Three Months Ended
June 30,
|
%
|
Six Months Ended
June 30,
|
%
|
|||||||||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||||||||
Per Diluted Share
|
||||||||||||||||||||||||
Net Income
|
|
$1.29
|
$1.40
|
-7.9%
|
|
$6.07
|
|
$3.21
|
89.1%
|
|
||||||||||||||
Total FFO
|
$3.21
|
$3.36
|
-4.5%
|
|
|
$6.65
|
|
$6.69
|
-0.6%
|
|
||||||||||||||
Core FFO
|
$3.16
|
|
$3.33
|
-5.1%
|
|
$6.64
|
$6.57
|
1.1%
|
|
|||||||||||||||
• |
Reported Net Income per diluted share for the second quarter of 2020 of $1.29, compared to $1.40 in the second quarter of 2019.
|
• |
Core FFO per diluted share declined by 5.1% compared to the second quarter of 2019.
|
• |
Same-property gross revenue and net operating income (“NOI”) declined by 3.8% and 7.4%,
respectively, compared to the second quarter of 2019. The Company recorded an additional $9.7 million of delinquencies in the second quarter compared to the prior year period. Excluding these delinquencies, same-property revenue and NOI
would have declined 0.9% and 3.5%, respectively.
|
• |
Same-property operating expenses increased 6.0% compared to the second quarter of 2019. The increase is largely due to a 9.6% increase in real estate taxes,
driven by higher taxes in Seattle.
|
• |
Disposed of two apartment communities during the second quarter for a total contract price of $232.0 million.
|
• |
Repurchased 87,988 shares of common stock totaling $20.1 million at an average price per share of $228.36 under the stock buyback program.
|
• |
In June 2020, the Company issued $150.0 million of 12-year senior unsecured notes due in March 2032 bearing an interest rate per annum of 2.65% and an effective yield of 2.09%.
|
• |
As of July 31, 2020, the Company’s immediately available liquidity exceeded $1.4 billion.
|
Q2 2020 vs.
Q2 2019
|
Q2 2020 vs.
Q1 2020
|
% of Total
|
||||||||||
Gross
Revenues
|
Gross
Revenues
|
Q2 2020
Revenues
|
||||||||||
Southern California
|
||||||||||||
Los Angeles County
|
-8.6%
|
|
-10.2%
|
|
18.3%
|
|
||||||
Orange County
|
-4.3%
|
|
-6.5%
|
|
11.0%
|
|
||||||
San Diego County
|
-2.0%
|
|
-4.5%
|
|
8.4%
|
|
||||||
Ventura County
|
-3.2%
|
|
-5.3%
|
|
4.4%
|
|
||||||
Total Southern California
|
-5.7%
|
|
-7.7%
|
|
42.1%
|
|
||||||
Northern California
|
||||||||||||
Santa Clara County
|
-1.5%
|
|
-3.9%
|
|
19.3%
|
|
||||||
Alameda County
|
-4.9%
|
|
-6.5%
|
|
6.9%
|
|
||||||
San Mateo County
|
-4.6%
|
|
-7.3%
|
|
5.0%
|
|
||||||
Contra Costa County
|
-5.3%
|
|
-6.7%
|
|
4.8%
|
|
||||||
San Francisco
|
-6.5%
|
|
-7.8%
|
|
3.3%
|
|
||||||
Total Northern California
|
-3.4%
|
|
-5.5%
|
|
39.3%
|
|
||||||
Seattle Metro
|
-0.2%
|
|
-3.7%
|
|
18.6%
|
|
||||||
Same-Property Portfolio
|
-3.8%
|
|
-6.1%
|
|
100.0%
|
|
Same-Property Revenue Components
|
$ Amount
(in millions)
