10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to _________

Commission file number 001-13106

ESSEX PROPERTY TRUST, INC.

(Exact name of Registrant as Specified in its Charter)

Maryland	77-0369576
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. 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)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days. YES  x NO  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” ”accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  x	Accelerated filer  o	Non-accelerated filer  o	Smaller reporting company  o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o No  x

 APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:  37,998,106 shares of Common Stock as of May 2, 2013.

ESSEX PROPERTY TRUST, INC.

FORM 10-Q

INDEX

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of March 31, 2013 and December 31, 2012	4
	Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2013 and 2012	5
	Condensed Consolidated Statement of Equity for the three months ended March 31, 2013	6
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2012	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	28
Item 4.	Controls and Procedures	29
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	30
Item 6.	Exhibits	30
Signatures		31

2

Part I -- Financial Information

Item 1: Condensed Financial Statements (Unaudited)

"Essex" or the "Company" means Essex Property Trust, Inc., a real estate investment trust incorporated in the State of Maryland, or where the context otherwise requires, Essex Portfolio, L.P., a limited partnership (the "Operating Partnership") in which Essex Property Trust, Inc. is the sole general partner.

The information furnished in the accompanying unaudited condensed consolidated balance sheets, statements of operations and comprehensive income, equity, and cash flows of the Company reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the aforementioned condensed consolidated financial statements for the interim periods and are normal and recurring in nature, except as otherwise noted.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the notes to such unaudited condensed consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations herein.  Additionally, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2012.

3

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(Dollars in thousands, except per share amounts)

	March 31,			December 31,
Assets	2013			2012
Real estate:
Rental properties:
Land and land improvements	$	1,054,229		$	1,003,171
Buildings and improvements		4,167,500			4,030,501
		5,221,729			5,033,672
Less accumulated depreciation		(1,127,030	)		(1,081,517	)
		4,094,699			3,952,155
Real estate under development		65,568			66,851
Co-investments		579,654			571,345
		4,739,921			4,590,351
Cash and cash equivalents-unrestricted		30,844			18,606
Cash and cash equivalents-restricted		24,790			23,520
Marketable securities		80,432			92,713
Notes and other receivables		11,359			66,163
Prepaid expenses and other assets		28,329			35,003
Deferred charges, net		20,784			20,867
Total assets	$	4,936,459		$	4,847,223
Liabilities and  Equity
Mortgage notes payable	$	1,559,079		$	1,565,599
Unsecured debt		1,112,159			1,112,084
Lines of credit		102,300			141,000
Accounts payable and accrued liabilities		86,461			64,858
Construction payable		8,768			5,392
Dividends payable		50,396			45,052
Derivative liabilities		6,107			6,606
Other liabilities		22,625			22,167
Total liabilities		2,947,895			2,962,758
Commitments and contingencies
Cumulative convertible Series G preferred stock		4,349			4,349
Equity:
Cumulative redeemable Series H preferred stock at liquidation value		73,750			73,750
Common stock, $.0001 par value, 656,020,000 shares authorized 37,276,204 and 36,442,994 shares issued and outstanding		3			3
Additional paid-in capital		2,329,383			2,204,778
Distributions in excess of accumulated earnings		(464,391	)		(444,466	)
Accumulated other comprehensive loss, net		(68,280	)		(69,261	)
Total stockholders' equity		1,870,465			1,764,804
Noncontrolling interest		113,750			115,312
Total equity		1,984,215			1,880,116
Total liabilities and equity	$	4,936,459		$	4,847,223

See accompanying notes to the unaudited condensed consolidated financial statements.

4

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARES

Condensed Consolidated Statements of Operations and Comprehensive Income

(Unaudited)

(Dollars in thousands, except per share amounts)

	Three Months Ended
	March 31,
	2013			2012
Revenues:
Rental and other property	$	146,394		$	125,474
Management and other fees		2,948			2,444
		149,342			127,918
Expenses:
Property operating, excluding real estate taxes		32,608			28,751
Real estate taxes		14,156			11,413
Depreciation		47,144			40,734
General and administrative		6,626			5,400
Cost of management and other fees		1,701			1,640
		102,235			87,938
Earnings from operations		47,107			39,980
Interest expense before amortization		(25,211	)		(24,658	)
Amortization expense		(2,930	)		(2,871	)
Interest and other income		5,023			2,413
Equity income in co-investments		4,211			2,340
Gain on sale of land		1,503			-
Income from continuing operations		29,703			17,204
Income from discontinued operations		-			10,037
Net income		29,703			27,241
Net income attributable to noncontrolling interest		(3,132	)		(3,151	)
Net income attributable to controlling interest		26,571			24,090
Dividends to preferred stockholders		(1,368	)		(1,368	)
Net income available to common stockholders	$	25,203		$	22,722
Comprehensive income	$	30,739		$	29,592
Comprehensive income attributable to noncontrolling interest		(3,187	)		(3,296	)
Comprehensive income attributable to controlling interest	$	27,552		$	26,296
Per common share data:
Basic:
Income from continuing operations	$	0.68		$	0.39
Income from discontinued operations		-			0.28
Net income available to common stockholders	$	0.68		$	0.67
Weighted average number of common shares outstanding during the period		37,003,925			34,027,890
Diluted:
Income from continuing operations	$	0.68		$	0.39
Income from discontinued operations		-			0.28
Net income available to common stockholders	$	0.68		$	0.67
Weighted average number of common shares outstanding during the period		37,092,062			34,151,475
Dividend per common share	$	1.21		$	1.10

See accompanying notes to the unaudited condensed consolidated financial statements.

5

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statement of Equity for the three months ended March 31, 2013

(Unaudited)

(Dollars and shares in thousands)

												Distributions			Accumulated
	Series H								Additional			in excess of			other
	Preferred stock				Common stock				paid-in			accumulated			comprehensive			Noncontrolling
	Shares		Amount		Shares		Amount		capital			earnings			loss, net			Interest			Total
Balances at December 31, 2012		2,950	$	73,750		36,443	$	3	$	2,204,778		$	(444,466	)	$	(69,261	)	$	115,312		$	1,880,116
Net income		-		-		-		-		-			26,571			-			3,132			29,703
Reversal of unrealized gains upon the sale of marketable securites		-		-		-		-		-			-			(1,673	)		(94	)		(1,767	)
Change in fair value of cash flow hedges and amortization of swap settlements		-		-		-		-		-			-			2,524			141			2,665
Change in fair value of marketable securities		-		-		-		-		-			-			130			8			138
Issuance of common stock under:
Stock option and restricted stock plans		-		-		16		-		1,956			-			-			-			1,956
Sale of common stock		-		-		817		-		122,905			-			-			-			122,905
Equity based compensation costs		-		-		-		-		(256	)		-			-			575			319
Distributions to noncontrolling interest		-		-		-		-		-			-			-			(3,995	)		(3,995	)
Redemptions of noncontrolling interest		-		-		-		-		-			-			-			(1,329	)		(1,329	)
Common and preferred stock dividends		-		-		-		-		-			(46,496	)		-			-			(46,496	)
Balances at March 31, 2013		2,950	$	73,750		37,276	$	3	$	2,329,383		$	(464,391	)	$	(68,280	)	$	113,750		$	1,984,215

See accompanying notes to the unaudited condensed consolidated financial statements.

6

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)

	Three Months Ended
	March 31,
	2013			2012
Cash flows from operating activities:
Net income	$	29,703		$	27,241
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of marketable securities		(1,767	)		-
Co-investments		(391	)		862
Amortization expense		2,930			2,871
Amortization of discount on notes receivables		(844	)		(466	)
Amortization of discount on marketable securities		(1,377	)		(1,256	)
Gain on the sales of real estate.		(1,503	)		(10,870	)
Depreciation		47,144			40,828
Equity-based compensation		1,132			986
Changes in operating assets and liabilities:
Prepaid expenses and other assets		1,764			(2,563	)
Accounts payable and accrued liabilities		8,443			14,610
Other liabilities		458			(83	)
Net cash provided by operating activities		85,692			72,160
Cash flows from investing activities:
Additions to real estate:
Acquisitions of real estate		(175,950	)		(38,900	)
Improvements to recent acquisitions		(2,601	)		(2,296	)
Redevelopment.		(6,573	)		(8,008	)
Revenue generating capital expenditures		(304	)		(611	)
Lessor required capital expenditures		(768	)		-
Non-revenue generating capital expenditures		(4,019	)		(1,200	)
Acquisitions of and additions to real estate under development		(3,332	)		(6,789	)
Dispositions of real estate		9,051			16,816
Changes in restricted cash and deposits		19,980			517
Purchases of marketable securities		(6,541	)		(5,438	)
Sales and maturities of marketable securities		20,335			1,348
Collections of notes and other receivables		52,473			7,164
Contributions to co-investments		(45,518	)		(12,945	)
Distributions from co-investments		38,030			6,291
Net cash used in investing activities		(105,737	)		(44,051	)
Cash flows from financing activities:
Borrowings under debt agreements		235,282			159,394
Repayment of debt		(279,854	)		(177,984	)
Additions to deferred charges		(716	)		(293	)
Equity related issuance cost		(225	)		(150	)
Net proceeds from stock options exercised		1,367			933
Net proceeds from issuance of common stock		122,905			31,590
Distributions to noncontrolling interest		(3,995	)		(3,850	)
Redemption of noncontrolling interest		(1,329	)		(435	)
Common and preferred stock dividends paid		(41,152	)		(36,459	)
Net cash provided by (used in) financing activities		32,283			(27,254	)
Net increase in cash and cash equivalents		12,238			855
Cash and cash equivalents at beginning of year		18,606			12,889
Cash and cash equivalents at end of period	$	30,844		$	13,744

(Continued)

7

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)

	2013		2012
Supplemental disclosure of cash flow information:
Cash paid for interest, net of $3.7 million, and $1.6 million capitalized in 2013 and 2012, respectively	$	23,863	$	22,603
Supplemental disclosure of noncash investing and financing activities:
Transfer from real estate under development to rental properties	$	67	$	242
Contribution of note receivable to co-investment	$	-	$	12,325
Change in accrual of dividends	$	5,344	$	2,484
Change in fair value of derivative liabilities	$	570	$	396
Change in fair value of marketable securities	$	1,629	$	379
Change in construction payable	$	3,376	$	3,168

See accompanying notes to the unaudited condensed consolidated financial statements

8

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

(1)  Organization and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. (the “Company”), which include the accounts of the Company and Essex Portfolio, L.P. (the “Operating Partnership,” which holds the operating assets of the Company) , prepared in accordance with U.S. generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q.  In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been included and are normal and recurring in nature.  These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2012.

All significant intercompany balances and transactions have been eliminated in the condensed consolidated financial statements.

The unaudited condensed consolidated financial statements for the three months ended March 31, 2013 and 2012 include the accounts of the Company and the Operating Partnership.  The Company is the sole general partner in the Operating Partnership, with a 94.5% general partnership interest as of March 31, 2013.  Total Operating Partnership units outstanding were 2,154,510 and 2,122,381 as of March 31, 2013 and December 31, 2012, respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled $324.4 million and $311.2 million, as of March 31, 2013 and December 31, 2012, respectively.

As of March 31, 2013, the Company owned or had ownership interests in 166 apartment communities, aggregating 34,343 units, excluding the Company’s ownership in preferred interest co-investments,  (collectively, the “Communities”, and individually, a “Community”), five commercial buildings and eight active development projects (collectively, the “Portfolio”).  The Communities are located in Southern California (Los Angeles, Orange, Riverside, San Diego, Santa Barbara, and Ventura counties), Northern California (the San Francisco Bay Area) and the Seattle metropolitan area.

Marketable Securities

The Company reports its available for sale securities at fair value, based on quoted market prices (Level 2 for the unsecured bonds and Level 1 for the common stock and investment funds, as defined by the Financial Accounting Standards Board (“FASB”) standard for fair value measurements as discussed later in Note 1), and any unrealized gain or loss is recorded as other comprehensive income (loss).  Realized gains and losses, interest and dividend income, and amortization of purchase discounts are included in interest and other income on the condensed consolidated statement of operations and comprehensive income.

As of March 31, 2013 and December 31, 2012, marketable securities consisted primarily of investment-grade unsecured bonds, common stock, investments in mortgage backed securities and investment funds that invest in U.S. treasury or agency securities.  As of March 31, 2013 and December 31, 2012, the Company classified its investments in mortgage backed securities, which mature in November 2019 and September 2020, as held to maturity, and accordingly, these securities are stated at their amortized cost.  The estimated fair values of the mortgage backed securities (Level 2 securities) are approximately equal to the carrying values.

9

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

As of March 31, 2012 and December 31, 2012 marketable securities consist of the following ($ in thousands):

	March 31, 2013
	Cost/		Gross
	Amortized		Unrealized
	Cost		Gain		Carrying Value
Available for sale:
Investment-grade unsecured bonds	$	5,119	$	96	$	5,215
Investment funds - US treasuries		15,365		721		16,086
Common stock		5,642		85		5,727
Held to maturity:
Mortgage backed securities		53,404		-		53,404
Total	$	79,530	$	902	$	80,432

	December 31, 2012
	Cost/		Gross
	Amortized		Unrealized
	Cost		Gain		Carrying Value
Available for sale:
Investment-grade unsecured bonds	$	5,143	$	98	$	5,241
Investment funds - US treasuries		14,120		729		14,849
Common stock		18,917		1,704		20,621
Held to maturity:
Mortgage backed securities		52,002		-		52,002
Total	$	90,182	$	2,531	$	92,713

The Company uses the specific identification method to determine the cost basis of a security sold and to reclassify amounts from accumulated other comprehensive income for securities sold.  For the three months ended March 31, 2013, the proceeds from sales of available for sale securities totaled $20.3 million which resulted in a realized gain of $1.8 million.  For the three months ended March 31, 2012, there were no sales of available for sale securities.

Variable Interest Entities

The Company consolidates 19 DownREIT limited partnerships (comprising twelve communities) since the Company is the primary beneficiary of these variable interest entities (“VIEs”).  Total DownREIT units outstanding were 1,033,474 and 1,039,431 as of March 31, 2013 and December 31, 2012, respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled $155.6 million and $152.4 million, as of March 31, 2013 and December 31, 2012, respectively.  The consolidated total assets and liabilities related to these VIEs, net of intercompany eliminations, were approximately $202.4 million and $181.1 million, respectively, as of March 31, 2013 and $201.1 million and $178.6 million, respectively, as of December 31, 2012.  Interest holders in VIEs consolidated by the Company are allocated income equal to the cash payments made to those interest holders.  The remaining results of operations are allocated to the Company.  As of March 31, 2013 and December 31, 2012, the Company did not have any other VIEs of which it was deemed to be the primary beneficiary.

Equity Based Compensation

The Company accounts for equity based compensation using the fair value method of accounting.  The estimated fair value of stock options granted by the Company is being amortized over the vesting period of the stock options.  The estimated grant date fair values of the long term incentive plan units (discussed in Note 13, “Equity Based Compensation Plans,” in the Company’s Form 10-K for the year ended December 31, 2012) are being amortized over the expected service periods.

10

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

Stock-based compensation expense for options and restricted stock totaled $0.6 million and $0.4 million for the three months ended March 31, 2013 and 2012, respectively.  The intrinsic value of the stock options exercised during the three months ended March 31, 2013 and 2012 totaled $0.9 million and $1.1 million, respectively.  As of March 31, 2013, the intrinsic value of the stock options outstanding totaled $14.6 million.  As of March 31, 2013, total unrecognized compensation cost related to unvested share-based compensation granted under the stock option and restricted stock plans totaled $5.8 million.  The cost is expected to be recognized over a weighted-average period of 1 to 5 years for the stock option plans and is expected to be recognized straight-line over a period of 1 to 7 years for the restricted stock awards.

The Company has adopted an incentive program involving the issuance of Series Z-1 Incentive Units of limited partnership interest in the Operating Partnership.  Stock-based compensation expense for Z-1 Units totaled $0.5 million and $0.6 million for the three months ended March 31, 2013 and 2012.  Stock-based compensation for Z-1 units capitalized totaled $0.1 million for the three months ended March 31, 2013, and 2012, respectively.  As of March 31, 2013, the intrinsic value of the Z-1 Units subject to future vesting totaled $16.1 million.  As of March 31, 2013, total unrecognized compensation cost related to Z-1 Units subject to future vesting totaled $6.8 million.  The unamortized cost is expected to be recognized up to 14 years subject to the achievement of the stated performance criteria.

Fair Value of Financial Instruments

Management believes that the carrying amounts of its amounts outstanding under lines of credit, notes receivable and notes and other receivables approximate fair value as of March 31, 2013 and December 31, 2012, because interest rates, yields and other terms for these instruments are consistent with yields and other terms currently available for similar instruments.  Management has estimated that the fair value of the Company’s $2.12 billion of fixed rate debt, including unsecured bonds, at March 31, 2013 is approximately $2.21 billion and the fair value of the Company’s $551.6 million of variable rate debt, excluding borrowings under the lines of credit, at March 31, 2013 is $632.7 million based on the terms of existing mortgage notes payable, unsecured bonds and variable rate demand notes compared to those available in the marketplace.  Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities and dividends payable approximate fair value as of March 31, 2013 due to the short-term maturity of these instruments.  The fair values of the Company’s investments in mortgage backed securities are approximately equal to the amortized cost carrying value of these securities.  Marketable securities and derivatives are carried at fair value as of March 31, 2013.

Capitalization of Costs

The Company’s capitalized internal costs related to development and redevelopment projects totaled $1.6 million and $1.5 million during the three months ended March 31, 2013 and 2012, respectively, most of which relates to development projects.  These totals include capitalized salaries of $0.6 million and $0.7 million for the three months ended March 31, 2013 and 2012, respectively.

Co-investments

The Company owns investments in joint ventures (“co-investments”) in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with the accounting standards.  Therefore, the Company accounts for these investments using the equity method of accounting.  Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company’s equity in earnings less distributions received and the Company’s share of losses.  The significant accounting policies of the Company’s co-investments entities are consistent with those of the Company in all material respects.  For preferred equity investments the Company recognizes its preferred interest as equity in earnings.

Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the consolidated statement of operations equal to the amount by which the fair-value of the co-investment interest the Company previously owned exceeds its carrying value.

A majority of the co-investments, excluding the preferred equity investments, compensate the Company for its asset management services and may provide promote distributions if certain financial return benchmarks are achieved.  Asset management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible.

11

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

Changes in Accumulated Other Comprehensive Loss, Net by Component

				Unrealized
	Change in			gains/(losses) on
	fair value and amortization of			available for sale
	derivatives			securities			Total
Balance at December 31, 2012	$	(71,658	)	$	2,397		$	(69,261	)
Other comprehensive income before reclassification		506			130			636
Amounts reclassified from accumulated other
comprehensive loss		2,018			(1,673	)		345
Net other comprehensive income (loss)		2,524			(1,543	)		981
Balance at March 31, 2013	$	(69,134	)	$	854		$	(68,280	)

Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense before amortization on the condensed consolidated statement of operations and comprehensive income.  Realized gains and losses on available for sale securities are included in interest and other income on the condensed consolidated statement of operations and comprehensive income.

Accounting Estimates

The preparation of condensed consolidated financial statements, in accordance with U.S. generally accepted accounting principles, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate portfolio, its investments in and advances to joint ventures and affiliates, its notes receivables and its qualification as a Real Estate Investment Trust (“REIT”). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions.

(2)  Significant Transactions During the First Quarter of 2013 and Subsequent Events

Acquisitions

In January 2013, the Company acquired Annaliese, a 56 unit community located in Seattle, Washington for $19.0 million.  The property was built in 2009 and is located in the South Lake Union submarket.

In February 2013, the Company purchased Fox Plaza, a 444 unit property located in San Francisco, California, for $135.0 million. Built in 1968, the property is a 29 story high rise tower with Fox Plaza apartments located on floors 14 through 29. The purchase price did not include floors 1 through 12 of commercial office space but did include an adjacent two-story building comprised of approximately 37,800 square feet of space leased to retail and office tenants and a two story underground parking garage comprised of 405 stalls.

Common Stock

During the first quarter, the Company sold 817,445 shares of common stock for $122.9 million, net of commissions, at an average per share price of $151.82.  Subsequent to quarter end, the Company has not sold any shares of common stock.

Unsecured Bond Offering

In April 2013, the Company issued $300 million aggregate principal amount of its 3.25% Senior Notes due on May 1, 2023 (the "Notes").  The net proceeds from the issuance of Notes were approximately $295.2 million, after deducting the underwriters' discounts and estimated offering expenses.

12

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

Dispositions

In January, the Company sold the land parcel held for future development located in Palo Alto, California for $9.1 million, resulting in a gain of $1.5 million.

