2192003 8K/A DOC

8-K/A 1 body8ka.htm 8-K/A 2192003 8K/A DOC

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A

Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 17, 2002

Essex Portfolio, L.P.
(Exact name of registrant as specified in its charter)

Commission file number 333-44467-01

Maryland 77-0369575

(State or Other Jurisdiction of Incorporation or Organization) (IRS Employer Identification Number)

925 East Meadow Drive
Palo Alto, California 94303
(Address of principal executive offices including zip code)

(650) 494-3700
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Essex Portfolio, L.P., a California limited partnership (the "Operating Partnership") effectively holds the assets and liabilities and conducts the operating activities of Essex Property Trust, Inc. ("Essex" or the "Company"). Essex Property Trust, Inc., a real estate investment trust incorporated in the State of Maryland, is the sole general partner of the Operating Partnership.

This Form 8-K/A hereby amends Item 7 of the Form 8-K, dated December 23, 2002, of Essex Portfolio, L.P., to provide the financial information required in connection with the merger of John M. Sachs, Inc., into a subsidiary of Essex. The following financial statements required by such Item 7 are filed as part of this report:

Item 7. Financial Statements and Exhibits. Page No.



(a) Financial Statements Under Rule 3-14 of Regulation S-X



           The Sachs Portfolio


           Independent Auditors' Report
1



           Combined Statement of Revenue and Certain Expenses
           for the year ended December 31, 2001 2



           Notes to Combined Statement of Revenue and Certain Expenses 3



           Combined Statement of Estimated Taxable Operating Results and
           Estimated Cash to be Made Available by Operations (unaudited) 5



(b) Pro Forma Condensed Consolidated Financial Statments 6



           Pro Forma Condensed Consolidated Balance Sheet
           as of September 30, 2002 (unaudited) 7



           Pro Forma Condensed Consolidated Statement of Operations
           for the nine months ended September 30, 2002 (unaudited) 8



           Pro Forma Condensed Consolidated Statements of Operations
           for the year ended December 31, 2001 (unaudited) 9



           Notes to the Pro Forma Condensed Consolidated Financial Statements 10



           Combining Schedule of Revenue and Certain Expenses of the Acquisition
           Properties for the nine months ended September 30, 2002 (unaudited) 11



           Combining Schedule of Revenue and Certain Expenses of the Acquisition
           Properties for the year ended December 31, 2001 (unaudited) 12



(c) Exhibit and Exhibit Index

Exhibit
Number

Description

23.1

Consent of KPMG LLP.

2.1*

Agreement and Plan of Reorganization by and among Essex, Merger Sub, Sachs, the Sachs Shareholders and John M. Sachs, dated December 17, 2002, attached as Exhibit 2.1 to the Company's Current Report on Form 8-K, dated December 23, 2002, and incorporated herein by reference. Certain exhibits and schedules referenced in the Merger Agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted exhibit or schedule will be furnished supplementally to the Securities and Exchange Commission upon request.

10.1*

Registration Rights Agreement by and among Essex and the Sachs shareholders, dated December 17, 2002, attached as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated December 20, 2002, and incorporated herein by reference.

99.1

Press release dated December 17, 2002, announcing the Merger (incorporated by reference to exhibit 99.2 to Essex's Form 8-K, dated December 19, 2002).

*Incorporated by reference to exhibits in the Company's Current Report on Form 8-K, filed on December 23, 2002.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned therunto duly authorized.

Date: February 19, 2003

Essex Portfolio, L.P.

By: /s/ Mark J. Mikl

Mark J. Mikl

Vice President and Controller

EXHIBIT INDEX

Exhibit
Number

Description

Exhibit 23.1

Consent of KPMG LLP.

Independent Auditors' Report

The General Partner
Essex Portfolio, L.P.:

We have audited the accompanying combined statement of revenue and certain expenses of The Sachs Portfolio for the year ended December 31, 2001. This combined statement is the responsibility of management. Our responsibility is to express an opinion on this combined statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined statement of revenue and certain expenses is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the combined statement. We believe that our audit provides a reasonable basis for our opinion.

