSeries B preferred interest. The Company used the funds for general corporate purposes.

During the three months ended March 31, 2018, Brookfield DTLA made distributions to redemption value are recorded inDTLA Holdings totaling $3.5 million as preferred returns on the condensed consolidated statementSeries B preferred interest and $1.1 million as returns of operations as a redemption measurement adjustment.investment related to the senior participating preferred interest using cash on hand.

As of September 30, 2018March 31, 2019 and December 31, 2017,2018, 9,730,370 shares of Series A preferred stock were outstanding, of which 9,357,469 shares were issued to third parties and 372,901 shares were issued to DTLA Fund Holding Co., a subsidiary of DTLA Holdings.

No dividends were declared on the Series A preferred stock during the ninethree months ended September 30, 2018March 31, 2019 and 2017.2018. Dividends on the Series A preferred stock are cumulative, and therefore, will continue to accrue at an annual rate of $1.90625 per share. As of September 30, 2018, the cumulative amount of unpaid dividends totals $162.1 million and has been reflected in the carrying amount of the Series A preferred stock.

The Series A preferred stock does not have a stated maturity and is not subject to any sinking fund or mandatory redemption provisions. Upon liquidation, dissolution or winding up, the Series A preferred stock will rank senior to our common stock with respect to the payment of distributions. We may, at our option, redeem the Series A preferred stock, in whole or in part, for cash at a redemption price of $25.00 per share, plus all accumulated and unpaid dividends on such Series A preferred stock up to and including the redemption date. The Series A preferred stock is not convertible into or exchangeable for any other property or securities of Brookfield DTLA.

As of September 30, 2018,March 31, 2019, the Series A preferred stock is reported at its redemption value of $405.3$414.6 million calculated using the redemption price of $25.00 per share plus all$171.3 million of accumulated and unpaid dividends on such Series A preferred stock through September 30, 2018.

The Series A-1 preferred interest is held by DTLA Holdings or wholly owned subsidiaries of DTLA Holdings and has a stated value of $225.7 million.

As of September 30, 2018,March 31, 2019, the Series A-1 preferred interest is reported at its redemption value of $396.4$405.1 million calculated using its liquidation value of $225.7 million plus $170.7$179.4 million of accumulated and unpaid dividendsinterest on such Series A-1 preferred interest through September 30, 2018.March 31, 2019.

Brookfield DTLA Fund Properties III LLC (“DTLA OP”) issued a senior participating preferred interest to DTLA Holdings in connection with the formation of Brookfield DTLA and the MPG acquisition. As of September 30, 2018 and December 31, 2017, theThe senior participating preferred interest represents a 4.0% participating interest in the residual value of DTLA OP.

During the ninethree months ended September 30,March 31, 2018, Brookfield DTLA made distributions totaling $2.6$1.1 million to DTLA Holdings as returns of investment related to the senior participating preferred interest using cash on hand.

As of September 30, 2018,March 31, 2019, the senior participating preferred interest is reported at its redemption value of $25.6$22.9 million using the value of the participating interest.

At the time of the merger with MPG, DTLA Holdings made a commitment to make capital contributions in cash or property to New OP, which directly or indirectly owns the Brookfield DTLA properties, to fund up to $260.0 million of its future cash needs, for which it will be entitled to receive a market rate of return determined at the time of contribution (“preferred return, if and when called by New OP.return”).