(3) Co-investments

The Company has co-investments, which are accounted for under the equity method.  The co-investments own, operate and develop apartment communities.  The following table details the Company's co-investments (dollars in thousands):

	March 31,		December 31,
	2013		2012
Membership interest in Wesco I	$	143,051	$	143,874
Partnership interest in Fund II		27,121		53,601
Membership interest in a limited liability company that owns Expo		18,714		18,752
Membership interest in Wesco III		9,821		9,941
Total operating co-investments		198,707		226,168
Membership interests in limited liability companies that own and are developing Epic, Connolly Station, Mosso I. & II. , and Elkhorn		221,247		186,362
Membership interests in limited liability companies that own and are developing The Huxley and The Dylan		16,928		16,552
Total development co-investments		238,175		202,914
Membership interest in Wesco II that owns a preferred equity interest in Parkmerced with a preferred return of 10.1%		92,550		91,843
Preferred interest in related party limited liability company that owns Sage at Cupertino with a preferred return of  9.5%		15,055		14,438
Preferred interest in a related party limited liability company that owns Madison Park at Anaheim with a preferred return of 13%		13,232		13,175
Preferred interest in limited liability company that owns an apartment community in downtown Los Angeles with a preferred return 10%		13,068		13,068
Preferred interest in related limited liability company that owns an apartment development in Redwood City with a preferred return of 9.5%		8,867		-
Preferred interests in limited liability companies that own apartment communities in downtown Los Angeles with preferred returns of 9% repaid in March 2013		-		9,739
Total preferred interest investments		142,772		142,263
Total co-investments	$	579,654	$	571,345

In January 2013, the Company invested $8.6 million as a preferred equity interest investment in an apartment development in Redwood City, California.  The investment has a preferred return of 9.5% and matures in January 2016.

In March 2013, the Company received the redemption of $9.7 million of preferred equity related to two properties located in downtown Los Angeles.  The Company recorded $0.4 million in redemption penalties due to the early redemption of these preferred equity investments.

13

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

The combined summarized balance sheet and statements of operations for co-investments are as follows (dollars in thousands).

	March 31,		December 31,
	2013		2012
Balance sheets:
Rental properties and real estate under development	$	1,709,065	$	1,745,147
Other assets		85,039		168,061
Total assets	$	1,794,104	$	1,913,208
Debt	$	785,459	$	820,895
Other liabilities		54,877		91,922
Equity		953,768		1,000,391
Total liabilities and equity	$	1,794,104	$	1,913,208
Company's share of equity	$	579,654	$	571,345

	Three Months Ended
	March 31,
	2013			2012
Statements of operations:
Property revenues	$	27,859		$	34,323
Property operating expenses		(9,828	)		(13,137	)
Net property operating income		18,031			21,186
Interest expense		(6,778	)		(8,545	)
General and administrative		(1,514	)		(796	)
Depreciation and amortization		(11,019	)		(13,896	)
Net loss	$	(1,280	)	$	(2,051	)
Company's share of net income	$	4,211		$	2,340

14

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

(4) Notes and Other Receivables

Notes receivable secured by real estate, and other receivables consist of the following as of March 31, 2013 and December 31, 2012 (dollars in thousands):

	March 31,		December 31,
	2013		2012
Note receivable, secured, bearing interest at 8.0%, due November 2013	$	971	$	971
Note receivable, secured, bearing interest at 4.0%, due December 2014 (1)		3,212		3,212
Notes and other receivables from affiliates		4,085		28,896
Other receivables		3,091		3,785
Note receivable, secured, bearing interest at 8.8%, paid in full March 2013		-		10,800
Note receivable, secured, effective interest at 9.6%, paid in full March 2013		-		18,499
	$	11,359	$	66,163

(1) The borrower funds an impound account for capital replacement.

During the quarter, the Company received the repayment of two notes receivables totaling $29.5 million.  One of the notes was repaid early, and as such the Company recorded $0.8 million of income related to a change in estimate on the discount to the note receivable.

In March 2013, Wesco III repaid the Company for a $26.0 million short-term bridge loan at LIBOR + 2.5% to assist with the purchase of Haver Hill.  Wesco III used the proceeds from a $27.3 million loan secured by Haver Hill at 3.1% for a term of seven years to repay the bridge loan.

(5) Related Party Transactions

Management and other fees from affiliates include management, development and redevelopment fees from co-investments of $2.8 million and $2.3 million during the three months ended March 31, 2013 and 2012, respectively.  All of these fees are net of intercompany amounts eliminated by the Company.

The Company’s Chairman and founder, Mr. George Marcus, is the Chairman of The Marcus & Millichap Company (“TMMC”), which is a holding company for certain real estate brokerage services and other subsidiary companies.  As described in Note 3, the Company invested $8.6 million as a preferred equity interest investment in an entity affiliated with TMMC that owns an apartment development in Redwood City, California.  Independent members of the Company’s Board of Directors that serve on the Nominating and Corporate Governance and Audit Committees approved the investment in this entity.

As described in Note 4, The Company provided a $26.0 million short-term bridge loan to Wesco III to assist with the purchase of Haver Hill which was repaid during the quarter.

15

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

(6) Unsecured Debt and Lines of Credit

Unsecured debt and lines of credit consist of the following as of March 31, 2013 and December 31, 2012 ($ in thousands):

							Weighted Average
	March 31,			December 31,			Maturity
	2013			2012			In Years
Bonds private placement - fixed rate	$	465,000		$	465,000			6.0
Term loan - variable rate		350,000			350,000			3.9
Bonds public offering - fixed rate		297,159			297,084			9.4
Unsecured debt		1,112,159			1,112,084
Lines of credit		102,300			141,000			2.7
Total unsecured debt and lines of credit	$	1,214,459		$	1,253,084
Weighted average interest rate on fixed rate unsecured bonds		4.2	%		4.2	%
Weighted average interest rate on variable rate term loan		2.6	%		2.7	%
Weighted average interest rate on line of credit		2.1	%		2.3	%

As described in Note 2, in April 2013, the Company issued $300 million aggregate principal amount of its 3.25% Senior Notes due on May 1, 2023.

(7) Segment Information

The Company defines its reportable operating segments as the three geographical regions in which its apartment communities are located: Southern California, Northern California and Seattle Metro.  Excluded from segment revenues are properties classified in discontinued operations, management and other fees from affiliates, and interest and other income.  Non-segment revenues and net operating income included in the following schedule also consist of revenue generated from commercial properties.  Other non-segment assets include real estate under development, co-investments, cash and cash equivalents, marketable securities, notes and other receivables, prepaid expenses and other assets and deferred charges.

16

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

The revenues, net operating income, and assets for each of the reportable operating segments are summarized as follows for the three months ended March 30, 2013 and 2012 (dollars in thousands):

	Three Months Ended
	March 31,
	2013			2012
Revenues:
Southern California	$	65,830		$	58,560
Northern California		50,770			41,622
Seattle Metro		26,328			22,309
Other real estate assets		3,466			2,983
Total property revenues	$	146,394		$	125,474
Net operating income:
Southern California	$	44,434		$	39,830
Northern California		35,283			28,942
Seattle Metro		17,373			14,831
Other real estate assets		2,540			1,707
Total net operating income		99,630			85,310
Management and other fees from affiliates		2,948			2,444
Depreciation		(47,144	)		(40,734	)
General and administrative		(6,626	)		(5,400	)
Cost of management and other fees		(1,701	)		(1,640	)
Interest expense before amortization		(25,211	)		(24,658	)
Amortization expense		(2,930	)		(2,871	)
Interest and other income		5,023			2,413
Equity income from co-investments		4,211			2,340
Gain on sale of land		1,503			-
Income from continuing operations	$	29,703		$	17,204

Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2013 and December 31, 2012:

	March 31,		December 31,
	2013		2012
Assets:
Southern California	$	1,662,493	$	1,675,265
Northern California		1,632,994		1,489,095
Seattle Metro		711,458		699,465
Other real estate assets		87,754		88,330
Net reportable operating segment - real estate assets		4,094,699		3,952,155
Real estate under development		65,568		66,851
Co-investments		579,654		571,345
Cash and cash equivalents, including restricted cash		55,634		42,126
Marketable securities		80,432		92,713
Notes and other receivables		11,359		66,163
Other non-segment assets		49,113		55,870
Total assets	$	4,936,459	$	4,847,223

17

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

(8)  Net Income Per Common Share

(Amounts in thousands, except per share and unit data)

	Three Months Ended						Three Months Ended
	March 31, 2013						March 31, 2012
			Weighted-		Per				Weighted-		Per
			average		Common				average		Common
			Common		Share				Common		Share
	Income		Shares		Amount		Income		Shares		Amount
Basic:
Income from continuing operations available to common stockholders	$	25,203		37,004	$	0.68	$	13,307		34,028	$	0.39
Income from discontinued operations available to common stockholders		-		37,004		-		9,415		34,028		0.28
		25,203			$	0.68		22,722			$	0.67
Effect of Dilutive Securities (1)		-		88				54		124
Diluted:
Income from continuing operations available to common stockholders		25,203		37,092	$	0.68		13,361		34,152	$	0.39
Income from discontinued operations available to common stockholders		-		37,092		-		9,415		34,152		0.28
	$	25,203			$	0.68	$	22,776			$	0.67

(1) Weighted average convertible limited partnership units of 2,079,447 and 2,245,166, which include vested Series Z-1 incentive units, for the three months ended March 31, 2013, and 2012, respectively, were not included in the determination of diluted EPS because they were anti-dilutive.  Income allocated to convertible limited partnership units, which includes vested Series Z-1 units, aggregating $1.5 million and $1.6 million for the three months ended March 31, 2013 and 2012, respectively, have been excluded from income available to common stock holders for the calculation of diluted income per common share since these units are excluded from the diluted weighted average common shares for the period as the effect was anti-dilutive.  The Company has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities.

Stock options of 260,513 and 36,750 for the three months ended March 31, 2013 and 2012, respectively, were not included in the diluted earnings per share calculation because the effects on earnings per share were anti-dilutive.

All shares of Series G cumulative convertible preferred stock have been excluded in diluted earnings per share for the three months ended March 31, 2013, respectively, as the effect was anti-dilutive.

(9)  Derivative Instruments and Hedging Activities

The Company has entered into interest rate swap contracts with an aggregate notional amount of $300 million that effectively fixed the interest rate on $300 million of the $350 million unsecured term loan at 2.6%.  These derivatives qualify for hedge accounting.

As of March 31, 2013 the Company also had twelve interest rate cap contracts totaling a notional amount of $187.8 million that qualify for hedge accounting as they effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying variable interest rate for $201.6 million of the Company’s tax exempt variable rate debt.

As of March 31, 2013 and December 31, 2012 the aggregate carrying value of the interest rate swap contracts was a liability of $6.1 million and $6.6 million, respectively. The aggregate carrying value of the interest rate cap contracts was zero on the balance sheet as of March 31, 2013 and December 31, 2012, respectively.

18

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

(10)  Discontinued Operations

The Company classifies real estate as "held for sale" when the sale is considered to be probable.  The Company had no communities sold or held for sale for the quarter ended March 31, 2013.

During the first quarter of 2012, the Company sold Tierra Del Sol/Norte, a 156 unit community located in San Diego, California for $17.2 million for a gain of $7.0 million.  Also in the first quarter of 2012, the Company sold Alpine Country, a 108 unit community located in San Diego metropolitan area, for $11.1 million for a gain of $3.9 million.

The components of discontinued operations are outlined below and include the results of operations for the respective periods that the Company owned such assets, as described above (dollars in thousands).

	Three Months Ended
	March 31,
	2013		2012
Rental revenues	$	-	$	608
Property operating expenses		-		(260	)
Depreciation and amortization		-		(94	)
Income from real estate sold		-		254
Gain on sale		-		10,870
Internal dispositon costs and taxes		-		(1,087	)
Income from discontinued operations	$	-	$	10,037

(11)  Commitments and Contingencies

As of March 31, 2013, the Company had six non-cancelable ground leases for certain apartment communities and buildings that expire between 2027 and 2080.  Ground lease payments are typically the greater of a stated minimum or a percentage of gross rents generated by these apartment communities.  Total minimum lease commitments, under ground leases and operating leases, are approximately $1.7 million per year for the next five years.

To the extent that an environmental matter arises or is identified in the future that has other than a remote risk of having a material impact on the financial statements, the Company will disclose the estimated range of possible outcomes, and, if an outcome is probable, accrue an appropriate liability for remediation and other potential liability. The Company will consider whether such occurrence results in an impairment of value on the affected property and, if so, impairment will be recognized.

Except with respect to three communities, the Company has no indemnification agreements from third parties for potential environmental clean-up costs at its communities.  The Company has no way of determining at this time the magnitude of any potential liability to which it may be the subject, arising out of unknown environmental conditions or violations with respect to the communities formerly owned by the Company.  No assurance can be given that existing environmental studies with respect to any of the communities will reveal all environmental liabilities, that any prior owner or operator of a Property did not create any material environmental condition not known to the Company, or that a material environmental condition does not otherwise exist as to any one or more of the communities.  The Company has limited insurance coverage for the types of environmental liabilities described above.

The Company may enter into transactions that may require the Company to pay the tax liabilities of the partners in the Operating Partnership or in the DownREIT entities.  These transactions are within the Company’s control. Although the Company plans to hold the contributed assets or defer recognition of gain on their sale pursuant to like-kind exchange rules under Section 1031 of the Internal Revenue Code, the Company can provide no assurance that it will be able to do so and if such tax liabilities are incurred they may have a material impact on the Company’s financial position.

19

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2013 and 2012

(Unaudited)

There have been a number of lawsuits in recent years against owners and managers of apartment communities alleging personal injury and property damage caused by the presence of mold in residential real estate. Some of these lawsuits have resulted in substantial monetary judgments or settlements.  The Company has been sued for mold related matters and has settled some, but not all, of such matters.   Insurance carriers have reacted to mold related liability awards by excluding mold related claims from standard policies and pricing mold endorsements at prohibitively high rates.  The Company has, however, purchased pollution liability insurance, which includes some coverage for mold.  The Company has adopted policies for promptly addressing and resolving reports of mold when it is detected, and to minimize any impact mold might have on residents of the property.  The Company believes its mold policies and proactive response to address any known existence, reduces its risk of loss from these cases.  There can be no assurances that the Company has identified and responded to all mold occurrences, but the Company promptly addresses all known reports of mold.  Liabilities resulting from such mold related matters are not expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.  As of March 31, 2013, potential liabilities for mold and other environmental liabilities are not considered probable or the loss cannot be quantified or estimated.

The Company carries comprehensive liability, fire, extended coverage and rental loss insurance for each of the communities.  Under comprehensive liability claims, the Company has insurance to cover claims in excess of $100,000 per incident.  Under property casualty claims, the Company reinsures the primary carrier for losses up to $5.0 million deductible per incident.  There are, however, certain types of extraordinary losses, such as, for example, losses from earthquake, for which the Company does not have insurance. Substantially all of the communities are located in areas that are subject to earthquakes.

The Company provided a loan and construction completion guarantee to the lender in order to fulfill the lender’s standard financing requirements related to the construction of the Expo community.  The outstanding balance for the construction loan is included in the debt line item in the balance sheet of the co-investments included in Note 3.  The construction completion guarantee is for the life of the loan, which is scheduled to mature on July 1, 2014, with two, one-year extension options at the Expo joint venture’s option.  As of March 31, 2013, the Company was in compliance with all terms of the construction loan and the construction of the community is expected to be completed on time and within budget.  The maximum exposure of the guarantee as of March 31, 2013 was $70.0 million based on the construction costs that were budgeted to be incurred to complete the construction.

The Company provided a payment guarantee to the counterparties in relation to the total return swaps entered into by the joint venture responsible for the development of The Huxley (formerly Fountain at La Brea) and The Dylan (formerly Santa Monica at La Brea) communities.  Further the Company has guaranteed completion of development and made certain debt service guarantees for The Huxley and The Dylan.  The outstanding balance for the loans is included in the debt line item in the balance sheet of the co-investments included in Note 3.  The payment guarantee is for the payment of the amounts due to the counterparty related to the total return swaps which are scheduled to mature in September and December 2016.  The maximum exposure of the guarantee as of March 31, 2013 was $68.0 million based on the aggregate outstanding debt amount.

The Company is subject to various other lawsuits in the normal course of its business operations.  Such lawsuits are not expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with the Company’s 2012 Annual Report on  Form 10-K for the year ended December 31, 2012.

The Company is a fully integrated Real Estate Investment Trust (“REIT”), and its property revenues are generated primarily from apartment community operations.  The Company’s investment strategy has two components:  constant monitoring of existing markets, and evaluation of new markets in the Company’s current three geographical regions to identify areas with the characteristics that underlie rental growth.  The Company’s strong financial condition supports its investment strategy by enhancing its ability to quickly shift the Company’s acquisition, development, and disposition activities to markets that will optimize the performance of the portfolio.

As of March 31, 2013, the Company had ownership interests in 166 apartment communities, comprising 34,343 apartment units, excluding the Company’s ownership in preferred equity interest co-investments, and the Company also had ownership interests in five commercial buildings with approximately 315,900 square feet.  The Company’s apartment communities are located in the following major West Coast regions:

20

Southern California (Los Angeles, Orange, Riverside, San Diego, Santa Barbara, and Ventura counties)

Northern California (the San Francisco Bay Area)

Seattle Metro (Seattle metropolitan area)

As of March 31, 2013, the Company’s development pipeline was comprised of two consolidated projects under development, six unconsolidated joint venture projects under development, two consolidated predevelopment projects, and one unconsolidated joint venture predevelopment projects, all aggregating 2,669 units, with total incurred costs of $528.7 million, and estimated remaining project costs of approximately $397.4 million for total estimated project costs of $926.1 million.

The Company’s consolidated apartment communities are as follows:

	As of March 31, 2013					As of March 31, 2012
	Apartment Units		%			Apartment Units		%
Southern California		13,656		46	%		12,941		47	%
Northern California		9,431		32	%		8,206		30	%
Seattle Metro		6,720		22	%		6,168		23	%
Total		29,807		100	%		27,315		100	%

Co-investments, including Essex Apartment Value Fund II, L.P. ("Fund II"), and Wesco I, LLC ("Wesco I")  and Wesco III, LLC ("Wesco III")  communities, and preferred equity interest co-investment communities are not included in the table presented above for both periods.

Comparison of the Three Months Ended March 31, 2013 to the Three Months Ended March 31, 2012

The Company’s average financial occupancies for the Company’s stabilized apartment communities or “Quarterly Same-Property” (stabilized properties consolidated by the Company for the quarters ended March 31, 2013 and 2012) decreased  30 basis points to 96.6% as of March 31, 2013 from 96.9% as of March 31, 2012.  Financial occupancy is defined as the percentage resulting from dividing actual rental revenue by total possible rental revenue.  Actual rental revenue represents contractual rental revenue pursuant to leases without considering delinquency and concessions.  Total possible rental revenue represents the value of all apartment units, with occupied units valued at contractual rental rates pursuant to leases and vacant units valued at estimated market rents.  We believe that financial occupancy is a meaningful measure of occupancy because it considers the value of each vacant unit at its estimated market rate.

Market rates are determined using a variety of factors such as effective rental rates at the property based on recently signed leases and asking rates for comparable properties in the market.  The recently signed effective rates at the property are used as the starting point in the determination of the market rates of vacant units.  The Company then increases or decreases these rates based on the supply and demand in the apartment community’s market.  The Company will check the reasonableness of these rents based on its position within the market and compare the rents against the asking rents by comparable properties in the market.  Financial occupancy may not completely reflect short-term trends in physical occupancy and financial occupancy rates as disclosed by other REIT, which may not be comparable to the Company’s calculation of financial occupancy.

The Company does not take into account delinquency and concessions to calculate actual rent for occupied units and market rents for vacant units.  The calculation of financial occupancy compares contractual rates for occupied units to estimated market rents for unoccupied units, thus the calculation compares the gross value of all apartment units excluding delinquency and concessions. For apartment communities that are development properties in lease-up without stabilized occupancy figures, the Company believes the physical occupancy rate is the appropriate performance metric.  While an apartment community is in the lease-up phase, the Company’s primary motivation is to stabilize the property which may entail the use of rent concessions and other incentives, and thus financial occupancy which is based on contractual revenue is not considered the best metric to quantify occupancy.