The accompanying combined statement of revenue and certain expenses was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission, as described in note 1 to the combined statement of revenue and certain expenses. It is not intended to be a complete presentation of The Sachs Portfolio's combined revenue and expenses.

In our opinion, the combined statement referred to above presents fairly, in all material respects, the combined revenue and certain expenses, as described in note 1, of The Sachs Portfolio for the year ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America.

/s/ KPMG LLP

San Francisco, California
December 17, 2002

THE SACHS PORTFOLIO
Combined Statement of Revenue and Certain Expenses
Year ended December 31, 2001
(Dollars in thousands)






Rent revenue (note 3)                                     $    36,183
                                                           -----------

Certain expenses:
   Administrative                                               5,770
   Utilities                                                    3,798
   Repairs and maintenance                                      2,792
   Real estate taxes                                            1,857
   Advertising and promotion                                      664
   Insurance                                                      437
                                                           -----------
                                                               15,318
                                                           -----------
          Revenue in excess of certain expenses           $    20,865
                                                           ===========

See accompanying notes to combined statement of revenue and certain expense.

THE SACHS PORTFOLIO
Notes to Combined Statement of Revenue and Certain Expenses
Year ended December 31, 2001

(1) Basis of Presentation

The accompanying combined statement of revenue and certain expenses relates to the operations of The Sachs Portfolio (the Properties), consisting of the following:

Property		Location

Apartment Communities:
Alpine Country Apartments		Alpine, California
Alpine Village Apartments		Alpine, California
Bonita Cedars		Bonita, California
Cambridge Apartments		Chula Vista, California
Carlton Heights Villas		Santee, California
Casa Tierra Apartments		El Cajon, California
Coral Gardens Apartments		El Cajon, California
Country Villas		Oceanside, California
Devonshire Apartments		Hemet, California
Emerald Palms Apartments		San Diego, California
Grand Regency Apartments		Escondido, California
Mesa Village Apartments		San Diego, California
Mira Woods Villas		San Diego, California
Saint Cloud Apartments		Houston, Texas
Shadow Point Apartments		Spring Valley, California
Summit Park Village		San Diego, California
Tierra Del Sol/Norte		El Cajon, California
Villa Capri East		San Diego, California
Villa Capri North		San Diego, California
Woodlawn Colonial		Chula Vista, California

Recreational Vehicle Parks:
Circle RV Park		El Cajon, California
Diamond Valley RV Resort		San Jacinto, California
Golden Village Palms Resort		Hemet, California
Riviera Vegas RV Park		Las Vegas, Nevada
Vacationer RV Resort		El Cajon, California

Manufactured Housing Communities:
Green Valley Mobile Home Park		Vista, California
Riviera Vegas Mobile Home Park		Las Vegas, Nevada

Office Properties:
Moore Street		San Diego, California
Valley Financial Center		San Diego, California

All of the Properties were directly or indirectly owned by John M. Sachs, Inc. (Sachs). Essex Portfolio, L.P., a California limited partnership (the Operating Partnership) effectively holds the assets and liabilities and conducts the operating activities of Essex Property Trust, Inc. (Essex or the Company). Essex Property Trust Inc., a real estate investment trust incorporated in the State of Maryland, is the sole general partner of the Operating Partnership. The Operating Partnership or an affiliate acquired, through a merger, the Properties listed above, and the related mortgage notes payable (note 3) on December 17, 2002.

The accompanying combined statement of revenue and certain expenses has been prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and accordingly, is not representative of the actual results of operations of the Properties for the year ended December 31, 2001 due to the exclusion of the following expenses, which may not be comparable to the proposed future operations of the Properties:

Depreciation and amortization

Federal and state income taxes

Other costs not directly related to the proposed future operations of the Properties

Property taxes have not been adjusted to reflect the estimated reassessed value of the Properties after acquisition by the Operating Partnership.

