(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):

	June 30, 2014		December 31, 2013


Membership interest in Wesco I	$	136,100	$	142,025
Membership interest in Wesco III		54,059		39,073
Partnership interest in Fund II		2,484		4,166
Membership interest in a limited liability company that owns Expo		11,561		12,041
Membership interest in a limited liability company that owns The Huxley		11,585		11,224
Membership interest in Wesco IV		97,840		-
Membership interest in BEXAEW		94,958		-
Total operating co-investments		408,587		208,529

Membership interests in limited liability companies with CPPIB that own and are developing Epic, Connolly Station, Mosso I & II, Park 20, The Village, and The Emme		372,477		301,538
Membership interests in limited liability companies that own and are developing The Dylan		8,155		7,321
Membership interest in a limited liability company that owns and is developing One South Market		30,942		17,115
Total development co-investments		411,574		325,974

Membership interest in Wesco II that owns a preferred equity interest in Parkmerced with a preferred return of 10.1%		95,527		94,711
Preferred interest in related party limited liability company that owns Sage at Cupertino with a preferred return of 9.5%		16,135		15,775
Preferred interest in a related party limited liability company that owns Madison Park at Anaheim with a preferred return of 9%		13,824		13,824
Preferred interest in related party limited liability company that owns an apartment development in Redwood City with a preferred return of 12%		9,913		9,455
Preferred interest in a limited liability company that owns an apartment development in San Jose with a preferred return of 12%		9,410		8,865
Total preferred interest investments		144,809		142,630

Total co-investments	$	964,970	$	677,133

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

	June 30, 2014		December 31, 2013
Balance sheets:
Rental properties and real estate under development	$	2,980,972	$	1,953,328
Other assets		113,794		61,578

Total assets	$	3,094,766	$	2,014,906

Debt	$	1,248,579	$	667,641
Other liabilities		83,310		125,479
Equity		1,762,877		1,221,786

Total liabilities and equity	$	3,094,766	$	2,014,906

Company's share of equity	$	964,970	$	677,133

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Statements of operations:
Property revenues	$	48,784		$	26,258		$	76,744		$	54,117
Property operating expenses		(18,556	)		(9,874	)		(30,116	)		(19,702	)
Net property operating income		30,228			16,384			46,628			34,415

Gain on sale of real estate		-			8,817			11,369			8,817
Interest expense		(9,422	)		(6,094	)		(15,445	)		(12,872	)
General and administrative		(1,811	)		(1,539	)		(3,199	)		(3,053	)
Equity income from co-investments		4,784			4,657			9,543			9,279
Depreciation and amortization		(17,885	)		(9,577	)		(28,578	)		(20,596	)

Net income	$	5,894		$	12,648		$	20,318		$	15,990

Company's share of net income	$	5,629		$	7,282		$	16,155		$	11,493

Wesco IV and AEW

On April 1, 2014, in connection with the merger, the Company acquired a 50% interest in Wesco IV LLC (“Wesco IV”) and a 50% interest in BEXAEW LLC (“BEXAEW”). Wesco IV and BEXAEW’s remaining 50% interest is owned by an institutional partner. Wesco IV and BEXAEW expect to utilize debt targeted at approximately 50% and 60%, respectively, of the cost to acquire and improve real estate. Under the terms of Wesco IV’s and BEXAEW’s operating agreements, Essex is entitled to asset management, property management, development and redevelopment service fees. In addition, Essex is entitled to its 50% pro rata share of the income or loss generated by these entities and upon the achievement of certain performance measures, is entitled to promote income. As of June 30, 2014, Wesco IV owned five apartment communities with 1,116 units with an aggregate carrying value of approximately $297.7 million. As of June 30, 2014, BEXAEW owned nine apartment communities with 2,723 units with an aggregate carrying value of approximately $516.1 million.