EX-99.2 3 ex99_2.htm EXHIBIT 99.2
Exhibit 99.2
 
Q3 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 – September 30, 2014
S-5
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – September 30, 2014
S-6
Property Operating Results – Quarters ended September 30, 2014 and 2013
S-7
Property Operating Results – Nine Months ended September 30, 2014 and 2013
S-7.1
Revenue by County – Quarters ended September 30, 2014, September 30, 2013, and June 30, 2014
S-8
Revenue by County – Nine Months ended September 30, 2014 and 2013
S-8.1
Development Pipeline – September 30, 2014
S-9
Redevelopment Pipeline and Capital Expenditures – September 30, 2014
S-10
Co-Investments – September 30, 2014
S-11
Summary of Consolidated Co-Investments and Noncontrolling Interest – September 30, 2014
S-12
Assumptions for 2014 FFO Guidance Range
S-13
Summary of Apartment Community Acquisitions and Dispositions Activity
S-14
Preliminary 2015 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
    
Nine Months Ended
  
(Dollars in thousands, except share and per share amounts)
  
September 30,
    
September 30,
  
 
  
2014
    
2013
    
2014
    
2013
  
                 
Revenues:
                
Rental and other property
  
$
268,118
    
$
152,177
    
$
683,749
    
$
446,017
  
Management and other fees
    
2,361
      
1,771
      
6,856
      
5,812
  
     
270,479
      
153,948
      
690,605
      
451,829
  
                                 
Expenses:
                                
Property operating
    
87,668
      
50,322
      
222,862
      
144,943
  
Depreciation
    
102,184
      
48,227
      
254,211
      
142,687
  
General and administrative
    
11,479
      
6,263
      
28,621
      
19,852
  
Merger and integration expenses
    
3,857
      
-
      
46,413
      
-
  
Acquisition and disposition costs
    
51
      
237
      
1,555
      
792
  
     
205,239
      
105,049
      
553,662
      
308,274
  
Earnings from operations
    
65,240
      
48,899
      
136,943
      
143,555
  
                                 
Interest expense
    
(45,830
)
    
(29,192
)
    
(117,021
)
    
(86,661
)
Interest and other income
    
2,992
      
2,387
      
8,685
      
9,326
  
Equity income from co-investments
    
4,910
      
40,802
      
21,065
      
52,295
  
(Loss) gain on early retirement of debt
    
-
      
(178
)
    
-
      
846
  
Gain on sale of real estate and land
    
31,372
      
-
      
39,640
      
1,503
  
Income before discontinued operations
    
58,684
      
62,718
      
89,312
      
120,864
  
Income from discontinued operations
    
-
      
13,157
      
-
      
14,289
  
Net income
    
58,684
      
75,875
      
89,312
      
135,153
  
Net income attributable to noncontrolling interest
    
(3,720
)
    
(5,719
)
    
(8,971
)
    
(12,112
)
Net income attributable to controlling interest
    
54,964
      
70,156
      
80,341
      
123,041
  
Dividends to preferred stockholders
    
(1,296
)
    
(1,368
)
    
(3,977
)
    
(4,104
)
Net income available to common stockholders
  
$
53,668
    
$
68,788
    
$
76,364
    
$
118,937
  
                                 
Net income per share - basic
  
$
0.85
    
$
1.84
    
$
1.41
    
$
3.20
  
                                 
Shares used in income per share - basic
    
62,892,601
      
37,320,562
      
54,250,104
      
37,206,895
  
                                 
Net income per share - diluted
  
$
0.85
    
$
1.84
    
$
1.40
    
$
3.19
  
                                 
Shares used in income per share - diluted
    
63,069,772
      
37,436,983
      
54,443,227
      
37,295,691
  
 
See Company's 10-Q 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
    
Nine Months Ended
  
Selected Line Item Detail
  
September 30,
    
September 30,
  
(Dollars in thousands)
  
2014
    
2013
    
2014
    
2013
  
                 
Rental and other property
                
Rental
  
$
250,303
    
$
141,620
    
$
636,218
    
$
415,878
  
Other property
    
17,815
      
10,557
      
47,531
      
30,139
  
Rental and other property
  
$
268,118
    
$
152,177
    
$
683,749
    
$
446,017
  
                                 
Property operating expenses
                                
Real estate taxes
  
$
31,768
    
$
14,535
    
$
77,452
    
$
42,773
  
Administrative and insurance
    
18,920
      
12,327
      
49,985
      
34,353
  
Maintenance and repairs
    
15,812
      
10,438
      
41,774
      
30,186
  
Utilities
    
16,052
      
9,710
      
40,059
      
27,775
  
Property management
    
5,116
      
3,312
      
13,592
      
9,856
  
Property operating expenses
  
$
87,668
    
$
50,322
    
$
222,862
    
$
144,943
  
                                 
Interest and other income
                                
Marketable securities and other interest income
  
$
2,951
    
$
2,346
    
$
7,676
    
$
5,833
  
Notes receivable
    
41
      
41
      
123
      
882
  
Gain from sale of marketable securities and note prepayment
    
-
      
-
      
886
      
2,611
  
Interest and other income
  
$
2,992
    
$
2,387
    
$
8,685
    
$
9,326
  
                                 
Equity income from co-investments
                                
Equity income from co-investments
  
$
535
    
$
277
    
$
1,578
    
$
822
  
Income from preferred equity investments
    
4,375
      
3,727
      
11,372
      
11,363
  
Gain on sale of co-investment
    
-
      
36,386
      
3,211
      
38,752
  
Co-investment promote income
    
-
      
-
      
4,904
      
-
  
Income from early redemption of preferred equity investments
    
-
      
412
      
-
      
1,358
  
Equity income from co-investments
  
$
4,910
    
$
40,802
    
$
21,065
    
$
52,295
  
                                 
Noncontrolling interest
                                
Limited partners of Essex Portfolio, L.P.
  
$
1,816
    
$
3,989
    
$
3,442
    
$
7,037
  
DownREIT limited partners' distributions
    
1,208
      
1,148
      
3,563
      
3,492
  
Third-party ownership interest
    
696
      
582
      
1,966
      
1,583
  
Noncontrolling interest
  
$
3,720
    
$
5,719
    
$
8,971
    
$
12,112
  
 
See Company's 10-Q 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
  
 
        
 
      
(Dollars in thousands, except share and per share amounts)
  
Three Months Ended
September 30,
        
Nine Months Ended
September 30,
      
 
  
2014
    
2013
    
% Change
    
2014
    
2013
    
% Change
  
                         
Funds from operations
                        
Net income available to common stockholders
  
$
53,668
    
$
68,788
        
$
76,364
    
$
118,937
      
Adjustments:
                                        
Depreciation
    
102,184
      
48,487
          
254,211
      
143,662
      
Gains not included in FFO, net of internal disposition costs
    
(31,372
)
    
(49,044
)
        
(41,664
)
    
(51,410
)
    
Depreciation add back from unconsolidated co-investments
    
9,986
      
3,723
          
23,060
      
11,342
      
Noncontrolling interest related to Operating Partnership units
    
1,816
      
3,989
          
3,442
      
7,037
      
Depreciation attributable to third party ownership
    
(335
)
    
(327
)
        
(996
)
    
(981
)
    
Funds from operations
  
$
135,947
    
$
75,616
        
$
314,417
    
$
228,587
      
FFO per share-diluted
  
$
2.08
    
$
1.91
      
9.1
%
  
$
5.55
    
$
5.79
      
-4.2
%
                                                 
Components of the change in FFO
                                                
Non-core items:
                                                
Merger and integration expenses
  
$
3,857
      
-
            
$
46,413
      
-
          
Cyber intrusion expenses
    
1,249
      
-
              
1,249
      
-
          
Acquisition and disposition costs
    
51
      
237
              
768
      
792
          
Gain on sale of marketable securities and note prepayment
    
-
      
-
              
(886
)
    
