8-K

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION 

Washington, DC 20549 

FORM 8-K 

Current Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): May 7,2014

ESSEX PROPERTY TRUST, INC. 

ESSEX PORTFOLIO, L.P. 

(Exact Name of Registrant as Specified in its Charter)

001-13106 (Essex Property Trust, Inc.)

333-44467-01 (Essex Portfolio, L.P.)

 (Commission File Number)

Maryland (Essex Property Trust, Inc.) California (Essex Portfolio, L.P.)	77-0369576 (Essex Property Trust, Inc.) 77-0369575 (Essex Portfolio, L.P.)
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification No.)

925 East Meadow Drive, Palo Alto, California 94303

(Address of principal executive offices) (Zip Code)

(650) 494-3700

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition

On May 7, 2014, Essex Property Trust, Inc. (the “Company”) issued a press release announcing the Company’s earnings for the quarter ended March 31, 2014. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated by reference herein in its entirety.

The information in this report (including Exhibits 99.1 and 99.2) is being furnished pursuant to Item 2.02 and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

(a) - (b) Not applicable.

(c) Exhibits.

The exhibits listed below are being furnished with this Form 8-K.

99.1 Press Release issued by Essex Property Trust, Inc. dated May 7, 2014

99.2 Supplemental Information

SIGNATURES

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 hereunto duly authorized.

Date:  May 8, 2014
	ESSEX PROPERTY TRUST, INC.
	/s/ Michael T. Dance
	Name:	Michael T. Dance
	Title:	Executive Vice President & Chief Financial Officer
	ESSEX PORTFOLIO, L.P.
	By:	Essex Property Trust, Inc.,
		its General Partner
	/s/ Michael T. Dance
	Name:	Michael T. Dance
	Title:	Executive Vice President & Chief Financial Officer

EXHIBIT INDEX 

Exhibit Number	Description
99.1	Press Release issued by Essex Property Trust, Inc. dated May 7, 2014
99.2	Supplemental Information

EX-99.1

Exhibit 99.1

Essex Announces First Quarter 2014 Results

Robust Housing Conditions Underlie 7.2% Same-Property Revenue Growth

Palo Alto, California—May 7, 2014—Essex Property Trust, Inc. (NYSE:ESS) announced today its first quarter 2014 earnings results and related business activities.

Funds from Operations (“FFO”) and Net Income for the quarter ended March 31, 2014 are detailed below. Total FFO and Net Income for the quarter ended March 31, 2014 includes $16.1 million in merger related expenses.  Core FFO excludes merger expenses, acquisition costs and non-recurring items.

	Quarter Ended
	March 31,				%
Earnings (in millions)	2014		2013		change
Total FFO	$	67.8	$	77.4		-12.4	%
Core FFO	$	81.1	$	73.2		10.8	%
Net Income	$	21.9	$	25.2		-13.1	%
Per Diluted Share
Total FFO	$	1.68	$	1.97		-14.6	%
Core FFO	$	2.02	$	1.87		8.0	%
Earnings per Share	$	0.58	$	0.68		-14.7	%

First Quarter Highlights:

· Completed the merger with BRE Properties on April 1^st, creating the preeminent West Coast multifamily REIT.

· On March 31, 2014, contributed $888 million in BRE properties to three new co-investment entities to fund a significant portion of the cash consideration of the BRE merger.

· Grew Core FFO per diluted share by 8.0% compared to Q1 2013.

· Increased same-property gross revenues and net operating income (“NOI”) by 7.2% and 8.3%, respectively, compared to Q1 2013.

· Achieved a 1.4% sequential increase in quarterly gross revenues and 2.6% sequential increase in net operating income (“NOI”) for the same-property portfolio.

· Completed the lease-up of Connolly Station, a 309 unit community located in Dublin, CA, and began the lease-up of two additional development communities during the quarter.

· The Company was added to the S&P 500 Index on April 1, 2014.

· Established Core FFO guidance range for the second quarter of 2014 of $1.96 to $2.04 per diluted share, which incorporates the BRE portfolio and recent financing transactions.

· Revised the full year Core FFO per diluted share range to $8.15 to $8.45, raising the midpoint by $0.05 per share.

925 East Meadow Drive Palo Alto California 94303 telephone 650 494 3700 facsimile 650 494 8743

www.essexpropertytrust.com

 “We are pleased to highlight the Company’s strong operating performance as we begin 2014, demonstrated by 7.2% same-property revenue growth.  Fundamentals on the West Coast continue to be robust, driven by nation-leading job growth and muted deliveries of new rental and for-sale housing.  We are also pleased with the performance of the legacy BRE portfolio, which generated a 5.6% increase in same-property revenues in the first quarter,” commented Michael J. Schall, President and Chief Executive Officer of the Company.  Mr. Schall continued, “We are excited that the consummation of the merger with BRE occurred substantially as planned, and we look forward to continuing integration efforts for the next 12-18 months.  Our recent capital markets activities support our belief that the Company’s larger operating platform and unique geographic profile will provide cost of capital benefits that will complement a variety of synergies that are expected to be realized from the merger.”

SAME-PROPERTY OPERATIONS

Essex same-property operating results exclude properties that are not comparable for the periods presented.  The table below illustrates the percentage change in same-property gross revenues for the quarter ended March 31, 2014 compared to the quarter ended March 31, 2013, and the sequential percentage change for the quarter ended March 31, 2014 versus the quarter ended December 31, 2013 by submarket for the Company:

	Q1 2014 vs. Q1 2013			Q1 2014 vs. Q4 2013			% of Total
	Gross Revenues			Gross Revenues			Q1 2014  Revenues
Southern California
Los Angeles County		4.7	%		0.9	%		17.2	%
Ventura County		4.6	%		1.6	%		8.9	%
Orange County		5.3	%		1.1	%		11.2	%
San Diego County		4.6	%		1.2	%		5.6	%
Other Southern California		6.7	%		0.4	%		1.8	%
Total Southern California		4.9	%		1.1	%		44.7	%
Northern California
Santa Clara County		9.2	%		1.9	%		18.4	%
Contra Costa County		8.0	%		2.3	%		6.4	%
Alameda County		11.3	%		2.7	%		5.8	%
Other Northern California		10.2	%		1.1	%		5.6	%
Total Northern California		9.5	%		2.0	%		36.2	%
Seattle Metro		8.3	%		1.3	%		19.1	%
Same-Property Portfolio		7.2	%		1.4	%		100.0	%

	Year Over Year Growth
	Q1 2014 compared to Q1 2013
	Gross Revenues			Operating Expenses		NOI
Southern California		4.9	%	4.5	%	5.1	%
Northern California		9.5	%	3.6	%	12.0	%
Seattle Metro		8.3	%	6.8	%	9.1	%
Same-property portfolio		7.2	%	4.6	%	8.3	%

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	Sequential Growth
	Q1 2014 compared to Q4 2013
	Gross Revenues			Operating Expenses			NOI
Southern California		1.1	%		-1.8	%		2.5	%
Northern California		2.0	%		-3.3	%		4.3	%
Seattle Metro		1.3	%		5.1	%		-0.6	%
Same-property portfolio		1.4	%		-1.0	%		2.6	%

	Financial Occupancies
	Quarter Ended
	3/31/2014			12/31/2013			3/31/2013
Southern California		96.4	%		96.3	%		96.5	%
Northern California		96.5	%		96.1	%		96.5	%
Seattle Metro		96.5	%		95.9	%		96.6	%
Same-property portfolio		96.5	%		96.2	%		96.5	%

BRE MERGER CLOSED

As previously announced, Essex completed the merger with BRE Properties (BRE) on April 1, 2014.  On March 31, 2014, 17 BRE properties were contributed to three joint ventures with a total estimated property value of $888 million.  Properties were contributed to Wesco III, Wesco IV and a joint venture formed with AEW Capital Management.  Please see page S-14 of the supplement for the list of properties contributed to the joint ventures. As of April 1, 2014, Essex has a 50% ownership interest in each of the joint ventures and will receive property management, acquisition, and redevelopment fees and a promote interest if certain return hurdles are achieved.  New secured mortgage debt totaling $475 million was placed on the properties at LIBOR plus 160 basis points for a five year initial term with up to two years of extension options.  The Company has swapped 80% of the $475 million of secured mortgages to an effective fixed rate of 3.6% for a 5.7 year term.  As a result of the joint venture financing, Essex did not utilize the committed bridge loan facility it had in place at the time the merger was announced.  Please see the press release dated April 1, 2014 for additional details about the merger.