(2) Summary of Significant Accounting Policies and Practices
(a) Revenue Recognition

Revenue from tenants renting or leasing apartment units are recorded when due from tenants and is recognized monthly as it is earned, which is not materially different than on a straight-line basis. The terms of tenant leases are generally for one year or less.

(b) Use of Estimates

Management has made a number of estimates and assumptions relating to the reporting and disclosure of revenue and certain expenses during the reporting period to prepare the combined statement of revenue and certain expenses in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates.

(3) Mortgage Notes Payable

Loans in the amount of $64,640,000, secured by a first trust deed and an assignment of rents on four of the Properties owned by Sachs (Devonshire Apartments, Alpine Village Apartments, Coral Gardens Apartments, and Summit Park Village Apartments), were executed by Sachs on December 17, 2002. The loans bear interest at a fixed annual rate of 5.51% with principal and interest payments of $367,222 due monthly through maturity on January 1, 2013. These loans were assumed by the Operating Partnership in connection with the acquisition on December 17, 2002.

THE SACHS PORTFOLIO
Combined Statement of Estimated Taxable Operating Results and Estimated Cash to be Made
Available by Operations
Year ended December 31, 2001
(Unaudited)
(Dollars in thousands)







Rent revenue                                                                         $      36,183
                                                                                      -------------

Operating expenses:
   Administrative                                                                            5,770
   Utilities                                                                                 3,798
   Repairs and maintenance                                                                   2,792
   Real estate taxes                                                                         1,857
   Advertising and promotion                                                                   664
   Insurance                                                                                   437
                                                                                      -------------
                                                                                            15,318
                                                                                      -------------
          Estimated cash to be made available by operations                                 20,865
Depreciation expense                                                                         5,747
                                                                                      -------------
          Estimated taxable operating income                                         $      15,118
                                                                                      =============


Note:  This combined statement of estimated taxable operating results and estimated cash to be
       made available by operations is an estimate of operating results of The Sachs Portfolio
       for a period of twelve months based on information provided by management and does not
       purport to reflect actual results for any period.  The Operating Partnership does not
       expect to pay federal income tax because of its election to be taxed as a REIT.

ESSEX PORTFOLIO, L.P.
Pro Forma Condensed Consolidated Financial Statements
September 30, 2002
(Unaudited)

The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2002 is presented as if the acquisition of The Sachs Portfolio had occurred on September 30, 2002. As more completely discussed in the Form 8-K filed by the Company on December 19, 2002, The Sachs Portfolio was merged with and into a wholly-owned subsidiary of Essex Property Trust, Inc. ("Essex") on December 17, 2002. In connection with the merger, Essex: (i) issued 2,719,875 shares of its common stock, (ii) assumed from the seller and obtained new mortgage notes payable of $126,680,000, and (iii) drew upon new and existing lines of credit of $34,598,000. The following unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2002 and the year ended December 31, 2001 are presented as if the acquisitions of The Sachs Portfolio and Marbrisa Apartments (collectively the Acquisitions) all had occurred on January 1 of the year presented.

The pro forma condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of Essex Portfolio, L.P., including the notes thereto, for the year ended December 31, 2001 that were filed as part of Essex Portfolio, L.P.'s Current Report on Form 8-K filed on January 16, 2003, quarterly report on Form 10-Q for the period ended March 31, 2002 filed on May 15, 2002, quarterly report on Form 10-Q for the period ended June 30, 2002 filed on August 13, 2002, and quarterly report on Form 10-Q for the period ended September 30, 2002 filed on November 14, 2002. The pro forma condensed consolidated financial statements do not purport to represent Essex Portfolio, L.P.'s financial position as of September 30, 2002 or the results of operations for the nine months ended September 30, 2002 or for the year ended December 31, 2001 that would actually have occurred had the Company completed the transactions described above nor do they purport to represent the results of operations as of any future date or for any future period.