(2,611
)
        
Gain on sale of land
    
-
      
-
              
(400
)
    
(1,503
)
        
Utility reimbursement income accrual
    
-
      
-
              
(1,807
)
    
-
          
Earthquake related and other
    
-
      
-
              
1,571
      
-
          
Loss on early retirement of debt add back from unconsolidated co-investments
    
-
      
-
              
197
      
-
          
Loss (gain) on early retirement of debt
    
-
      
178
              
-
      
(846
)
        
Acquisition fee income
    
-
      
-
              
(500
)
    
-
          
Co-investment promote income
    
-
      
-
              
(4,904
)
    
-
          
Income from early redemption of preferred equity investments
    
-
      
(412
)
            
-
      
(1,358
)
        
Core funds from operations
    
141,104
      
75,619
              
356,118
      
223,061
          
Core FFO per share-diluted
  
$
2.16
    
$
1.91
      
13.2
%
  
$
6.28
    
$
5.65
      
11.1
%
                                                 
Changes in core items:
                                                
Same-property NOI
  
$
8,963
                    
$
25,137
                  
Non-same property NOI
    
69,632
                      
134,440
                  
Management and other fees, net
    
590
                      
544
                  
Equity income from co-investments
    
7,169
                      
12,680
                  
Interest and other income
    
605
                      
1,084
                  
Interest expense
    
(16,638
)
                    
(30,360
)
                
General and administrative
    
(3,967
)
                    
(7,520
)
                
Discontinued operations
    
(758
)
                    
(2,606
)
                
Other items, net
    
(111
)
                    
(342
)
                
   
$
65,485
                    
$
133,057
                  
                                                 
Weighted average number of shares outstanding diluted (1)
    
65,234,328
      
39,583,912
              
56,677,712
      
39,456,163
          
 
(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-Q 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)
 
  
September 30, 2014
    
December 31, 2013
  
         
Real Estate:
        
Land and land improvements
  
$
2,453,093
    
$
1,083,552
  
Buildings and improvements
    
8,820,657
      
4,360,205
  
     
11,273,750
      
5,443,757
  
Less: accumulated depreciation
    
(1,469,991
)
    
(1,254,886
)
     
9,803,759
      
4,188,871
  
Real estate under development
    
363,193
      
50,430
  
Co-investments
    
1,043,277
      
677,133
  
Real estate held for sale, net
    
107,772
      
-
  
     
11,318,001
      
4,916,434
  
Cash and cash equivalents
    
88,000
      
53,766
  
Marketable securities
    
108,147
      
90,084
  
Notes and other receivables
    
22,973
      
68,255
  
Acquired in place lease value and other assets (1)
    
129,441
      
58,300
  
Total assets
  
$
11,666,562
    
$
5,186,839
  
                 
Mortgage notes payable
  
$
2,258,010
    
$
1,404,080
  
Unsecured debt
    
2,745,487
      
1,410,023
  
Lines of credit
    
222,628
      
219,421
  
Other liabilities
    
325,552
      
150,728
  
Total liabilities
    
5,551,677
      
3,184,252
  
                 
Redeemable noncontrolling interest
    
21,442
      
-
  
Cumulative convertible preferred stock, carrying value
    
-
      
4,349
  
                 
Equity:
                
Common stock
    
6
      
4
  
Cumulative redeemable preferred stock, liquidation value
    
73,750
      
73,750
  
Additional paid-in-capital
    
6,569,442
      
2,345,763
  
Distributions in excess of accumulated earnings
    
(608,498
)
    
(474,426
)
Accumulated other comprehensive loss
    
(51,408
)
    
(60,472
)
Total stockholders' equity
    
5,983,292
      
1,884,619
  
Noncontrolling interest
    
110,151
      
113,619
  
Total equity
    
6,093,443
      
1,998,238
  
                 
Total liabilities and equity
  
$
11,666,562
    
$
5,186,839
  

(1) Includes $63.4 million of acquired in place leases, net at September 30, 2014.
 
See Company's 10-Q 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 - September 30, 2014
(Dollars in thousands)

                                         
               
Scheduled principal payments and unamortized premiums (excludes lines of credit) are as follows:
  
                                         
       
Weighted Average
        
   
Weighted
    
Percentage
  
   
Balance
    
Interest
    
Maturity
                
Unamortized
        
Average Interest
    
of Total
  
   
Outstanding
    
Rate
    
In Years
        
Secured
    
Unsecured
    
premiums
    
Total
    
Rate
    
Debt
  
Mortgage Notes Payable
                                        
Fixed rate - secured
  
$
1,980,338
      
4.9
%
    
4.7
      
2014
    
$
7,388
    
$
-
    
$
7,670
    
$
15,058
      
3.8
%
    
0.3
%
Variable rate - secured (1)
    
189,219
      
1.9
%
    
18.4
      
2015
      
94,580
      
-
      
30,466
      
125,046
      
4.6
%
    
2.5
%
Unamortized premiums
    
88,453
      
-
      
-
      
2016
      
41,481
      
350,000
      
30,172
      
421,653
      
3.4
%
    
8.4
%
Total mortgage notes payable
    
2,258,010
      
4.6
%
    
5.8
      
2017
      
198,683
      
490,000
      
20,464
      
709,147
      
3.1
%
    
14.2
%
                             
2018
      
320,080
      
-
      
16,804
      
336,884
      
5.4
%
    
6.7
%
Unsecured Debt
                            
2019
      
565,801
      
75,000
      
11,729
      
652,530
      
4.2
%
    
13.0
%
Bonds private - fixed rate
    
465,000
      
4.5
%
    
4.5
      
2020
      
692,800
      
-
      
5,854
      
698,654
      
5.0
%
    
14.0
%
Bonds public - fixed rate
    
1,900,000
      
3.4
%
    
7.3
      
2021
      
50,444
      
500,000
      
(1,523
)
    
548,921
      
4.3
%
    
11.0
%
Term loan (2)
    
350,000
      
2.4
%
    
2.4
      
2022
      
412
      
300,000
      
(2,167
)
    
298,245
      
3.7
%
    
6.0
%
Unamortized premiums
    
30,487
      
-
      
-
      
2023
      
435
      
600,000
      
(440
)
    
599,995
      
3.6
%
    
12.0
%
     
2,745,487
      
3.5
%
    
6.2
      
2024
      
18,234
      
400,000
      
(89
)
    
418,145
      
4.0
%
    
8.3
%
Unsecured Lines of Credit
                          
Thereafter
      
179,219
      
-
      
-
      
179,219
      
1.9
%
    
3.6
%
Line of credit (3)
    
205,000
      
1.7
%
                                                                
Line of credit (4)
    
17,628
      
1.7
%
          
Total
    
$
2,169,557
    
$
2,715,000
    
$
118,940
    
$
5,003,497
      
4.0
%
    
100.0
%
Total lines of credit
    
222,628
      
1.7
%
                                                                
                                                                                 
Total debt
  
$
5,226,125
      
3.9
%
                                                                
 

Capitalized interest for the three and nine months ended September 30 2014 was approximately $6.1 million and $17.8 million, respectively.