On March 31, 2014, BRE contributed 14 properties valued at $1.4 billion to Essex Portfolio L.P. (the “Operating Partnership”) in exchange for 8.6 million of Essex Operating Partnership Units (“OP Units”).  The OP Units were subsequently retired by the Company on April 1, 2014.  The purpose of this transaction was tax efficiency.  The balance sheet at March 31, 2014 reflects the acquisition of these properties on the last day of the quarter along with the issuance of OP Units.

The table below represents the BRE Properties same-property revenue results for the stabilized portfolio of properties, excluding developments and properties held for sale.  The Company did not own BRE during the first quarter 2014 but acquired the portfolio on March 31, 2014, as described above, and on April 1, 2014.  Therefore, these results are not reflected in the Company’s income statement during the quarter.  The table below illustrates the percentage change in same-property revenues for the quarter ended March 31, 2014 compared to the quarter ended March 31, 2013, and the sequential percentage change for the quarter ended March 31, 2014 versus the quarter ended December 31, 2013 by submarket:

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BRE LEGACY PROPERTIES

	Q1 2014 vs.  Q1 2013			Q1 2014 vs. Q4 2013			% of Total
	Total Revenues			Total Revenues			Q1 2014 Revenues
Southern California
Los Angeles County		4.1	%		-0.4	%		18.2	%
Orange County		4.5	%		1.0	%		18.4	%
San Diego County		3.5	%		0.3	%		16.6	%
Riverside County		2.6	%		0.6	%		3.7	%
Total Southern California		3.9	%		0.3	%		56.9	%
Northern California
San Mateo County		9.0	%		0.3	%		8.6	%
Santa Clara County		5.9	%		0.0	%		4.3	%
Contra Costa County		9.6	%		0.9	%		3.5	%
Alameda County		8.7	%		1.0	%		9.4	%
Other Northern California		9.6	%		2.6	%		1.3	%
Total Northern California		8.5	%		0.7	%		27.1	%
Seattle Metro		6.7	%		0.8	%		16.0	%
Same-Property Portfolio		5.6	%		0.5	%		100.0	%

MB360 FIRE UPDATE

On March 11, 2014, a fire broke out at one of the two buildings at BRE’s MB360 development located in San Francisco, CA.  The building that contained the fire consisted of 172 units, all of which were destroyed above the podium structure, which was also damaged.  The second phase of the development, containing 188 units, suffered no damage and is expected to begin delivering apartment homes in the fourth quarter of 2014.  BRE carried comprehensive insurance coverage, including lost profits, related to the property.  Insurance proceeds will be set up as a receivable on the balance sheet.  We estimate Core FFO for 2014 will be reduced by $0.03-$0.05 per share as the cost basis of MB360 that qualifies for interest capitalization is lower than the previous investment balance and the generation of rental revenue will be delayed.  The insurance policies covering MB360 provide coverage for loss of rental income and soft costs, although we are not assuming recovery of these costs in 2014.

INVESTMENT ACTIVITY

Subsequent to quarter end, the Company acquired Piedmont Apartments for $76.8 million.  The 396 unit community was built in 1969 and subsequently renovated in 1997 and 2005.  The Company assumed a $44.8 million mortgage loan secured by the property at a fixed rate of 5.6% for a remaining term of three years.  The property is located in Bellevue, a submarket of Seattle and within one mile of Microsoft’s World Headquarters.

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DISPOSITIONS

In January, the Company sold Vista Capri, a 106 unit community located in San Diego, CA for $14.4 million.  The total gain on sale was $7.1 million, net of internal disposition costs.  The gain has been excluded from the calculation of FFO.

In March, Essex Apartment Value Fund II, L.P. (“Fund II”) sold one of the two remaining communities for $23.8 million.  The total gain on sale was $11.4 million.  The Company has a 28.2% ownership stake in Fund II and received promote income of $3.8 million which has been excluded from Core FFO.

During the first quarter, BRE, which was not owned by the Company at the time, sold three properties located in Sacramento, CA, Spring Valley, CA and San Diego, CA for total proceeds of $156.8 million.     

DEVELOPMENT ACTIVITY

During the quarter, Connolly Station, a 309 unit community located in Dublin, CA achieved stabilized occupancy.  As of the end of April, the community was 99% occupied.

Leasing at Phase II of Epic, located in San Jose, CA, is proceeding ahead of schedule.  As of May 5, 2014, 78% of the 289 units were leased.  The Company now expects the community to stabilize during the second quarter 2014, six months ahead of schedule.

In March, the Company began leasing The Huxley, a 187 unit community located in West Hollywood, CA.  Through May 5, 2014, 49% of the apartment homes were leased.

In March, The Avery, located in Los Angeles, CA received final certificate of occupancy and Essex purchased the property subject to a pre-sale arrangement, for approximately $35 million.  The 121 unit community is currently 62% leased as of May 5, 2014.

As part of the merger agreement, the Company acquired two development communities that are currently in lease up.  Solstice, a 280 unit community located in Sunnyvale, CA was 77% leased as of May 5, 2014.  The Company expects to stabilize the community during the third quarter of 2014.  Wilshire at La Brea, a 478 unit community located in Los Angeles, CA was 38% leased as of May 5, 2014.  The Company expects Wilshire at La Brea to stabilize in the first quarter of 2015.

EXTRAORDINARY EVENTS

During the first quarter, the Company incurred $1.6 million in damages at two properties that were related to earthquake damages and unusual wet weather in the Pacific Northwest.  These costs were charged to earnings and excluded from Core FFO in the first quarter of 2014.

LIQUIDITY AND BALANCE SHEET

Common Stock

During the first quarter, the Company issued 958,055 shares of common stock for $157.6 million, net of commissions, at an average per share price of $166.24.  Subsequent to quarter end through May 7, 2014, excluding the approximately 23.1 million shares issued in connection with the BRE merger, the Company has issued 197,600 shares of stock at an average price of $171.62, for total proceeds of $33.7 million, net of commissions.

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Unsecured Notes Offering

In April, the Company issued $400 million of 3.875% senior unsecured notes that mature in May 2024.  Please see our press release dated April 8, 2014 for additional details about the notes offering.

Balance Sheet

At the end of April, the Company had $5.1 billion in total debt outstanding, reflecting the approximately $1.7 billion of debt assumed from BRE and the new $400 million unsecured notes issued in April 2014.  At the end of April, the Company had $845 million available on its $1.0 billion revolving line of credit and total shares and operating partnership units outstanding for Essex was approximately 64.0 million.

Guidance

The Company has revised its full year guidance for Core FFO per diluted share from a range of $8.10 - $8.40 to a range of $8.15 to $8.45.  The revised numbers reflect the BRE transaction, timing of the first quarter equity offering, and the $400 million unsecured note offering announced in April.  The Company has not revised its same-property NOI growth outlook for the Essex portfolio for the full year but will do so as part of its second quarter earnings release.  The table below outlines the key assumptions relating to BRE and additional details can be found on page S-13 of the Supplemental Financial Information.