21

The regional breakdown of the Company’s Quarterly Same-Property portfolio for financial occupancy for the three months ended March 31, 2013 and 2012 is as follows:

	Three months ended
	March 31,
	2013			2012
Southern California		96.6	%		96.7	%
Northern California		96.8	%		97.3	%
Seattle Metro		96.6	%		96.8	%

The following table provides a breakdown of revenue amounts, including revenues attributable to the Quarterly Same-Property portfolio:

			Three Months Ended
	Number of		March 31,				Dollar		Percentage
	Properties		2013		2012		Change		Change
Property Revenues(dollars in thousands)
Quarterly Same-Property:
Southern California		61	$	60,989	$	58,560	$	2,429		4.1	%
Northern California		35		44,537		41,336		3,201		7.7
Seattle Metro		30		23,045		21,566		1,479		6.9
Total Quarterly Same-Property revenues		126		128,571		121,462		7,109		5.9
Quarterly Non-Same Property Revenues (1)				17,823		4,012		13,811		344.2
Total property revenues			$	146,394	$	125,474	$	20,920		16.7	%

(1) Includes twelve communities acquired after January 1, 2012, one redevelopment community and one commercial building.

Quarterly Same-Property Revenues increased by $7.1 million or 5.9% to $128.6 million in the first quarter of 2013 from $121.5 million in the first quarter of 2012.  The increase was primarily attributable to an increase in scheduled rents of $7.2 million as reflected in an increase of 6.7% in average rental rates from $1,425 per unit in the first quarter of 2012 to $1,520 per unit in the first quarter of 2013.  Scheduled rents increased by 4.0%, 8.3%, and 7.8% in Southern California, Northern California, and Seattle Metro, respectively.  Quarterly Same-Property financial occupancy decreased 30 basis points from the first quarter of 2012 which offset the increase in Quarterly Same-Property Revenues by $0.6 million.  On a sequential basis the Company experienced Quarterly Same-Property revenue growth from the fourth quarter of 2012 to the first quarter of 2013 of $1.3 million or 1.1%, resulting from sequential revenue growth in all three regions mainly driven by a 0.8% increase in scheduled rents and  a 50 basis point increase in occupancy compared to the fourth quarter of 2012.

Quarterly Non-Same Property Revenues increased by $13.8 million or 344% to $17.8 million in the first quarter of 2013 from $4.0 million in the first quarter of 2012.  The increase was primarily due to revenue generated from twelve communities acquired or consolidated since January 1, 2012 (Reed Square, Essex Skyline at MacArthur Place, Park Catalina, The Huntington, Montebello, Park West, Domaine, Ascent, Willow Lake, Bennett Lofts, Annaliese and Fox Plaza ).

Management and Other Fees increased by $0.5 million in the first quarter of 2013 as compared to the first quarter of 2012.  The increase is primarily due to the asset and property management fees earned from Wesco I and III co-investments formed during 2012, and development fees earned from the joint ventures to develop Epic, Expo, Connolly Station, Elkhorn, Mosso I. and II., The Huxley, The Dylan, and The Village.  The increase in management fees was offset by a reduction of $0.4 million in asset and property management fees from the sale of seven Fund II communities in 2012.  The remaining seven communities owned by Fund II are expected to be sold by the end of the third quarter of 2013.

Property operating expenses, excluding real estate taxes increased $3.9 million or 13.4% to $32.6 million in the first quarter of 2013 from $28.8 million in the first quarter of 2012, primarily due to the acquisition of twelve communities. Quarterly Same-Property operating expenses excluding real estate taxes, increased by $1.3 million or 4.7% for the first quarter of 2013 compared to the first quarter of 2012, due to a $0.6 million increase in repairs and maintenance expense, and a $0.5 million increase in salaries and administration costs.

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Real Estate taxes increased by $2.7 million or 24.0% for the first quarter of 2013 compared to the first quarter of 2012, due primarily to the acquisition of twelve communities.  Quarterly Same-Property real estate taxes increased by $0.8 million or 7.0% for first quarter of 2013 compared to the first quarter of 2012 due to $0.5 million or a 25% increase in property taxes for the Seattle Metro due to higher assessed values for 2013, and an increase of 2% in property taxes for the majority of the properties located in California.

Depreciation expense increased by $6.4 million or 15.7% for the first quarter of 2013 compared to the first quarter of 2012, due to the acquisition of twelve communities.  Also, the increase is due to the capitalization of approximately $14.1 million in additions to rental properties through the first quarter of 2013, including $6.6 million spent on redevelopment,  and the capitalization of approximately $97.9 million in additions to rental properties in 2012, including $40.2 million spent on redevelopment, $13.7 million spent on improvement to recent acquisitions, and $7.7 million spent on revenue generating capital expenditures

General and administrative expense increased $1.2 million or 22.7% for first quarter of 2013 compared to the first quarter of 2012 primarily due to an increase of acquisitions cost of $0.2 million compared to the first quarter of 2012, annual compensation adjustments for merit, investments in technology, and the cost of hiring additional staff.

Interest and other income increased by $2.6 million for the first quarter of 2013 compared to 2012 primarily due to a gain of $1.8 million from the sale of marketable securities, and $0.8 million earned from the change in estimate for the discount  related to the Reserve Lofts notes receivable that was repaid during the first quarter of 2013.

Equity income in co-investments increased $1.9 million in the first quarter of 2013 to $4.2 million compared to $2.4 million in the first quarter of 2012 primarily due to two new preferred equity investments made in third quarter of 2012 and the first quarter of 2013 totaling $0.6 million in equity income, $0.4 million earned from the redemption of two preferred equity investments in the first quarter of 2013, and income earned from four communities acquired by the Wesco joint ventures in the second half of 2012.  The increases in equity income in the first quarter of 2013 were offset by the sale of seven communities owned by Fund II in the second half of 2012, and the acquisition of the Essex Skyline community in the second quarter of 2012 which was accounted for on the equity method for the first quarter for 2012.

Income from discontinued operations for the first quarter of 2013 was $0 as compared to income of $10.0 million in the first quarter of 2012 that included a gain of $9.8 million from the sale of Tierra del Sol/Norte and Alpine Country, net of internal disposition costs.

Liquidity and Capital

Fitch Ratings ("Fitch"), Moody’s Investor Service, and Standard and Poor's (“S&P”) credit agencies rate Essex Property Trust, Inc. and Essex Portfolio, L.P. BBB+/Stable, Baa2/Stable, and BBB/Stable, respectively.

As of March 31, 2013, the Company had $30.8 million of unrestricted cash and cash equivalents and $80.4 million in marketable securities, of which $27.0 million were held available for sale.  We believe that cash flows generated by our operations, existing cash, cash equivalents, and marketable securities balances, availability under existing lines of credit, access to capital markets and the ability to generate cash from the disposition of real estate are sufficient to meet all of our reasonably anticipated cash needs during the next twelve months.  The timing, source and amounts of cash flows provided by financing activities and used in investing activities are sensitive to changes in interest rates and other fluctuations in the capital markets environment, which can affect our plans for acquisitions, dispositions, development and redevelopment activities.

The Company has two lines of unsecured credit aggregating $625.0 million.  As of March 31, 2013 there was a $102.3 million outstanding balance on the $600 million unsecured line.  The underlying interest rate on the $600 million line is based on a tiered rate structure tied to the Company's credit ratings on the credit facility and the rate was LIBOR + 1.075% as of March 31, 2013.  This facility matures in December 2015 with two one-year extensions, exercisable by the Company.  The Company has a working capital unsecured line of credit agreement for $25.0 million.  This facility matures in January 2014, with a one year extension option.  As of March 31, 2013 there was no balance outstanding on this unsecured line.  The underlying interest rate on the $25.0 million line is based on a tiered rate structure tied to Fitch and S&P ratings on the credit facility of LIBOR plus 1.075%.

On March 29, 2013, the Company entered into equity distribution agreements with Cantor Fitzgerald & Co, Barclays Capital Inc., BMO Capital Markets Corp., BNP Paribas Securities Corp., Liquidnet, Inc., Mitsubishi UFJ Securities (USA), Inc., and Citigroup Global Markets Inc., which superseded the equity distribution agreements entered into in March 2012 with Cantor Fitzgerald & Co, KeyBanc Capital Markets Inc., Barclays Capital Inc., BMO Capital Markets Corp., Liquidnet, Inc., Mitsubishi UFJ Securities (USA), Inc., and Citigroup Global Markets Inc.  During the first quarter of 2013, the Company sold 817,445 shares of common stock for $122.9 million, net of commissions, at an average per share price of $151.82.   Under this program, the Company may from time to time sell shares of common stock into the existing trading market at current market prices, and the Company anticipates using the net proceeds to potentially acquire, develop, or redevelop properties, which primarily will be apartment communities, to make other investments and for working capital or general corporate purposes, which may include the repayment of indebtedness.  As of May 2, 2013, the Company may sell an additional 5,000,000 shares under the current equity distribution program.

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During March 2013, the Company filed a new shelf registration statement with the SEC, allowing the Company to sell an undetermined number or amount of certain equity and debt securities as defined in the prospectus.

During April 2013, the Company issued $300 million of senior unsecured bonds due May 1, 2023 with a coupon rate of 3.25% per annum.  The interest is payable semi-annually in arrears on May 1 and November 1 of each year, commencing November 1, 2013 until the maturity date of May 1, 2023.  The Company used the net proceeds of this offering to repay indebtedness under the Company’s $600 million unsecured line of credit facility and for other general corporate and working capital purposes.

As of March 31, 2013, the Company’s mortgage notes payable totaled $1.6 billion which consisted of $1.4 billion in fixed rate debt with interest rates varying from 4.3% to 6.4% and maturity dates ranging from 2013 to 2021 and $201.6 million of variable rate debt with a weighted average interest rate of 1.6% ($201.6 million of the variable debt is tax-exempt variable rate demand notes).  The tax-exempt variable rate demand notes have maturity dates ranging from 2013 to 2039, and $187.4 million are subject to interest rate caps.

The Company pays quarterly dividends from cash available for distribution. Until it is distributed, cash available for distribution is invested by the Company primarily in investment grade securities held available for sale or is used by the Company to reduce balances outstanding under its line of credit.

The Company has benefited from borrowing from Fannie Mae and Freddie Mac, and there are no assurances that these entities will lend to the Company in the future.  To the extent that the Company’s access to capital and credit is at a higher cost than the Company has experienced in recent years (reflected in higher interest rates for debt financing or a lower stock price for equity financing) the Company’s ability to make acquisitions, develop communities, obtain new financing, and refinance existing borrowing at competitive rates could be adversely impacted.  For the past two years the Company has primarily issued unsecured debt and repaid secured debt when it has matured to place less reliance on mortgage debt financing, and to unencumber more of the Company's communities.

Derivative Activity

The Company uses interest rate swaps and interest rate cap contracts to manage certain interest rate risks. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.

The Company has entered into interest rate swap contracts with an aggregate notional amount of $300 million that effectively fixed the interest rate on $300 million of the $350 million unsecured term loan at 2.6%.  These derivatives qualify for hedge accounting.

As of March 31, 2013 the Company also had twelve interest rate cap contracts totaling a notional amount of $187.8 million that qualify for hedge accounting as they effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying variable interest rate for $201.6 million of the Company’s tax exempt variable rate debt.

As of March 31, 2013 and December 31, 2012 the aggregate carrying value of the interest rate swap contracts was a liability of $6.1 million and $6.6 million, respectively. The aggregate carrying value of the interest rate cap contracts was zero on the balance sheet as of March 31, 2013 and December 31, 2012, respectively.

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Development and Predevelopment Pipeline

The Company defines development activities as new properties that are being constructed, or are newly constructed and, in the case of development communities, are in a phase of lease-up and have not yet reached stabilized operations.  As of March 31, 2013, the Company had two consolidated development projects, and six unconsolidated joint venture development projects aggregating 2,220 units for an estimated cost of $861.8 million, of which $397.4 million remains to be expended.

The Company had two predevelopment projects and one unconsolidated joint venture predevelopment projects aggregating 449 units with an aggregate carrying value of $64.3 million as of March 31, 2013.  The Company expects to fund the development and predevelopment pipeline by using a combination of some or all of the following sources: its working capital, amounts available on its lines of credit, net proceeds from public and private equity and debt issuances, and proceeds from the disposition of properties, if any.

Alternative Capital Sources

Fund II has eight institutional investors, and the Company, with combined partner equity contributions of $265.9 million.  The Company contributed $75.0 million to Fund II, which represents a 28.2% interest as general partner and limited partner, and the Company uses the equity method of accounting for its investment in Fund II.  Fund II utilized leverage equal to approximately 55% upon the initial acquisition of the underlying real estate.  Fund II invested in apartment communities in the Company’s targeted West Coast markets and, as of December 31, 2012, owned seven apartment communities.  The Company records revenue for its asset management, property management, development and redevelopment services when earned, and promote income when realized if Fund II exceeds certain financial return benchmarks.  Seven communities were sold during 2012 from Fund II, and the Company has begun the sale of the remaining seven communities within the Essex Apartment.  The Company has exercised its one-year extension which provides for the option to extend Fund II to September 2014.

Wesco I is a 50/50 programmatic joint venture with an institutional partner formed in 2011 for a total equity commitment of $300.0 million.  Each partner’s equity commitment is $150.0 million.  Wesco I will utilize debt as leverage equal to approximately 50% of the underlying real estate.  The Company has contributed $150.0 million to Wesco I, and as of March 31, 2013, Wesco I owned nine apartment communities with 2,713 units with an aggregate carrying value of $661.2 million.

Wesco III is a 50/50 programmatic joint venture with an institutional partner formed in 2012 for a total equity commitment of $120.0 million. Each partner’s commitment is $60.0 million. Wesco III will utilize debt as leverage equal to approximately 50% of the underlying real estate.  The Company has contributed $10.0 million to Wesco III, and provided a $26.0 million short term bridge loan to Wesco III at a rate of LIBOR + 2.5% in the fourth quarter of 2012 that was repaid by Wesco III in the first quarter of 2013.  Wesco III owned one apartment community with 264 units for a purchase price of $45.6 million.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements, in accordance with U.S. generally accepted accounting principles requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. The Company defines critical accounting policies as those accounting policies that require the Company’s management to exercise their most difficult, subjective and complex judgments. The Company’s critical accounting policies and estimates relate principally to the following key areas: (i) consolidation under applicable accounting standards for entities that are not wholly owned; (ii) assessing the carrying values of our real estate properties and investments in and advances to joint ventures and affiliates; (iii) internal cost capitalization; and (iv) qualification as a REIT. The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances.  Actual results may differ from those estimates made by management.

The Company’s critical accounting policies and estimates have not changed materially from information reported in Note 2, “Summary of Critical and Significant Accounting Policies,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.

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Forward Looking Statements

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this quarterly report on Form 10-Q which are not historical facts may be considered forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended, including statements regarding the Company's expectations, hopes, intentions, beliefs and strategies regarding the future. Forward looking statements include statements regarding the Company’s expectations as to the total projected costs of predevelopment, development and predevelopment projects, the Company’s reduced risk of loss from mold cases, beliefs as to our ability to meet our cash needs during the next twelve months, expectations as to the sources for funding the Company’s development and redevelopment pipeline, the timing and proceeds of the sale of the Fund II properties and statements regarding the Company's financing activities.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors including, but not limited to, that the Company will fail to achieve its business objectives, that the total projected costs of current predevelopment, development and redevelopment projects exceed expectations, that such development and redevelopment projects will not be completed, that development and redevelopment projects and acquisitions will fail to meet expectations, that estimates of future income from an acquired property may prove to be inaccurate, that future cash flows will be inadequate to meet operating requirements, that there may be a downturn in the markets in which the Company's properties are located, that the terms of any refinancing may not be as favorable as the terms of existing indebtedness, and that mold lawsuits will be more costly than anticipated, as well as those risks, special considerations, and other factors referred to in Item 1A, “Risk Factors,” of the Company's Annual Report on Form 10-K for the year ended December 31, 2012, and those risk factors and special considerations set forth in the Company's other filings with the Securities and Exchange Commission (the “SEC”) which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  All forward-looking statements are made as of the date hereof, and the Company assumes no obligation to update this information.

Funds from Operations (“FFO”)

FFO is a financial measure that is commonly used in the REIT industry.  The Company presents funds from operations as a supplemental operating performance measure.  FFO is not used by the Company as, nor should it be considered to be, an alternative to net earnings computed under GAAP as an indicator of the Company’s operating performance or as an alternative to cash from operating activities computed under GAAP as an indicator of the Company’s ability to fund its cash needs.

FFO is not meant to represent a comprehensive system of financial reporting and does not present, nor does it intend to present, a complete picture of the Company's financial condition and operating performance.  The Company believes that net earnings computed under GAAP remain the primary measure of performance and that FFO is only meaningful when it is used in conjunction with net earnings.  The Company considers FFO and FFO excluding non-recurring items and acquisition costs (referred to as “Core FFO”) to be useful financial performance measurements of an equity REIT because, together with net income and cash flows, FFO provides investors with an additional basis to evaluate operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and ability to pay dividends.  Further, the Company believes that its consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of its financial condition and its operating performance.

In calculating FFO, the Company follows the definition for this measure published by the National Association of REITs (“NAREIT”), which is a REIT trade association.  The Company believes that, under the NAREIT FFO definition, the two most significant adjustments made to net income are (i) the exclusion of historical cost depreciation and (ii) the exclusion of gains and losses (including impairment charges on depreciable real estate) from the sale of previously depreciated properties.  The Company agrees that these two NAREIT adjustments are useful to investors for the following reason:

(a) historical cost accounting for real estate assets in accordance with GAAP assumes, through depreciation charges, that the value of real estate assets diminishes predictably over time. NAREIT stated in its White Paper on Funds from Operations “since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” Consequently, NAREIT’s definition of FFO reflects the fact that real estate, as an asset class, generally appreciates over time and depreciation charges required by GAAP do not reflect the underlying economic realities.

(b) REITs were created as a legal form of organization in order to encourage public ownership of real estate as an asset class through investment in firms that were in the business of long-term ownership and management of real estate.  The exclusion, in NAREIT’s definition of FFO, of gains and losses (including impairment charges on depreciable real estate) from the sales of previously depreciated operating real estate assets allows investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT’s activity and assists in comparing those operating results between periods.

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Management believes that it has consistently applied the NAREIT definition of FFO to all periods presented.  However, there is judgment involved and other REITs’ calculation of FFO may vary from the NAREIT definition for this measure, and thus their disclosure of FFO may not be comparable to the Company’s calculation.

The following table sets forth the Company’s calculation of FFO and Core FFO for the three months ended March 31, 2013 and 2012 (in thousands except for per share data):

	Three Months Ended
	March 31,
	2013			2012
Net income available to common stockholders	$	25,203		$	22,722
Adjustments:
Depreciation and amortization		47,144			40,827
Gains not included in FFO, net of internal disposition costs		-			(9,783	)
Depreciation add back from unconsolidated co-investments, and add back convertible preferred dividend - Series G		3,842			4,384
Noncontrolling interests related to Operating Partnership units		1,501			1,590
Depreciation attributable to noncontrolling interest		(327	)		(289	)
Funds from operations	$	77,363		$	59,451
Funds from operations per share - diluted	$	1.97		$	1.63
Non-core items:
Acquisition costs		387			186
Gain on sales of marketable securities and note prepayment		(2,611	)		-
Gain on sale of land		(1,503	)		-
Income from early redemption of preferred equity investments		(423	)		-
Core FFO	$	73,213		$	59,637
Core FFO per share-diluted	$	1.87		$	1.64
Weighted average number shares outstanding diluted (1)		39,205,611			36,396,641

(1) Assumes conversion of all dilutive outstanding operating partnership interests in the Operating Partnership.

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Net Operating Income (“NOI”)

Same-property net operating income (“NOI”)is considered by management to be an important supplemental performance measure to earnings from operations included in the Company’s consolidated statements of operations.   The presentation of same-property NOI assists with the presentation of the Company’s operations prior to the allocation of depreciation and any corporate-level or financing-related costs.  NOI reflects the operating performance of a community and allows for an easy comparison of the operating performance of individual communities or groups of communities.  In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impacts to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets.  The Company defines same-property NOI as same-property revenue less same-property operating expenses, including property taxes.  Please see the reconciliation of earnings from operations to same-property NOI, which in the table below is the NOI for stabilized properties consolidated by the Company for the periods presented:

	Three months ended March 31,
	2013			2012
Earnings from operations	$	47,107		$	39,980
Adjustments:
General and administrative		6,626			5,400
Cost of management and other fees		1,701			1,640
Depreciation		47,144			40,734
Management and other fees from affiliates		(2,948	)		(2,444	)
Net operating income		99,630			85,310
Less: Non same-property net operating income		(11,623	)		(2,360	)
Same-property net operating income	$	88,007		$	82,950

Item 3: Quantitative and Qualitative Disclosures About Market Risks

Interest Rate Hedging Activities

The Company’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements or other identified risks.  To accomplish this objective, the Company uses interest rate swaps as part of its cash flow hedging strategy.  As of March 31, 2013, the Company has entered into ten interest rate swap contracts to mitigate the risk of changes in the interest-related cash outflows on $300.0 million of the variable rate five-year unsecured term debt.  As of March 31, 2013, the Company also had $201.6 million of variable rate indebtedness, of which $187.4 million is subject to interest rate cap protection.   All of the Company’s derivative instruments are designated as cash flow hedges, and the Company does not have any fair value hedges as of March 31, 2013.  The following table summarizes the notional amount, carrying value, and estimated fair value of the Company’s derivative instruments used to hedge interest rates as of March 31, 2013.  The notional amount represents the aggregate amount of a particular security that is currently hedged at one time, but does not represent exposure to credit, interest rates or market risks.  The table also includes a sensitivity analysis to demonstrate the impact on the Company’s derivative instruments from an increase or decrease in 10-year Treasury bill interest rates by 50 basis points, as of March 31, 2013.