(1) Variable rate debt of $179.2 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-Q 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 - September 30, 2014
(Dollars and shares in thousands, except per share amounts)

               
Capitalization Data
    
Public Bond Covenants
  
Actual
    
Requirement
  
Total debt
  
$
5,226,125
            
         
Debt to Total Assets:
    
40
%
    
< 65
%
Common stock and potentially dilutive securities
                          
Common stock outstanding
    
63,230
                    
Limited partnership units (1)
    
2,156
                    
Options-treasury method
    
180
  
Secured Debt to Total Assets:
    
17
%
    
< 40
%
Total shares of common stock and potentially dilutive securities
    
65,566
                    
                           
Common stock price per share as of September 30, 2014
  
$
178.75
                    
         
Interest Coverage:
    
331
%
    
> 150
%
Market value of common stock and potentially dilutive securities
  
$
11,719,923
                    
                           
Preferred stock
  
$
73,750
  
Unsecured Debt Ratio (1) :
    
278
%
    
> 150
%
                           
Total equity capitalization
  
$
11,793,673
                    
         
Selected Credit Ratios
  
Actual
          
Total market capitalization
  
$
17,019,798
                    
 
Ratio of debt to total market capitalization
    
30.7
%
Indebtedness Divided by Adjusted EBITDA (2) (3):
    
7.0
          
                           
         
Unencumbered NOI to Total NOI:
    
64
%
        
 
(1) Assumes conversion of all outstanding operating partnership interests in the Operating Partnership into shares of the Company's common stock.
(1) Unsecured Debt Ratio is unsecured assets (excluding investments in co-investments) divided by unsecured indebtedness.
 
(2) Indebtedness is total debt less unamortized premiums.
 
(3) Adjusted EBITDA annualizes the proforma NOI for current quarter acquisitions and excludes non-routine items in earnings.
 
 
Credit Ratings
Rating Agency Rating
Outlook
Fitch BBB+
  Stable
Moody's Baa2
  Stable
Standard & Poors       BBB
  Stable
 
 
See Company's 10-Q 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 September 30, 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
  
$
67,230
    
$
63,560
      
5.8
%
  
$
55,377
    
$
50,498
      
9.7
%
  
$
29,106
    
$
27,200
      
7.0
%
  
$
-
    
$
-
    
$
151,713
    
$
141,258
      
7.4
%
Non-same property revenue (2)
    
5,018
      
2,245
              
7,051
      
3,691
              
3,611
      
12
              
5,493
      
4,971
      
21,173
      
10,919
          
Legacy BRE portfolio property revenue (3)
    
45,994
      
-
              
32,215
      
-
              
14,349
      
-
              
2,674
      
-
      
95,232
      
-
          
Total Revenues
  
$
118,242
    
$
65,805
            
$
94,643
    
$
54,189
            
$
47,066
    
$
27,212
            
$
8,167
    
$
4,971
    
$
268,118
    
$
152,177
          
                                                                                                                 
Property operating expenses:
                                                                                                                
Same-property operating expenses
                                                                                                                
Real estate taxes
  
$
5,891
    
$
5,707
            
$
5,201
    
$
4,952
            
$
2,768
    
$
2,461
            
$
-
    
$
-
    
$
13,860
    
$
13,120
      
5.6
%
Administrative and insurance
    
6,059
      
6,225
              
3,124
      
3,178
              
2,020
      
2,022
              
-
      
-
      
11,203
      
11,425
      
-1.9
%
Maintenance and repairs
    
4,912
      
4,654
              
3,076
      
3,105
              
1,768
      
1,803
              
-
      
-
      
9,756
      
9,562
      
2.0
%
Utilities
    
4,030
      
3,582
              
3,197
      
3,071
              
2,228
      
2,142
              
-
      
-
      
9,455
      
8,795
      
7.5
%
Management fees
    
1,407
      
1,384
              
1,014
      
960
              
750
      
707
              
-
      
-
      
3,171
      
3,051
      
3.9
%
Total same-property operating expenses
    
22,299
      
21,552
      
3.5
%
    
15,612
      
15,266
      
2.3
%
    
9,534
      
9,135
      
4.4
%
    
-
      
-
      
47,445
      
45,953
      
3.2
%
Non-same property operating expenses (2)
    
2,076
      
1,016
              
2,344
      
1,457
              
1,201
      
30
              
1,374
      
1,866
      
6,995
      
4,369
          
Legacy BRE portfolio property operating expenses (3)
    
17,142
      
-
              
10,400
      
-
              
4,616
      
-
              
1,070
      
-
      
33,228
      
-
          
Total property operating expenses
  
$
41,517
    
$
22,568
            
$
28,356
    
$
16,723
            
$
15,351
    
$
9,165
            
$
2,444
    
$
1,866
    
$
87,668
    
$
50,322
          
                                                                                                                 
Net operating income (NOI):
                                                                                                                
Same-property NOI
  
$
44,931
    
$
42,008
      
7.0
%
  
$
39,765
    
$
35,232
      
12.9
%
  
$
19,572
    
$
18,065
      
8.3
%
  
$
-
    
$
-
    
$
104,268
    
$
95,305
      
9.4
%
Non-same property NOI (2)
                                                                                                                
Legacy BRE portfolio (3)
    
28,852
      
-
              
21,815
      
-
              
9,733
      
-
              
1,604
      
-
      
62,004
      
-
          
Redevelopment communities
    
1,353
      
1,229
              
-
      
-
              
-
      
-
              
-
      
-
      
1,353
      
1,229
          
Development communities - 2014
    
372
      
-
              
-
      
-
              
-
      
-
              
-
      
-
      
372
      
-
          
Acquired communities - 2013 (4)
    
1,217
      
-
              
2,708
      
2,234
              
573
      
(18
)
            
-
      
-
      
4,498
      
2,216
          
Acquired communities - 2014 (5)
    
-
      
-
              
1,999
      
-
              
1,837
      
-
                              
3,836
      
-
          
Other real estate assets (1)
    
-
      
-
              
-
      
-
              
-
      
-
              
4,119
      
3,105
      
4,119
      
3,105
          
Total non-same property NOI
    
31,794
      
1,229
              
26,522
      
2,234
              
12,143
      
(18
)
            
5,723
      
3,105
      
76,182
      
6,550
          
Total NOI
  
$
76,725
    
$
43,237
            
$
66,287
    
$
37,466
            
$
31,715
    
$
18,047
            
$
5,723
    
$
3,105
    
$
180,450
    
$
101,855
          
                                                                                                                 
Same-property operating margin
    
67
%
    
66
%
            
72
%
    
70
%
            
67
%
    
66
%
                            
69
%
    
67
%
        
                                                                                                                 
Annualized same-property turnover percentage
    
68
%
    
65
%
            
57
%
    
61
%
            
59
%
    
60
%
                            
63
%
    
62
%
        
                                                                                                                 
Average same-property concessions per turn (6)
  
$
79
    
$
104
            
$
150
    
$
114
            
$
77
    
$
71
                            
$
98
    
$
100
          
                                                                                                                 
Reconciliation of apartment units at end of period
                                                                                                                
                                                                                                                 
Same-property apartment units
    
12,875
                      
8,741
                      
6,537
                      
-
              
28,153
                  
                                                                                                                 
Consolidated apartment units
    
13,831
      
13,656
              
9,998
      
9,427
              
7,395
      
6,645
                              
31,224
      
29,728
          
Legacy BRE portfolio (3)
    
8,337
      
-
              
4,603
      
-
              
2,821
      
-
              
902
      
-
      
16,663
      
-
          
Joint venture (7)
    
4,957
      
1,870
              
2,066
      
1,661
              
1,958
      
1,157
              
-
      
-
      
8,981
      
4,688
          
Under development
    
184
      
492
              
2,917
      
2,009
              
-
      
-
              
-
      
-
      
3,101
      
2,501
          
Total apartment units at end of period
    
27,309
      
16,018
              
19,584
      
13,097
              
12,174
      
7,802
              
902
      
-
      
59,969
      
36,917
          
                                                                                                                 
Percentage of total
    
46
%
    
44
%
            
33
%
    
35
%
            
20
%
    
21
%
            
1
%
    
-
      
100
%
    
100
%
        
                                                                                                                 
                                                                                                                 
Average same-property financial occupancy
    
95.9
%
    
95.7
%
            
96.3
%
    
95.6
%
            
95.5
%
    
95.7
%
                            
95.9
%
    
95.7
%
        

(1) Other real estate assets consists mainly of retail space, commercial properties, boat slips, two Phoenix properties acquired as part of the merger with BRE and properties sold during 2014.
(2) Includes properties which subsequent to January 1, 2013 were either acquired or in a stage of development or redevelopment without stabilized operations.
(3) Properties acquired as part of the BRE Properties merger on April 1, 2014, excluding 17 properties contributed to joint ventures.
(4) Acquired communities during 2013 includes Fox Plaza, Bennett Lofts, Slater 116, Vox, and Domain.
(5) Acquired communities during 2014 includes Apex, Collins on Pine, Ellington at Bellevue, Paragon, and Piedmont.
(6) 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.
(7) Includes BRE properties contributed to joint ventures.
 
