RE: Terms of Employment

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Exhibit 10.40

June 7, 2006

Andrès Gavinet
11601 Wilshire Blvd. Ste. #350
Los Angeles, CA 90025

RE:

Terms of Employment

Dear Andrès

        We are pleased to present you with the terms of your proposed employment as our Executive Vice President—Finance. You will initially be employed by Douglas Emmett and Company (and upon a successful completion of an IPO you will employed by Douglas Emmett, Inc., or a subsidiary thereof, (the "REIT")). You will primarily report to the REIT's CFO with additional responsibility to the REIT's COO and CEO. Your supervisory and reporting responsibilities for the REIT are expected to include accounting, the audit function, taxes, SEC reporting, Sarbanes Oxley, investor relations, earnings projections, the corporate model, and support for capital markets transactions. The REIT's CAO is expected to report to you and the COO.

        Your employment start date will be on or about July 1, 2006. Your beginning annual base salary will be $300,000 plus a discretionary annual bonus based on performance with a target of 80% of your base salary. You also will be given a package of other benefits, which currently include a cell phone for business use, a car allowance, and health insurance, commensurate with our Senior Vice Presidents. Annual employee performance reviews are generally done in December. Your first annual employee performance and bonus review is expected to be in December 2006 at which time you will be considered for your 2008 bonus on a prorated basis with a target of $175,000 AG.

        Upon a successful completion of an IPO, and at the same time as the other senior officers of the REIT and on our standard grant agreements, you will receive a grant of 15,000 LTIP units and of non qualified options with an exercise price equal to the IPO price covering 44,444 shares of REIT common stock, each vesting 25% each year on December 31, beginning on December 31, 2007. (The number of shares and LTIP units are based on a price per share of $20 and a value for each of option of $2.25, and will be adjusted proportionately to the extent the mid point of the range in the "road show" prospectus (but not the final prospectus) differs from those values). In the event of a "cha