|
% Contribution to
Growth/(Decline)
|
||||||
Q2 2019 Same-Property Revenue
|
$
|
336.5
|
||||||
Scheduled Rents
|
6.7
|
2.0%
|
|
|||||
Delinquencies
|
(9.7
|
)
|
-2.9%
|
|
||||
Concessions
|
(3.4
|
)
|
-1.0%
|
|
||||
Vacancy
|
(5.9
|
)
|
-1.7%
|
|||||
Other Income
|
(0.5
|
)
|
-0.1%
|
|
||||
Q2 2020 Same-Property Revenues/Growth
|
$
|
323.7
|
-3.8%
|
|
Year-Over-Year Growth
|
Year-Over-Year Growth
|
|||||||||||||||||||||||
Q2 2020 compared to Q2 2019
|
YTD 2020 compared to YTD 2019
|
|||||||||||||||||||||||
Gross
Revenues
|
Operating
Expenses
|
NOI
|
Gross
Revenues
|
Operating
Expenses
|
NOI
|
|||||||||||||||||||
Southern California
|
-5.7%
|
3.1%
|
-9.1%
|
-1.5%
|
2.8%
|
-3.2%
|
||||||||||||||||||
Northern California
|
-3.4%
|
3.9%
|
-5.9%
|
-0.2%
|
2.8%
|
-1.2%
|
||||||||||||||||||
Seattle Metro
|
-0.2%
|
17.2%
|
-7.0%
|
2.2%
|
7.2%
|
0.1%
|
||||||||||||||||||
Same-Property Portfolio
|
-3.8%
|
6.0%
|
-7.4%
|
-0.3%
|
3.6%
|
-1.8%
|
Sequential Growth
|
||||||||||||
Q2 2020 compared to Q1 2020
|
||||||||||||
Gross
Revenues
|
Operating
Expenses
|
NOI
|
||||||||||
Southern California
|
-7.7%
|
0.1%
|
-10.7%
|
|||||||||
Northern California
|
-5.5%
|
0.9%
|
-7.6%
|
|||||||||
Seattle Metro
|
-3.7%
|
8.1%
|
-8.6%
|
|||||||||
Same-Property Portfolio
|
-6.1%
|
1.9%
|
-9.1%
|
Financial Occupancies
|
||||||||||||
Quarter Ended
|
||||||||||||
6/30/2020
|
3/31/2020
|
6/30/2019
|
||||||||||
Southern California
|
94.5%
|
96.6%
|
96.6%
|
|||||||||
Northern California
|
95.0%
|
96.9%
|
96.6%
|
|||||||||
Seattle Metro
|
95.4%
|
96.8%
|
96.4%
|
|||||||||
Same-Property Portfolio
|
94.9%
|
96.8%
|
96.6%
|
Project Name
|
Location
|
Total
Apartment
Homes
|
ESS
Ownership
|
% Leased
as of
07/31/20
|
Status
|
|||||||||
Station Park Green – Phase III
|
San Mateo, CA
|
172
|
100%
|
88.4%
|
In Lease-Up
|
|||||||||
500 Folsom
|
San Francisco, CA
|
537
|
50%
|
73.4%
|
In Lease-Up
|
|||||||||
Mylo
|
Santa Clara, CA
|
476
|
100%
|
45.8%
|
In Lease-Up
|
|||||||||
Patina at Midtown
|
San Jose, CA
|
269
|
50%
|
9.3%
|
In Lease-Up
|
|||||||||
Total/Average % Leased
|
1,454
|
54.3%
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
Funds from Operations attributable to common
stockholders and unitholders
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Net income available to common stockholders
|
$
|
84,458
|
$
|
92,275
|
$
|
399,464
|
$
|
211,133
|
||||||||
Adjustments:
|
||||||||||||||||
Depreciation and amortization
|
133,609
|
119,465
|
265,168
|
240,033
|
||||||||||||
Gains not included in FFO
|
(16,597
|
)
|
(870
|
)
|
(251,291
|
)
|
(32,405
|
)
|
||||||||
Depreciation and amortization from unconsolidated co-investments
|
12,764
|
14,631
|
25,308
|
29,821
|
||||||||||||
Noncontrolling interest related to Operating Partnership units