See Company's 10-Q 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.

Property Operating Results - Nine months ended September 30, 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
  
$
198,488
      
188,423
      
5.3
%
  
$
161,368
      
147,422
      
9.5
%
  
$
85,419
      
79,431
      
7.5
%
  
$
-
      
-
    
$
445,275
    
$
415,276
      
7.2
%
Non-same property revenue (2)(7)
    
13,802
      
6,849
              
14,965
      
9,561
              
6,482
      
12
              
17,356
      
14,319
      
52,605
      
30,741
          
Legacy BRE portfolio property revenue (3)
    
90,090
      
-
              
62,231
      
-
              
28,188
      
-
              
5,360
      
-
      
185,869
      
-
          
Total Revenues
  
$
302,380
    
$
195,272
            
$
238,564
    
$
156,983
            
$
120,089
    
$
79,443
            
$
22,716
    
$
14,319
    
$
683,749
    
$
446,017
          
                                                                                                                 
Property operating expenses:
                                                                                                                
Same-property operating expenses
                                                                                                                
Real estate taxes
  
$
17,255
      
16,667
            
$
15,044
      
14,479
            
$
8,568
      
7,598
            
$
-
      
-
    
$
40,867
    
$
38,744
      
5.5
%
Administrative and insurance
    
17,578
      
17,474
              
9,166
      
9,235
              
5,841
      
5,837
              
-
      
-
      
32,585
      
32,546
      
0.1
%
Maintenance and repairs
    
13,722
      
13,145
              
9,469
      
9,219
              
5,417
      
5,332
              
-
      
-
      
28,608
      
27,696
      
3.3
%
Utilities
    
11,329
      
10,377
              
9,130
      
8,822
              
6,239
      
6,074
              
-
      
-
      
26,698
      
25,273
      
5.6
%
Management fees
    
4,220
      
4,150
              
3,030
      
2,868
              
2,250
      
2,119
              
-
      
-
      
9,500
      
9,137
      
4.0
%
Total same-property operating expenses
    
64,104
      
61,813
      
3.7
%
    
45,839
      
44,623
      
2.7
%
    
28,315
      
26,960
      
5.0
%
    
-
      
-
      
138,258
      
133,396
      
3.6
%
Non-same property operating expenses (2)(8)
    
5,984
      
3,061
              
5,303
      
3,879
              
2,102
      
30
              
5,721
      
4,577
      
19,110
      
11,547
          
Legacy BRE portfolio property operating expenses (3)
    
33,419
      
-
              
20,439
      
-
              
9,547
      
-
              
2,089
      
-
      
65,494
      
-
          
Total property operating expenses
  
$
103,507
    
$
64,874
            
$
71,581
    
$
48,502
            
$
39,964
    
$
26,990
            
$
7,810
    
$
4,577
    
$
222,862
    
$
144,943
          
                                                                                                                 
Net operating income (NOI):
                                                                                                                
Same-property NOI
  
$
134,384
    
$
126,610
      
6.1
%
  
$
115,529
    
$
102,799
      
12.4
%
  
$
57,104
    
$
52,471
      
8.8
%
  
$
-
    
$
-
    
$
307,017
    
$
281,880
      
8.9
%
Non-same property NOI (2)
                                                                                                                
Legacy BRE portfolio (3)
    
56,671
      
-
              
41,792
      
-
              
18,641
      
-
              
3,271
      
-
      
120,375
      
-
          
Redevelopment communities
    
4,264
      
3,788
              
-
      
-
              
-
      
-
              
-
      
-
      
4,264
      
3,788
          
Development communities - 2014
    
454
      
-
              
-
      
-
              
-
      
-
              
-
      
-
      
454
      
-
          
Acquired communities - 2013 (4)
    
3,100
      
-
              
7,663
      
5,682
              
1,673
      
(18
)
            
-
      
-
      
12,436
      
5,664
          
Acquired communities - 2014 (5)
    
-
      
-
              
1,999
      
-
              
2,707
      
-
                              
4,706
      
-
          
Other real estate assets (1)
    
-
      
-
              
-
      
-
              
-
      
-
              
11,635
      
9,742
      
11,635
      
9,742
          
Total non-same property NOI
    
64,489
      
3,788
              
51,454
      
5,682
              
23,021
      
(18
)
            
14,906
      
9,742
      
153,870
      
19,194
          
Total NOI
  
$
198,873
    
$
130,398
            
$
166,983
    
$
108,481
            
$
80,125
    
$
52,453
            
$
14,906
    
$
9,742
    
$
460,887
    
$
301,074
          
                                                                                                                 
Same-property operating margin
    
68
%
    
67
%
            
72
%
    
70
%
            
67
%
    
66
%
                            
69
%
    
68
%
        
                                                                                                                 
Annualized same-property turnover percentage
    
56
%
    
55
%
            
52
%
    
54
%
            
49
%
    
51
%
                            
53
%
    
54
%
        
                                                                                                                 
Average same-property concessions per turn (6)
  
$
109
      
112
            
$
150
      
133
            
$
97
      
87
                            
$
119
      
113
          
                                                                                                                 
Average same-property financial occupancy
    
96.2
%
    
96.0
%
            
96.3
%
    
96.1
%
            
96.0
%
    
96.1
%
                            
96.2
%
    
96.1
%
        

(1) Other real estate assets consists mainly of retail space, commercial properties, boat slips, two Phoenix properties acquired as part of the merger with BRE and properties sold during 2014.
(2) Includes properties which subsequent to January 1, 2013 were either acquired or in a stage of development or redevelopment without stabilized operations.
(3) Properties acquired as part of the BRE Properties merger on April 1, 2014, excluding 17 properties contributed to joint ventures.
(4) Acquired communities during 2013 includes Fox Plaza, Slater 116, Vox, and Domain.
(5) Acquired communities during 2014 includes Apex, Collins on Pine, Ellington at Bellevue, Paragon, and Piedmont.
(6) 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.
(7) Other real estate asset revenues for the nine months ended September 30, 2014, includes $1.8 million related to a change in accounting policy related to accrual of utility reimbursement revenue. Other real estate asset expenses for the nine months ended September 30, 2014, includes $1.6 million related to earthquake and flood damage at two communities.
 