ESSEX PORTFOLIO, L.P.
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2002
(Unaudited)
(Dollars in thousands, except per unit amounts)



                                                                Operating   Acquisition   Operating
                                                               Partnership  of The Sachs Partnership
                                                               (historical) Portfolio (1)(pro forma)
                                                               -----------  -----------  -----------
                           ASSETS
                           ------
Real estate:
   Rental properties:
       Land and land improvements                             $   294,942  $    73,462  $   368,404
       Buildings and improvements                                 909,567      233,246    1,142,813
                                                               -----------  -----------  -----------
                                                                1,204,509      306,708    1,511,217
   Less accumulated depreciation                                 (182,011)          --     (182,011)
                                                               -----------  -----------  -----------
                                                                1,022,498      306,708    1,329,206
   Investments                                                     77,621           --       77,621
   Real estate under development                                  135,178           --      135,178
                                                               -----------  -----------  -----------
                                                                1,235,297      306,708    1,542,005
Cash and cash equivalents--unrestricted                             2,147           --        2,147
Cash and cash equivalents--restricted cash                          8,489           --        8,489
Notes receivable from investees and other related parties          25,436           --       25,436
Notes and other receivables                                        69,423           --       69,423
Prepaid expenses and other assets                                   9,966        2,053       12,019
Deferred charges, net                                               5,907          490        6,397
                                                               -----------  -----------  -----------
          Total assets                                        $ 1,356,665  $   309,251  $ 1,665,916
                                                               ===========  ===========  ===========


              LIABILITIES AND PARTNERS' CAPITAL
            ------------------------------------
Mortgage notes payable                                        $   559,900  $   126,680  $   686,580
Lines of credit                                                   121,959       34,598      156,557
Accounts payable and accrued liabilities                           28,182        8,411       36,593
Dividends payable                                                  17,876           --       17,876
Other liabilities                                                   6,754        2,753        9,507
                                                               -----------  -----------  -----------
          Total liabilities                                       734,671      172,442      907,113

Minority interests                                                  5,716           --        5,716

Partners' capital:
   General partner:
     Common equity                                                370,753      136,809      507,562
     Preferred equity                                                  --           --           --
                                                               -----------  -----------  -----------
                                                                  370,753      136,809      507,562

   Limited partners:
     Common equity                                                 41,035           --       41,035
     Preferred equity                                             204,490           --      204,490
                                                               -----------  -----------  -----------
                                                                  245,525           --      245,525
                                                               -----------  -----------  -----------
          Total partners' capital                                 616,278      136,809      753,087
                                                               -----------  -----------  -----------
          Total liabilities and partners' capital             $ 1,356,665  $   309,251    1,665,916
                                                               ===========  ===========  ===========

See accompanying notes to pro forma condensed consolidated financial statements.

ESSEX PORTFOLIO, L.P.
Pro Forma Condensed Consolidated Statement of Operations
Nine months ended September 30, 2002
(Unaudited)
(Dollars in thousands, except per unit amounts)


