Reportable Segments

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Reportable Segments

17. 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 accounts for approximately 2.7% 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 consolidated same store operating segments 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 three years ended December 31, 2020, 2019 and 2018, 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 years ended December 31, 2020, 2019 and 2018, respectively (amounts in thousands):

	Year Ended December 31,
	2020			2019			2018
Rental income	$	2,571,705		$	2,700,691		$	2,577,681
Property and maintenance expense		(440,998	)		(446,845	)		(429,335	)
Real estate taxes and insurance expense		(381,562	)		(366,139	)		(357,814	)
Total operating expenses		(822,560	)		(812,984	)		(787,149	)
Net operating income	$	1,749,145		$	1,887,707		$	1,790,532

The following tables present NOI for each segment from our rental real estate for the years ended December 31, 2020, 2019 and 2018, respectively, as well as total assets and capital expenditures at December 31, 2020 and 2019, respectively (amounts in thousands):

	Year Ended December 31, 2020						Year Ended December 31, 2019						Year Ended December 31, 2018
	Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	468,450	$	145,342	$	323,108	$	485,084	$	144,314	$	340,770	$	451,592	$	129,455	$	322,137
Orange County		105,236		24,545		80,691		105,087		24,359		80,728		101,198		24,468		76,730
San Diego		74,737		18,176		56,561		73,698		17,889		55,809		91,971		24,024		67,947
Subtotal - Southern California		648,423		188,063		460,360		663,869		186,562		477,307		644,761		177,947		466,814
San Francisco		451,724		119,183		332,541		473,102		115,702		357,400		463,492		112,331		351,161
Washington D.C.		389,533		120,533		269,000		394,171		119,419		274,752		403,761		123,345		280,416
New York		426,016		198,228		227,788		464,270		191,514		272,756		444,112		178,055		266,057
Seattle		245,559		71,003		174,556		252,311		68,717		183,594		200,222		55,871		144,351
Boston		240,158		71,611		168,547		253,297		70,875		182,422		218,778		60,409		158,369
Other Markets		17,605		4,858		12,747		18,215		4,713		13,502		1,940		658		1,282
Total same store		2,419,018		773,479		1,645,539		2,519,235		757,502		1,761,733		2,377,066		708,616		1,668,450
Non-same store/other (2) (3)
Non-same store		116,103		35,952		80,151		58,751		17,702		41,049		103,688		36,874		66,814
Other (3)		36,584		13,129		23,455		122,705		37,780		84,925		96,927		41,659		55,268
Total non-same store/other		152,687		49,081		103,606		181,456		55,482		125,974		200,615		78,533		122,082
Totals	$	2,571,705	$	822,560	$	1,749,145	$	2,700,691	$	812,984	$	1,887,707	$	2,577,681	$	787,149	$	1,790,532

(1) For the years ended December 31, 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 73,585 apartment units.  For the year ended December 31, 2018, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2018, less properties subsequently sold, which represented 71,830 apartment units.     

(2) For the years ended December 31, 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.  For the year ended December 31, 2018, non-same store primarily includes properties acquired after January 1, 2018, plus any properties in lease-up and not stabilized as of January 1, 2018.  

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

	Year Ended December 31, 2020				Year Ended December 31, 2019
	Total Assets		Capital Expenditures		Total Assets		Capital Expenditures
Same store (1)
Los Angeles	$	3,007,621	$	22,817	$	3,110,659	$	32,611
Orange County		389,007		7,260		404,545		9,276
San Diego		242,429		3,430		252,051		3,947
Subtotal - Southern California		3,639,057		33,507		3,767,255		45,834
San Francisco		3,233,901		18,983		3,345,882		25,925
Washington D.C.		3,066,702		23,626		3,174,721		22,409
New York		3,950,286		25,609		4,004,078		26,976
Seattle		1,802,952		11,372		1,871,232		22,023
Boston		1,758,665		18,367		1,822,373		27,267
Denver		247,133		817		255,974		701
Total same store		17,698,696		132,281		18,241,515		171,135
Non-same store/other (2) (3)
Non-same store		1,664,892		2,627		1,681,367		1,864
Other (3)		923,303		1,071		1,249,887		5,424
Total non-same store/other		2,588,195		3,698		2,931,254		7,288
Totals	$	20,286,891	$	135,979	$	21,172,769	$	178,423

(1) Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2019, less properties subsequently sold, which represented 73,585 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.