See Company's 10-Q for additional disclosures
S-7.1
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 September 30, 2014, September 30, 2013 and June 30, 2014
(Dollars in thousands, except average property rental rates)

                   
Three months ended
    
Three months ended
        
Three months ended
      
       
Average Property Rental Rates
    
September 30, 2014
    
September 30 2013
        
June 30, 2014
      
Region
  
Units
    
QTD
2014
    
QTD
2013
    
% Change
    
Property Revenue
    
Financial Occupancy
    
Property Revenue
    
Financial Occupancy
    
Property Revenue
% Change
    
Property Revenue
    
Sequential % Change
  
                                             
Southern California
                                            
Los Angeles County
    
4,400
    
$
$1,938
    
$
1,843
      
5.2
%
  
$
25,794
      
95.6
%
  
$
24,521
      
96.1
%
    
5.2
%
  
$
25,323
      
1.9
%
Ventura County
    
2,898
      
1,494
      
1,409
      
6.0
%
    
13,346
      
96.3
%
    
12,616
      
96.2
%
    
5.8
%
    
13,185
      
1.2
%
Orange County
    
2,887
      
1,955
      
1,851
      
5.6
%
    
17,055
      
96.1
%
    
16,115
      
95.8
%
    
5.8
%
    
16,582
      
2.9
%
San Diego County
    
2,067
      
1,318
      
1,251
      
5.4
%
    
8,509
      
96.5
%
    
7,944
      
95.2
%
    
7.1
%
    
8,334
      
2.1
%
Santa Barbara County
    
347
      
1,827
      
1,716
      
6.5
%
    
1,834
      
91.4
%
    
1,748
      
88.8
%
    
4.9
%
    
1,880
      
-2.4
%
Riverside County
    
276
      
809
      
798
      
1.4
%
    
692
      
94.9
%
    
616
      
88.8
%
    
12.3
%
    
678
      
2.1
%
Total same-property
    
12,875
      
1,715
      
1,626
      
5.5
%
    
67,230
      
95.9
%
    
63,560
      
95.7
%
    
5.8
%
    
65,982
      
1.9
%
Los Angeles County
    
3,499
      
2,056
                      
20,538
              
2,245
                                  
Orange County
    
2,899
      
1,700
                      
14,839
              
-
                                  
San Diego County
    
2,895
      
1,809
                      
15,635
              
-
                                  
Non-same property
    
9,293
      
1,868
                      
51,012
              
2,245
                                  
                                                                                         
Northern California
                                                                                        
Santa Clara County
    
4,279
      
2,209
      
2,024
      
9.1
%
    
28,460
      
96.0
%
    
26,015
      
95.4
%
    
9.4
%
    
27,539
      
3.3
%
Contra Costa County
    
1,720
      
1,868
      
1,728
      
8.1
%
    
9,851
      
96.7
%
    
9,089
      
96.7
%
    
8.4
%
    
9,446
      
4.3
%
Alameda County
    
1,542
      
1,876
      
1,679
      
11.7
%
    
8,940
      
96.5
%
    
8,075
      
96.1
%
    
10.7
%
    
8,719
      
2.5
%
San Mateo County
    
768
      
2,272
      
2,070
      
9.8
%
    
5,386
      
96.7
%
    
4,908
      
96.7
%
    
9.7
%
    
5,189
      
3.8
%
San Francisco MSA
    
202
      
2,484
      
2,264
      
9.7
%
    
1,497
      
95.4
%
    
1,306
      
91.2
%
    
14.6
%
    
1,443
      
3.7
%
Other
    
230
      
1,761
      
1,646
      
7.0
%
    
1,243
      
97.1
%
    
1,105
      
91.7
%
    
12.5
%
    
1,202
      
3.4
%
Total same-property
    
8,741
      
2,084
      
1,905
      
9.4
%
    
55,377
      
96.3
%
    
50,498
      
95.6
%
    
9.7
%
    
53,538
      
3.4
%
Santa Clara County
    
1,595
      
2,539
                      
10,783
              
-
                                  
Contra Costa County
    
550
      
2,202
                      
3,484
              
-
                                  
Alameda County
    
1,596
      
2,277
                      
10,143
              
-
                                  
San Mateo County
    
1,358
      
2,851
                      
9,356
              
-
                                  
San Francisco MSA
    
590
      
2,759
                      
4,221
              
3,691
                                  
Other
    
171
      
2,388
                      
1,279
              
-
                                  
Non-same property
    
5,860
      
2,526
                      
39,266
              
3,691
                                  
                                                                                         
Seattle Metro
                                                                                        
King County
    
6,072
      
1,443
      
1,344
      
7.4
%
    
27,554
      
95.5
%
    
25,802
      
95.8
%
    
6.8
%
    
26,903
      
2.4
%
Snohomish County
    
465
      
1,051
      
968
      
8.6
%
    
1,552
      
95.9
%
    
1,398
      
94.4
%
    
11.0
%
    
1,515
      
2.4
%
Total same-property
    
6,537
      
1,415
      
1,317
      
7.5
%
    
29,106
      
95.5
%
    
27,200
      
95.7
%
    
7.0
%
    
28,418
      
2.4
%
King County
    
3,171
      
1,608
                      
15,428
              
12
                                  
Snohomish County
    
508
      
1,591
                      
2,532
              
-
                                  
Non-same property
    
3,679
      
1,606
                      
17,960
              
12
                                  
                                                                                         
Other real estate assets (1)
    
902
                              
8,167
              
4,971
                                  
                                                                                         
Total same-property revenue
    
28,153
    
$
$1,760
    
$
1,641
      
7.3
%
  
$
151,713
      
95.9
%
  
$
141,258
      
95.7
%
    
7.4
%
  
$
147,938
      
2.6
%
                                                                                         
Total non-same property revenue
    
19,734
    
$
$1,929
                    
$
116,405
            
$
10,919
                                  

(1) Other real estate assets consists mainly of retail space, commercial properties, boat slips, and two Phoenix properties acquired as part of the merger with BRE and properties sold in 2014.
 
See Company's 10-Q 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.

Revenue by County - Nine months ended September 30, 2014 and 2013
(Dollars in thousands, except average property rental rates)