Key BRE Assumptions

(all dollars are in millions and at Essex’s pro rata share)

	Q2 2014 to Q4 2014  Range		Full Year Run  Rate Range
Operating & G&A Synergies	$	18 to $20	$	24 to $27
Prop 13 Tax Adjustment	($15 to $17)		($20 to $23)
Mark-to-Market Debt	$	17 to $21	$	23 to $28
MB360 Fire Impact	($2 to $3)		($2 to $3)

For the second quarter, the Company has established a range for Core FFO per diluted share of $1.96 to $2.04. During the quarter, the Company does not expect to achieve the full operating synergy benefits it expects on a full year run rate basis as it will take several months to implement new processes.  In the fourth quarter, the Company expects the majority of the savings it has initially identified will be in-place.  The second quarter will be impacted by the amount and timing of capital markets activities and a lower cost basis of MB360 that qualifies for interest capitalization.

CONFERENCE CALL WITH MANAGEMENT

The Company will host an earnings conference call with management to discuss its quarterly results on Thursday May 8, 2014 at 10 a.m. PDT (1 p.m. EDT), which will be broadcast live via the Internet at www.essexpropertytrust.com, and accessible via phone by dialing (877) 407-0784, no passcode is necessary.

A rebroadcast of the live call will be available online for 90 days and digitally for 7 days. To access the replay online, go to www.essexpropertytrust.com and select the first quarter earnings link.  To access the replay digitally, dial (877) 870-5176 using the replay pin number 13578671. If you are unable to access the information via the Company’s website, please contact the Investor Relations Department at investors@essexpropertytrust.com or by calling (650) 494-3700.

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CORPORATE PROFILE

Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 234 apartment communities with an additional 14 properties in various stages of active development. Additional information about Essex can be found on the Company’s web site at www.essexpropertytrust.com.

This press release and accompanying supplemental financial information will be filed electronically on Form 8-K with the Securities and Exchange Commission and can be accessed from the Company’s Web site at www.essexpropertytrust.com. If you are unable to obtain the information via the Web, please contact the Investor Relations Department at (650) 494-3700.

FUNDS FROM OPERATIONS (“FFO”) RECONCILIATION

FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, FFO adjusts the net income of equity REITs for non-cash charges such as depreciation and amortization of rental properties, impairment charges, gains/losses on sales of real estate and extraordinary items. Management considers FFO and FFO which excludes acquisition costs and items that are non-recurring or not related to the Company’s core business activities, which is referred to as (“Core FFO”), to be useful financial performance measurements of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with an additional basis to evaluate the operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and the ability to pay dividends.

FFO does not represent net income or cash flows from operations as defined by U.S. generally accepted accounting principles (“GAAP”) and is not intended to indicate whether cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the REIT's operating performance or to cash flows as a measure of liquidity. FFO does not measure whether cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to shareholders. FFO also does not represent cash flows generated from operating, investing or financing activities as defined under GAAP. Management 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 disclosures of FFO may not be comparable to the Company’s calculation.

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The following table sets forth the Company’s calculation of diluted FFO and Core FFO for the quarters ended March 31, 2014 and 2013:

	Quarter Ended March 31,
Funds from Operations (In thousands)	2014			2013
Net income available to common stockholders	$	21,912		$	25,203
Adjustments:
Depreciation		50,312			47,144
Gains not included in FFO, net of internal disposition costs		(10,292	)		-
Depreciation add back from unconsolidated co-investments, and add back convertible preferred dividend – Series G		4,760			3,842
Noncontrolling interest related to Operating Partnership units		1,417			1,501
Depreciation attributable to noncontrolling interests		(329	)		(327	)
Funds from Operations	$	67,780		$	77,363
Acquisition costs		188			387
Gain on sales of marketable securities and note prepayment		(427	)		(2,611	)
Gain on sale of land		(400	)		(1,503	)
Earthquake related and other		1,571			-
Loss on early retirement of debt add back from unconsolidated co-investments		197			-
Merger expenses		16,059			-
Co-investment promote income		(3,848	)		-
Income from early redemption of preferred equity investments		-			(423	)
Core Funds from Operations	$	81,120		$	73,213

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SAFE HARBOR STATEMENT UNDER THE PRIVATE LITIGATION REFORM ACT OF 1995:

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  Such forward-looking statements include statements and estimates on page 1 and under the caption “Guidance” on page 6 with respect to Core FFO and same-property NOI growth for the second quarter 2014 and for the full year 2014, statements and estimates regarding plans for a dividend increase, regarding the timing and realization of cost of capital and synergy benefits from the BRE merger and regarding the anticipated insurance proceeds in connection with the MB360 fire and regarding stabilization dates of the development properties, and statements and estimates set forth under the captions “Development Pipeline—March 31, 2014” and “Redevelopment Pipeline and Capital Expenditures—March 31, 2014” on pages S-9 and S-10 of the Company’s Supplemental Financial Information Package, which accompanies this press release, regarding estimated costs of property development and redevelopment and regarding the anticipated timing of redevelopments and of the construction start, initial occupancy and stabilization of property development and the various financial estimates and assumptions set forth in the columns “ESS Standalone 2014 Midpoint”, “Impact from BRE Merger” and “2014 Revised Guidance Range for ESS”on page S-13 of the Company’s Supplemental Financial Information Package and the forecasts, set forth on page S-15 of the Company’s Supplemental Financial Information Package, of residential supply, jobs, and rent growth in various areas.  The Company's actual results may differ materially from those projected in such forward-looking statements.  Factors that might cause such a difference include, but are not limited to, changes in market demand for rental units and the impact of competition and competitive pricing, unanticipated difficulties in integrating the businesses of Essex and BRE and realizing anticipated synergies, changes in economic conditions, unexpected delays in the development and stabilization of development projects, unexpected difficulties in leasing of development projects, total costs of development investments exceeding the Company’s projections and other risks detailed in the Company's filings with the Securities and Exchange Commission (SEC).  All forward-looking statements are made as of today, and the Company assumes no obligation to update this information.  For more details relating to risk and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks to our business in general, please refer to our SEC filings, including the Company’s Report on Form 10-K for the year ended December 31, 2013.

Contact Information

Barb Pak

Director of Investor Relations

(650) 494-3700

bpak@essex.com

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EX-99.2

Exhibit 99.2

Q1 2014 Supplemental

Table of Contents

	Page
Consolidated Operating Results	S-1 – S-2
Consolidated Funds From Operations	S-3
Consolidated Balance Sheets	S-4
Debt Summary – March 31, 2014	S-5
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – March 31, 2014	S-6
Property Operating Results – Quarters ended March 31, 2014 and 2013	S-7
Revenue by County – Quarters ended March 31, 2014, March 31, 2013, and December 31, 2013	S-8
Development Pipeline – March 31, 2014	S-9
Redevelopment Pipeline and Capital Expenditures – March 31, 2014	S-10
Co-Investments – March 31, 2014	S-11
Summary of Consolidated Co-Investments and Noncontrolling Interest – March 31, 2014	S-12
Assumptions for 2014 FFO Guidance Range	S-13
Summary of Apartment Community Acquisitions and Dispositions Activity	S-14
2014 MSA Level Forecasts: Supply, Jobs and Apartment Market Conditions	S-15

E S S E X  P R O P E R T Y  T R U S T, I N C.

Consolidated Operating Results	Three Months Ended
(Dollars in thousands, except share and per share amounts)	March 31,
	2014			2013
Revenues:
Rental and other property	$	159,017		$	145,057
Management and other fees		2,628			2,948
		161,645			148,005
Expenses:
Property operating		51,973			46,326
Depreciation		50,312			46,787
General and administrative		7,075			6,239
Merger expenses		16,059			-
Cost of management and other fees		1,477			1,701
Acquisition and disposition costs		975			387
		127,871			101,440
Earnings from operations		33,774			46,565
Interest expense before amortization		(26,055	)		(25,211	)
Amortization expense		(2,986	)		(2,930	)
Interest and other income		2,879			5,023
Equity income from co-investments		10,526			4,211
Gain on sale of real estate and land		8,268			1,503
Income before discontinued operations		26,406			29,161
Income from discontinued operations		-			542
Net income		26,406			29,703
Net income attributable to noncontrolling interest		(3,126	)		(3,132	)
Net income attributable to controlling interest		23,280			26,571
Dividends to preferred stockholders		(1,368	)		(1,368	)
Net income available to common stockholders	$	21,912		$	25,203
Net income per share - basic	$	0.58		$	0.68
Shares used in income per share - basic		37,685,073			37,003,925
Net income per share - diluted	$	0.58		$	0.68
Shares used in income per share - diluted		37,931,454			37,092,062

See Company's 10-K for additional disclosures

S-1

E S S E X  P R O P E R T Y  T R U S T, I N C.

