Real Estate Investments (Tables)

12 Months Ended

Dec. 31, 2021

Real Estate Investments, Net [Abstract]

The table below summarizes acquisition activity for the year ended December 31, 2021 ($ in millions):

For the year ended December 31, 2021, the Company purchased two communities consisting of 268 apartment homes and two commercial properties for approximately $165.4 million.


Property Name	Location	Apartment Homes	Essex Ownership Percentage		Quarter in 2021	Purchase Price
The Village at Toluca Lake (1)	Burbank, CA	145	100	%	Q2	$	31.8
7 South Linden (2)	South San Francisco, CA	—	100	%	Q3	33.5
Third & Broad (3)	Seattle, WA	—	100	%	Q3	52.5
Canvas	Seattle, WA	123	100	%	Q4	47.6
Total 2021		268				$	165.4

(1) In June 2021, the Company purchased its joint venture partner's 50.0% membership interest in the BEX III, LLC co-investment that owned The Village at Toluca Lake based on a property valuation of $63.5 million. In conjunction with the acquisition, $29.5 million of mortgage debt that encumbered the property was paid off.

(2) The commercial property is fully-leased to two commercial tenants. The Company is currently pursuing entitlements to construct an apartment community on the property.

(3) The Company will hold the fully-leased commercial property for future apartment development.

Sales of Real Estate Investments

The table below summarizes the disposition activity for the year ended December 31, 2021 ($ in millions):


Property Name	Location	Apartment Homes	Ownership	Quarter in 2021	Sales Price
Hidden Valley	Simi Valley, CA	324	EPLP	Q1	$	105.0	(1)
Park 20	San Mateo, CA	197	EPLP	Q1	113.0		(2)
Axis 2300	Irvine, CA	115	EPLP	Q1	57.5		(3)
Devonshire Apartments	Hemet, CA	276	EPLP	Q3	54.5		(4)
Total 2021		912			$	330.0

(1) The Company recognized a $69.2 million gain on sale. In conjunction with the sale, the Company repaid $29.7 million of mortgage debt that encumbered the property.

(2) The Company recognized an immaterial gain on sale.

(3) The Company recognized a $30.8 million gain on sale.

(4) The Company recognized a $42.9 million gain on sale.

Summary of Co-Investment

The carrying values of the Company’s co-investments as of December 31, 2021 and 2020 are as follows ($ in thousands, except in parenthetical):


	Weighted Average Essex Ownership		December 31,
	Percentage (1)		2021		2020
Ownership interest in:
Wesco I (2), Wesco III, Wesco IV, Wesco V and Wesco VI	52	%	$	168,198	$	178,322
BEXAEW, BEX II, BEX III (3), BEX IV and 500 Folsom (4)	50	%	270,550		152,309
Other (5)	52	%	126,503		27,635
Total operating and other co-investments, net			565,251		358,266
Total development co-investments	50	%	11,076		157,433
Total preferred interest co-investments (includes related party investments of $71.1 million and $81.4 million as of December 31, 2021 and December 31, 2020, respectively - Note 6 - Related Party Transactions for further discussion)			565,930		502,311
Total co-investments, net			$	1,142,257	$	1,018,010

(1)Weighted average Company ownership percentages are as of December 31, 2021.

(2)As of December 31, 2021, the Company's investment in Wesco I was classified as a liability of $35.3 million due to distributions received in excess of the Company's investment.

(3)In June 2021, the Company purchased the additional 50% interest in BEX III.

(4)500 Folsom had not stabilized as of December 31, 2020. Its carrying value was included in the development co-investments balance as of December 31, 2020.

(5)As of December 31, 2021, the Company's investment in Expo was classified as a liability of $0.2 million due to distributions received in excess of the Company's investment. The weighted average Essex ownership percentage excludes our investments in non-core technology co-investments which are carried at fair value..

Summarized Financial Statement for Co-Investment Accounted for Under the Equity Method

The combined summarized financial information of co-investments is as follows ($ in thousands):


	December 31,
	2021		2020
Combined balance sheets: (1)
Rental properties and real estate under development	$	4,603,465	$	4,242,611
Other assets	278,411		200,777
Total assets	$	4,881,876	$	4,443,388
Debt	$	3,046,765	$	2,611,365
Other liabilities	200,129		189,515
Equity	1,634,982		1,642,508
Total liabilities and equity	$	4,881,876	$	4,443,388
Company's share of equity	$	1,142,257	$	1,018,010


	Years ended December 31,
	2021		2020		2019
Combined statements of income: (1)
Property revenues	$	289,680	$	300,624	$	336,922
Property operating expenses	(115,023)		(108,682)		(115,658)
Net operating income	174,657		191,942		221,264
Gain on sale of real estate	—		—		112,918
Interest expense	(65,172)		(78,962)		(65,665)
General and administrative	(17,885)		(17,079)		(9,575)

Depreciation and amortization	(133,787)		(117,836)		(121,006)
Net income	$	(42,187)	$	(21,935)	$	137,936
Company's share of net income (2)	$	111,721	$	66,512	$	112,136

(1)Includes preferred equity investments held by the Company.

(2)Includes the Company's share of equity income from joint ventures and preferred equity investments, gain on sales of co-investments, co-investment promote income and income from early redemption of preferred equity investments. Includes related party income of $9.1 million, $8.6 million, and $7.5 million for the years ended December 31, 2021, 2020, and 2019, respectively.