                   
Nine months ended
    
Nine months ended
      
       
Average Property Rental Rates
    
September 30, 2014
    
September 30, 2013
      
Region
  
Units
    
YTD 2014
    
YTD 2013
    
% Change
    
Property Revenue
    
Financial Occupancy
    
Property Revenue
    
Financial Occupancy
    
Property Revenue % Change
  
                                     
Southern California
                                    
Los Angeles County
    
4,400
    
$
1,896
    
$
1,811
      
4.7
%
  
$
76,157
      
96.2
%
  
$
72,440
      
96.1
%
    
5.1
%
Ventura County
    
2,898
      
1,468
      
1,396
      
5.2
%
    
39,546
      
96.6
%
    
37,557
      
96.5
%
    
5.3
%
Orange County
    
2,887
      
1,920
      
1,822
      
5.4
%
    
50,104
      
95.9
%
    
47,599
      
95.9
%
    
5.3
%
San Diego County
    
2,067
      
1,295
      
1,236
      
4.8
%
    
25,028
      
96.3
%
    
23,640
      
95.6
%
    
5.9
%
Santa Barbara County
    
347
      
1,779
      
1,688
      
5.4
%
    
5,606
      
96.4
%
    
5,301
      
94.5
%
    
5.8
%
Riverside County
    
276
      
800
      
799
      
0.1
%
    
2,047
      
95.6
%
    
1,886
      
89.8
%
    
8.5
%
                                                                         
Total same-property
    
12,875
      
1,682
      
1,603
      
4.9
%
    
198,488
      
96.2
%
    
188,423
      
96.0
%
    
5.3
%
                                                                         
Los Angeles County
    
3,499
      
2,002
                      
41,768
              
6,849
                  
Orange County
    
2,899
      
1,690
                      
29,468
              
-
                  
San Diego County
    
2,895
      
1,799
                      
32,656
              
-
                  
Non-same property
    
9,293
      
1,841
                      
103,892
              
6,849
                  
                                                                         
Northern California
                                                                        
Santa Clara County
    
4,279
      
2,140
      
1,964
      
9.0
%
    
82,992
      
96.1
%
    
75,955
      
95.9
%
    
9.3
%
Contra Costa County
    
1,720
      
1,815
      
1,684
      
7.8
%
    
28,601
      
96.3
%
    
26,483
      
96.5
%
    
8.0
%
Alameda County
    
1,542
      
1,813
      
1,627
      
11.4
%
    
26,163
      
97.0
%
    
23,545
      
96.7
%
    
11.1
%
San Mateo County
    
768
      
2,205
      
2,011
      
9.6
%
    
15,681
      
96.6
%
    
14,362
      
97.1
%
    
9.2
%
San Francisco MSA
    
202
      
2,252
      
2,069
      
8.8
%
    
4,307
      
94.4
%
    
3,757
      
91.5
%
    
14.6
%
Other
    
230
      
1,719
      
1,605
      
7.1
%
    
3,624
      
96.9
%
    
3,320
      
94.8
%
    
9.2
%
                                                                         
Total same-property
    
8,741
      
2,018
      
1,849
      
9.1
%
    
161,368
      
96.3
%
    
147,422
      
96.1
%
    
9.5
%
                                                                         
Santa Clara County
    
1,595
      
2,524
                      
19,241
              
-
                  
Contra Costa County
    
550
      
2,164
                      
6,839
              
-
                  
Alameda County
    
1,596
      
2,262
                      
18,560
              
-
                  
San Mateo County
    
1,358
      
2,829
                      
17,889
              
-
                  
San Francisco MSA
    
590
      
2,670
                      
12,136
              
9,561
                  
Other
    
171
      
2,366
                      
2,531
              
-
                  
Non-same property
    
5,860
      
2,500
                      
77,196
              
9,561
                  
                                                                         
Seattle Metro
                                                                        
King County
    
6,072
      
1,405
      
1,307
      
7.5
%
    
80,865
      
96.0
%
    
75,352
      
96.2
%
    
7.3
%
Snohomish County
    
465
      
1,018
      
945
      
7.7
%
    
4,554
      
96.8
%
    
4,079
      
94.7
%
    
11.6
%
Total same-property
    
6,537
      
1,377
      
1,282
      
7.4
%
    
85,419
      
96.0
%
    
79,431
      
96.1
%
    
7.5
%
King County
    
3,171
      
1,648
                      
29,680
              
12
                  
Snohomish County
    
508
      
1,570
                      
4,990
              
-
                  
Non-same property
    
3,679
      
1,637
                      
34,670
              
12
                  
                                                                         
Other real estate assets (1) (2)
    
902
                              
22,716
              
14,319
                  
                                                                         
Total same-property revenue
    
28,153
    
$
1,717
    
$
1,606
      
6.9
%
  
$
445,275
      
96.2
%
  
$
415,276
      
96.1
%
    
7.2
%
                                                                         
Total non-same property revenue
    
19,734
    
$
1,537
                    
$
238,474
            
$
30,741
                  

(1) Other real estate assets consists mainly of retail space, commercial properties, boat slips, and two Phoenix properties acquired as part of the merger with BRE and properties sold in 2014.
(2) Other real estate asset revenues for the nine months ended September 30, 2014, includes $1.8 million related to a change in accounting policy related to accrual of utility reimbursement revenue.
 
See Company's 10-Q for additional disclosures
S-8.1
E S S E X  P R O P E R T Y  T R U S T,  I N C.

Development Pipeline - September 30, 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 (1)
    
Construction Start
    
Initial Occupancy
    
Stabilized Operations
  
Development Projects - Consolidated (2)
                                              
Project Name
Location
                                            
MB 360 (3) (4)
San Francisco, CA
    
100
%
    
360
      
11,500
    
$
216
    
$
59
    
$
275
    
$
275
    
$
744
              
Radius
Redwood City, CA
    
100
%
    
264
      
-
      
160
      
12
      
172
      
172
      
652
      
Q2 2012
      
Q3 2014
      
Q1 2015
  
Total Development Projects - Consolidated
            
624
      
11,500
      
376
      
71
      
447
      
447
      
716
                          
                                                                                           
Land Held for Future Development - Consolidated
                                                                                          
Project Name
Location
                                                                                        
Other Projects
various
    
100
%
    
-
      
-
      
49
      
-
      
49
      
49
                                  
Total Development Pipeline - Consolidated
            
624
      
11,500
      
425
      
71
      
496
      
496
                                  
                                                                                           
Development Projects/Land Held for Future Development - Joint Venture (2)
                                                                                          
Project Name
Location
                                                                                        
Epic - Phase III
San Jose, CA
    
55
%
    
200
      
-
      
55
      
42
      
97
      
53
      
483
      
Q3 2013
      
Q3 2015
      
Q1 2016
  
The Dylan
West Hollywood, CA
    
50
%
    
184
      
12,750
      
77
      
-
      
77
      
39
      
363
      
Q4 2011
      
Q3 2014
      
Q4 2014
  
Mosso I
San Francisco, CA
    
55
%
    
181
      
5,030
      
88
      
12
      
100
      
55
      
538
      
Q2 2012
      
Q2 2014
      
Q4 2014
  
Mosso II
San Francisco, CA
    
55
%
    
282
      
4,270
      
141
      
9
      
150
      
83
      
525
      
Q2 2012
      
Q3 2014
      
Q2 2015
  
Park 20
San Mateo, CA
    
55
%
    
197
      
-
      
66
      
11
      
77
      
42
      
391
      
Q3 2012
      
Q4 2014
      
Q1 2015
  
One South Market
San Jose, CA
    
55
%
    
312
      
6,000
      
96
      
49
      
145
      
80
      
458
      
Q2 2013
      
Q2 2015
      
Q2 2016
  
The Village
Walnut Creek, CA
    
50
%
    
49
      
35,000
      
56
      
26
      
82
      
41
      
769
      
Q3 2013
      
Q3 2015
      
Q4 2015
  
Emme
Emeryville, CA
    
55
%
    
190
      
-
      
56
      
6
      
62
      
34
      
328
      
Q3 2012
      
Q4 2014
      
Q1 2015
  
Owens
Pleasanton, CA
    
55
%
    
255
      
5,729
      
17
      
72
      
89
      
49
      
341
      
Q3 2014
      
Q2 2016
      
Q2 2017
  
Hacienda
Pleasanton, CA
    
55
%
    
251
      
-
      
15
      
71
      
86
      
47
      
343
      
Q1 2015
      
Q3 2016
      
Q3 2017
  
Century Towers
San Jose, CA
    
50
%
    
376
      
2,006
      
31
      
141
      
172
      
86
      
455
      
Q3 2014
      
Q1 2017
      
Q1 2018
  
Total Development Projects - Joint Venture
            
2,477
      
70,785
      
698
      
439
      
1,137
      
609
    
$
437
                          
                                                                                           
Grand Total - Development Pipeline
            
3,101
      
82,285
    
$
1,123
    
$
510
    
$
1,633
      
1,105
                                  
Essex Cost Incurred to Date
                                                    
(801
)
                                
Essex Remaining Commitment
                                                  
$
304
                                  

(1) Excludes the estimated allocation to retail square feet.
(2) The company share of cost included $5.9 million of capitalized interest, $1.4M of capitalized overhead and $1.5M of co-investment development fees related to development in Q3 2014.
(3) To date the Company has received $35 million of the $45 million of expected insurance proceeds related to the fire.
 