Consolidated Operating Results	Three Months Ended
Selected Line Item Detail	March 31,
(Dollars in thousands)	2014			2013
Rental and other property
Rental	$	147,994		$	135,512
Other property		11,023			9,545
Rental and other property	$	159,017		$	145,057
Management and other fees
Management	$	1,656		$	2,007
Development and redevelopment		972			941
Management and other fees	$	2,628		$	2,948
Property operating expenses
Real estate taxes	$	15,339		$	14,073
Administrative and insurance		13,056			10,484
Maintenance and repairs		10,221			9,350
Utilities		9,469			8,942
Property management		3,888			3,477
Property operating expenses	$	51,973		$	46,326
Interest and other income
Marketable securities and other interest income	$	2,411		$	1,625
Notes receivable		41			787
Gain from sale of marketable securities and note prepayment		427			2,611
Interest and other income	$	2,879		$	5,023
Equity income from co-investments
Equity loss from co-investments	$	(18	)	$	(41	)
Income from preferred equity investments		3,485			3,829
Gain on sale of co-investment		3,211			-
Co-investment promote income		3,848			-
Income from early redemption of preferred equity investments		-			423
Equity income from co-investments	$	10,526		$	4,211
Noncontrolling interest
Limited partners of Essex Portfolio, L.P.	$	1,417		$	1,501
DownREIT limited partners' distributions		1,144			1,175
Third-party ownership interest		565			456
Noncontrolling interest	$	3,126		$	3,132

See Company's 10-K for additional disclosures

S-2

E S S E X  P R O P E R T Y  T R U S T, I N C.

Consolidated Funds From Operations	Three Months Ended
(Dollars in thousands, except share and per share amounts)	March 31,
	2014			2013			% Change
Funds from operations
Net income available to common stockholders	$	21,912		$	25,203
Adjustments:
Depreciation		50,312			47,144
Gains not included in FFO, net of internal disposition costs		(10,292	)		-
Depreciation add back from unconsolidated co-investments, and add back convertible preferred dividend - Series G		4,760			3,842
Noncontrolling interest related to Operating Partnership units		1,417			1,501
Depreciation attributable to noncontrolling interest		(329	)		(327	)
Funds from operations	$	67,780		$	77,363
FFO per share-diluted	$	1.68		$	1.97			-14.6	%
Components of the change in FFO
Non-core items:
Acquisition costs		188			387
Gain on sale of marketable securities and note prepayment		(427	)		(2,611	)
Gain on sale of land		(400	)		(1,503	)
Earthquake related and other		1,571			-
Loss on early retirement of debt add back from unconsolidated co-investments		197			-
Merger expenses		16,059			-
Co-investment promote income		(3,848	)		-
Income from early redemption of preferred equity investments		-			(423	)
Core funds from operations		81,120			73,213
Core FFO per share-diluted	$	2.02		$	1.87			8.0	%
Changes in core items:
Same-property NOI	$	7,770
Non-same property NOI		2,114
Management and other fees, net		(96	)
Equity income from co-investments		794
Interest and other income		40
Interest and amortization expense		(900	)
General and administrative		(836	)
Discontinued operations		(899	)
Other items, net		(80	)
	$	7,907
Weighted average number of shares outstanding diluted (1)		40,238,064			39,205,611

(1) Assumes conversion of the weighted average operating partnership interests in the Operating Partnership into shares of the Company's common stock.

See Company's 10-K for additional disclosures

S-3

E S S E X  P R O P E R T Y  T R U S T, I N C.

Consolidated Balance Sheets    

(Dollars in thousands)     

	March 31, 2014				December 31, 2013
Real Estate:
Land and land improvements	$	1,354,748			$	1,083,552
Buildings and improvements		5,286,033				4,360,205
		6,640,781				5,443,757
Less:  accumulated depreciation		(1,300,793	)			(1,254,886	)
		5,339,988				4,188,871
Real estate under development		308,266				50,430
Co-investments		716,443				677,133
		6,364,697				4,916,434
Cash and cash equivalents		48,671				53,766
Marketable securities		100,348				90,084
Notes and other receivables		36,105				68,255
Other assets		83,221				58,300
Total assets	$	6,633,042			$	5,186,839
Mortgage notes payable	$	1,408,232			$	1,404,080
Unsecured debt		1,410,162				1,410,023
Lines of credit		135,903				219,421
Other liabilities		114,883				148,046
Derivative liabilities		2,109				2,682
Total liabilities		3,071,289				3,184,252
Cumulative convertible preferred stock, carrying value		4,349				4,349
Equity:
Common stock		4				4
Cumulative redeemable preferred stock, liquidation value		73,750				73,750
Additional paid-in-capital		2,505,003				2,345,763
Distributions in excess of accumulated earnings		(498,368	)			(474,426	)
Accumulated other comprehensive loss		(56,395	)			(60,472	)
Total stockholders' equity		2,023,994				1,884,619
Noncontrolling interest		1,533,410		(1)		113,619
Total equity		3,557,404				1,998,238
Total liabilities and equity	$	6,633,042			$	5,186,839

(1) Includes $1.4 billion related to the issuance of Operating Partnership Units issued to BRE Properties on March 31, 2014 for the contribution of 14 properties to the Operating Partnership. On April 1, 2014, the units were retired in the merger with BRE.

See Company's 10-K for additional disclosures

S-4

E S S E X  P R O P E R T Y  T R U S T, I N C.

Debt Summary - March 31, 2014

(Dollars in thousands)

											Scheduled principal payments (excludes lines of credit)
	Percentage					Weighted Average													Weighted			Percentage
	of Total			Balance		Interest			Maturity				Balance Outstanding						Average Interest			of Total
	Debt			Outstanding		Rate			In Years				Secured		Unsecured		Total		Rate			Debt
Mortgage Notes Payable
Fixed rate - secured		42	%	$	1,230,625		6.0	%		4.9		2014	$	-	$	-	$	-		-			-
Variable rate - secured (1)		6	%		177,607		1.5	%		18.8		2015		67,070		-		67,070		5.2	%		2.4	%
Total mortgage notes payable		48	%		1,408,232		5.4	%		6.7		2016		12,319		350,000		362,319		3.3	%		12.9	%
												2017		182,049		190,000		372,049		4.3	%		13.2	%
Unsecured Debt												2018		269,939		-		269,939		5.8	%		9.6	%
Bonds private - fixed rate		16	%		465,000		4.5	%		5.0		2019		264,984		75,000		339,984		5.4	%		12.0	%
Bonds public - fixed rate		20	%		595,162		3.5	%		8.7		2020		396,721		-		396,721		6.4	%		14.1	%
Term loan (2)		12	%		350,000		2.4	%		2.9		2021		47,543		200,000		247,543		5.0	%		8.8	%
		48	%		1,410,162		3.6	%		6.1		2022		-		297,387		297,387		3.7	%		10.5	%
Unsecured Lines of Credit												2023		-		297,775		297,775		3.4	%		10.6	%
Line of credit (3)		4	%		124,000		1.6	%				2024		-		-		-		-			-
Line of credit (4)		-			11,903		1.6	%			Thereafter			167,607		-		167,607		1.5	%		5.9	%
Total lines of credit		4	%		135,903		1.6	%
											Total		$	1,408,232	$	1,410,162	$	2,818,394		4.5	%		100.0	%
Total debt		100	%	$	2,954,297		4.4	%

Capitalized interest for the three months ended March 31, 2014 was approximately $3.4 million.