					Carrying and			Estimated Carrying Value
	Notional		Maturity		Estimated Fair				+ 50			- 50
(Dollars in thousands)	Amount		Date Range		Value			Basis Points			Basis Points
Cash flow hedges:
Interest rate swaps	$	300,000		2016-2017	$	(6,107	)	$	(311	)	$	(10,760	)
Interest rate caps		187,788		2013-2018		-			63			-
Total cash flow hedges	$	487,788		2013-2018	$	(6,107	)	$	(248	)	$	(10,760	)

Interest Rate Sensitive Liabilities

The Company is exposed to interest rate changes primarily as a result of its lines of credit and long-term tax exempt variable rate debt and unsecured term debt.  The Company’s interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. To achieve its objectives the Company borrows primarily at fixed rates and may enter into derivative financial instruments such as interest rate swaps, caps and treasury locks in order to mitigate its interest rate risk on a related financial instrument. The Company does not enter into derivative or interest rate transactions for speculative purposes.

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The Company’s interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts and weighted average interest rates by year of expected maturity to evaluate the expected cash flows.

For the Years Ended	2013				2014			2015			2016				2017				Thereafter				Total			Fair value
(In thousands)
Fixed rate debt	$	37,811				47,717			68,555			162,589				224,646				1,578,329			$	2,119,647		$	2,211,356
Average interest rate		5.6	%			5.2	%		5.2	%		4.5	%			5.5	%			5.4	%			5.3	%
Variable rate debt	$	19,420		(1)		-			102,300			200,000		(2)		150,000		(2)		182,171		(2)	$	653,891		$	632,704
Average interest rate		1.2	%			0.0	%		2.1	%		2.6	%			2.6	%			1.6	%			2.2	%

 (1) $187.4 million subject to interest rate caps.

(2) $300.0 million subject to interest rate swap agreements.

The table incorporates only those exposures that exist as of March 31, 2013; it does not consider those exposures or positions that could arise after that date. As a result, our ultimate realized gain or loss, with respect to interest rate fluctuations and hedging strategies would depend on the exposures that arise prior to settlement.

Item 4: Controls and Procedures

As of March 31, 2013, we carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2013, our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such disclosure controls and procedures were also effective to ensure that information required to be disclosed in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There were no changes in the Company's internal control over financial reporting, that occurred during the quarter ended March 31, 2013, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Part II -- Other Information

Item 1: Legal Proceedings

Recently there has been an increasing number of lawsuits against owners and managers of apartment communities alleging personal injury and property damage caused by the presence of mold in residential real estate.  Some of these lawsuits have resulted in substantial monetary judgments or settlements.  The Company has been sued for mold related matters and has settled some, but not all, of such matters.  Insurance carriers have reacted to mold related liability awards by excluding mold related claims from standard policies and pricing mold endorsements at prohibitively high rates.  The Company has, however, purchased pollution liability insurance, which includes some coverage for mold.  The Company has adopted policies for promptly addressing and resolving reports of mold when it is detected, and to minimize any impact mold might have on residents of the property.  The Company believes its mold policies and proactive response to address any known existence, reduces its risk of loss from these cases.  There can be no assurances that the Company has identified and responded to all mold occurrences, but the Company promptly addresses all known reports of mold.  Liabilities resulting from such mold related matters are not expected to have a material adverse effect on the Company’s financial condition, results of operations or cash flows.  As of March 31, 2013, no potential liabilities for mold and other environmental liabilities are quantifiable and an estimate of possible loss cannot be made.

The Company carries comprehensive liability, fire, extended coverage and rental loss insurance for each of the Company’s communities.  Insured risks for comprehensive liability covers claims in excess of $100,000 per incident, and property insurance covers losses in excess of a $5.0 million deductible per incident.  There are, however, certain types of extraordinary losses, such as, for example, losses for earthquake, for which the Company does not have insurance. Substantially all of the Company’s properties are located in areas that are subject to earthquakes.

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The Company is subject to various other lawsuits in the normal course of its business operations.  Such lawsuits could, but are not expected to, have a material adverse effect on the Company’s financial condition, results of operations or cash flows.

Item 1A: Risk Factors

There were no material changes to the Risk Factors disclosed in Item IA of the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 as filed with the SEC and available at www.sec.gov.

Item 6: Exhibits

A. Exhibits

4.1 Indenture, dated April 15, 2013, among Essex Portfolio, L.P., Essex Property Trust, Inc., and U.S. Bank National Association, as trustee, including the form of 3.25% Senior   Notes due 2023 and the guarantee thereof, attached as Exhibit 4.1 to the Form 8-K, filed on April 15, 2013 and incorporated herein by reference.

10.1 Essex Property Trust, Inc. Executive Severance Plan (as Amended and Restated effective March 12, 2013), attached as Exhibit 10.1 to the Form 8-K, filed on March 18, 2013, and incorporated herein by reference.*

10.2 Form of Equity Distribution Agreement between Essex Property Trust, Inc. and various entities, dated March 29, 2013, attached as Exhibit 10.1 to the Form 8-K, filed on April 2, 2013, and incorporated herein by reference.

10.3 Second  Amendment to Amended and Restated Revolving Credit Agreement, dated August 30, 2012.

10.4 Third Amendment to Amended and Restated Revolving Credit Agreement, dated January 22, 2013.

12.1 Ratio of Earnings to Fixed Charges.

31.1 Certification of Michael J. Schall, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 Certification of Michael T. Dance, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 Certification of Michael J. Schall, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 Certification of Michael T. Dance, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Management contract or compensatory plan or arrangement

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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 thereunto duly authorized.

ESSEX PROPERTY TRUST, INC.

(Registrant)

Date: May 3, 2013

By:  /S/ BRYAN G. HUNT

Bryan G. Hunt

First Vice President, Chief Accounting Officer

By:  /S/ MICHAEL T. DANCE

Michael T. Dance

Executive Vice President, Chief Financial Officer

(Authorized Officer, Principal Financial Officer)

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EX-10.3

EXHIBIT 10.3

SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

THIS SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this "Second Amendment") is made as of August 30, 2012 (the "Effective Date"), by and among ESSEX PORTFOLIO, L.P., a California limited partnership ("Borrower"), the lenders which are parties hereto (collectively, "Lenders") and PNC BANK, NATIONAL ASSOCIATION, as administrative agent under the Credit Agreement (in such capacity, "Administrative Agent") and L/C Issuer.

BACKGROUND

A.Administrative Agent, Lenders, and Borrower entered into that certain Amended and Restated Revolving Credit Agreement, dated as of September 16, 2011, as amended by that certain First Amendment to Amended and Restated Credit Agreement, dated as of May 31, 2012 (as so amended, the "Credit Agreement"), pursuant to which Lenders agreed to make revolving credit loans to Borrower in an aggregate outstanding amount of up to Four Hundred Twenty Five Million Dollars ($425,000,000) (the "Credit Line").

B.Borrower has requested that Lenders and Administrative Agent modify the Credit Agreement to modify the negative pledge and limitations on affiliate indebtedness covenants contained therein. Lenders and Administrative Agent are willing to make such modifications to the Credit Agreement, all on the terms and subject to the conditions herein set forth.

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:

AGREEMENT

1.   Terms. Capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement.

2.   Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows:

(a)        Sections 6.14(a) and (b) of the Credit Agreement are hereby amended and restated to read in full as follows:

"(a) Borrower shall not, nor permit its subsidiaries to, create, assume, or allow any Lien (including any judicial lien) on any Unencumbered Property, and neither Borrower nor Guarantor shall create, assume or allow any Lien (including any judicial lien) on Borrower's or Guarantor's direct or indirect ownership interests in any of their respective subsidiaries, except for Permitted Liens; it being understood and agreed by Borrower, Guarantor (as a signatory hereto in its capacity as the general partner of Borrower), and the other parties hereto that nothing contained in this Section 6.14 shall be deemed or construed to prohibit Borrower and Guarantor from delivering from time to time a negative pledge covenant substantially in the form contained in this Section 6.14 under and pursuant to a third party credit agreement (including any institutional private placement note agreement) or notes issued at any time in a Rule 144A, Regulation S or public offering or exchange of such notes to the institutional creditor or creditors party to any such third party credit agreement (including any such private placement note agreement) or holders of such notes.

(b) Borrower shall not, and shall not permit any its subsidiaries to, create, assume or allow any negative pledge agreement in favor of any other Person affecting or relating to any Unencumbered Property, other than a negative pledge agreement as contemplated by Section 6.14(a) under and pursuant to a third party credit agreement (including any third party private placement note agreement) with institutional investors or under and pursuant to notes issued at any time in a Rule 144A, Regulation S or public offering or exchange of such notes. In addition, neither Borrower nor Guarantor shall incur nor permit their respective subsidiaries to incur (in this context, an "Obligor") any intercompany Indebtedness owing to Borrower, Guarantor, any such subsidiary of Borrower or Guarantor or any other Affiliate (in this context, an "Intercompany Creditor") that is in excess of $3,000,000 owing by an Obligor to any Intercompany Creditor or in excess of $10,000,000, in the aggregate, owing by the Obligors to any one or more Intercompany Creditors, unless such Indebtedness has been subordinated in right of payment to the full and prior repayment to Administrative Agent and Lenders of the Obligations pursuant to a subordination agreement in form and substance acceptable to Administrative Agent in its reasonable discretion (an "Approved Subordination Agreement"). Nothing contained in this Section 6.14(b) shall be deemed or construed to prohibit Borrower and Guarantor from delivering from time to time a subordination agreement with respect to any such intercompany Indebtedness to other institutional investors under and pursuant to any third party credit agreement (including any private placement note agreement) contemplated by this Section 6.14."

3.   Loan Documents. Except where the context clearly requires otherwise, all references to the Credit Agreement in any other Loan Document shall be to the Credit Agreement as amended by this Second Amendment.

4.  Borrower's Ratification. Borrower agrees that it has no defenses or set­offs against Lenders or their respective officers, directors, employees, agents or attorneys, with respect to the Loan Documents, all of which are in full force and effect, and that all of the terms and conditions of the Loan Documents not inconsistent herewith shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms. Borrower hereby ratifies and confirms its obligations under the Loan Documents and agrees that the execution and delivery of this Second Amendment does not in any way diminish or invalidate any of its obligations thereunder.

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5.  Guarantor Ratification. Guarantor agrees that it has no defenses or set­offs against Lenders or their respective officers, directors, employees, agents or attorneys, with respect to the Guaranty, which is in full force and effect, and that all of the terms and conditions of the Guaranty not inconsistent herewith shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms. Guarantor hereby ratifies and confirms its obligations under the Guaranty and agrees that the execution and delivery of this Second Amendment does not in any way diminish or invalidate any of its obligations thereunder.

6.   Representations and Warranties. Borrower hereby represents and warrants to Lenders that:

(a)  The representations and warranties made in the Credit Agreement, as amended by this Second Amendment, are true and correct in all material respects as of the date hereof;

(b)  After giving effect to this Second Amendment, no Default or Event of Default under the Credit Agreement or the other Loan Documents exists on the date hereof;

(c)  This Second Amendment has been duly authorized, executed and delivered by Borrower so as to constitute the legal, valid and binding obligations of Borrower, enforceable in accordance with its terms, except as the same may be limited by insolvency, bankruptcy, reorganization or other laws relating to or affecting the enforcement of creditors' rights or by general equitable principles;

(d)  The Joinder Pages to this Second Amendment have been duly authorized, executed and delivered by Guarantor; and

(e)  No material adverse change in the business, assets, operations, condition (financial or otherwise) or prospects of Borrower, Guarantor or any of their subsidiaries or Affiliates has occurred since the date of the last financial statements of the aforementioned entities which were delivered to Administrative Agent.

All of the above representations and warranties shall survive the making of this Second Amendment.

7.   Conditions Precedent. The effectiveness of the amendments set forth herein is subject to the fulfillment, to the satisfaction of Administrative Agent and its counsel, of the following conditions precedent:

(a)        Borrower shall have delivered to Administrative Agent the following, all of which shall be in form and substance satisfactory to Administrative Agent and shall be duly completed and executed (as applicable):

(i)           This Second Amendment;

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(ii)    If requested by Administrative Agent, evidence that the execution, delivery and performance by Borrower and Guarantor, as the case may be, of this Second Amendment have been duly authorized, executed and delivered by Responsible Officers of Borrower and Guarantor, as the case may be; and

(iii)   Such additional documents, certificates and information as Administrative Agent may require pursuant to the terms hereof or otherwise reasonably request.

(b)   The representations and warranties set forth in the Credit Agreement shall be true and correct in all material respects on and as of the date hereof.

(c)   After giving effect to this Second Amendment, no Default or Event of Default shall have occurred and be continuing as of the date hereof.

(d)   Borrower shall have paid to Administrative Agent, all costs and expenses of Administrative Agent in connection with preparing and negotiating this Second Amendment, including, but not limited to, reasonable attorneys' fees and costs.

(e)   Required Lenders shall have executed and delivered this Second Amendment to Administrative Agent.

8.         Miscellaneous.

(a)  All terms, conditions, provisions and covenants in the Loan Documents and all other documents delivered to Administrative Agent in connection therewith shall remain unaltered and in full force and effect except as modified or amended hereby. To the extent that any term or provision of this Second Amendment is or may be deemed expressly inconsistent with any term or provision in any Loan Document or any other document executed in connection therewith, the terms and provisions hereof shall control.

(b)  Except as expressly provided herein, the execution, delivery and effectiveness of this Second Amendment shall neither operate as a waiver of any right, power or remedy of Administrative Agent or Lenders under any of the Loan Documents nor constitute a waiver of any Default or Event of Default thereunder.

(c)  This Second Amendment constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements.

(d)  In the event any provisions of this Second Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

(e)  This Second Amendment shall be governed by and construed according to the laws of the State of California, without giving effect to any of its choice of law rules.

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(f)  This Second Amendment, when executed and delivered by Borrower, Administrative Agent and the Required Lenders, shall inure to the benefit of, and be binding upon, the parties from time to time to the Credit Agreement and their respective successors and assigns. This Second Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(g)  The headings used in this Second Amendment are for convenience of reference only, do not form a part of this Second Amendment and shall not affect in any way the meaning or interpretation of this Second Amendment.

[Signatures commence on the next page]

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IN WITNESS WHEREOF, Borrower, Administrative Agent and Lenders have caused this Second Amendment to be executed by their duly authorized officers as of the date first above written.

ESSEX PORTFOLIO, L.P.,
a California limited partnership
BY:	ESSEX PROPERTY TRUST, INC.,
	a Maryland corporation, its general partner
	By:	/s/ Mark J. Mikl
		Mark J. Mikl
		Senior Vice President

[Signature Page to Second Amendment to Amended and Restated Credit Agreement]

[Remaining signature pages have been omitted but will be provided to the SEC upon request]

JOINDER PAGE

Essex Property Trust, Inc., a Maryland corporation, as the "Guarantor" under the Credit Agreement hereby joins in the execution of this Second Amendment to make the affirmations set forth in Section 5 of this Second Amendment and to evidence its agreement to be bound by the terms and conditions of this Second Amendment applicable to it. The party executing this Joinder Page on behalf of Guarantor has the requisite power and authority, and has been duly authorized, to execute this Joinder Page on behalf of Guarantor.

ESSEX PROPERTY TRUST, INC.,
a Maryland corporation, as Guarantor
By:	/s/ Mark J. Mikl
	Mark J. Mikl
	Senior Vice President

EX-10.4

EXHIBIT 10.4

THIRD AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

THIS THIRD AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT (this "Third Amendment") is made as of January 22, 2013 (the "Effective Date"), by and among ESSEX PORTFOLIO, L.P., a California limited partnership ("Borrower"), the lenders which are parties hereto (collectively, "Lenders") and PNC BANK, NATIONAL ASSOCIATION, as administrative agent under the Credit Agreement (in such capacity, "Administrative Agent") and L/C Issuer.

BACKGROUND

A.       Administrative Agent, Lenders, and Borrower entered into that certain Amended and Restated Revolving Credit Agreement, dated as of September 16, 2011, as amended by that certain First Amendment to Amended and Restated Revolving Credit Agreement, dated as of May 31, 2012, as further amended by that certain Second Amendment to Amended and Restated Revolving Credit Agreement, dated as of August 30, 2012 (as so amended, the "Credit Agreement"), pursuant to which Lenders agreed to make revolving credit loans to Borrower in an aggregate outstanding amount of up to Five Hundred Million Dollars ($500,000,000) (the "Credit Line").

B.        Borrower has requested that Lenders and Administrative Agent modify the Credit Agreement to, among other things, (i) increase the Credit Line to the maximum principal amount of Six Hundred Million Dollars ($600,000,000) (the "Increased Commitment Amount") and (ii) to increase the Commitment of a certain existing Lender under the Credit Agreement (the "Existing Lender") and to add an additional Lender under the Credit Agreement (the "Additional Lender"). The Existing Lender and the Additional Lender are identified on Exhibit A attached hereto. Lenders and Administrative Agent are willing to make such modifications to the Credit Agreement, all on the terms and subject to the conditions herein set forth.

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:

AGREEMENT

1.         Terms. Capitalized terms used herein and not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement.

2.         Amendments to Credit Agreement. The Credit Agreement is hereby amended as follows:

(a)        The definition of "Maximum Commitment Amount" in Article 1 is hereby amended and restated to read in full as follows:

""Maximum Commitment Amount" means, at any time, an amount equal to Six Hundred Million Dollars ($600,000,000), subject to decrease pursuant to the provisions of Section 2.7."

(b)       To give effect to the increase in the Maximum Commitment Amount hereunder, the joinder of the Additional Lender and the changes in the Commitment of the Existing Lender, Schedule 1.1 to the Credit Agreement is hereby amended and replaced with Schedule 1.1 attached hereto.

3.        Loan Documents. Except where the context clearly requires otherwise, all references to the Credit Agreement in any other Loan Document shall be to the Credit Agreement as amended by this Third Amendment.

4.        Borrower's Ratification. Borrower agrees that it has no defenses or set­offs against Lenders or their respective officers, directors, employees, agents or attorneys, with respect to the Loan Documents, all of which are in full force and effect, and that all of the terms and conditions of the Loan Documents not inconsistent herewith shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms. Borrower hereby ratifies and confirms its obligations under the Loan Documents and agrees that the execution and delivery of this Third Amendment does not in any way diminish or invalidate any of its obligations thereunder.

5.        Guarantor Ratification. Guarantor agrees that it has no defenses or set­offs against Lenders or their respective officers, directors, employees, agents or attorneys, with respect to the Guaranty, which is in full force and effect, and that all of the terms and conditions of the Guaranty not inconsistent herewith shall remain in full force and effect unless and until modified or amended in writing in accordance with their terms. Guarantor hereby ratifies and confirms its obligations under the Guaranty and agrees that the execution and delivery of this Third Amendment does not in any way diminish or invalidate any of its obligations thereunder.

6.         Representations and Warranties. Borrower hereby represents and warrants to Lenders that:

(a)        The representations and warranties made in the Credit Agreement, as amended by this Third Amendment, are true and correct in all material respects as of the date hereof;

(b)       After giving effect to this Third Amendment, no Default or Event of Default under the Credit Agreement or the other Loan Documents exists on the date hereof;

(c)       This Third Amendment has been duly authorized, executed and delivered by Borrower so as to constitute the legal, valid and binding obligations of Borrower, enforceable in accordance with its terms, except as the same may be limited by insolvency, bankruptcy, reorganization or other laws relating to or affecting the enforcement of creditors' rights or by general equitable principles;

(d)        The Joinder Pages to this Third Amendment have been duly authorized, executed and delivered by Guarantor; and

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(e)        No material adverse change in the business, assets, operations, condition (financial or otherwise) or prospects of Borrower, Guarantor or any of their subsidiaries or Affiliates has occurred since the date of the last financial statements of the aforementioned entities which were delivered to Administrative Agent.

All of the above representations and warranties shall survive the making of this Third Amendment.