(4)
Construction Start
Initial Occupancy
Stabilized Operations
MB Phase I
Q2 2012
Q4 2014
Q2 2015
MB Phase II
Q3 2014
Q4 2015
Q2 2016
 
See Company's 10-Q 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 - September 30, 2014
(Dollars in thousands, except per unit amounts)

       
Total
    
Estimated
    
Estimated
        
NOI
  
       
Incurred
    
Remaining
    
Total
    
Project
    
For the nine months ended
  
Region/Project Name
  
Units
    
To Date
    
Cost
    
Cost
    
Start Date
      
Q3 2014
      
Q3 2013
  
                                     
Same-property - Redevelopment Projects (1) (2)
                                    
Southern California
                                    
Hamptons
    
215
      
1,470
      
18,011
      
19,481
      
Q1 2014
                  
Monterras
    
292
      
3,259
      
23,124
      
26,383
      
Q1 2014
                  
Total Same-property - Redevelopment Projects
    
507
    
$
4,729
    
$
41,135
    
$
45,864
            
$
5,500
    
$
5,399
  
                                                         
Same-Property Redevelopment Vacancy Loss
                                          
$
1,995
    
$
2,079
  
                                                         
Non-same property - Redevelopment Projects
                                                        
Southern California
                                                        
Bunker Hill Towers, Los Angeles
    
456
      
9,754
      
66,390
      
76,144
      
Q3 2013
                  
Total Non-same property - Redevelopment Projects
    
456
    
$
9,754
    
$
66,390
    
$
76,144
            
$
4,264
    
$
3,788
  

(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 $0.7 million of vacancy loss for the same-property portfolio, and $0.9 million of vacancy loss for the total portfolio during the three months ended
September 30, 2014. The Company completed the redevelopment of interiors totaling 522 units for the same-property portfolio and 699 units for the total portfolio, during the
three months ended September 30, 2014
(3) The company incurred $0.2 million of capitalized interest, $1.7M of capitalized overhead and $0.1M of co-investment redevelopment fees related to redevelopment in Q3 2014.

Non-revenue Generating Capital Expenditures
    
Q3 2014
      
Q2 2014
      
Q1 2014
      
Q4 2013
      
Q3 2013
  
                                         
Non-revenue generating capital expenditures
  
$
14,022
    
$
10,623
    
$
4,416
    
$
5,153
    
$
9,536
  
Average apartment units in quarter
    
38,702
      
34,158
      
29,886
      
29,833
      
29,646
  
Capital expenditures per apartment unit in the quarter
  
$
362
    
$
311
    
$
148
    
$
173
    
$
322
  
Capital expenditures per apartment unit-trailing four quarters
  
$
884
    
$
870
    
$
918
    
$
906
    
$
1,235
  
 
See Company's 10-Q 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 - September 30, 2014
  
Essex
        
Total
        
Essex
    
Weighted
    
Remaining
    
For the Quarter
    
For the Nine Months Ended
  
(Dollars in thousands)
  
Ownership
        
Undepreciated
    
Debt
    
Book
    
Average
    
Term of
    
Ended September 30,
    
Ended September 30,
  
   
Percentage
    
Units
    
Book Value
    
Amount
    
Value
    
Borrowing Rate
    
Debt/(in Years)
    
2014
    
2013
    
2014
    
2013
  
                                             
Operating Non-Consolidated Joint Ventures
                              
Net Operating Income
  
                                             
Essex Apartment Value Fund II, L.P. (Fund II) (1)
    
28.2
%
    
96
    
$
14,449
    
$
6,224
    
$
2,578
      
5.6
%
    
0.4
    
$
349
    
$
595
    
$
966
    
$
1,764
  
Wesco I, LLC
    
50.0
%
    
2,713
      
680,218
      
365,621
      
135,875
      
4.0
%
    
8.8
      
8,911
      
8,369
      
27,175
      
24,824
  
Wesco III, LLC
    
50.0
%
    
993
      
229,525
      
119,830
      
53,411
      
3.4
%
    
6.2
      
2,926
      
1,869
      
7,665
      
3,299
  
Wesco IV, LLC
    
50.0
%
    
1,116
      
297,828
      
148,000
      
95,338
      
3.8
%
    
6.4
      
3,851
      
-
      
7,663
      
-
  
BEXAEW, LLC
    
50.0
%
    
2,723
      
516,748
      
295,000
      
89,504
      
3.1
%
    
6.4
      
7,472
      
-
      
14,502
      
-
  
CPPIB
    
55.0
%
    
878
      
254,352
      
-
      
172,189
      
-
      
-
      
3,965
      
-
      
8,992
      
-
  
Other
    
50.0
%
    
462
      
136,583
      
105,535
      
20,089
      
2.1
%
    
5.9
      
1,912
      
1,190
      
4,314
      
2,495
  
Total Operating Non-Consolidated Joint Ventures
            
8,981
    
$
2,129,703
    
$
1,040,210
      
568,984
      
3.5
%
    
7.1
    
$
29,386
    
$
12,023
    
$
71,277
    
$
32,382
  
                                                                                         
                                                           
Essex Portion of NOI and Expenses
  
NOI
                                                          
$
14,815
    
$
5,882
    
$
35,878
    
$
15,806
  
Depreciation
                                                            
(9,986
)
    
(3,723
)
    
(23,060
)
    
(11,342
)
Interest expense and other
                                                            
(4,557
)
    
(1,584
)
    
(11,500
)
    
(3,316
)
Gain and promote income
                                                            
-
      
36,386
      
8,115
      
38,752
  
Net income from operating co-investments
                                                          
$
272
    
$
36,961
    
$
9,433
    
$
39,900
  
                                                                                         
Development Joint Ventures (2) (3)
    
50/55
%
    
2,477
    
$
698,000
    
$
59,900
      
292,636
      
1.5
%
    
2.1
    
$
263
    
$
(298
)
  
$
260
    
$
(326
)
                                                                                         
                                           
Weighted
    
Weighted
                                  
                                           
Average
    
Average
                                  
                                           
Preferred
    
Expected
                                  
                                           
Return
    
Term
                                  
                                                               Income from Prederred Equity Investments          
Preferred Equity Investments
                                    
181,657
      
10.3
%
    
3.4
    
$
4,375
    
$
4,139
    
$
11,372
    
$
12,721
  
                                                                                         
Total Co-investments
                                  
$
1,043,277
                    
$
4,910
    
$
40,802
    
$
21,065
    
$
52,295
  

(1) The Company has a 28.2% interest as a general partner and limited partner in Fund II. As of September 30, 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 interests in eleven development co-investments, which are detailed on S-9.
(3) The Dylan has a $59.9 million long-term tax-exempt bond debt that is subject to a total return swap that will mature in 2016.
 
See Company's 10-Q 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 - September 30, 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 nine months ended
  
   
Balance as of September 30, 2014
    
September 30, 2014
  
   
Investment in
    
Related
    
Noncontrolling
    
DownREIT
        
Operating
      
   
Real Estate
    
Debt
    
Interest
    
Units Outstanding (1)
    
Revenue
    
Expenses
    
NOI
  
                             
Noncontrolling Interest - DownREIT:
                            
Barkley Apartments
  
$
8,177
    
$
16,338
    
$
1,696
      
74,248
    
$
2,064
    
$
716
    
$
1,348
  
Avery (2)
    
36,327
      
10,000
      
2,568
      
58,884
      
1,058
      
604
      
454
  
Brookside Oaks
    
31,539
      
19,399
      
2,183
      
78,903
      
3,176
      
614
      
2,562
  
Capri at Sunny Hills
    
15,937
      
-
      
2,927
      
157,665
      
1,960
      
562
      
1,398
  
Hidden Valley (3)
    
36,266
      
30,046
      
6,089
      
62,647
      
4,319
      
1,329
      
2,990
  
Highridge Apartments
    
29,229
      
44,807
      
2,746
      
262,505
      
5,384
      
1,153
      
4,231
  
Montejo Apartments
    
7,615
      
12,876
      
1,216
      
29,319
      
1,485
      
403
      
1,082
  
The Elliot at Mukilteo
    
14,876
      
10,750
      
1,197
      
99,438
      
2,865
      
997
      
1,868
  
Magnolia Square
    
36,694
      
12,872
      
6,101
      
54,938
      
3,089
      
778
      
2,312
  
Fairhaven Apartments
    
12,108
      
16,709
      
2,951
      
67,728
      
2,108
      
581
      
1,527
  
Valley Park Apartments
    
12,905
      
21,860
      
30
      
2,156
      
2,381
      
858
      
1,523
  
Villa Angelina Apartments
    
18,739
      
26,650
      
1,593
      
43,552
      
3,223
      
826
      
2,397
  
                                                         
   
$
260,412
    
$
222,307
      
31,297
      
991,983
    
$
33,112
    
$
9,421
    
$
23,692
  
                                                         
Other Components of Noncontrolling Interest:
                                                        
Hillsdale Garden Apartments (4)
  
$
103,861
              
22,044
            
$
14,142
    
$
4,256
    
$
9,886
  
Operating Partnership Units and Other
                    
56,810
                                  
Total Noncontrolling Interest
                  
$
110,151
                                  

(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.
(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.
 