(1) Variable rate debt of $167.6 million is tax exempt to the note holders and $156.9 million is subject to interest rate protection agreements.

(2) The unsecured term loan has a variable interest rate of LIBOR plus 1.05%.  The Company has entered into interest rate swap contracts with a notional amount totaling $300 million, which effectively converts the interest rate on $300 million of the term loan to a fixed rate of 2.4%.

(3) The unsecured line of credit facility is $1 billion and the line matures in December 2017 with one 18-month extension, exercisable at the Company's option.  The underlying interest rate on this line is based on a tiered rate structure tied to the Company's corporate ratings and is currently at LIBOR plus 0.95%.

(4) The unsecured line of credit facility is $25 million and matures in January 2016.  The underlying interest rate on this line is based on a tiered rate structure tied to the Company's corporate ratings and is currently at LIBOR plus 0.95%.

See Company's 10-K for additional disclosures

S-5

E S S E X  P R O P E R T Y  T R U S T, I N C.     

Capitalization Data, Public Bond Covenants, Credit Ratings and Selected Credit Ratios - March 31, 2014

(Dollars and shares in thousands, except per share amounts)

Capitalization Data				Public Bond Covenants (1)	Actual			Requirement
Total debt	$	2,954,297
				Debt to Total Assets:		46	%	< 65%
Common stock and potentially dilutive securities
Common stock outstanding		38,392
Limited partnership units (1)(2)		2,176
Options-treasury method		348		Secured Debt to Total Assets:		22	%	< 40%
Total shares of common stock and potentially dilutive securities		40,916
Common stock price per share as of March 31, 2014	$	170.05
				Interest Coverage:		347	%	> 150%
Market value of common stock and potentially dilutive securities	$	6,957,766
Preferred stock	$	73,079		Unsecured Debt Ratio (2) :		243	%	> 150%
Total equity capitalization	$	7,030,845
				Selected Credit Ratios (1)	Actual
Total market capitalization	$	9,985,142
Ratio of debt to total market capitalization		29.6	%	Indebtedness Divided by Adjusted EBITDA (3):		6.8	x
				Unencumbered NOI to Total NOI:		60	%

(1)   Assumes conversion of all outstanding operating partnership interests in the Operating Partnership into shares of the Company's common stock. (2)   Excludes 8.6 million of Operating Partnership Units issued to BRE Properties on March 31, 2014 for the contribution of 14 properties to the Operating Partnership. On April 1, 2014, the units were retired as part of the merger with BRE.			(1) Excludes 14 properties, or approximately $1.4 billion, contributed to the Operating Partnership at March 31, 2014 by BRE in exchange for OP units.  On April 1, 2014, the units were retired by Essex. (2) Unsecured Debt Ratio is unsecured assets (excluding investments in co-investments) divided by unsecured indebtedness. (3) Adjusted EBITDA is annualized current quarter NOI adjusted for non-recurring items and proforma NOI for current quarter acquisitions.
Credit Ratings
Rating Agency	Rating	Outlook
Fitch	BBB+	Stable
Moody's	Baa2	Stable
Standard & Poors	BBB	Stable

See Company's 10-K for additional disclosures

S-6

E S S E X  P R O P E R T Y  T R U S T, I N C.

Property Operating Results - Quarters ended March 31, 2014 and 2013

(Dollars in thousands, except per unit amounts)

	Southern California									Northern California									Seattle Metro									Other real estate assets (1)				Total
	2014			2013			% Change			2014			2013			% Change			2014			2013			% Change			2014		2013		2014			2013			% Change
Revenues:
Same-property revenue	$	65,475		$	62,431			4.9	%	$	53,054		$	48,461			9.5	%	$	27,896		$	25,751			8.3	%	$	-	$	-	$	146,425		$	136,643			7.2	%
Non-same property revenue (2)		4,212			2,309						3,890			2,309						745			-						3,745		3,796		12,592			8,414
Total Revenues	$	69,687		$	64,740					$	56,944		$	50,770					$	28,641		$	25,751					$	3,745	$	3,796	$	159,017		$	145,057
Property operating expenses:
Same-property operating expenses
Real estate taxes	$	5,721		$	5,511					$	4,989		$	4,818					$	2,909		$	2,598					$	-	$	-	$	13,619		$	12,927			5.4	%
Administrative and insurance		5,756			5,596						2,984			2,958						1,871			1,834						-		-		10,611			10,388			2.1	%
Maintenance and repairs		4,326			4,111						3,139			2,995						1,803			1,638						-		-		9,268			8,744			6.0	%
Utilities		3,630			3,351						2,978			2,851						2,019			1,980						-		-		8,627			8,182			5.4	%
Management fees		1,421			1,394						1,024			967						750			706						-		-		3,195			3,067			4.2	%
Total same-property operating expenses		20,854			19,963			4.5	%		15,114			14,589			3.6	%		9,352			8,756			6.8	%		-		-		45,320			43,308			4.6	%
Non-same property operating expenses (2)(7)		1,767			1,069						1,477			898						244			-						3,165		1,051		6,653			3,018
Total property operating expenses	$	22,621		$	21,032					$	16,591		$	15,487					$	9,596		$	8,756					$	3,165	$	1,051	$	51,973		$	46,326
Net operating income (NOI):
Same-property NOI	$	44,621		$	42,468			5.1	%	$	37,940		$	33,872			12.0	%	$	18,544		$	16,995			9.1	%	$	-	$	-	$	101,105		$	93,335			8.3	%
Non-same property NOI (2)
Redevelopment communities		1,454			1,240						-			-						-			-						-		-		1,454			1,240
Development communities - 2014 (3)		(13	)		-						-			-						-			-						-		-		(13	)		-
Acquired communities - 2013 (4)		1,004			-						2,413			1,411						501			-						-		-		3,918			1,411
Other real estate assets (1)		-			-						-			-						-			-						580		2,745		580			2,745
Total non-same property NOI (6)		2,445			1,240						2,413			1,411						501			-						580		2,745		5,939			5,396
Total NOI	$	47,066		$	43,708					$	40,353		$	35,283					$	19,045		$	16,995					$	580	$	2,745	$	107,044		$	98,731
Same-property operating margin		68	%		68	%					72	%		70	%					66	%		66	%									69	%		68	%
Annualized same-property turnover percentage		45	%		45	%					45	%		46	%					39	%		37	%									44	%		43	%
Average same-property concessions per turn (5)	$	117		$	148					$	173		$	178					$	126		$	133									$	137		$	155
Reconciliation of apartment units at end of period
Same-property apartment units		12,914									8,840									6,537													28,291
Consolidated apartment units		13,870			13,656						9,430			9,431						6,703			6,720										30,003			29,807
Joint venture		1,870			1,788						1,592			1,236						1,157			1,512										4,619			4,536
Under development		571			492						1,780			1,728						-			-										2,351			2,220
Total apartment units at end of period		16,311			15,936						12,802			12,395						7,860			8,232										36,973			36,563
Percentage of total		44	%		44	%					35	%		34	%					21	%		22	%									100	%		100	%
Average same-property financial occupancy		96.4	%		96.5	%					96.5	%		96.5	%					96.5	%		96.6	%									96.5	%		96.5	%

(1) Other real estate assets consists mainly of retail space, commercial properties, boat slips, and properties sold during 2014. Their operating results are classified in non-same property results.

(2) Includes properties which subsequent to January 1, 2013 were either acquired or in a stage of development or redevelopment without stabilized operations.

(3) In March 2014, the Company purchased The Avery, a development community that is in lease up.

(4) Acquired communities during 2013 includes Annaliese, Fox Plaza, Slater 116, Vox, and Domain.

(5) Average same-property concessions per turn is the dollar amount per unit resulting from the same-property concessions divided by the product of the same property turnover percentage for the quarter times the same-property apartment units.

(6) Non-same property NOI excludes operating results related to 14 BRE properties contributed to the Operating Partnership on March 31, 2014.

(7) Other real estate asset expenses for the quarter ended March 31, 2014, includes $1.6 million related to earthquake and flood damage at two communities.

