Reportable Segments

3 Months Ended

Mar. 31, 2022

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 accounts for approximately 3.8% of total revenues for the quarter ended March 31, 2022 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 quarters ended March 31, 2022 and 2021, 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 quarters ended March 31, 2022 and 2021, respectively (amounts in thousands):

	Quarter Ended March 31,
	2022			2021
Rental income	$	653,348		$	597,602
Property and maintenance expense		(124,874	)		(117,054	)
Real estate taxes and insurance expense		(100,688	)		(103,470	)
Total operating expenses		(225,562	)		(220,524	)
Net operating income	$	427,786		$	377,078

The following tables present NOI from our rental real estate for each segment for the quarters ended March 31, 2022 and 2021, respectively, as well as total assets and capital expenditures at March 31, 2022 (amounts in thousands):

	Quarter Ended March 31, 2022							Quarter Ended March 31, 2021
	Rental Income		Operating Expenses		NOI			Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	115,353	$	36,775	$	78,578		$	106,418	$	35,693	$	70,725
Orange County		28,767		6,425		22,342			25,841		6,314		19,527
San Diego		20,940		4,929		16,011			18,740		4,633		14,107
Subtotal - Southern California		165,060		48,129		116,931			150,999		46,640		104,359
San Francisco		102,440		32,119		70,321			96,728		30,985		65,743
Washington D.C.		100,472		33,901		66,571			97,487		32,607		64,880
New York		110,086		53,071		57,015			98,034		51,854		46,180
Seattle		67,127		19,325		47,802			63,848		20,436		43,412
Boston		62,594		20,438		42,156			57,312		19,547		37,765
Denver		10,578		3,008		7,570			9,344		2,821		6,523
Total same store		618,357		209,991		408,366			573,752		204,890		368,862
Non-same store/other (2) (3)
Non-same store		34,694		14,182		20,512			1		58		(57	)
Other (3)		297		1,389		(1,092	)		23,849		15,576		8,273
Total non-same store/other		34,991		15,571		19,420			23,850		15,634		8,216
Totals	$	653,348	$	225,562	$	427,786		$	597,602	$	220,524	$	377,078

(1) For the quarters ended March 31, 2022 and 2021, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2021, less properties subsequently sold, which represented 74,675 apartment units.

(2) For the quarters ended March 31, 2022 and 2021, non-same store primarily includes properties acquired after January 1, 2021, plus any properties in lease-up and not stabilized as of January 1, 2021.

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

	Quarter Ended March 31, 2022
	Total Assets		Capital Expenditures
Same store (1)
Los Angeles	$	2,773,359	$	6,880
Orange County		367,316		919
San Diego		230,718		849
Subtotal - Southern California		3,371,393		8,648
San Francisco		3,165,308		5,330
Washington D.C.		3,149,802		5,681
New York		3,851,201		6,232
Seattle		2,123,848		2,867
Boston		1,724,548		4,034
Denver		487,546		208
Total same store		17,873,646		33,000
Non-same store/other (2) (3)
Non-same store		2,413,693		2,274
Other (3)		542,898		11
Total non-same store/other		2,956,591		2,285
Totals	$	20,830,237	$	35,285

(1) Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2021, less properties subsequently sold, which represented 74,675 apartment units.

(2) Non-same store primarily includes properties acquired after January 1, 2021, plus any properties in lease-up and not stabilized as of January 1, 2021.

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