Reportable Segments

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Reportable Segments

13. Reportable Segments

Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the chief operating decision maker.  The chief operating decision maker decides how resources are allocated and assesses performance on a recurring basis at least quarterly.

The Company’s primary business is the acquisition, development and management of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents.  The chief operating decision maker evaluates the Company’s operating performance geographically by market and both on a same store and non-same store basis.  While the Company does maintain a non-residential presence, it historically has accounted for approximately 4.0% of total revenues and is designed as an amenity for our residential residents.  The chief operating decision maker evaluates the performance of each property on a consolidated residential and non-residential basis.  The Company’s geographic same store operating segments located in urban and high-density suburban communities represent its reportable segments.

The Company’s development activities are other business activities that do not constitute an operating segment and as such, have been aggregated in the “Other” category in the tables presented below.

All revenues are from external customers and there is no customer who contributed 10% or more of the Company’s total revenues during the six months and quarters ended June 30, 2020 and 2019, respectively.

The primary financial measure for the Company’s rental real estate segment is net operating income (“NOI”), which represents rental income less: 1) property and maintenance expense and 2) real estate taxes and insurance expense (all as reflected in the accompanying consolidated statements of operations and comprehensive income).  The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties.  Revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

The following table presents a reconciliation of NOI from our rental real estate for the six months and quarters ended June 30, 2020 and 2019, respectively (amounts in thousands):

	Six Months Ended June 30,						Quarter Ended June 30,
	2020			2019			2020			2019
Rental income	$	1,335,837		$	1,331,676		$	653,532		$	669,374
Property and maintenance expense		(220,268	)		(223,531	)		(104,452	)		(108,461	)
Real estate taxes and insurance expense		(192,770	)		(182,888	)		(95,038	)		(91,446	)
Total operating expenses		(413,038	)		(406,419	)		(199,490	)		(199,907	)
Net operating income	$	922,799		$	925,257		$	454,042		$	469,467

The following tables present NOI for each segment from our rental real estate for the six months and quarters ended June 30, 2020 and 2019, respectively, as well as total assets and capital expenditures at June 30, 2020 (amounts in thousands):

	Six Months Ended June 30, 2020						Six Months Ended June 30, 2019
	Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	239,914	$	71,930	$	167,984	$	240,751	$	72,145	$	168,606
Orange County		53,013		12,167		40,846		51,887		12,142		39,745
San Diego		47,848		12,417		35,431		47,023		12,126		34,897
Subtotal - Southern California		340,775		96,514		244,261		339,661		96,413		243,248
San Francisco		236,580		59,313		177,267		234,514		57,629		176,885
Washington D.C.		196,601		59,331		137,270		195,453		59,389		136,064
New York		227,179		98,581		128,598		230,808		96,067		134,741
Seattle		127,073		35,440		91,633		124,029		34,634		89,395
Boston		123,673		35,144		88,529		124,671		35,639		89,032
Denver		8,944		2,419		6,525		9,125		2,417		6,708
Total same store		1,260,825		386,742		874,083		1,258,261		382,188		876,073
Non-same store/other (2) (3)
Non-same store		58,629		17,748		40,881		14,374		4,423		9,951
Other (3)		16,383		8,548		7,835		59,041		19,808		39,233
Total non-same store/other		75,012		26,296		48,716		73,415		24,231		49,184
Totals	$	1,335,837	$	413,038	$	922,799	$	1,331,676	$	406,419	$	925,257

(1) For the six months ended June 30, 2020 and 2019, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2019, less properties subsequently sold, which represented 74,264 apartment units.

(2) For the six months ended June 30, 2020 and 2019, non-same store primarily includes properties acquired after January 1, 2019, plus any properties in lease-up and not stabilized as of January 1, 2019.

(3) Other includes development, other corporate operations and operations prior to disposition for properties sold.

	Quarter Ended June 30, 2020						Quarter Ended June 30, 2019
	Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	117,994	$	35,013	$	82,981	$	121,216	$	35,688	$	85,528
Orange County		26,318		5,953		20,365		26,058		5,966		20,092
San Diego		23,706		6,100		17,606		23,720		5,978		17,742
Subtotal - Southern California		168,018		47,066		120,952		170,994		47,632		123,362
San Francisco		116,303		29,045		87,258		118,044		28,528		89,516
Washington D.C.		97,527		28,680		68,847		98,571		29,409		69,162
New York		111,949		48,130		63,819		117,457		47,626		69,831
Seattle		63,378		18,383		44,995		63,695		17,853		45,842
Boston		59,990		16,984		43,006		62,751		17,398		45,353
Denver		6,110		1,733		4,377		6,403		1,831		4,572
Total same store		623,275		190,021		433,254		637,915		190,277		447,638
Non-same store/other (2) (3)
Non-same store		24,631		7,212		17,419		4,000		1,124		2,876
Other (3)		5,626		2,257		3,369		27,459		8,506		18,953
Total non-same store/other		30,257		9,469		20,788		31,459		9,630		21,829
Totals	$	653,532	$	199,490	$	454,042	$	669,374	$	199,907	$	469,467

(1) For the quarters ended June 30, 2020 and 2019, same store primarily includes all properties acquired or completed that were stabilized prior to April 1, 2019, less properties subsequently sold, which represented 74,843 apartment units.

(2) For the quarters ended June 30, 2020 and 2019, non-same store primarily includes properties acquired after April 1, 2019, plus any properties in lease-up and not stabilized as of April 1, 2019.

(3) Other includes development, other corporate operations and operations prior to disposition for properties sold.

	Six Months Ended June 30, 2020
	Total Assets		Capital Expenditures
Same store (1)
Los Angeles	$	3,064,404	$	13,070
Orange County		397,148		3,458
San Diego		382,082		1,993
Subtotal - Southern California		3,843,634		18,521
San Francisco		3,288,932		6,940
Washington D.C.		3,120,074		10,534
New York		4,001,050		10,429
Seattle		1,838,484		4,334
Boston		1,790,996		8,631
Denver		251,427		245
Total same store		18,134,597		59,634
Non-same store/other (2) (3)
Non-same store		1,642,289		1,129
Other (3)		938,065		502
Total non-same store/other		2,580,354		1,631
Totals	$	20,714,951	$	61,265

(1) Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2019, less properties subsequently sold, which represented 74,264 apartment units.

(2) Non-same store primarily includes properties acquired after January 1, 2019, plus any properties in lease-up and not stabilized as of January 1, 2019.

(3) Other includes development, other corporate operations and capital expenditures for properties sold.