See Company's 10-K for additional disclosures

S-7

E S S E X  P R O P E R T Y  T R U S T, I N C.  

Revenue by County - Quarters ended March 31, 2014, March 31, 2013 and December 31, 2013        

(Dollars in thousands, except average property rental rates)  

										Three months ended					Three months ended
			Average Property Rental Rates							March 31, 2014					March 31, 2013
Region	Units		QTD 2014		QTD 2013		% Change			Property Revenue		Financial Occupancy			Property Revenue		Financial Occupancy			Property Revenue % Change			Property Revenue December 31, 2013		Sequential  % Change
Southern California
Los Angeles County		4,439	$	1,865	$	1,783		4.6	%	$	25,237		96.5	%	$	24,106		96.7	%		4.7	%	$	25,019		0.9	%
Ventura County		2,898		1,442		1,384		4.2	%		13,016		96.9	%		12,446		96.9	%		4.6	%		12,815		1.6	%
Orange County		2,887		1,889		1,795		5.2	%		16,467		95.8	%		15,644		96.4	%		5.3	%		16,290		1.1	%
San Diego County		2,067		1,273		1,222		4.2	%		8,186		96.2	%		7,828		96.2	%		4.6	%		8,092		1.2	%
Santa Barbara County		347		1,750		1,670		4.8	%		1,892		99.6	%		1,779		97.6	%		6.4	%		1,892		0.0	%
Riverside County		276		791		798		-0.9	%		677		95.7	%		628		89.5	%		7.8	%		668		1.3	%
Total same-property		12,914		1,655		1,582		4.6	%		65,475		96.4	%		62,431		96.5	%		4.9	%		64,776		1.1	%
Los Angeles County		577		1,727							2,385					2,309
San Diego County		379		1,895							1,827					-
Non-same property		956		1,794							4,212					2,309
Northern California
Santa Clara County		4,279		2,075		1,907		8.8	%		26,992		96.6	%		24,710		96.6	%		9.2	%		26,479		1.9	%
Contra Costa County		1,720		1,772		1,647		7.6	%		9,305		96.3	%		8,619		96.4	%		8.0	%		9,094		2.3	%
Alameda County		1,542		1,757		1,582		11.1	%		8,504		97.3	%		7,644		97.1	%		11.3	%		8,278		2.7	%
San Mateo County		768		2,146		1,960		9.5	%		5,106		96.7	%		4,655		97.2	%		9.7	%		5,004		2.0	%
San Francisco MSA		301		2,235		1,995		12.0	%		1,968		93.4	%		1,741		92.1	%		13.0	%		1,996		-1.4	%
Other		230		1,683		1,572		7.1	%		1,179		96.3	%		1,092		95.8	%		8.0	%		1,163		1.4	%
Total same-property		8,840		1,962		1,799		9.1	%		53,054		96.5	%		48,461		96.5	%		9.5	%		52,014		2.0	%
San Francisco MSA		590		2,271							3,890					2,309
Non-same property		590		2,271							3,890					2,309
Seattle Metro
King County		6,072		1,369		1,273		7.5	%		26,409		96.5	%		24,402		96.6	%		8.2	%		26,115		1.1	%
Snohomish County		465		990		919		7.7	%		1,487		97.6	%		1,349		96.8	%		10.2	%		1,435		3.6	%
Total same-property		6,537		1,342		1,247		7.7	%		27,896		96.5	%		25,751		96.6	%		8.3	%		27,550		1.3	%
King County		166		1,622							745					-
Non-same property		166		1,622							745					-
Other real estate assets											3,745					3,796
Total same-property revenue		28,291	$	1,678	$	1,572		6.8	%	$	146,425		96.5	%	$	136,643		96.5	%		7.2	%	$	144,340		1.4	%
Total non-same property revenue		1,712	$	1,941						$	12,592				$	8,414

See Company's 10-K for additional disclosures

S-8

E S S E X  P R O P E R T Y  T R U S T, I N C.

Development Pipeline - March 31, 2014

(Dollars in millions, except per unit amounts in thousands)

		Ownership %			Estimated Units		Estimated Retail sq. feet		Incurred to Date		Remaining Costs		Estimated Total Cost		Essex Share of Estimated Total Cost				Apartment Cost per Unit		Construction Start		Initial Occupancy		Stabilized Operations
Development Projects - Consolidated
Project Name	Location
Emme	Emeryville, CA		100	%		190		-	$	40	$	22	$	62	$	62			$	326		Q3 2012		Q3 2014		Q1 2015
Avery (1)	Valley Village, CA		100	%		121		-		37		1		38		38				314		Q3 2012		Q1 2014		Q2 2014
Total Development Projects - Consolidated						311		-		77		23		100		100				322
Other Development Projects - Consolidated
Project Name	Location
City Centre	Moorpark, CA		100	%		200		-		12		-		12		12
Other Projects	various		100	%		-		-		3		-		3		3
Real Estate under Development transferred from BRE on 3/31/14 (2)			100	%		-		-		252		253		505		505
Total Other Development Projects - Consolidated						200		-		267		253		520		520
Total Development Pipeline - Consolidated						511		-		344		276		620		620
Development Projects - Joint Venture
Project Name	Location
Epic - Phase II	San Jose, CA		55	%		289		-		88		9		97		54				336		Q1 2012		Q4 2013		Q2 2014
Epic - Phase III	San Jose, CA		55	%		200		-		36		60		96		53				480		Q3 2013		Q3 2015		Q1 2016
The Huxley	West Hollywood, CA		50	%		187		18,200		75		-		75		38		(3)		339		Q4 2011		Q1 2014		Q3 2014
The Dylan	West Hollywood, CA		50	%		184		12,750		70		5		75		38		(3)		363		Q4 2011		Q2 2014		Q4 2014
Mosso I	San Francisco, CA		55	%		181		5,030		78		22		100		55		(3)		538		Q2 2012		Q2 2014		Q1 2015
Mosso II	San Francisco, CA		55	%		282		4,270		128		22		150		82		(3)		525		Q2 2012		Q3 2014		Q2 2015
Park 20	San Mateo, CA		55	%		197		-		53		23		76		42				386		Q3 2012		Q3 2014		Q1 2015
One South Market	San Jose, CA		55	%		312		6,000		41		104		145		80		(3)		458		Q2 2013		Q3 2015		Q2 2016
The Village	Walnut Creek, CA		50	%		49		35,000		40		41		81		41		(3)		769		Q3 2013		Q3 2015		Q1 2016
Total Development Projects - Joint Venture						1,881		81,250		609		286		895		483			$	439
Grand Total - Development Pipeline						2,392		81,250	$	953	$	562	$	1,515		1,103
Essex Cost Incurred to Date																(670	)
Essex Remaining Commitment															$	433

(1) The Company purchased this property in March 2014 after it obtained a certificate of occupancy.

(2) The real estate under development was transferred on March 31, 2014 as part of the Operating Partnership unit trade that occurred one day prior to the close of the merger with BRE.

(3) Excludes the estimated allocation to retail square feet.

See Company's 10-K for additional disclosures

S-9

E S S E X  P R O P E R T Y  T R U S T, I N C.

Redevelopment Pipeline and Capital Expenditures - March 31, 2014

(Dollars in thousands, except per unit amounts)

			Total		Estimated		Estimated				NOI
			Incurred		Remaining		Total		Project		For the three months ended
Region/Project Name	Units		To Date		Cost		Cost		Start		2014		2013
Same-property - Redevelopment Projects (1) (2)
Southern California
The Hamptons, Glendale, CA		215	$	73	$	19,408	$	19,481		Q1 2014
The Monterras, Pasadena, CA		292		691		25,692		26,383		Q1 2014
Total Same-Property - Redevelopment Projects		507	$	764	$	45,100	$	45,864			$	1,792	$	1,794
Same-Property Redevelopment Vacancy Loss											$	441	$	431
Non-same property - Redevelopment Projects
Southern California
Bunker Hill Towers, Los Angeles		456		4,189		71,955		76,144		Q3 2013
Total Non-Same Property - Redevelopment Projects		456	$	4,189	$	71,955	$	76,144			$	1,454	$	1,240

(1) Redevelopment activities are ongoing at these communities, but the communities have stabilized operations, therefore results are classified in same-property operations.