7.         Conditions Precedent. The effectiveness of the amendments set forth herein is subject to the fulfillment, to the satisfaction of Administrative Agent and its counsel, of the following conditions precedent:

(a)        Borrower shall have delivered to Administrative Agent the following, all of which shall be in form and substance satisfactory to Administrative Agent and shall be duly completed and executed (as applicable):

(i)          This Third Amendment;

(ii)         The Replacement Note and the Additional Note, as more fully set forth in Section 8 below;

(iii)        If requested by Administrative Agent, evidence that the execution, delivery and performance by Borrower and Guarantor, as the case may be, of this Third Amendment have been duly authorized, executed and delivered by Responsible Officers of Borrower and Guarantor, as the case may be; and

(iv)        Such additional documents, certificates and information as Administrative Agent may require pursuant to the terms hereof or otherwise reasonably request.

(b)        The representations and warranties set forth in the Credit Agreement shall be true and correct in all material respects on and as of the date hereof.

(c)        After giving effect to this Third Amendment, no Default or Event of Default shall have occurred and be continuing as of the date hereof.

(d)       Borrower shall have paid to Administrative Agent, (i) any fees required to be paid by Borrower to Administrative Agent for its benefit or the benefit of the Lenders in connection with the Increased Commitment Amount as agreed to by Borrower and Administrative Agent; and (ii) all other costs and expenses of Administrative Agent in connection with preparing and negotiating this Third Amendment, including, but not limited to, reasonable attorneys' fees and costs.

8.         Replacement and Additional Note. Concurrently with the execution and delivery of this Third Amendment, Borrower shall execute and deliver (i) to the Existing Lender, a replacement Revolving Note in the face amount of the Increased Commitment of the Existing Lender as set forth on Exhibit A attached hereto and (ii) to the Additional Lender, a Revolving Note in the face amount of the Commitment of the Additional Lender as set forth on Exhibit A attached hereto, in each case in the form of Exhibit G-l attached to the Credit Agreement. The replacement Revolving Note to the Existing Lender shall evidence any outstanding Loans of the Existing Lender and upon receipt thereof the existing Revolving Note to the Existing Lender shall be cancelled and returned to Borrower.

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9.         Joinder by Additional Lender. Effective on the Effective Date, the Additional Lender hereby joins in and becomes a party to the Credit Agreement with the Commitment set forth opposite its name on Exhibit A attached hereto, agrees to be bound by the provisions of the Credit Agreement and shall have the rights and obligations of a Lender thereunder and under any other document issued in connection therewith. The Additional Lender hereby makes and agrees to be bound by all of the terms and conditions set forth in Section 10.5(b) of the Credit Agreement as if it were an assignee of its Commitment under the provisions of Section 10.5 of the Credit Agreement.

10.       Adjusting Payments. As of the Effective Date, Administrative Agent shall notify each Lender as to the adjusting payments which will be required to be made to the outstanding Loans of each Lender in order to give effect to the increase in the Maximum Commitment Amount and the increase to and addition of the individual Commitments of certain Lenders pursuant to this Third Amendment so that after such adjusting payments are made each Lender's outstanding Loans evidenced by such Lender's Revolving Note shall be in an amount equal to its Pro Rata Share of all outstanding Loans. On the Effective Date each Lender agrees to pay to the other Lenders the amounts, if any, specified by Administrative Agent in such notice.

11.       Miscellaneous.

(a)        All terms, conditions, provisions and covenants in the Loan Documents and all other documents delivered to Administrative Agent in connection therewith shall remain unaltered and in full force and effect except as modified or amended hereby. To the extent that any term or provision of this Third Amendment is or may be deemed expressly inconsistent with any term or provision in any Loan Document or any other document executed in connection therewith, the terms and provisions hereof shall control.

(b)       Except as expressly provided herein, the execution, delivery and effectiveness of this Third Amendment shall neither operate as a waiver of any right, power or remedy of Administrative Agent or Lenders under any of the Loan Documents nor constitute a waiver of any Default or Event of Default thereunder.

(c)       This Third Amendment constitutes the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements.

(d)       In the event any provisions of this Third Amendment shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

(e)        This Third Amendment shall be governed by and construed according to the laws of the State of California, without giving effect to any of its choice of law rules.

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(f)        This Third Amendment shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and assigns and may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

(g)       The headings used in this Third Amendment are for convenience of reference only, do not form a part of this Third Amendment and shall not affect in any way the meaning or interpretation of this Third Amendment.

[Signatures commence on the next page]

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IN WETNESS WHEREOF, Borrower, Administrative Agent and Lenders have caused this Third Amendment to be executed by their duly authorized officers as of the date first above written.

ESSEX PORTFOLIO, L.P.,
a California limited partnership
BY:	ESSEX PROPERTY TRUST, INC.,
	A Maryland corporation, its general partners
	By:	/s/ Mark J. Mikl
		Name: Mark J. Mikl
		Title: Senior Vice President

[Signature Page to Third Amendment to Amended and Restated Credit Agreement]

[Remaining signature pages have been omitted but will be provided to the SEC upon request]

JOINDER PAGE

Essex Property Trust, Inc., a Maryland corporation, as the "Guarantor" under the Credit Agreement hereby joins in the execution of this Third Amendment to make the affirmations set forth in Section 5 of this Third Amendment and to evidence its agreement to be bound by the terms and conditions of this Third Amendment applicable to it. The party executing this Joinder Page on behalf of Guarantor has the requisite power and authority, and has been duly authorized, to execute this Joinder Page on behalf of Guarantor.

ESSEX PROPERTY TRUST, INC.,
A Maryland corporation, as Guarantor
By:	/s/ Mark J. Mikl
	Name: Mark J. Mikl
	Title: Senior Vice President

EXHIBIT A TO THIRD AMENDMENT

EXISTING LENDER

Existing Lender	Original Commitment		Increased Commitment
Citibank, N.A.	$	25,000,000	$	35,000,000
TOTAL:	$	60,000,000

ADDITIONAL LENDER

Additional Lender	Commitment
JP MORGAN CHASE BANK, N.A.	$	65,000,000

A-1

SCHEDULE 1.1 TO CREDIT AGREEMENT

LENDERS' NAMES, COMMITMENTS AND PRO RATA SHARES

Lender	Commitment		Pro Rata Share
PNC Bank, National Association	$	75,000,000		12.50	%
Bank of West	$	40,000,000		6.67	%
Union Bank, N.A.	$	60,000,000		10.00	%
Wells Fargo, National Association	$	60,000,000		10.00	%
Capital One, N.A.	$	30,000,000		5.00	%
Comerica Bank	$	30,000,000		5.00	%
US Bank, National Association	$	60,000,000		10.00	%
Keybank, N.A.	$	40,000,000		6.67	%
Compass Bank	$	30,000,000		5.00	%
Bank of Montreal	$	40,000,000		6.67	%
Citibank, N.A.	$	60,000,000		10.00	%
HSBC Bank USA, N.A.	$	10,000,000		1.66	%
JPMorgan Chase Bank, N.A.	$	65,000,000		10.83	%
Total	$	600,000,000		100.00	%

1.1 - 1

EX-12

Exhibit 12.1

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Schedule of computation of Ratio and Earnings to Fixed Charges and Preferred Stock Dividends

(Dollars in thousands, except ratios)

	Quarter
	ended
	March 31			Years ended December 31
	2013			2012			2011			2010			2009				2008
Earnings:
Income before discontinued operations	$	29,703		$	129,553		$	48,868		$	49,162		$	43,279			$	78,625
Gain on sales of real estate		-			-			-			-			(103	)			(4,578	)
Interest and amortization expense		28,141			111,888			103,168			87,584			86,016				85,063
Total earnings	$	57,844		$	241,441		$	152,036		$	136,746		$	129,192			$	159,110
Fixed charges:
Interest and amortization expense	$	28,141		$	111,888		$	103,168		$	87,584		$	86,016			$	85,063
Capitalized interest		3,695			10,346			8,240			9,486			10,463				10,908
Preferred stock dividends		1,368			5,472			4,753			2,170			4,860				9,241
Perpetual preferred unit distributions		-			-			1,650			6,300			6,300				9,909
Total fixed charges and preferred stock dividends and preferred unit distributions	$	33,204		$	127,706		$	117,811		$	105,540		$	107,639			$	115,121
Ratio of earnings to fixed charges (excluding preferred stock dividends and preferred unit distributions)		1.82	X		1.98	X		1.36	X		1.41	X		1.34		X		1.66		X
Ratio of earnings to combined fixed charges and preferred stock dividends and preferred unit distributions		1.74	X		1.89	X		1.29	X		1.30	X		1.20		X		1.38		X

EX-31.1

EXHIBIT 31.1

ESSEX PROPERTY TRUST, INC.

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael J. Schall, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Essex Property Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:      May 3, 2013

/s/    Michael J. Schall

Michael J. Schall

Chief Executive Officer and President,

Essex Property Trust, Inc.

EX-31.2

EXHIBIT 31.2

ESSEX PROPERTY TRUST, INC.

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael T. Dance, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Essex Property Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure control and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal controls over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5) The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:      May 3, 2013

/s/    Michael T. Dance

Michael T. Dance

Chief Financial Officer, Executive Vice President,

Essex Property Trust, Inc.

EX-32.1

Exhibit 32.1

ESSEX PROPERTY TRUST, INC.

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350 as adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), I, Michael J. Schall, hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended March 31, 2013 (the “Form 10-Q”) of Essex Property Trust, Inc. fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Essex Property Trust, Inc. at the dates of and for the periods presented.

Date: May 3, 2013	/s/ Michael J. Schall
	Michael J. Schall
	Chief Executive Officer and President,
	Essex Property Trust, Inc.

EX-32.2

Exhibit 32.2

ESSEX PROPERTY TRUST, INC.

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350 as adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), I, Michael T. Dance, hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended March 31, 2013 (the “Form 10-Q”) of Essex Property Trust, Inc. fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Essex Property Trust, Inc. at the dates of and for the periods presented.

Date: May 3, 2013	/s/ Michael T. Dance
	Michael T. Dance
	Chief Financial Officer, Executive Vice President,
	Essex Property Trust, Inc.

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 Segment	Mar. 31, 2012	Dec. 31, 2012
Segment Information [Abstract]
Number of reportable operating segments defined by geographical regions	3
Revenues from External Customers and Long-Lived Assets [Line Items]
Property revenues	$ 146,394	$ 125,474
Net operating income	99,630	85,310
Management and other fees from affiliates	2,948	2,444
Depreciation	(47,144)	(40,734)
General and administrative	(6,626)	(5,400)
Cost of management and other fees	(1,701)	(1,640)
Interest expense before amortization	(25,211)	(24,658)
Amortization expense	(2,930)	(2,871)
Interest and other income	5,023	2,413
Equity income from co-investments	4,211	2,340
Gain on sale of land	1,503	0
Income from continuing operations	29,703	17,204
Net reportable operating segment - real estate assets	4,094,699		3,952,155
Real estate under development	65,568		66,851
Co-investments	579,654		571,345
Cash and cash equivalents, including restricted cash	55,634		42,126
Marketable securities	80,432		92,713
Notes and other receivables	11,359		66,163
Other non-segment assets	49,113		55,870
Total assets	4,936,459		4,847,223
Southern California [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property revenues	65,830	58,560
Net operating income	44,434	39,830
Net reportable operating segment - real estate assets	1,662,493		1,675,265
Northern California [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property revenues	50,770	41,622
Net operating income	35,283	28,942
Net reportable operating segment - real estate assets	1,632,994		1,489,095
Seattle Metro [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property revenues	26,328	22,309
Net operating income	17,373	14,831
Net reportable operating segment - real estate assets	711,458		699,465
Other Real Estate Assets [Member]
Revenues from External Customers and Long-Lived Assets [Line Items]
Property revenues	3,466	2,983
Net operating income	2,540	1,707
Net reportable operating segment - real estate assets	$ 87,754		$ 88,330

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Net Income Per Common Share (Tables)

3 Months Ended

Mar. 31, 2013

Net Income Per Common Share [Abstract]

Net Income Per Common Share

(Amounts in thousands, except per share and unit data)

	Three Months Ended						Three Months Ended
	March 31, 2013						March 31, 2012
			Weighted-		Per				Weighted-		Per
			average		Common				average		Common
			Common		Share				Common		Share
	Income		Shares		Amount		Income		Shares		Amount
Basic:
Income from continuing operations available to common stockholders	$	25,203		37,004	$	0.68	$	13,307		34,028	$	0.39
Income from discontinued operations available to common stockholders		-		37,004		-		9,415		34,028		0.28
		25,203			$	0.68		22,722			$	0.67
Effect of Dilutive Securities (1)		-		88				54		124
Diluted:
Income from continuing operations available to common stockholders		25,203		37,092	$	0.68		13,361		34,152	$	0.39
Income from discontinued operations available to common stockholders		-		37,092		-		9,415		34,152		0.28
	$	25,203			$	0.68	$	22,776			$	0.67

(1) Weighted average convertible limited partnership units of 2,079,447 and 2,245,166, which include vested Series Z incentive units, for the three months ended March 31, 2013, and 2012, respectively, were not included in the determination of diluted EPS because they were anti-dilutive.  Income allocated to convertible limited partnership units, which includes vested Series Z units, aggregating $1.5 million and $1.6 million for the three months ended March 31, 2013 and 2012, respectively, , have been excluded from income available to common stock holders for the calculation of diluted income per common share since these units are excluded from the diluted weighted average common shares for the period as the effect was anti-dilutive.  The Company has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities.

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Commitments and Contingencies (Details) (USD $)	3 Months Ended
	Mar. 31, 2013 Extension
Guarantor Obligations [Line Items]
Number of non cancelable ground leases	6
Total minimum lease commitments under land leases and operating leases for next five years	$ 1,700,000
Number of communities with indemnification agreements from third parties for potential environmental clean up costs	3
Comprehensive liabilities insurance deductible per incident	100,000
Property casualty insurance, deductible per incident, maximum	5,000,000
Loan and Construction Completion Guarantee [Member] | Construction Contracts [Member]
Guarantor Obligations [Line Items]
Mortgage loan, maturity date	Jul. 01, 2014
Debt instrument, number of extensions	2
Debt instrument, term of extensions options	1 year
Maximum exposure of the guarantee	70,000,000
Payment Guarantee [Member] | Construction Contracts [Member]
Guarantor Obligations [Line Items]
Maximum exposure of the guarantee	$ 68,000,000

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Significant Transactions During the First Quarter of 2013 and Subsequent Events

3 Months Ended

Mar. 31, 2013

Significant Transactions During the First Quarter of 2013 and Subsequent Events [Abstract]

Significant Transactions During the First Quarter of 2013 and Subsequent Events

(2)  Significant Transactions During the First Quarter of 2013 and Subsequent Events

Acquisitions

In January 2013, the Company acquired Annaliese, a 56 unit community located in Seattle, Washington for $19.0 million.  The property was built in 2009 and is located in the South Lake Union submarket.

In February 2013, the Company purchased Fox Plaza, a 444 unit property located in San Francisco, California, for $135.0 million. Built in 1968, the property is a 29 story high rise tower with Fox Plaza apartments located on floors 14 through 29. The purchase price did not include floors 1 through 12 of commercial office space but did include an adjacent two story building comprised of approximately 37,800 square feet of space leased to retail and office tenants and a two story underground parking garage comprised of 405 stalls.

Common Stock

During the first quarter, the Company sold 817,445 shares of common stock for $122.9 million, net of commissions, at an average per share price of $151.82.  Subsequent to quarter end, the Company has not sold any shares of common stock.

Unsecured Bond Offering

In April 2013, the Company issued $300 million aggregate principal amount of its 3.25% Senior Notes due on May 1, 2023 (the "Notes").  The net proceeds from the issuance of Notes were approximately $295.2 million, after deducting the underwriters' discounts and estimated offering expenses.

Dispositions

In January, the Company sold the land parcel held for future development located in Palo Alto, California for $9.1 million, resulting in a gain of $1.5 million.

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Co-investments (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	$ 579,654,000		$ 571,345,000
Preferred return rate (in hundredths)	9.50%
Preferred equity redemption	9,700,000
Early redemption penalties	400,000
Balance sheets: [Abstract]
Rental properties and real estate under development	65,568,000		66,851,000
Other Liabilities	22,625,000		22,167,000
Statement of operations: [Abstract]
Interest expense	(25,211,000)	(24,658,000)
General and administrative	(6,626,000)	(5,400,000)
Depreciation and Amortization	(2,930,000)	(2,871,000)
Membership interest in Wesco I [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	143,051,000		143,874,000
Partnership interest in Fund II [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	27,121,000		53,601,000
Membership interest in a limited liability company that owns Essex Skyline at MacArthur Place [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	18,714,000		18,752,000
Membership interest in Wesco III [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	9,821,000		9,941,000
Total operating co investments [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	198,707,000		226,168,000
Membership interests in limited liability companies that own and are developing Epic, Connolly Station, Mosso I. & II. , and Elkhorn [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	221,247,000		186,362,000
Membership interest in a limited liability company that owns and is developing Expo [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	16,928,000		16,552,000
Membership interests in limited liability companies that own and are developing Fountain at La Brea and Santa Monica at La Brea [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Preferred return rate (in hundredths)	10.00%
Total development co investments [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	238,175,000		202,914,000
Membership interest in Wesco II that owns a preferred equity interest in Park Merced with a preferred return of 10.1% [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	92,550,000		91,843,000
Preferred return rate (in hundredths)	10.10%
Preferred interest in limited liability company that owns an apartment community in downtown Los Angeles with a preferred return 10%
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	13,068,000		13,068,000
Preferred interests in related party limited liability companies that owns Sage at Cupertino with a preferred return of 9.5% [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	15,055,000		14,438,000
Preferred return rate (in hundredths)	9.50%
Preferred interest in a related limited liability company that owns Madison Park at Anaheim with a preferred return of 13% [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	13,232,000		13,175,000
Preferred return rate (in hundredths)	13.00%
Preferred interests in limited liability companies that own apartment communities in downtown Los Angeles with preferred returns of 9% repaid in March 2013 [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	0		9,739,000
Preferred return rate (in hundredths)	9.00%
Preferred interest in related limited liability company that owns an apartment deveopment in Redwood City with a preferred return of 9.5% [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	8,867,000		0
Preferred return rate (in hundredths)	9.50%
Total preferred interest investments [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	142,772,000		142,263,000
Preferred equity Interest investment [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	8,600,000
Total co investment [Member]
Investments in joint ventures accounted for under the equity method of accounting [Abstract]
Total co-investment	579,654,000		571,345,000
Balance sheets: [Abstract]
Rental properties and real estate under development	1,709,065,000		1,745,147,000
Other Assets	85,039,000		168,061,000
Total assets	1,794,104,000		1,913,208,000
Debt	785,459,000		820,895,000
Other Liabilities	54,877,000		91,922,000
Equity	953,768,000		1,000,391,000
Total liabilities and equity	1,794,104,000		1,913,208,000
Company's share of equity	579,654,000		571,345,000
Statement of operations: [Abstract]
Property revenues	27,859,000	34,323,000
Property operating expenses	(9,828,000)	(13,137,000)
Net property operating income	18,031,000	21,186,000
Interest expense	(6,778,000)	(8,545,000)
General and administrative	(1,514,000)	(796,000)
Depreciation and Amortization	(11,019,000)	(13,896,000)
Net Loss	(1,280,000)	(2,051,000)
Company's share of net income (loss)	$ 4,211,000	$ 2,340,000

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Significant Transactions During the First Quarter of 2013 and Subsequent Events (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Jan. 31, 2013 Annaliese [Member] Unit	Feb. 28, 2013 Fox Plaza [Member] Unit
Acquisitions [Abstract]
Cost of acquired entity			$ 19,000,000	$ 135,000,000
Number of units			56	444
Common stock [Abstract]
Number of common shares sold (in shares)	817,445
Proceeds from sale of common shares	122,905,000
Average price per share of common shares sold (dollars per share)	$ 151.82
Unsecured Bond Offering [Abstract]
Aggregate principal amount of debt issued	300,000,000
Coupon Rate (in hundredths)	3.25%
Net proceeds from issuance of notes	295,200,000
Dispositions [Abstract]
Sale of land held for future development	9,100,000
Gain on sale of land	$ 1,503,000	$ 0

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Notes and Other Receivables (Details) (USD $)	3 Months Ended
	Mar. 31, 2013		Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	$ 11,359,000		$ 66,163,000
Income related acceleration	800,000
Variable rate basis	LIBOR + 2.5%
Basis spread on rate (in hundredths)	2.50%
Proceeds from notes receivable	29,500,000
Note receivable contributed to Elkhorn co investment	27,300,000
Short term Bridge Loan	26,000,000
Secured Due March 2013 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	0		10,800,000
Stated interest rate (in hundredths)	8.80%
Secured Due November 2013 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	971,000		971,000
Stated interest rate (in hundredths)	8.00%
Secured Due December 2014 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	3,212,000	[1]	3,212,000	[1]
Stated interest rate (in hundredths)	4.00%
Secured Effective March 2013 [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	0		18,499,000
Stated interest rate (in hundredths)	9.60%
Note and Other Receivables From Affiliates [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	4,085,000		28,896,000
Other Receivables [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable	$ 3,091,000		$ 3,785,000

[1] The borrower funds an impound account for capital replacement.