See Company's 10-Q 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
Q3 2014 Earnings Results Supplement
($'s in thousands, except share and per share data)
  
YTD
    
2014 Revised Guidance Range
    
   
Actuals
    
Low End
    
High End
  
Changes from Q2 '14 Guidance
Net Operating Income ("NOI")
                   
Total NOI from consolidated communities
  
$
460,651
    
$
642,700
      
645,600
  
Increased same-property revenue growth to a range of 6.7% to 7.1% and NOI range to 8.3% to 8.7%. Reflects acquisitions through Oct.
                                 
Management Fees
    
6,356
      
8,400
      
8,800
    
                                 
Interest Expense
                               
 
 Interest expense, before capitalized interest
    
(134,804
)
    
(187,300
)
    
(186,500
)
Interest expense dependent on timing of capital markets activities.
 Projected interest capitalized
    
17,783
      
21,900
      
22,600
  
Capitalized interest dependent on development starts.
 Net interest expense
    
(117,021
)
    
(165,400
)
    
(163,900
)
  
 
Recurring Income and Expenses
                               
Interest and other income
    
7,799
      
10,600
      
11,000
    
FFO from co-investments
    
36,207
      
52,100
      
53,000
    
General and administrative expense
    
(27,372
)
    
(37,300
)
    
(38,000
)
Increased incentive compensation at higher performance.
Preferred dividends and non-controlling interest
    
(10,502
)
    
(14,000
)
    
(14,000
)
  
     
6,132
      
11,400
      
12,000
    
                                 
Non-Core Income and Expenses
                               
Promote income from co-investment
    
4,904
      
9,400
      
10,400
    
Gains on sales of marketable securities, land, prepayment penalties
    
1,286
      
1,286
      
1,286
    
Earthquake related and other
    
(1,571
)
    
(1,571
)
    
(1,571
)
  
Loss on early retirement of debt
    
(197
)
    
(197
)
    
(197
)
  
Merger and integration expenses
    
(46,413
)
    
(52,500
)
    
(49,500
)
  
Cyber-intrusion expenses
    
(1,249
)
    
(2,749
)
    
(2,749
)
  
Utility reimbursement income accrual and acquisition fee
    
2,307
      
2,307
      
2,307
    
Acquisition costs
    
(768
)
    
(900
)
    
(1,400
)
  
     
(41,701
)
    
(44,924
)
    
(41,424
)
  
                                 
Funds from Operations
  
$
314,417
      
452,177
      
461,077
    
                                 
Funds from Operations per diluted Share
  
$
5.55
      
7.67
      
7.82
    
                                 
% Change - Funds from Operations
    
-4.2
%
    
1.1
%
    
3.0
%
  
                                 
Funds from Operations excluding non-core items
  
$
356,118
      
497,101
      
502,501
    
                                 
Core Funds from Operations per diluted Share
  
$
6.28
      
8.43
      
8.52
    
                                 
% Change - Core Funds from Operations
    
11.1
%
    
11.0
%
    
12.2
%
  
                                 
Weighted average shares outstanding
    
56,677
      
58,950
      
58,950
    
 
See Company's 10-Q 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
Nine months ended September 30, 2014
(Dollars in thousands)

Acquisitions (1)
        
Essex
                  
         
Ownership
         
Purchase
    
Price per
    
Average
  
Property Name
Location
  
Units
    
Percentage
  
Entity
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
  
Collins on Pine
Seattle, WA
    
76
      
100
%
EPLP
May-14
    
29,200
      
384
      
1,884
  
Q2 2014 Total
    
472
                  
$
105,950
    
$
224
          
                                               
Paragon
Fremont, CA
    
301
      
100
%
EPLP
Jul-14
    
111,000
      
369
      
2,090
  
Apex
Milpitas, CA
    
366
      
100
%
EPLP
Aug-14
    
150,000
      
410
      
2,183
  
Ellington at Bellevue
Bellevue, WA
    
220
      
100
%
EPLP
Aug-14
    
58,750
      
267
      
1,540
  
Q3 2014 Total
    
887
                  
$
319,750
    
$
360
          
                                               
                                               
Dispositions
            
Essex
                              
             
Ownership
         
Sales
    
Price per
          
      
Units
    
Percentage
  
Entity
Date
  
Price
    
Unit
          
                                               
Vista Capri
      
106
      
100
%
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
          
                                             
Pinnacle at Queen's Creek
      
252
      
35.0
%
EPLP
Jun-14
    
33,300
      
132
          
Q2 2014 Total
    
252
                  
$
33,300
    
$
132
          
                                               
Coldwater Canyon
      
39
      
100
%
EPLP
Sep-14
  
$
9,525
      
244
          
Mt. Sutro
      
99
      
100
%
EPLP
Sep-14
    
39,500
      
399
          
Q3 2014 Total
    
138
                  
$
49,025
    
$
355
          

(1) Excludes properties acquired in the BRE merger on April 1, 2014.
 
See Company's 10-Q 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.
Preliminary 2015 MSA Level Forecast: 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
    
Economic Rent
Growth
  
                                 
Los Angeles
    
10,000
      
6,000
      
16,000
      
0.6
%
    
0.5
%
    
84,000
      
2.0
%
    
5.4
%
Ventura
    
550
      
700
      
1,250
      
0.8
%
    
0.4
%
    
5,500
      
1.9
%
    
4.4
%
Orange
    
3,500
      
3,900
      
7,400
      
0.9
%
    
0.7
%
    
29,700
      
2.0
%
    
4.6
%
San Diego
    
3,900
      
3,700
      
7,600
      
0.9
%
    
0.6
%
    
30,800
      
2.3
%
    
4.5
%
So. Cal.
    
17,950
      
14,300
      
32,250
      
0.8
%
    
0.6
%
    
150,000
      
2.1
%
    
4.8
%
                                                                 
San Francisco
    
5,000
      
900
      
5,900
      
1.3
%
    
0.8
%
    
33,100
      
3.0
%
    
6.9
%
Oakland
    
2,000
      
3,900
      
5,900
      
0.6
%
    
0.6
%
    
25,300
      
2.4
%
    
7.2
%
San Jose
    
4,400
      
2,200
      
6,600
      
1.8
%
    
1.0
%
    
31,800
      
3.2
%
    
7.5
%
No. Cal.
    
11,400
      
7,000
      
18,400
      
1.3
%
    
0.8
%
    
90,200
      
2.9
%
    
7.3
%
                                                                 
Seattle
    
9,000
      
7,500
      
16,500
      
1.9
%
    
1.4
%
    
43,300
      
2.8
%
    
4.5
%
                                                                 
Weighted Average (4)
    
38,350
      
28,800
      
67,150
      
1.2
%
    
0.8
%
    
283,500
      
2.5
%
    
5.6
%

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

U.S. Economic Assumptions: 2015 G.D.P. Growth: 2.8% , 2015 Job Growth: 2.0%

(1) New Residential Supply: MF reflects Company's internal estimate of actual multifamily deliveries; SF 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 2015 over estimated Dec 2014, 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 2015 vs Q4 2014 (excludes submarkets not targeted by Essex).

(4) Weighted Average: markets weighted by scheduled rent in the Company's Portfolio
 
 
See Company's 10-Q for additional disclosures
S-15