(2) The Company incurred $0.4 million of vacancy loss for the same-property portfolio, and $0.6 million  of vacancy loss for the total portfolio during the three months ended March 31, 2014. The Company completed the redevelopment of interiors totaling 240 units for the same-property portfolio and 285 units for the total portfolio, during the three months ended March 31, 2014.

Non-revenue Generating Capital Expenditures		Q1 2014		Q4 2013		Q3 2013		Q2 2013		Q1 2013		Q4 2012		Q3 2012
Non-revenue generating capital expenditures	$	4,416	$	5,153	$	9,536	$	8,330	$	4,019	$	14,715	$	8,736
Average apartment units in quarter		29,886		29,833		29,646		29,338		28,900		28,269		27,815
Capital expenditures per apartment unit in the quarter	$	148	$	173	$	322	$	284	$	139	$	521	$	314
Capital expenditures per apartment unit-trailing four quarters	$	918	$	906	$	1,235	$	1,220	$	1,153	$	1,079	$	1,004

See Company's 10-K for additional disclosures

S-10

E S S E X  P R O P E R T Y  T R U S T, I N C.

Co-investments - March 31, 2014	Essex					Total				Essex		Weighted			Remaining		For the Quarter
(Dollars in thousands)	Ownership					Undepreciated		Debt		Book		Average			Term of		Ended March 31,
	Percentage			Units		Book Value		Amount		Value		Borrowing Rate			Debt/(in Years)		2014			2013
Operating Non-consolidated Joint Ventures																	Net Operating Income
Essex Apartment Value Fund II, L.P. (Fund II) (1)		28.2	%		96	$	14,421	$	6,297	$	7,235		5.6	%		0.4	$	305		$	4,416
Wesco I, LLC (2)		50.0	%		2,713		672,617		368,832		136,495		4.0	%		9.2		8,939			8,229
Wesco III, LLC (2)		50.0	%		657		165,008		87,712		38,928		2.7	%		6.0		1,956			629
Expo		50.0	%		275		64,690		45,000		11,877		3.6	%		6.4		1,157			385
Total Operating Non-consolidated Joint Ventures					3,741	$	916,736	$	507,841		194,535		3.8	%		8.3	$	12,357		$	13,659
																	Essex Portion of NOI and Expenses
Essex portion of NOI																	$	6,112		$	5,867
Essex portion of depreciation																		(4,706	)		(3,788	)
Essex portion of interest expense and other																		(2,443	)		(2,120	)
Essex portion of gain and promote income (Fund II)																		7,059			-
Essex portion of net income (loss) from operating co-investments																	$	6,022		$	(41	)
Development Joint Ventures (3) (4)		50/55	%		2,470	$	784,989	$	109,100		378,200		1.5	%		32.7	$	1,019		$	-
												Weighted Average Preferred Return			Weighted Average Expected Term		Income from Preferred Equity Investments
																	Equity Investments
Preferred Equity Investments											143,708		10.0	%		3.8	$	3,485		$	4,252
Total Co-investments										$	716,443						$	10,526		$	4,211

(1) The Company has a 28.2% interest as a general partner and limited partner in Fund II, and may earn promote income if Fund II exceeds certain financial return benchmarks.  As of Q1 2014, 13 of the 14 properties in Fund II were sold.  The remaining property is expected to be sold in 2014.

(2) The Company has a 50% interest in Wesco I and III and the Company may earn promote income if the co-investment exceeds certain financial benchmarks.

(3) The Company has interests in nine development co-investments, which are detailed on S-9.  NOI generated from the lease-up of Epic Phase 1 and 2 and Connolly Station are included in Development Joint Ventures.

(4) The Huxley and The Dylan have a combined $109.1 million of long-term tax-exempt bond debt that are subject to total return swaps that mature in 2016.

See Company's 10-K for additional disclosures

S-11

E S S E X  P R O P E R T Y  T R U S T, I N C.

Summary of Consolidated Co-Investments and Noncontrolling Interest - March 31, 2014

(Dollars in thousands)

The Company enters into co-investment transactions with third party developers, owners and investors of apartment communities.  In accordance with GAAP, the Company consolidates certain of these co-investment transactions, resulting in noncontrolling interests corresponding to the ownership interest of the third-party developer, owner or investor.

The following table summarizes the consolidated co-investments and noncontrolling interest:

									Operations for the year ended
	Balance as of March 31, 2014								March 31, 2014
	Investment in		Related		Noncontrolling		DownREIT				Operating
	Real Estate		Debt		Interest		Units Outstanding (1)		Revenue		Expenses		NOI
Noncontrolling Interest - DownREIT:
Barkley Apartments	$	8,225	$	16,466	$	1,696		74,248	$	683	$	233	$	450
Avery (2)		36,509		10,000		2,568		58,884		-		-		-
Brookside Oaks		31,478		19,565		2,239		80,903		1,037		195		842
Capri at Sunny Hills		15,594		-		2,945		158,665		654		177		477
Hidden Valley (3)		36,635		30,033		6,089		62,647		1,428		433		995
Highridge Apartments		29,835		44,807		2,826		270,158		1,739		397		1,342
Montejo Apartments		7,774		13,000		1,216		29,319		488		125		363
The Elliot at Mukilteo		15,396		10,750		1,212		100,713		932		327		605
Magnolia Square		30,697		18,044		6,356		57,231		1,016		258		758
Fairhaven Apartments		12,475		16,871		2,951		67,728		686		183		503
Valley Park Apartments		13,142		22,071		53		3,831		780		295		485
Villa Angelina Apartments		19,111		26,907		1,593		43,552		1,070		272		798
	$	256,871	$	228,514		31,744		1,007,879	$	10,513	$	2,895	$	7,618
Other Components of Noncontrolling Interest:
Hillsdale Garden Apartments (4)	$	107,180				21,269			$	4,599	$	1,447	$	3,152
Operating Partnership Units and Other						60,581
Units from BRE Asset Contribution (5)						1,419,816
Total Noncontrolling Interest					$	1,533,410

(1) Generally, DownREIT units are redeemed for cash at a value equal to Essex's common stock.

(2) Avery was acquired on March 28, 2014 as the replacement property for Brentwood which completed a 1031 exchange transaction. Attributable to the 1031 exchange, the partnership underlying the noncontrolling interest remains in place. The Avery is in lease-up and therefore had no NOI during the period.

(3) The DownREIT has a 75% interest in this community and a joint venture partner has a 25% interest.

(4) The Company has an 81.5% interest in this community and the joint venture partner has an 18.5% interest.

(5) Includes 8.6 million of Operating Partnership Units issued to BRE Properties on March 31, 2014 for the contribution of 14 properties to the Operating Partnership. On April 1, 2014, the units were retired as part of the merger with BRE.

See Company's 10-K for additional disclosures

S-12

E S S E X  P R O P E R T Y  T R U S T, I N C.