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Related Party Transactions (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Related Party Transactions [Abstract]
Management and other fees from affiliates including management, property management, development and redevelopment fees from co-investments, net of intercompany amounts eliminated by company	$ 2.8	$ 2.3
Marcus and Millichamp Company TMMC Affiliate [Member]
Related Party Transaction [Line Items]
Related party preferred equity interest investment	8.6
Wesco III [Member]
Related Party Transaction [Line Items]
Short term bridge loan	$ 26.0

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Organization and Basis of Presentation

3 Months Ended

Mar. 31, 2013

Organization and Basis of Presentation [Abstract]

Organization and Basis of Presentation

(1)  Organization and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. (the "Company"), which include the accounts of the Company and Essex Portfolio, L.P. (the "Operating Partnership," which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q.  In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented have been included and are normal and recurring in nature.  These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2012.

All significant intercompany balances and transactions have been eliminated in the condensed consolidated financial statements.

The unaudited condensed consolidated financial statements for the three months ended March 31, 2013 and 2012 include the accounts of the Company and the Operating Partnership.  The Company is the sole general partner in the Operating Partnership, with a 94.5% general partnership interest as of March 31, 2013.  Total Operating Partnership units outstanding were 2,154,510 and 2,122,381 as of March 31, 2013 and December 31, 2012, respectively, and the redemption value of the units, based on the closing price of the Company's common stock totaled $324.4 million and $311.2 million, as of March 31, 2013 and December 31, 2012, respectively.

As of March 31, 2013, the Company owned or had ownership interests in 166 apartment communities, aggregating 34,343 units, excluding the Company's ownership in preferred interest co-investments,  (collectively, the "Communities", and individually, a "Community"), five commercial buildings and eight active development projects (collectively, the "Portfolio").  The Communities are located in Southern California (Los Angeles, Orange, Riverside, San Diego, Santa Barbara, and Ventura counties), Northern California (the San Francisco Bay Area) and the Seattle metropolitan area.

Marketable Securities

The Company reports its available for sale securities at fair value, based on quoted market prices (Level 2 for the unsecured bonds and Level 1 for the common stock and investment funds, as defined by the Financial Accounting Standards Board ("FASB") standard for fair value measurements as discussed later in Note 1), and any unrealized gain or loss is recorded as other comprehensive income (loss).  Realized gains and losses, interest and dividend income, and amortization of purchase discounts are included in interest and other income on the condensed consolidated statement of operations and comprehensive income.

As of March 31, 2013 and December 31, 2012, marketable securities consisted primarily of investment-grade unsecured bonds, common stock, investments in mortgage backed securities and investment funds that invest in U.S. treasury or agency securities.  As of March 31, 2013 and December 31, 2012, the Company classified its investments in mortgage backed securities, which mature in November 2019 and September 2020, as held to maturity, and accordingly, these securities are stated at their amortized cost.  The estimated fair values of the mortgage backed securities (Level 2 securities) are approximately equal to the carrying values.

As of March 31, 2012 and December 31, 2012 marketable securities consist of the following ($ in thousands):

	March 31, 2013
	Cost/		Gross
	Amortized		Unrealized
	Cost		Gain		Carrying Value
Available for sale:
Investment-grade unsecured bonds	$	5,119	$	96	$	5,215
Investment funds - US treasuries		15,365		721		16,086
Common stock		5,642		85		5,727
Held to maturity:
Mortgage backed securities		53,404		-		53,404
Total	$	79,530	$	902	$	80,432

	December 31, 2012
	Cost/		Gross
	Amortized		Unrealized
	Cost		Gain		Carrying Value
Available for sale:
Investment-grade unsecured bonds	$	5,143	$	98	$	5,241
Investment funds - US treasuries		14,120		729		14,849
Common stock		18,917		1,704		20,621
Held to maturity:
Mortgage backed securities		52,002		-		52,002
Total	$	90,182	$	2,531	$	92,713

The Company uses the specific identification method to determine the cost basis of a security sold and to reclassify amounts from accumulated other comprehensive income for securities sold.  For the three months ended March 31, 2013, the proceeds from sales of available for sale securities totaled $20.3 million which resulted in a realized gain of $1.8 million.  For the three months ended March 31, 2012, there were no sales of available for sale securities.

Variable Interest Entities

The Company consolidates 19 DownREIT limited partnerships (comprising twelve communities) since the Company is the primary beneficiary of these variable interest entities ("VIEs").  Total DownREIT units outstanding were 1,033,474 and 1,039,431 as of March 31, 2013 and December 31, 2012, respectively, and the redemption value of the units, based on the closing price of the Company's common stock totaled $155.6 million and $152.4 million, as of March 31, 2013 and December 31, 2012, respectively.  The consolidated total assets and liabilities related to these VIEs, net of intercompany eliminations, were approximately $202.4 million and $181.1 million, respectively, as of March 31, 2013 and $201.1 million and $178.6 million, respectively, as of December 31, 2012.  Interest holders in VIEs consolidated by the Company are allocated income equal to the cash payments made to those interest holders.  The remaining results of operations are allocated to the Company.  As of March 31, 2013 and December 31, 2012, the Company did not have any other VIEs of which it was deemed to be the primary beneficiary.

Equity Based Compensation

The Company accounts for equity based compensation using the fair value method of accounting.  The estimated fair value of stock options granted by the Company is being amortized over the vesting period of the stock options.  The estimated grant date fair values of the long term incentive plan units (discussed in Note 13, "Equity Based Compensation Plans," in the Company's Form 10-K for the year ended December 31, 2012) are being amortized over the expected service periods.

Stock-based compensation expense for options and restricted stock totaled $0.6 million and $0.4 million for the three months ended March 31, 2013 and 2012, respectively.  The intrinsic value of the stock options exercised during the three months ended March 31, 2013 and 2012 totaled $0.9 million and $1.1 million, respectively.  As of March 31, 2013, the intrinsic value of the stock options outstanding totaled $14.6 million.  As of March 31, 2013, total unrecognized compensation cost related to unvested share-based compensation granted under the stock option and restricted stock plans totaled $5.8 million.  The cost is expected to be recognized over a weighted-average period of 1 to 5 years for the stock option plans and is expected to be recognized straight-line over a period of 1 to 7 years for the restricted stock awards.

The Company has adopted an incentive program involving the issuance of Series Z-1 Incentive Units of limited partnership interest in the Operating Partnership.  Stock-based compensation expense for Z-1 Units totaled $0.5 million and $0.6 million for the three months ended March 31, 2013 and 2012.  Stock-based compensation for Z-1 units capitalized totaled $0.1 million for the three months ended March 31, 2013, and 2012, respectively.  As of March 31, 2013, the intrinsic value of the Z-1 Units subject to future vesting totaled $16.1 million.  As of March 31, 2013, total unrecognized compensation cost related to Z-1 Units subject to future vesting totaled $6.8 million.  The unamortized cost is expected to be recognized up to 14 years subject to the achievement of the stated performance criteria.

Fair Value of Financial Instruments

Management believes that the carrying amounts of its amounts outstanding under lines of credit, notes receivable and notes and other receivables approximate fair value as of March 31, 2013 and December 31, 2012, because interest rates, yields and other terms for these instruments are consistent with yields and other terms currently available for similar instruments.  Management has estimated that the fair value of the Company's $2.12 billion of fixed rate debt, including unsecured bonds, at March 31, 2013 is approximately $2.21 billion and the fair value of the Company's $551.6 million of variable rate debt, excluding borrowings under the lines of credit, at March 31, 2013 is $632.7 million based on the terms of existing mortgage notes payable, unsecured bonds and variable rate demand notes compared to those available in the marketplace.  Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities and dividends payable approximate fair value as of March 31, 2013 due to the short-term maturity of these instruments.  The fair values of the Company's investments in mortgage backed securities are approximately equal to the amortized cost carrying value of these securities.  Marketable securities and derivatives are carried at fair value as of March 31, 2013.

Capitalization

The Company's capitalized internal costs related to development and redevelopment projects totaled $1.6 million and $1.5 million during the three months ended March 31, 2013 and 2012, respectively, most of which relates to development projects.  These totals include capitalized salaries of $0.6 million and $0.7 million for the three months ended March 31, 2013 and 2012, respectively.

Co-investments

The Company owns investments in joint ventures ("co-investments") in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with the accounting standards.  Therefore, the Company accounts for these investments using the equity method of accounting.  Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company's equity in earnings less distributions received and the Company's share of losses.  The significant accounting policies of the Company's co-investments entities are consistent with those of the Company in all material respects.  For preferred equity investments the Company recognizes its preferred interest as equity in earnings.

Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the consolidated statement of operations equal to the amount by which the fair-value of the co-investment interest the Company previously owned exceeds its carrying value.

A majority of the co-investments, excluding the preferred equity investments, compensate the Company for its asset management services and may provide promote distributions if certain financial return benchmarks are achieved.  Asset management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible.

Changes in Accumulated Other Comprehensive Loss, Net by Component

					Unrealized
	Change in				gains/(losses) on
	fair value and amortization of				available for sale
	derivatives				securities				Total
Balance at December 31, 2012		$	(71,658	)		$	2,397			$	(69,261	)
Other comprehensive income (loss) before reclassification			506				130				636
Amounts reclassified from accumulated other
comprehensive loss			2,018				(1,543	)			345
Net other comprehensive income (loss)			2,524				(1,629	)			981
Balance at March 31, 2013		$	(69,134	)		$	854			$	(68,280	)

Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense before amortization on the condensed consolidated statement of operations and comprehensive income.  Realized gains and losses on available for sale securities are included in interest and other income on the condensed consolidated statement of operations and comprehensive income.

Accounting Estimates

The preparation of condensed consolidated financial statements, in accordance with U.S. generally accepted accounting principles, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate portfolio, its investments in and advances to joint ventures and affiliates, its notes receivables and its qualification as a Real Estate Investment Trust ("REIT"). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions.

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Unsecured Debt and Lines of Credit (Details) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Unsecured debts and line of credit [Abstract]
Unsecured debt	$ 1,112,159,000	$ 1,112,084,000
Lines of credit	102,300,000	141,000,000
Total unsecured debt and lines of credit	1,214,459,000	1,253,084,000
Senior Notes [Abstract]
Senior Notes	300,000,000
Coupon Rate (in hundredths)	3.25%
Bonds Private Placement - Fixed Rate [Member]
Unsecured debts and line of credit [Abstract]
Unsecured debt	465,000,000	465,000,000
Weighted Average Maturity	6 years
Term Loan - Variable Rate [Member]
Unsecured debts and line of credit [Abstract]
Unsecured debt	350,000,000	350,000,000
Weighted Average Maturity	4 years
Weighted average interest rate (in hundredths)	2.60%	2.70%
Bonds Public Offering - Fixed Rate [Member]
Unsecured debts and line of credit [Abstract]
Unsecured debt	$ 297,159,000	$ 297,084,000
Weighted Average Maturity	9 years 4 months 24 days
Weighted average interest rate (in hundredths)	4.20%	4.20%
Line of Credit [Member]
Unsecured debts and line of credit [Abstract]
Weighted Average Maturity, Line of credit	2 years 8 months 12 days
Weighted average interest rate (in hundredths)	2.10%	2.30%

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Rental properties:
Land and land improvements	$ 1,054,229	$ 1,003,171
Buildings and improvements	4,167,500	4,030,501
Total Rental Properties	5,221,729	5,033,672
Less: accumulated depreciation	(1,127,030)	(1,081,517)
Net Real Estate	4,094,699	3,952,155
Real estate under development	65,568	66,851
Co-investments	579,654	571,345
Total Real Estate	4,739,921	4,590,351
Cash and cash equivalents-unrestricted	30,844	18,606
Cash and cash equivalents-restricted	24,790	23,520
Marketable securities	80,432	92,713
Notes and other receivables	11,359	66,163
Prepaid expenses and other assets	28,329	35,003
Deferred charges, net	20,784	20,867
Total assets	4,936,459	4,847,223
Liabilities and Equity
Mortgage notes payable	1,559,079	1,565,599
Unsecured debt	1,112,159	1,112,084
Lines of credit	102,300	141,000
Accounts payable and accrued liabilities	86,461	64,858
Construction payable	8,768	5,392
Dividends payable	50,396	45,052
Derivative liabilities	6,107	6,606
Other liabilities	22,625	22,167
Total liabilities	2,947,895	2,962,758
Commitments and contingencies
Cumulative convertible Series G preferred stock	4,349	4,349
Equity:
Cumulative redeemable Series H preferred stock at liquidation value	73,750	73,750
Common stock, $.0001 par value, 656,020,000 shares authorized 37,276,204 and 36,442,994 shares issued and outstanding	3	3
Additional paid-in capital	2,329,383	2,204,778
Distributions in excess of accumulated earnings	(464,391)	(444,466)
Accumulated other comprehensive loss, net	(68,280)	(69,261)
Total stockholders' equity	1,870,465	1,764,804
Noncontrolling interest	113,750	115,312
Total equity	1,984,215	1,880,116
Total liabilities and equity	$ 4,936,459	$ 4,847,223

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 29,703	$ 27,241
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of marketable securities	(1,767)	0
Co-investments	(391)	862
Amortization expense	2,930	2,871
Amortization of discount on notes receivables	(844)	(466)
Amortization of discount on marketable securities	(1,377)	(1,256)
Gain on the sales of real estate	(1,503)	(10,870)
Depreciation	47,144	40,828
Equity-based compensation	1,132	986
Changes in operating assets and liabilities:
Prepaid expenses and other assets	1,764	(2,563)
Accounts payable and accrued liabilities	8,443	14,610
Other liabilities	458	(83)
Net cash provided by operating activities	85,692	72,160
Additions to real estate:
Acquisitions of real estate	(175,950)	(38,900)
Improvements to recent acquisitions	(2,601)	(2,296)
Redevelopment	(6,573)	(8,008)
Revenue generating capital expenditures	(304)	(611)
Non-revenue generating capital expenditures	(4,019)	(1,200)
Lessor required capital expenditure	(768)	0
Acquisitions of and additions to real estate under development	(3,332)	(6,789)
Dispositions of real estate	9,051	16,816
Changes in restricted cash deposits	19,980	517
Purchases of marketable securities	(6,541)	(5,438)
Sales and maturities of marketable securities	20,335	1,348
Collections of notes and other receivables	52,473	7,164
Contributions to co-investments	(45,518)	(12,945)
Distributions from co-investments	38,030	6,291
Net cash used in investing activities	(105,737)	(44,051)
Cash flows from financing activities:
Borrowings under debt agreements	235,282	159,394
Repayment of debt	(279,854)	(177,984)
Additions to deferred charges	(716)	(293)
Equity related issuance cost	(225)	(150)
Net proceeds from stock options exercised	1,367	933
Net proceeds from issuance of common stock	122,905	31,590
Distributions to noncontrolling interest	(3,995)	(3,850)
Redemption of noncontrolling interest	(1,329)	(435)
Common and preferred stock dividends paid	(41,152)	(36,459)
Net cash provided by (used in) financing activities	32,283	(27,254)
Net increase in cash and cash equivalents	12,238	855
Cash and cash equivalents at beginning of year	18,606	12,889
Cash and cash equivalents at end of period	30,844	13,744
Supplemental disclosure of cash flow information:
Cash paid for interest, net of $3.7 million, and $1.6 million capitalized in 2013 and 2012, respectively	23,863	22,603
Supplemental disclosure of noncash investing and financing activities:
Transfer from real estate under development to rental properties	67	242
Contribution of note receivable to co-investment	0	12,325
Change in accrual of dividends	5,344	2,484
Change in fair value of derivative liabilities	570	396
Change in fair value of marketable securities	1,629	379
Change in construction payable	$ 3,376	$ 3,168

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Derivative Instruments and Hedging Activities (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Derivative [Line Items]
Tax exempt variable rate debt	$ 201.6
Designated as Hedging Instrument [Member] | Interest Rate Cap [Member]
Derivative [Line Items]
Notional amount of interest rate contracts	187.8
Number of derivative instruments held	12
Aggregate carrying value of the interest rate cap contracts	0	0
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member]
Derivative [Line Items]
Notional amount of interest rate contracts	300.0
Total amount of unsecured loan	350
Interest rate (in hundredths)	2.60%
Aggregate carrying value of the interest rate swap contracts	$ 6.1	$ 6.6

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Notes and Other Receivables (Tables)

3 Months Ended

Mar. 31, 2013

Notes and Other Receivables [Abstract]

Notes and Other Receivables

Notes receivable secured by real estate, and other receivables consist of the following as of March 31, 2013 and December 31, 2012 (dollars in thousands):

	March 31,		December 31,
	2013		2012
Note receivable, secured, bearing interest at 8.0%, due November 2013	$	971	$	971
Note receivable, secured, bearing interest at 4.0%, due December 2014 (1)		3,212		3,212
Notes and other receivables from affiliates		4,085		28,896
Other receivables		3,091		3,785
Note receivable, secured, bearing interest at 8.8%, paid in full March 2013		-		10,800
Note receivable, secured, effective interest at 9.6%, paid in full March 2013		-		18,499
	$	11,359	$	66,163

(1) The borrower funds an impound account for capital replacement.

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Discontinued Operations (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Schedule of components from discontinued operations [Abstract]
Rental revenues	$ 0	$ 608,000
Property operating expenses	0	(260,000)
Depreciation and amortization	0	(94,000)
Income from real estate sold	0	254,000
Gain on sale	0	10,870,000
Internal disposition costs and taxes	0	(1,087,000)
Income from discontinued operations	0	10,037,000
Tierra Del Sol/Norte [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Units in the community	156
Sales price of communities sold	17,200,000
Gain on sale of real estate	7,000,000
Alpine Country [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Units in the community	108
Sales price of communities sold	11,100,000
Gain on sale of real estate	$ 3,900,000

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2013

Segment Information [Abstract]

Reconciliation of Revenues and Operating Profit Loss from Segments to Consolidated

The revenues, net operating income, and assets for each of the reportable operating segments are summarized as follows for the three months ended March 30, 2013 and 2012 (dollars in thousands):

	Three Months Ended
	March 31,
	2013			2012
Revenues:
Southern California	$	65,830		$	58,560
Northern California		50,770			41,622
Seattle Metro		26,328			22,309
Other real estate assets		3,466			2,983
Total property revenues	$	146,394		$	125,474
Net operating income:
Southern California	$	44,434		$	39,830
Northern California		35,283			28,942
Seattle Metro		17,373			14,831
Other real estate assets		2,540			1,707
Total net operating income		99,630			85,310
Management and other fees from affiliates		2,948			2,444
Depreciation		(47,144	)		(40,734	)
General and administrative		(6,626	)		(5,400	)
Cost of management and other fees		(1,701	)		(1,640	)
Interest expense before amortization		(25,211	)		(24,658	)
Amortization expense		(2,930	)		(2,871	)
Interest and other income		5,023			2,413
Equity income from co-investments		4,211			2,340
Gain on sale of land		1,503			-
Income from continuing operations	$	29,703		$	17,204

Reconciliation of Assets from Segment to Consolidated

Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2013 and December 31, 2012:

	March 31,		December 31,
	2013		2012
Assets:
Southern California	$	1,662,493	$	1,675,265
Northern California		1,632,994		1,489,095
Seattle Metro		711,458		699,465
Other real estate assets		87,754		88,330
Net reportable operating segment - real estate assets		4,094,699		3,952,155
Real estate under development		65,568		66,851
Cash and cash equivalents, including  restricted cash		55,634		42,126
Marketable securities		80,432		92,713
Co-investments		579,654		571,345
Notes and other receivables		11,359		66,163
Other non-segment assets		49,113		55,870
Total assets	$	4,936,459	$	4,847,223

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Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Supplemental disclosure of cash flow information:
Cash paid for interest, capitalized	$ 3.7	$ 1.6

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Mar. 31, 2013	Dec. 31, 2012
Liabilities and Equity
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized ( in shares)	656,020,000	656,020,000
Common stock, shares issued (in shares)	37,276,204	36,442,994
Common stock, shares outstanding (in shares)	37,276,204	36,442,994

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Discontinued Operations

3 Months Ended

Mar. 31, 2013

Discontinued Operations [Abstract]

Discontinued Operations

(10)  Discontinued Operations

The Company classifies real estate as "held for sale" when the sale is considered to be probable.  The Company had no communities sold or held for sale for the quarter ended March 31, 2013.