                                                                  Pro Forma Adjustments
                                                               ------------------------
                                                   Operating   Acquisition                     Operating
                                                  Partnership  properties                     Partnership
                                                  (historical) (Schedule I)  Other (2)        (pro forma)
                                                  -----------  -----------  -----------       -----------
Revenues:
   Rental                                        $   126,223  $    31,296  $       --        $   157,519
   Other property                                      4,004           16          --              4,020
                                                  -----------  -----------  -----------       -----------
      Total property                                 130,227       31,312          --            161,539
   Interest and other                                 18,961          --           --             18,961
                                                  -----------  -----------  -----------       -----------
      Total revenues                                 149,188       31,312          --            180,500
                                                  -----------  -----------  -----------       -----------
Expenses:
   Property operating expenses:
      Administrative                                  10,075        4,902          --             14,977
      Utilities                                        6,333        2,868          --              9,201
      Repairs and maintenance                          8,131        2,412          --             10,543
      Real estate taxes                                9,426        1,230        1,601 (A)        12,257
      Advertising and promotion                        2,011          542          --              2,553
      Insurance                                        1,436          798          --              2,234
      Depreciation and amortization                   27,229          --         6,304 (A)        33,533
                                                  -----------  -----------  -----------       -----------
                                                      64,641       12,752        7,905            85,298
   Interest                                           26,062          --         5,944 (B)        32,006
   Amortization of deferred financing costs              442          --            37 (B)           479
   General and administrative                          4,747          --           --              4,747
                                                  -----------  -----------  -----------       -----------
      Total expenses                                  95,892       12,752       13,886           122,530
                                                  -----------  -----------  -----------       -----------
      Income from continuing operations
          before minority interests                   53,296       18,560      (13,886)           57,970
   Minority interests                                   (105)         --           --               (105)
                                                  -----------  -----------  -----------       -----------
      Income from continuing operations               53,191       18,560      (13,886)           57,865
Dividends on preferred units - limited partners      (13,741)         --           --            (13,741)
                                                  -----------  -----------  -----------       -----------
      Income from continuing operations
          available to common units              $    39,450  $    18,560  $   (13,886)      $    44,124
                                                  ===========  ===========  ===========       ===========
Per operating partnership unit data:
   Basic:
      Income from continuing operations          $      1.90                                 $      1.88
                                                  ===========                                 ===========
      Weighted average number of partnership
        units outstanding during the period       20,723,668                           (C)    23,483,543
                                                  ===========                                 ===========

   Diluted:
      Income from continuing operations          $      1.88                                 $      1.86
                                                  ===========                                 ===========
      Weighted average number of partnership
        units outstanding during the period       20,622,970                           (C)    23,682,845
                                                  ===========                                 ===========

See accompanying notes to pro forma condensed consolidated financial statements.

ESSEX PORTFOLIO, L.P.
Pro Forma Condensed Consolidated Statement of Operations
Year ended December 31, 2001
(Unaudited)
(Dollars in thousands, except per unit amounts)


                                                                  Pro Forma Adjustments
                                                               ------------------------
                                                   Operating   Acquisition                     Operating
                                                  Partnership  properties                     Partnership
                                                  (historical) (Schedule II) Other (2)        (pro forma)
                                                  -----------  -----------  -----------       -----------
Revenues:
   Rental                                        $   175,894  $    38,639  $       --        $   214,533
   Other property                                      5,493           21          --              5,514
                                                  -----------  -----------  -----------       -----------
      Total property                                 181,387       38,660          --            220,047
   Interest and other                                 22,152          --           --             22,152
                                                  -----------  -----------  -----------       -----------
      Total revenues                                 203,539       38,660          --            242,199
                                                  -----------  -----------  -----------       -----------
Expenses:
   Property operating expenses:
      Administrative                                  15,087        5,925          --             21,012
      Utilities                                        8,620        3,934          --             12,554
      Repairs and maintenance                         12,442        2,965          --             15,407
      Real estate taxes                               12,151        1,986        1,788 (A)        15,925
      Advertising and promotion                        2,841          694          --              3,535
      Insurance                                        1,136          443          --              1,579
      Depreciation and amortization                   35,915          --         8,406 (A)        44,321
                                                  -----------  -----------  -----------       -----------
                                                      88,192       15,947       10,194           114,333
   Interest                                           38,746          --         7,914 (B)        46,660
   Amortization of deferred financing costs              657          --            49 (B)           706
   General and administrative                          7,498          --           --              7,498
                                                  -----------  -----------  -----------       -----------
      Total expenses                                 135,093       15,947       18,157           169,197
                                                  -----------  -----------  -----------       -----------
      Income from continuing operations
          before gain on sale of real estate
          and minority interests                      68,446       22,713      (18,157)           73,002
   Gain on sale of real estate                         3,788          --           --              3,788
   Minority interests                                   (196)         --           --               (196)
                                                  -----------  -----------  -----------       -----------
      Income from continuing operations          $    72,038  $    22,713  $   (18,157)      $    76,594
Dividends on preferred units - limited partners      (18,319)         --           --            (18,319)
                                                  -----------  -----------  -----------       -----------
      Income from continuing operations
          available to common units              $    53,719  $    22,713  $   (18,157)      $    58,275
                                                  ===========  ===========  ===========       ===========
Per operating partnership unit data:
   Basic:
      Income from continuing operations          $      2.60                           (C)   $      2.49
                                                  ===========                                 ===========
      Weighted average number of partnership
        units outstanding during the period       20,688,246                                  23,408,121
                                                  ===========                                 ===========