|
2,964
|
3,228
|
13,950
|
7,399
|
||||||||||||
Depreciation attributable to third party ownership and other
|
(139
|
)
|
(236
|
)
|
(273
|
)
|
(466
|
)
|
||||||||
Funds from Operations attributable to common
stockholders and unitholders
|
$
|
217,059
|
$
|
228,493
|
$
|
452,326
|
$
|
455,515
|
||||||||
FFO per share – diluted
|
$
|
3.21
|
$
|
3.36
|
$
|
6.65
|
$
|
6.69
|
||||||||
Expensed acquisition and investment related costs
|
$
|
15
|
$
|
24
|
$
|
102
|
$
|
56
|
||||||||
Deferred tax expense on unrealized gain on unconsolidated co-investment (1)
|
1,636
|
-
|
1,636
|
-
|
||||||||||||
Gain on sale of marketable securities
|
(46
|
)
|
(556
|
)
|
(33
|
)
|
(498
|
)
|
||||||||
Unrealized (gains) losses on marketable securities
|
(7,623
|
)
|
56
|
1,073
|
(4,454
|
)
|
||||||||||
Provision for credit losses
|
147
|
-
|
97
|
-
|
||||||||||||
Equity income from non-core co-investment (2)
|
(4,696
|
)
|
-
|
(4,586
|
)
|
(314
|
)
|
|||||||||
Interest rate hedge ineffectiveness (3)
|
-
|
-
|
-
|
181
|
||||||||||||
Loss (gain) on early retirement of debt, net
|
5,027
|
(332
|
)
|
4,706
|
(1,668
|
)
|
||||||||||
Gain on early retirement of debt from unconsolidated co-investment
|
(38
|
)
|
-
|
(38
|
)
|
-
|
||||||||||
Co-investment promote income
|
-
|
-
|
(6,455
|
)
|
(809
|
)
|
||||||||||
Income from early redemption of preferred equity investments
|
-
|
(732
|
)
|
(210
|
)
|
(832
|
)
|
|||||||||
General and administrative and other, net
|
2,312
|
-
|
3,132
|
-
|
||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
(106
|
)
|
(38
|
)
|
(63
|
)
|
(248
|
)
|
||||||||
Core Funds from Operations attributable to
common stockholders and unitholders
|
$
|
213,687
|
$
|
226,915
|
$
|
451,687
|
$
|
446,929
|
||||||||
Core FFO per share – diluted
|
$
|
3.16
|
$
|
3.33
|
$
|
6.64
|
$
|
6.57
|
||||||||
Weighted average number of shares outstanding diluted (4)
|
67,682,034
|
68,079,855
|
68,017,414
|
68,063,937
|
(1) |
A deferred tax expense was recorded during the second quarter of 2020 related to the $4.7 million net unrealized gain on the Real Estate Technology Ventures, L.P. co-investment.
|
(2) |
Represents the Company’s share of co-investment income from Real Estate Technology Ventures, L.P. Income for the second quarter of 2020 includes a net unrealized gain of $4.7
million.
|
(3) |
On January 1, 2019, the Company adopted ASU No. 2017-12 “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities,” which resulted in a cumulative
effect adjustment of approximately $181,000 from interest expense to accumulated other comprehensive income. As a result of the adoption of this standard, the Company recognizes qualifying hedge ineffectiveness through accumulated other
comprehensive income as opposed to current earnings.