During the first quarter of 2012, the Company sold Tierra Del Sol/Norte, a 156 unit community located in San Diego, California for $17.2 million for a gain of $7.0 million.  Also in the first quarter of 2012, the Company sold Alpine Country, a 108 unit community located in San Diego metropolitan area, for $11.1 million for a gain of $3.9 million.

The components of discontinued operations are outlined below and include the results of operations for the respective periods that the Company owned such assets, as described above (dollars in thousands).

	Three Months Ended
	March 31,
	2013		2012
Rental revenues	$	-	$	608
Property operating expenses		-		(260	)
Depreciation and amortization		-		(94	)
Income from real estate sold		-		254
Gain on sale		-		10,870
Internal dispositon costs and taxes		-		(1,087	)
Income from discontinued operations	$	-	$	10,037

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Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 02, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	ESSEX PROPERTY TRUST INC
Entity Central Index Key	0000920522
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		37,998,106
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

(11)  Commitments and Contingencies

As of March 31, 2013, the Company had six non-cancelable ground leases for certain apartment communities and buildings that expire between 2027 and 2080.  Ground lease payments are typically the greater of a stated minimum or a percentage of gross rents generated by these apartment communities.  Total minimum lease commitments, under ground leases and operating leases, are approximately $1.7 million per year for the next five years.

To the extent that an environmental matter arises or is identified in the future that has other than a remote risk of having a material impact on the financial statements, the Company will disclose the estimated range of possible outcomes, and, if an outcome is probable, accrue an appropriate liability for remediation and other potential liability. The Company will consider whether such occurrence results in an impairment of value on the affected property and, if so, impairment will be recognized.

Except with respect to three communities, the Company has no indemnification agreements from third parties for potential environmental clean-up costs at its communities.  The Company has no way of determining at this time the magnitude of any potential liability to which it may be the subject, arising out of unknown environmental conditions or violations with respect to the communities formerly owned by the Company.  No assurance can be given that existing environmental studies with respect to any of the communities will reveal all environmental liabilities, that any prior owner or operator of a Property did not create any material environmental condition not known to the Company, or that a material environmental condition does not otherwise exist as to any one or more of the communities.  The Company has limited insurance coverage for the types of environmental liabilities described above.

The Company may enter into transactions that may require the Company to pay the tax liabilities of the partners in the

Operating Partnership or in the DownREIT entities.  These transactions are within the Company's control. Although the Company plans to hold the contributed assets or defer recognition of gain on their sale pursuant to like-kind exchange rules under Section 1031 of the Internal Revenue Code, the Company can provide no assurance that it will be able to do so and if such tax liabilities are incurred they may have a material impact on the Company's financial position.

There have been a number of lawsuits in recent years against owners and managers of apartment communities alleging personal injury and property damage caused by the presence of mold in residential real estate. Some of these lawsuits have resulted in substantial monetary judgments or settlements.  The Company has been sued for mold related matters and has settled some, but not all, of such matters.   Insurance carriers have reacted to mold related liability awards by excluding mold related claims from standard policies and pricing mold endorsements at prohibitively high rates.  The Company has, however, purchased pollution liability insurance, which includes some coverage for mold.  The Company has adopted policies for promptly addressing and resolving reports of mold when it is detected, and to minimize any impact mold might have on residents of the property.  The Company believes its mold policies and proactive response to address any known existence, reduces its risk of loss from these cases.  There can be no assurances that the Company has identified and responded to all mold occurrences, but the Company promptly addresses all known reports of mold.  Liabilities resulting from such mold related matters are not expected to have a material adverse effect on the Company's financial condition, results of operations or cash flows.  As of March 31, 2013, potential liabilities for mold and other environmental liabilities are not considered probable or the loss cannot be quantified or estimated.

The Company carries comprehensive liability, fire, extended coverage and rental loss insurance for each of the communities.  Under comprehensive liability claims, the Company has insurance to cover claims in excess of $100,000 per incident.  Under property casualty claims, the Company reinsures the primary carrier for losses up to $5.0 million deductible per incident.  There are, however, certain types of extraordinary losses, such as, for example, losses from earthquake, for which the Company does not have insurance. Substantially all of the communities are located in areas that are subject to earthquakes.

The Company provided a loan and construction completion guarantee to the lender in order to fulfill the lender's standard financing requirements related to the construction of the Expo community.  The outstanding balance for the construction loan is included in the debt line item in the balance sheet of the co-investments included in Note 3.  The construction completion guarantee is for the life of the loan, which is scheduled to mature on July 1, 2014, with two, one-year extension options at the Expo joint venture's option.  As of March 31, 2013, the Company was in compliance with all terms of the construction loan and the construction of the community is expected to be completed on time and within budget.  The maximum exposure of the guarantee as of March 31, 2013 was $70.0 million based on the construction costs that were budgeted to be incurred to complete the construction.

The Company provided a payment guarantee to the counterparties in relation to the total return swaps entered into by the joint venture responsible for the development of The Huxley (formerly Fountain at La Brea) and The Dylan (formerly Santa Monica at La Brea) communities.  Further the Company has guaranteed completion of development and made certain debt service guarantees for The Huxley and The Dylan.  The outstanding balance for the loans is included in the debt line item in the balance sheet of the co-investments included in Note 3.  The payment guarantee is for the payment of the amounts due to the counterparty related to the total return swaps which are scheduled to mature in September and December 2016.  The maximum exposure of the guarantee as of March 31, 2013 was $68.0 million based on the aggregate outstanding debt amount.

The Company is subject to various other lawsuits in the normal course of its business operations.  Such lawsuits are not expected to have a material adverse effect on the Company's financial condition, results of operations or cash flows.

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Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenues:
Rental and other property	$ 146,394	$ 125,474
Management and other fees	2,948	2,444
Total revenues	149,342	127,918
Expenses:
Property operating, excluding real estate taxes	32,608	28,751
Real estate taxes	14,156	11,413
Depreciation	47,144	40,734
General and administrative	6,626	5,400
Cost of management and other fees	1,701	1,640
Total expenses	102,235	87,938
Earnings from operations	47,107	39,980
Interest expense before amortization	(25,211)	(24,658)
Amortization expense	(2,930)	(2,871)
Interest and other income	5,023	2,413
Equity income in co-investments	4,211	2,340
Gain on sale of land	1,503	0
Income from continuing operations	29,703	17,204
Income from discontinued operations	0	10,037
Net income	29,703	27,241
Net income attributable to noncontrolling interest	(3,132)	(3,151)
Net income attributable to controlling interest	26,571	24,090
Dividends to preferred stockholders	(1,368)	(1,368)
Net income available to common stockholders	25,203	22,722
Comprehensive income	30,739	29,592
Comprehensive income attributable to noncontrolling interest	(3,187)	(3,296)
Comprehensive income attributable to controlling interest	$ 27,552	$ 26,296
Basic:
Income from continuing operations (in dollars per share)	$ 0.68	$ 0.39
Income from discontinued operations (in dollars per share)	$ 0	$ 0.28
Net income available to common stockholders (in dollars per share)	$ 0.68	$ 0.67
Weighted average number of common shares outstanding during the period (in shares)	37,003,925	34,027,890
Diluted:
Income from continuing operations (in dollars per share)	$ 0.68	$ 0.39
Income from discontinued operations (in dollars per share)	$ 0	$ 0.28
Net income available to common stockholders (in dollars per share)	$ 0.68	$ 0.67
Weighted average number of common shares outstanding during the period (in shares)	37,092,062	34,151,475
Dividends per common share (in dollars per share)	$ 1.21	$ 1.10

XML

Related Party Transactions

3 Months Ended

Mar. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions

(5) Related Party Transactions

Management and other fees from affiliates include management, development and redevelopment fees from co-investments of $2.8 million and $2.3 million during the three months ended March 31, 2013 and 2012, respectively.  All of these fees are net of intercompany amounts eliminated by the Company.

The Company's Chairman and founder, Mr. George Marcus, is the Chairman of The Marcus & Millichap Company ("TMMC"), which is a holding company for certain real estate brokerage services and other subsidiary companies.  As described in Note 3, the Company invested $8.6 million as a preferred equity interest investment in an entity affiliated with TMMC that owns an apartment development in Redwood City, California.  Independent members of the Company's Board of Directors that serve on the Nominating and Corporate Governance and Audit Committees approved the investment in this entity.

As described in Note 4, The Company provided a $26.0 million short-term bridge loan to Wesco III to assist with the purchase of Haver Hill which was repaid during the quarter.

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Notes and Other Receivables

3 Months Ended

Mar. 31, 2013

Notes and Other Receivables [Abstract]

Notes and Other Receivables

(4) Notes and Other Receivables

Notes receivable secured by real estate, and other receivables consist of the following as of March 31, 2013 and December 31, 2012 (dollars in thousands):

	March 31,		December 31,
	2013		2012
Note receivable, secured, bearing interest at 8.0%, due November 2013	$	971	$	971
Note receivable, secured, bearing interest at 4.0%, due December 2014 (1)		3,212		3,212
Notes and other receivables from affiliates		4,085		28,896
Other receivables		3,091		3,785
Note receivable, secured, bearing interest at 8.8%, paid in full March 2013		-		10,800
Note receivable, secured, effective interest at 9.6%, paid in full March 2013		-		18,499
	$	11,359	$	66,163

(1) The borrower funds an impound account for capital replacement.

During the quarter, the Company received the repayment of two notes receivables totaling $29.5 million.  One of the notes was repaid early, and as such the Company recorded $0.8 million of income related a change in estimate on the discount to the note receivable.

In March 2013, Wesco III repaid the Company for a $26.0 million short-term bridge loan at LIBOR + 2.5% to assist with the purchase of Haver Hill.  Wesco III used the proceeds from a $27.3 million loan secured by Haver Hill at 3.1% for a term of seven years to repay the bridge loan.

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Unsecured Debt and Lines of Credit (Tables)

3 Months Ended

Mar. 31, 2013

Unsecured Debt and Lines of Credit [Abstract]

Schedule of unsecured debt and lines of credit

Unsecured debt and lines of credit consist of the following as of March 31, 2013 and December 31, 2012 ($ in thousands):

							Weighted Average
	March 31,			December 31,			Maturity
	2013			2012			In Years
Bonds private placement - fixed rate	$	465,000		$	465,000			6.0
Term loan - variable rate		350,000			350,000			3.9
Bonds public offering - fixed rate		297,159			297,084			9.4
Unsecured debt		1,112,159			1,112,084
Lines of credit		102,300			141,000			2.7
Total unsecured debt and lines of credit	$	1,214,459		$	1,253,084
Weighted average interest rate on fixed rate unsecured bonds		4.2	%		4.2	%
Weighted average interest rate on variable rate term loan		2.6	%		2.7	%
Weighted average interest rate on line of credit		2.1	%		2.3	%

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Organization and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2013

Organization and Basis of Presentation [Abstract]

Marketable Securities

Marketable Securities

The Company reports its available for sale securities at fair value, based on quoted market prices (Level 2 for the unsecured bonds and Level 1 for the common stock and investment funds, as defined by the Financial Accounting Standards Board ("FASB") standard for fair value measurements as discussed later in Note 1), and any unrealized gain or loss is recorded as other comprehensive income (loss).  Realized gains and losses, interest and dividend income, and amortization of purchase discounts are included in interest and other income on the condensed consolidated statement of operations and comprehensive income.

As of March 31, 2013 and December 31, 2012, marketable securities consisted primarily of investment-grade unsecured bonds, common stock, investments in mortgage backed securities and investment funds that invest in U.S. treasury or agency securities.  As of March 31, 2013 and December 31, 2012, the Company classified its investments in mortgage backed securities, which mature in November 2019 and September 2020, as held to maturity, and accordingly, these securities are stated at their amortized cost.  The estimated fair values of the mortgage backed securities (Level 2 securities) are approximately equal to the carrying values.

As of March 31, 2012 and December 31, 2012 marketable securities consist of the following ($ in thousands):

	March 31, 2013
	Cost/		Gross
	Amortized		Unrealized
	Cost		Gain		Carrying Value
Available for sale:
Investment-grade unsecured bonds	$	5,119	$	96	$	5,215
Investment funds - US treasuries		15,365		721		16,086
Common stock		5,642		85		5,727
Held to maturity:
Mortgage backed securities		53,404		-		53,404
Total	$	79,530	$	902	$	80,432

	December 31, 2012
	Cost/		Gross
	Amortized		Unrealized
	Cost		Gain		Carrying Value
Available for sale:
Investment-grade unsecured bonds	$	5,143	$	98	$	5,241
Investment funds - US treasuries		14,120		729		14,849
Common stock		18,917		1,704		20,621
Held to maturity:
Mortgage backed securities		52,002		-		52,002
Total	$	90,182	$	2,531	$	92,713

The Company uses the specific identification method to determine the cost basis of a security sold and to reclassify amounts from accumulated other comprehensive income for securities sold.  For the three months ended March 31, 2013, the proceeds from sales of available for sale securities totaled $20.3 million which resulted in a realized gain of $1.8 million.  For the three months ended March 31, 2012, there were no sales of available for sale securities.

Variable Interest Entities

Variable Interest Entities

The Company consolidates 19 DownREIT limited partnerships (comprising twelve communities) since the Company is the primary beneficiary of these variable interest entities ("VIEs").  Total DownREIT units outstanding were 1,033,474 and 1,039,431 as of March 31, 2013 and December 31, 2012, respectively, and the redemption value of the units, based on the closing price of the Company's common stock totaled $155.6 million and $152.4 million, as of March 31, 2013 and December 31, 2012, respectively.  The consolidated total assets and liabilities related to these VIEs, net of intercompany eliminations, were approximately $202.4 million and $181.1 million, respectively, as of March 31, 2013 and $201.1 million and $178.6 million, respectively, as of December 31, 2012.  Interest holders in VIEs consolidated by the Company are allocated income equal to the cash payments made to those interest holders.  The remaining results of operations are allocated to the Company.  As of March 31, 2013 and December 31, 2012, the Company did not have any other VIEs of which it was deemed to be the primary beneficiary.

Equity Based Compensation

Equity Based Compensation

The Company accounts for equity based compensation using the fair value method of accounting.  The estimated fair value of stock options granted by the Company is being amortized over the vesting period of the stock options.  The estimated grant date fair values of the long term incentive plan units (discussed in Note 13, "Equity Based Compensation Plans," in the Company's Form 10-K for the year ended December 31, 2012) are being amortized over the expected service periods.

Stock-based compensation expense for options and restricted stock totaled $0.6 million and $0.4 million for the three months ended March 31, 2013 and 2012, respectively.  The intrinsic value of the stock options exercised during the three months ended March 31, 2013 and 2012 totaled $0.9 million and $1.1 million, respectively.  As of March 31, 2013, the intrinsic value of the stock options outstanding totaled $14.6 million.  As of March 31, 2013, total unrecognized compensation cost related to unvested share-based compensation granted under the stock option and restricted stock plans totaled $5.8 million.  The cost is expected to be recognized over a weighted-average period of 1 to 5 years for the stock option plans and is expected to be recognized straight-line over a period of 1 to 7 years for the restricted stock awards.

The Company has adopted an incentive program involving the issuance of Series Z-1 Incentive Units of limited partnership interest in the Operating Partnership.  Stock-based compensation expense for Z-1 Units totaled $0.5 million and $0.6 million for the three months ended March 31, 2013 and 2012.  Stock-based compensation for Z-1 units capitalized totaled $0.1 million for the three months ended March 31, 2013, and 2012, respectively.  As of March 31, 2013, the intrinsic value of the Z-1 Units subject to future vesting totaled $16.1 million.  As of March 31, 2013, total unrecognized compensation cost related to Z-1 Units subject to future vesting totaled $6.8 million.  The unamortized cost is expected to be recognized up to 14 years subject to the achievement of the stated performance criteria.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Management believes that the carrying amounts of its amounts outstanding under lines of credit, notes receivable and notes and other receivables approximate fair value as of March 31, 2013 and December 31, 2012, because interest rates, yields and other terms for these instruments are consistent with yields and other terms currently available for similar instruments.  Management has estimated that the fair value of the Company's $2.12 billion of fixed rate debt, including unsecured bonds, at March 31, 2013 is approximately $2.21 billion and the fair value of the Company's $551.6 million of variable rate debt, excluding borrowings under the lines of credit, at March 31, 2013 is $632.7 million based on the terms of existing mortgage notes payable, unsecured bonds and variable rate demand notes compared to those available in the marketplace.  Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities and dividends payable approximate fair value as of March 31, 2013 due to the short-term maturity of these instruments.  The fair values of the Company's investments in mortgage backed securities are approximately equal to the amortized cost carrying value of these securities.  Marketable securities and derivatives are carried at fair value as of March 31, 2013.

Capitalization Policy

Capitalization

The Company's capitalized internal costs related to development and redevelopment projects totaled $1.6 million and $1.5 million during the three months ended March 31, 2013 and 2012, respectively, most of which relates to development projects.  These totals include capitalized salaries of $0.6 million and $0.7 million for the three months ended March 31, 2013 and 2012, respectively.

Co-investments

Co-investments

The Company owns investments in joint ventures ("co-investments") in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with the accounting standards.  Therefore, the Company accounts for these investments using the equity method of accounting.  Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company's equity in earnings less distributions received and the Company's share of losses.  The significant accounting policies of the Company's co-investments entities are consistent with those of the Company in all material respects.  For preferred equity investments the Company recognizes its preferred interest as equity in earnings.

Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the consolidated statement of operations equal to the amount by which the fair-value of the co-investment interest the Company previously owned exceeds its carrying value.

A majority of the co-investments, excluding the preferred equity investments, compensate the Company for its asset management services and may provide promote distributions if certain financial return benchmarks are achieved.  Asset management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible.

Changes in Accumulated Other Comprehensive Loss, Net by Component

					Unrealized
	Change in				gains/(losses) on
	fair value and amortization of				available for sale
	derivatives				securities				Total
Balance at December 31, 2012		$	(71,658	)		$	2,397			$	(69,261	)
Other comprehensive income (loss) before reclassification			506				130				636
Amounts reclassified from accumulated other
comprehensive loss			2,018				(1,543	)			345
Net other comprehensive income (loss)			2,524				(1,629	)			981
Balance at March 31, 2013		$	(69,134	)		$	854			$	(68,280	)

Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense before amortization on the condensed consolidated statement of operations and comprehensive income.  Realized gains and losses on available for sale securities are included in interest and other income on the condensed consolidated statement of operations and comprehensive income.

Accounting Estimates and Reclassifications

Accounting Estimates

The preparation of condensed consolidated financial statements, in accordance with U.S. generally accepted accounting principles, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate portfolio, its investments in and advances to joint ventures and affiliates, its notes receivables and its qualification as a Real Estate Investment Trust ("REIT"). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions.

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Net Income Per Common Share

3 Months Ended

Mar. 31, 2013

Net Income Per Common Share [Abstract]

Net Income Per Common Share

(8)  Net Income Per Common Share

(Amounts in thousands, except per share and unit data)

	Three Months Ended						Three Months Ended
	March 31, 2013						March 31, 2012
			Weighted-		Per				Weighted-		Per
			average		Common				average		Common
			Common		Share				Common		Share
	Income		Shares		Amount		Income		Shares		Amount
Basic:
Income from continuing operations available to common stockholders	$	25,203		37,004	$	0.68	$	13,307		34,028	$	0.39
Income from discontinued operations available to common stockholders		-		37,004		-		9,415		34,028		0.28
		25,203			$	0.68		22,722			$	0.67
Effect of Dilutive Securities (1)		-		88				54		124
Diluted:
Income from continuing operations available to common stockholders		25,203		37,092	$	0.68		13,361		34,152	$	0.39
Income from discontinued operations available to common stockholders		-		37,092		-		9,415		34,152		0.28
	$	25,203			$	0.68	$	22,776			$	0.67

(1) Weighted average convertible limited partnership units of 2,079,447 and 2,245,166, which include vested Series Z incentive units, for the three months ended March 31, 2013, and 2012, respectively, were not included in the determination of diluted EPS because they were anti-dilutive.  Income allocated to convertible limited partnership units, which includes vested Series Z units, aggregating $1.5 million and $1.6 million for the three months ended March 31, 2013 and 2012, respectively, , have been excluded from income available to common stock holders for the calculation of diluted income per common share since these units are excluded from the diluted weighted average common shares for the period as the effect was anti-dilutive.  The Company has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities.

Stock options of 260,513 and 36,750 for the three months ended March 31, 2013 and 2012, respectively, were not included in the diluted earnings per share calculation because the effects on earnings per share were anti-dilutive.

All shares of Series G cumulative convertible preferred stock have been excluded in diluted earnings per share for the three months ended March 31, 2013 respectively, as the effect was anti-dilutive.