   Diluted:
      Income from continuing operations          $      2.56                           (C)   $      2.46
                                                  ===========                                 ===========
      Weighted average number of partnership
        units outstanding during the period       21,004,707                                  23,724,582
                                                  ===========                                 ===========

See accompanying notes to pro forma condensed consolidated financial statements.

ESSEX PORTFOLIO, L.P.
Notes to Pro Forma Condensed Consolidated Financial Statements
September 30, 2002
(Unaudited)
(Dollars in thousands)

(1) Adjustments to the Pro Forma Condensed Consolidated Balance Sheet

Acquisition of The Sachs Portfolio (acquired from unrelated third party, recorded at cost):

Land and land improvements	$	73,462
Buildings and improvements		233,246
Prepaid expenses and other assets		2,053
Deferred charges		490
Mortgage notes payable		(126,680)
Increase in line of credit payable		(34,598)
Accounts payable and accrued liabilities		(8,411)
Other liabilities		(2,753)
General partner's common equity (2,719,875 units)		(136,809)

(2) Adjustments to the Pro Forma Condensed Consolidated Statements of Operations

The pro forma adjustments to the Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2002 and for the year ended December 31, 2001 are as follows:

Nine months ended September 30, 2002
Year ended December 31,

2001

(A) Increase in real estate taxes and depreciation expense as a result of acquisition of The Sachs Portfolio and Marbrisa Apartments Apartments

Real estate taxes

$

1,601

1,788

Depreciation expense

6,304

8,406

Nine months ended September 30, 2002
Year ended December 31,

2001

(B) Increase in interest expense and amortization of deferred financing costs associated with mortgage notes payable assumed and issued, totaling $126,680, and an increase to the borrowings under the line of credit of $34,598 all related to The Sachs Portfolio

Interest expense

$

5,944

7,914

Amortization of deferred financing

37

49

(C) Increase in weighted average number of partnership units outstanding during the period as a result of 2,719,875 units assumed to be outstanding for the entire period presented.

Schedule I

ESSEX PORTFOLIO, L.P.
Combining Schedule of Revenue and Certain Expenses of the Acquisition Properties
Nine months ended September 30, 2002
(Unaudited)
(Dollars in thousands)




                                              The Sachs    Marbrisa    Acquisition
                                              Portfolio   Apartments   Properties
                                             -----------  -----------  -----------
Revenues:
   Rental                                   $    29,454  $     1,842  $    31,296
   Other property                                   --            16           16
                                             -----------  -----------  -----------
      Total revenues                             29,454        1,858       31,312
                                             -----------  -----------  -----------
Expenses:
   Property operating expenses:
      Administrative                              4,786          116        4,902
      Utilities                                   2,766          102        2,868
      Repairs and maintenance                     2,283          129        2,412
      Real estate taxes                           1,131           99        1,230
      Advertising and promotion                     520           22          542
      Insurance                                     793            5          798
                                             -----------  -----------  -----------
      Total expenses                             12,279          473       12,752
                                             -----------  -----------  -----------
      Revenue in excess of certain expenses $    17,175  $     1,385  $    18,560
                                             ===========  ===========  ===========