Assumptions for 2014 FFO Guidance Range

Q1 2014 Earnings Results Supplement

Includes the Impact from BRE Properties as of April 1, 2014

($'s in thousands, except share and per share data)

				Changes to Guidance Including BRE Merger						2014 Revised Guidance  Range for ESS
	ESS
	Standalone			Low			High			Low			High
	2014 Midpoint			End			End			End			End			Changes from Original 2014 Guidance
Net Operating Income ("NOI")
Total NOI from consolidated communities	$	442,000			187,700			191,700			626,700			636,700		Includes NOI from the BRE properties, including the negative impact from Ave 64 redevelopment, the acquisition of Piedmont in May 2014, and Q1 '14 operating results for ESS
Accretion from external growth, net of dispositions		500			-			-			500			500
Management Fees		10,650			2,000			2,200			12,100			13,400		Reflects mgmt. fees from the three co-investments formed in the BRE merger
Interest Expense
Interest and amortization expense, before capitalized interest		(132,800	)		(53,700	)		(52,300	)		(189,200	)		(186,600	)	Updated for assumed debt from BRE at the effective interest rate on April 1 and $400M unsecured note offering in April
Projected interest capitalized		12,700			9,300			10,300			19,900			22,100		Reflects capitalized interest on developments acquired from BRE, including the impact from MB360
Net interest expense		(120,100	)		(44,400	)		(42,000	)		(169,300	)		(164,500	)
Recurring Income and Expenses
Interest and other income		9,800			-			-			9,400			10,200
FFO from co-investments		36,700			13,400			14,800			49,600			52,000		Reflects the three co-investments formed as part of the BRE merger
General and administrative expense		(25,500	)		(7,400	)		(8,400	)		(32,400	)		(34,400	)	Includes incremental G&A related to the merger
Cost of management and other fees		(6,800	)		(700	)		(700	)		(7,500	)		(7,500	)
Preferred dividends and non-controlling interest		(14,000	)		-			-			(14,000	)		(14,000	)
		200			5,300			5,700			5,100			6,300
Non-Core Income and Expenses
Promote income from co-investment		4,000			-			-			4,000			7,000
Gains on sales of marketable securities, land, note prepayment		-			-			-			827			827
Earthquake related and other		-			-			-			(1,571	)		(1,571	)
Loss on early retirement of debt		-			-			-			(197	)		(197	)
Merger expenses		-			(72,000	)		(68,000	)		(73,000	)		(67,000	)	Excludes BRE merger cost of $35 million
Acquisition costs		(1,300	)		-			-			(1,100	)		(1,600	)
		2,700			(72,000	)		(68,000	)		(71,041	)		(62,541	)
Funds from Operations	$	335,950			78,600			89,600			404,059			429,859
Funds from Operations per diluted Share	$	8.32									6.93			7.37
% Change - Funds from Operations		9.6	%								-8.7	%		-2.9	%
Funds from Operations excluding non-core items	$	333,250									475,100			492,400
Core Funds from Operations per diluted Share	$	8.25									8.15			8.45
% Change - Core Funds from Operations		8.5	%								7.2	%		11.1	%
Weighted average shares outstanding		40,400			23,100			23,100			58,300			58,300		Includes the 23.1M shares issued in the BRE merger and equity issued through April 2014

See Company's 10-K for additional disclosures

S-13

E S S E X  P R O P E R T Y  T R U S T, I N C.

Summary of Apartment Community Acquisitions and Dispositions Activity

Quarter ended March 31, 2014 and Q2 2014 to date

(Dollars in thousands)

Acquisitions				Essex
				Ownership							Purchase		Price per		Average
Property Name	Location	Units		Percentage			Ownership			Date	Price		Unit		Rent
The Avery	Los Angeles, CA		121		100	%	EPLP			Mar-14		35,000		289		2,386
	Q1 2014 Total		121								$	35,000	$	289
Piedmont	Bellevue, WA		396		100	%	EPLP			May-14		76,750		194		1,386
	Q2 2014 to date		396								$	76,750	$	194
Dispositions				Essex
				Ownership							Sales		Price per
		Units		Percentage			Ownership			Date	Price		Unit
Vista Capri			106		100.0	%	EPLP			Jan-14		14,350		135
Davey Glen			69		28.2	%	Fund II			Mar-14		23,750		344
	Q1 2014 Total		175								$	38,100	$	218
BRE Properties Contributed to Joint Ventures as of April 1, 2014							Essex
	Location			Units			Ownership Percentage			Ownership	MSA		Purchase Price
Regency at Palm Court	Los Angeles, CA				116			50.0	%	Wesco III	Los Angeles
The Summit	Chino Hills, CA				125			50.0	%	Wesco III	Los Angeles
Windsor Court	Los Angeles, CA				95			50.0	%	Wesco III	Los Angeles
		Wesco III Total			336
Bridgeport Coast	Santa Clarita, CA				188			50.0	%	Wesco IV	Los Angeles
City Centre	Hayward, CA				192			50.0	%	Wesco IV	San Francisco
Fairways at Westridge	Valencia, CA				234			50.0	%	Wesco IV	Los Angeles
Verandas	Union City, CA				282			50.0	%	Wesco IV	San Francisco
Vistas of West Hills	Valencia, CA				220			50.0	%	Wesco IV	Los Angeles
		Wesco IV Total			1,116
Ballinger Commons	Seattle, WA				485			50.0	%	AEW	Seattle
Bothell Ridge	Bothell, WA				214			50.0	%	AEW	Seattle
Canyon Creek	Northridge, CA				200			50.0	%	AEW	Los Angeles
City Walk	Seattle, WA				102			50.0	%	AEW	Seattle
Enclave at Town Square	Chino Hills, CA				124			50.0	%	AEW	Los Angeles
Esplanade	San Diego, CA				616			50.0	%	AEW	San Diego
Parkside Court	Santa Ana, CA				210			50.0	%	AEW	Orange County
The Havens	Fountain Valley, CA				440			50.0	%	AEW	Orange County
The Heights	Chino Hills, CA				332			50.0	%	AEW	Los Angeles
		AEW Total			2,723
		Total Joint Ventures			4,175								$	888,000

See Company's 10-K for additional disclosures

S-14

E S S E X  P R O P E R T Y  T R U S T, I N C.

2014 MSA Level Forecasts: Supply, Jobs and Apartment Market Conditions

	Residential Supply (1)												Job Forecast (2)					Market Forecast (3)
Market	New MF Supply		New SF Supply		Total Supply		% of MF Supply to MF Stock			% of Total  Supply to  Total Stock			Est. New  Jobs Dec- Dec		% Growth			Estimated Rent Growth
Los Angeles		9,000		3,300		12,300		0.6	%		0.4	%		75,500		1.9	%		5.3	%
Ventura		650		1,200		1,850		1.0	%		0.7	%		4,800		1.7	%		4.3	%
Orange		3,250		3,500		6,750		0.8	%		0.6	%		28,700		2.0	%		4.6	%
San Diego		2,500		2,500		5,000		0.6	%		0.4	%		23,400		1.8	%		3.7	%
So. Cal.		15,400		10,500		25,900		0.7	%		0.5	%		132,400		1.9	%		4.7	%
San Jose		4,300		1,800		6,100		1.7	%		0.9	%		26,500		2.8	%		7.9	%
San Francisco		4,500		525		5,025		1.2	%		0.7	%		26,200		2.5	%		6.4	%
Oakland		2,000		2,900		4,900		0.6	%		0.5	%		20,300		2.0	%		5.4	%
No. Cal.		10,800		5,225		16,025		1.3	%		0.7	%		73,000		2.5	%		6.8	%
Seattle		8,500		6,500		15,000		1.9	%		1.3	%		39,000		2.6	%		5.4	%
Weighted Average (4)		34,700		22,225		56,925		1.1	%		0.7	%		244,400		2.2	%		5.6	%

All data are based on Essex Property Trust, Inc. forecasts.

U.S. Economic Assumptions: 2014 G.D.P. Growth:  2.8% , 2014 Job Growth: 1.8%

(1) New Residential Supply:  MF (multifamily) reflects the Company's internal estimate of actual multifamily deliveries; SF (single family) is based on 12 month single family trailing permits reported by the US Census Bureau.

(2) Job Forecast: refers to the difference between total non-farm industry employment (not seasonally adjusted) projected through Dec 2014 over estimated Dec 2013, expressed as total new jobs and growth rates.

(3) Market Forecast: the estimated rent growth represents the forecasted change in effective market rents for Q4 2014 vs Q4 2013 (excludes submarkets not targeted by Essex).

(4) Weighted Average: markets weighted by economic rent in the Company's portfolio.     

See Company's 10-K for additional disclosures

S-15