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Unsecured Debt and Lines of Credit

3 Months Ended

Mar. 31, 2013

Unsecured Debt and Lines of Credit [Abstract]

Unsecured Debt Lines of Credit

(6) Unsecured Debt and Lines of Credit

Unsecured debt and lines of credit consist of the following as of March 31, 2013 and December 31, 2012 ($ in thousands):

							Weighted Average
	March 31,			December 31,			Maturity
	2013			2012			In Years
Bonds private placement - fixed rate	$	465,000		$	465,000			6.0
Term loan - variable rate		350,000			350,000			3.9
Bonds public offering - fixed rate		297,159			297,084			9.4
Unsecured debt		1,112,159			1,112,084
Lines of credit		102,300			141,000			2.7
Total unsecured debt and lines of credit	$	1,214,459		$	1,253,084
Weighted average interest rate on fixed rate unsecured bonds		4.2	%		4.2	%
Weighted average interest rate on variable rate term loan		2.6	%		2.7	%
Weighted average interest rate on line of credit		2.1	%		2.3	%

As described in Note 2, in April 2013, the Company issued $300 million aggregate principal amount of its 3.25% Senior Notes due on May 1, 2023.

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Segment Information

3 Months Ended

Mar. 31, 2013

Segment Information [Abstract]

Segment Information

(7) Segment Information

The Company defines its reportable operating segments as the three geographical regions in which its apartment communities are located: Southern California, Northern California and Seattle Metro.  Excluded from segment revenues are properties classified in discontinued operations, management and other fees from affiliates, and interest and other income.  Non-segment revenues and net operating income included in the following schedule also consist of revenue generated from commercial properties.  Other non-segment assets include real estate under development, co-investments, cash and cash equivalents, marketable securities, notes and other receivables, prepaid expenses and other assets and deferred charges.

The revenues, net operating income, and assets for each of the reportable operating segments are summarized as follows for the three months ended March 30, 2013 and 2012 (dollars in thousands):

	Three Months Ended
	March 31,
	2013			2012
Revenues:
Southern California	$	65,830		$	58,560
Northern California		50,770			41,622
Seattle Metro		26,328			22,309
Other real estate assets		3,466			2,983
Total property revenues	$	146,394		$	125,474
Net operating income:
Southern California	$	44,434		$	39,830
Northern California		35,283			28,942
Seattle Metro		17,373			14,831
Other real estate assets		2,540			1,707
Total net operating income		99,630			85,310
Management and other fees from affiliates		2,948			2,444
Depreciation		(47,144	)		(40,734	)
General and administrative		(6,626	)		(5,400	)
Cost of management and other fees		(1,701	)		(1,640	)
Interest expense before amortization		(25,211	)		(24,658	)
Amortization expense		(2,930	)		(2,871	)
Interest and other income		5,023			2,413
Equity income from co-investments		4,211			2,340
Gain on sale of land		1,503			-
Income from continuing operations	$	29,703		$	17,204

Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2013 and December 31, 2012:

	March 31,		December 31,
	2013		2012
Assets:
Southern California	$	1,662,493	$	1,675,265
Northern California		1,632,994		1,489,095
Seattle Metro		711,458		699,465
Other real estate assets		87,754		88,330
Net reportable operating segment - real estate assets		4,094,699		3,952,155
Real estate under development		65,568		66,851
Cash and cash equivalents, including  restricted cash		55,634		42,126
Marketable securities		80,432		92,713
Co-investments		579,654		571,345
Notes and other receivables		11,359		66,163
Other non-segment assets		49,113		55,870
Total assets	$	4,936,459	$	4,847,223

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Derivative Instruments and Hedging Activities

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments and Hedging Activities

(9)  Derivative Instruments and Hedging Activities

The Company has entered into interest rate swap contracts with an aggregate notional amount of $300 million that effectively fixed the interest rate on $300 million of the $350 million unsecured term loan at 2.6%.  These derivatives qualify for hedge accounting.

As of March 31, 2013 the Company also had twelve interest rate cap contracts totaling a notional amount of $187.8 million that qualify for hedge accounting as they effectively limit the Company's exposure to interest rate risk by providing a ceiling on the underlying variable interest rate for $201.6 million of the Company's tax exempt variable rate debt.

As of March 31, 2013 and December 31, 2012 the aggregate carrying value of the interest rate swap contracts was a liability of $6.1 million and $6.6 million, respectively. The aggregate carrying value of the interest rate cap contracts was zero on the balance sheet as of March 31, 2013 and December 31, 2012, respectively.

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Net Income Per Common Share (Details) (USD $)	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Basic:
Income from continuing operations available to common stockholders	$ 25,203,000		$ 13,307,000
Income from continuing operations available to common stockholders (in shares)	37,003,925		34,027,890
Income from continuing operations available to common stockholders (in dollars per share)	$ 0.68		$ 0.39
Income from discontinued operations	0		9,415,000
Income from discontinued operations (in shares)	37,004,000		34,028,000
Income from discontinued operations (in dollars per share)	$ 0		$ 0.28
Income available to common stockholders	25,203,000		22,722,000
Income available to common stockholders (in dollars per share)	$ 0.68		$ 0.67
Effect of Dilutive Securities	0	[1]	54,000	[1]
Effect of Dilutive Securities (in shares)	88,000	[1]	124,000	[1]
Diluted:
Income from continuing operations available to common stockholders	25,203,000		13,361,000
Adjusted income from continuing operations available to common stockholders (in shares)	37,092,000		34,152,000
Adjusted income from continuing operations available to common stockholders (in dollars per share)	$ 0.68		$ 0.39
Adjusted income from discontinued operations available to common stockholders	0		9,415,000
Adjusted income from discontinued operations available to common stockholders (in shares)	37,092,000		34,152,000
Adjusted income from discontinued operations available to common stockholders (in dollars per share)	$ 0		$ 0.28
Total income (Diluted)	25,203,000		22,776,000
Total income per common share amount (in dollars per share)	$ 0.68		$ 0.67
Convertible Limited Partnership Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted convertible limited partnership units	2,079,447		2,245,166
Net Income (Loss) Allocated to Limited Partners	$ 1,500,000		$ 1,600,000
Anti-dilutive securities (in shares)	2,079,447		2,245,166
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted convertible limited partnership units	260,513		36,750
Anti-dilutive securities (in shares)	260,513		36,750

[1] Weighted average convertible limited partnership units of 2,079,447 and 2,245,166, which include vested Series Z incentive units, for the three months ended March 31, 2013, and 2012, respectively, were not included in the determination of diluted EPS because they were anti-dilutive. Income allocated to convertible limited partnership units, which includes vested Series Z units, aggregating $1.5 million and $1.6 million for the three months ended March 31, 2013 and 2012, respectively, , have been excluded from income available to common stock holders for the calculation of diluted income per common share since these units are excluded from the diluted weighted average common shares for the period as the effect was anti-dilutive. The Company has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities.

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Co-investments (Tables)

3 Months Ended

Mar. 31, 2013

Co-investments [Abstract]

Summary of Co Investment

The Company has co-investments, which are accounted for under the equity method.  The co-investments own, operate and develop apartment communities.  The following table details the Company's co-investments (dollars in thousands):

	March 31,		December 31,
	2013		2012
Membership interest in Wesco I	$	143,051	$	143,874
Partnership interest in Fund II		27,121		53,601
Membership interest in a limited liability company that owns Expo		18,714		18,752
Membership interest in Wesco III		9,821		9,941
Total operating co-investments		198,707		226,168
Membership interests in limited liability companies that own and are developing Epic, Connolly Station, Mosso I. & II. , and Elkhorn		221,247		186,362
Membership interests in limited liability companies that own and are developing The Huxley and The Dylan		16,928		16,552
Total development co-investments		238,175		202,914
Membership interest in Wesco II that owns a preferred equity interest in Parkmerced with a preferred return of 10.1%		92,550		91,843
Preferred interest in related party limited liability company that owns Sage at Cupertino with a preferred return of  9.5%		15,055		14,438
Preferred interest in a related party limited liability company that owns Madison Park at Anaheim with a preferred return of 13%		13,232		13,175
Preferred interest in limited liability company that owns an apartment community in downtown Los Angeles with a preferred return 10%		13,068		13,068
Preferred interest in related limited liability company that owns an apartment development in Redwood City with a preferred return of 9.5%		8,867		-
Preferred interests in limited liability companies that owns in downtown Los Angeles with preferred returns of 9% repaid in March 2013		-		9,739
Total preferred interest investments		142,772		142,263
Total co-investments	$	579,654	$	571,345

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

The combined summarized balance sheet and statements of operations for co-investments are as follows (dollars in thousands).

	March 31,		December 31,
	2013		2012
Balance sheets:
Rental properties and real estate under development	$	1,709,065	$	1,745,147
Other assets		85,039		168,061
Total assets	$	1,794,104	$	1,913,208
Debt	$	785,459	$	820,895
Other liabilities		54,877		91,922
Equity		953,768		1,000,391
Total liabilities and equity	$	1,794,104	$	1,913,208
Company's share of equity	$	579,654	$	571,345

`	Three Months Ended
	March 31,
	2013			2012
Statements of operations:
Property revenues	$	27,859		$	34,323
Property operating expenses		(9,828	)		(13,137	)
Net property operating income		18,031			21,186
Interest expense		(6,778	)		(8,545	)
General and administrative		(1,514	)		(796	)
Depreciation and amortization		(11,019	)		(13,896	)
Net loss	$	(1,280	)	$	(2,051	)
Company's share of net income	$	4,211		$	2,340

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Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2013

Discontinued Operations [Abstract]

Schedule of Components from Discontinued Operations

The components of discontinued operations are outlined below and include the results of operations for the respective periods that the Company owned such assets, as described above (dollars in thousands).

	Three Months Ended
	March 31,
	2013		2012
Rental revenues	$	-	$	608
Property operating expenses		-		(260	)
Depreciation and amortization		-		(94	)
Income from real estate sold		-		254
Gain on sale		-		10,870
Internal dispositon costs and taxes		-		(1,087	)
Income from discontinued operations	$	-	$	10,037

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Condensed Consolidated Statements of Equity (Unaudited) (USD $) In Thousands, except Share data, unless otherwise specified	Series H Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Distributions in Excess of Accumulated Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interest [Member]	Total
Balances at Dec. 31, 2012	$ 73,750	$ 3	$ 2,204,778	$ (444,466)	$ (69,261)	$ 115,312	$ 1,880,116
Balances (in shares) at Dec. 31, 2012	2,950,000	36,443,000
Net income	0	0	0	26,571	0	3,132	29,703
Changes in fair value of cash flow hedges and amortization of settlement swaps	0	0	0	0	2,524	141	2,665
Changes in fair value of marketable securities	0	0	0	0	130	8	138
Issuance of common stock under:
Stock option and restricted stock plans	0	0	1,956	0	0	0	1,956
Stock option and restricted stock plans shares (in shares)	0	16,000
Sale of common stock	0	0	122,905	0	0	0	122,905
Sale of common stock (in shares)	0	817,000					817,445
Equity based compensation costs	0	0	(256)	0	0	575	319
Distributions to noncontrolling interest	0	0	0	0	0	(3,995)	(3,995)
Redemptions of noncontrolling interest	0	0	0	0	0	(1,329)	(1,329)
Common and preferred stock dividends	0	0	0	(46,496)	0	0	(46,496)
Reversal of unrealized gains upon the sale of marketable securities	0	0	0	0	(1,673)	(94)	(1,767)
Balances at Mar. 31, 2013	$ 73,750	$ 3	$ 2,329,383	$ (464,391)	$ (68,280)	$ 113,750	$ 1,984,215
Balances (in shares) at Mar. 31, 2013	2,950,000	37,276,000

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Co-investments

3 Months Ended

Mar. 31, 2013

Co-investments [Abstract]

Co-investments

(3) Co-investments

The Company has co-investments, which are accounted for under the equity method.  The co-investments own, operate and develop apartment communities.  The following table details the Company's co-investments (dollars in thousands):

	March 31,		December 31,
	2013		2012
Membership interest in Wesco I	$	143,051	$	143,874
Partnership interest in Fund II		27,121		53,601
Membership interest in a limited liability company that owns Expo		18,714		18,752
Membership interest in Wesco III		9,821		9,941
Total operating co-investments		198,707		226,168
Membership interests in limited liability companies that own and are developing Epic, Connolly Station, Mosso I. & II. , and Elkhorn		221,247		186,362
Membership interests in limited liability companies that own and are developing The Huxley and The Dylan		16,928		16,552
Total development co-investments		238,175		202,914
Membership interest in Wesco II that owns a preferred equity interest in Parkmerced with a preferred return of 10.1%		92,550		91,843
Preferred interest in related party limited liability company that owns Sage at Cupertino with a preferred return of  9.5%		15,055		14,438
Preferred interest in a related party limited liability company that owns Madison Park at Anaheim with a preferred return of 13%		13,232		13,175
Preferred interest in limited liability company that owns an apartment community in downtown Los Angeles with a preferred return 10%		13,068		13,068
Preferred interest in related limited liability company that owns an apartment development in Redwood City with a preferred return of 9.5%		8,867		-
Preferred interests in limited liability companies that owns in downtown Los Angeles with preferred returns of 9% repaid in March 2013		-		9,739
Total preferred interest investments		142,772		142,263
Total co-investments	$	579,654	$	571,345

In January 2013, the Company invested $8.6 million as a preferred equity interest investment in an apartment development in Redwood City, California.  The investment has a preferred return of 9.5% and matures in January 2016.

In March 2013, the Company received the redemption of $9.7 million of preferred equity related to two properties located in downtown Los Angeles.  The Company recorded $0.4 million in redemption penalties due to the early redemption of these preferred equity investments.

The combined summarized balance sheet and statements of operations for co-investments are as follows (dollars in thousands).

	March 31,		December 31,
	2013		2012
Balance sheets:
Rental properties and real estate under development	$	1,709,065	$	1,745,147
Other assets		85,039		168,061
Total assets	$	1,794,104	$	1,913,208
Debt	$	785,459	$	820,895
Other liabilities		54,877		91,922
Equity		953,768		1,000,391
Total liabilities and equity	$	1,794,104	$	1,913,208
Company's share of equity	$	579,654	$	571,345

`	Three Months Ended
	March 31,
	2013			2012
Statements of operations:
Property revenues	$	27,859		$	34,323
Property operating expenses		(9,828	)		(13,137	)
Net property operating income		18,031			21,186
Interest expense		(6,778	)		(8,545	)
General and administrative		(1,514	)		(796	)
Depreciation and amortization		(11,019	)		(13,896	)
Net loss	$	(1,280	)	$	(2,051	)
Company's share of net income	$	4,211		$	2,340

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Organization and Basis of Presentation (Details) (USD $)	3 Months Ended
	Mar. 31, 2013 Community Project Building Partnership Apartment	Mar. 31, 2012	Dec. 31, 2012
Organization and Basis of Presentation [Abstract]
General partner ownership interest (in hundredths)	94.50%
Operating Partnership units outstanding (in shares)	2,154,510		2,122,381
Redemption value of Operating Partnership units outstanding	$ 324,400,000		$ 311,200,000
Number of apartment communities owned	166
Apartment units owned (in units)	34,343
Ownership interests, number of commercial buildings	5
Ownership interests, number of active development projects	8
Schedule of Available-for-sale Securities [Line Items]
Total Amortized Cost	79,530,000		90,182,000
Total Gross Unrealized Gain	902,000		2,531,000
Total Carrying Value	80,432,000		92,713,000
Proceeds from sales of available for sale securities	20,300,000	0
Gain from sales of available-for-sale securities	1,800,000
Variable Interest Entities [Abstract]
Number of DownREIT limited partnerships the company consolidates	19
Number of communities within the DownREIT partnership	12
Total DownREIT Partnership's Outstanding units (shares)	1,033,474		1,039,431
Redemption value of the variable interest entities	155,600,000		152,400,000
Assets related to variable interest entities, net intercompany eliminations	202,400,000		201,100,000
Liabilities related to variable interest entities, net of intercompany eliminations	181,100,000		178,600,000
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense for options and restricted stock	600,000	400,000
Intrinsic value of the stock options exercised	900,000	1,100,000
Intrinsic value of the stock options outstanding and fully vested	14,600,000
Unrecognized compensation cost related to unvested share-based compensation granted under the stock option and restricted stock plans	5,800,000
Stock-based compensation expense for the Series Z Units	500,000	600,000
Capitalization of stock based compensation for Z units	100,000	100,000
Intrinsic value of Series Z Units outstanding	16,100,000
Total unrecognized compensation cost related to Z-1 Units subject to future vesting	6,800,000
Unamortized cost recognition period range (in years)	14 years
Fair Value of Financial Instruments [Abstract]
Fixed rate debt carrying amount	2,120,000,000
Fixed rate debt fair value	2,210,000,000
Variable rate debt, carrying amount	551,600,000
Variable rate debt fair value	632,700,000
Capitalization Policy [Abstract]
Capitalized internal costs related to development and redevelopment projects	1,600,000	1,500,000
Capitalized salaries	600,000	700,000
Change in fair value and amortization of derivatives [Abstract]
Balance at beginning	(71,658,000)
Other comprehensive income (loss) before reclassification, derivative	506,000
Amounts reclassified from accumulated other comprehensive loss	2,018,000
Net other comprehensive income (loss)	2,524,000
Balance at the end	(69,134,000)
Unrealized gains/(losses) on available for sale securities [Abstract]
Balance at beginning	854,000		2,397,000
Other comprehensive income (loss) before reclassification, available for sale securities, total	130,000
Amounts reclassified from accumulated other comprehensive loss	(1,543,000)
Net other comprehensive income (loss)	(1,629,000)
Balance at the end	854,000		2,397,000
Accumulated other comprehensive loss, net by component [Abstract]
Balance at beginning	(68,280,000)		(69,261,000)
Other comprehensive income (loss) before reclassification	636,000
Amounts reclassified from accumulated other comprehensive loss	345,000
Net other comprehensive income (loss)	981,000
Balance at the end	(68,280,000)		(69,261,000)
Minimum [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Range of weighted average period on recognition of compensation cost for stock options	1 year
Range of weighted average period on recognition of compensation cost for restricted stock	1 year
Maximum [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Range of weighted average period on recognition of compensation cost for stock options	5 years
Range of weighted average period on recognition of compensation cost for restricted stock	7 years
Investment-Grade Unsecured Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	5,119,000		5,143,000
Gross Unrealized Gain	96,000		98,000
Carrying Value	5,215,000		5,241,000
Investment Funds - US Treasuries [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	15,365,000		14,120,000
Gross Unrealized Gain	721,000		729,000
Carrying Value	16,086,000		14,849,000
Common Stock [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	5,642,000		18,917,000
Gross Unrealized Gain	85,000		1,704,000
Carrying Value	5,727,000		20,621,000
Mortgage Backed Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Cost/Amortized Cost	53,404,000		52,002,000
Gross Unrealized Gain	0		0
Carrying Value	$ 53,404,000		$ 52,002,000

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Organization and Basis of Presentation (Tables)

3 Months Ended

Mar. 31, 2013

Organization and Basis of Presentation [Abstract]

Components of Marketable Securities

As of March 31, 2012 and December 31, 2012 marketable securities consist of the following ($ in thousands):

	March 31, 2013
	Cost/		Gross
	Amortized		Unrealized
	Cost		Gain		Carrying Value
Available for sale:
Investment-grade unsecured bonds	$	5,119	$	96	$	5,215
Investment funds - US treasuries		15,365		721		16,086
Common stock		5,642		85		5,727
Held to maturity:
Mortgage backed securities		53,404		-		53,404
Total	$	79,530	$	902	$	80,432

	December 31, 2012
	Cost/		Gross
	Amortized		Unrealized
	Cost		Gain		Carrying Value
Available for sale:
Investment-grade unsecured bonds	$	5,143	$	98	$	5,241
Investment funds - US treasuries		14,120		729		14,849
Common stock		18,917		1,704		20,621
Held to maturity:
Mortgage backed securities		52,002		-		52,002
Total	$	90,182	$	2,531	$	92,713

Changes in Accumulated Other Comprehensive Loss, Net by Component

Changes in Accumulated Other Comprehensive Loss, Net by Component

					Unrealized
	Change in				gains/(losses) on
	fair value and amortization of				available for sale
	derivatives				securities				Total
Balance at December 31, 2012		$	(71,658	)		$	2,397			$	(69,261	)
Other comprehensive income (loss) before reclassification			506				130				636
Amounts reclassified from accumulated other
comprehensive loss			2,018				(1,543	)			345
Net other comprehensive income (loss)			2,524				(1,629	)			981
Balance at March 31, 2013		$	(69,134	)		$	854			$	(68,280	)