Schedule II

ESSEX PORTFOLIO, L.P.
Combining Schedule of Revenue and Certain Expenses of the Acquisition Properties
Year ended December 31, 2001
(Unaudited)
(Dollars in thousands)




                                              The Sachs    Marbrisa    Acquisition
                                              Portfolio   Apartments   Properties
                                             -----------  -----------  -----------
Revenues:
   Rental                                   $    36,183  $     2,456  $    38,639
   Other property                                   --            21           21
                                             -----------  -----------  -----------
      Total revenues                             36,183        2,477       38,660
                                             -----------  -----------  -----------
Expenses:
   Property operating expenses:
      Administrative                              5,770          155        5,925
      Utilities                                   3,798          136        3,934
      Repairs and maintenance                     2,792          173        2,965
      Real estate taxes                           1,857          129        1,986
      Advertising and promotion                     664           30          694
      Insurance                                     437            6          443
                                             -----------  -----------  -----------
      Total expenses                             15,318          629       15,947
                                             -----------  -----------  -----------
      Revenue in excess of certain expenses $    20,865  $     1,848  $    22,713
                                             ===========  ===========  ===========

Maryland	77-0369575
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)

Item 7. Financial Statements and Exhibits.	Page No.

(a) Financial Statements Under Rule 3-14 of Regulation S-X

The Sachs Portfolio

Independent Auditors' Report	1

Combined Statement of Revenue and Certain Expenses for the year ended December 31, 2001	2

Notes to Combined Statement of Revenue and Certain Expenses	3

Combined Statement of Estimated Taxable Operating Results and Estimated Cash to be Made Available by Operations (unaudited)	5

(b) Pro Forma Condensed Consolidated Financial Statments	6

Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2002 (unaudited)	7

Pro Forma Condensed Consolidated Statement of Operations for the nine months ended September 30, 2002 (unaudited)	8

Pro Forma Condensed Consolidated Statements of Operations for the year ended December 31, 2001 (unaudited)	9

Notes to the Pro Forma Condensed Consolidated Financial Statements	10

Combining Schedule of Revenue and Certain Expenses of the Acquisition Properties for the nine months ended September 30, 2002 (unaudited)	11

Combining Schedule of Revenue and Certain Expenses of the Acquisition Properties for the year ended December 31, 2001 (unaudited)	12

(c) Exhibit and Exhibit Index

Exhibit Number	Description
23.1	Consent of KPMG LLP.
2.1*	Agreement and Plan of Reorganization by and among Essex, Merger Sub, Sachs, the Sachs Shareholders and John M. Sachs, dated December 17, 2002, attached as Exhibit 2.1 to the Company's Current Report on Form 8-K, dated December 23, 2002, and incorporated herein by reference. Certain exhibits and schedules referenced in the Merger Agreement have been omitted in accordance with Item 601(b)(2) of Regulation S-K. A copy of any omitted exhibit or schedule will be furnished supplementally to the Securities and Exchange Commission upon request.
10.1*	Registration Rights Agreement by and among Essex and the Sachs shareholders, dated December 17, 2002, attached as Exhibit 10.1 to the Company's Current Report on Form 8-K, dated December 20, 2002, and incorporated herein by reference.
99.1	Press release dated December 17, 2002, announcing the Merger (incorporated by reference to exhibit 99.2 to Essex's Form 8-K, dated December 19, 2002).

		Nine months ended September 30, 2002	Year ended December 31, 2001

(A) Increase in real estate taxes and depreciation expense as a result of acquisition of The Sachs Portfolio and Marbrisa Apartments Apartments
Real estate taxes	$	1,601	1,788
Depreciation expense		6,304	8,406

		Nine months ended September 30, 2002	Year ended December 31, 2001

(B) Increase in interest expense and amortization of deferred financing costs associated with mortgage notes payable assumed and issued, totaling $126,680, and an increase to the borrowings under the line of credit of $34,598 all related to The Sachs Portfolio
Interest expense	$	5,944	7,914
Amortization of deferred financing		37	49