|
(4) |
Assumes conversion of all outstanding limited partnership units in Essex Portfolio, L.P. (the “Operating Partnership”) into shares of the Company’s common stock and excludes all
DownREIT limited partnership units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Earnings from operations
|
$
|
119,736
|
$
|
124,560
|
$
|
250,573
|
$
|
240,255
|
||||||||
Adjustments:
|
||||||||||||||||
Corporate-level property management expenses
|
8,646
|
8,469
|
17,405
|
16,898
|
||||||||||||
Depreciation and amortization
|
133,609
|
119,465
|
265,168
|
240,033
|
||||||||||||
Management and other fees from affiliates
|
(2,348
|
)
|
(2,260
|
)
|
(4,965
|
)
|
(4,595
|
)
|
||||||||
General and administrative
|
14,952
|
13,927
|
28,934
|
27,386
|
||||||||||||
Expensed acquisition and investment related costs
|
15
|
24
|
102
|
56
|
||||||||||||
Gain on sale of real estate and land
|
(16,597
|
)
|
-
|
(16,597
|
)
|
-
|
||||||||||
NOI
|
258,013
|
264,185
|
540,620
|
520,033
|
||||||||||||
Less: Non-same property NOI
|
(30,333
|
)
|
(18,217
|
)
|
(62,445
|
)
|
(33,088
|
)
|
||||||||
Same-Property NOI
|
$
|
227,680
|
$
|
245,968
|
$
|
478,175
|
$
|
486,945
|
Page(s)
|
|
Consolidated Operating Results
|
S-1 – S-2
|
Consolidated Funds From Operations
|
S-3
|
Consolidated Balance Sheets
|
S-4
|
Debt Summary – June 30, 2020
|
S-5
|
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – June 30, 2020
|
S-6
|
Portfolio Summary by County – June 30, 2020
|
S-7
|
Operating Income by Quarter – June 30, 2020
|
S-8
|
Same-Property Revenue Results by County – Quarters ended June 30, 2020 and 2019, and March 31, 2020
|
S-9
|
Same-Property Revenue Results by County – Six months ended June 30, 2020 and 2019
|
S-9.1
|
Same-Property Operating Expenses – Quarter and Year to Date as of June 30, 2020 and 2019
|
S-10
|
Development Pipeline – June 30, 2020
|
S-11
|
Redevelopment Pipeline – June 30, 2020
|
S-12
|
Capital Expenditures – June 30, 2020
|
S-12.1
|
Co-investments and Preferred Equity Investments – June 30, 2020
|
S-13 |
Summary of Apartment Community Acquisitions and Dispositions Activity
|
S-14
|
Delinquencies, Operating Statistics, and Same-Property Portfolio Growth with Concessions on a GAAP basis
|
S-15
|
Reconciliations of Non-GAAP Financial Measures and Other Terms
|
S-16.1-S-16.4
|
Consolidated Operating Results
(Dollars in thousands, except share and per share amounts)
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
|
||||||||||||||||
Revenues:
|
||||||||||||||||
Rental and other property
|
$
|
368,149
|
$
|
359,375
|
$
|
757,899
|
$
|
713,263
|
||||||||
Management and other fees from affiliates
|
2,348
|
2,260
|
4,965
|
4,595
|
||||||||||||
370,497
|
361,635
|
762,864
|
717,858
|
|||||||||||||
Expenses:
|
||||||||||||||||
Property operating
|
110,136
|
95,190
|
217,279
|
193,230
|
||||||||||||
Corporate-level property management expenses
|
8,646
|
8,469
|
17,405
|
16,898
|
||||||||||||
Depreciation and amortization
|
133,609
|
119,465
|
265,168
|
240,033
|
||||||||||||
General and administrative
|
14,952
|
13,927
|
28,934
|
27,386
|
||||||||||||
Expensed acquisition and investment related costs
|
15
|
24
|
102
|
56
|
||||||||||||
267,358
|
237,075
|
528,888
|
477,603
|
|||||||||||||
Gain on sale of real estate and land
|
16,597
|
-
|
16,597
|
-
|
||||||||||||
Earnings from operations
|
119,736
|
124,560
|
250,573
|
240,255
|
||||||||||||
Interest expense, net (1)
|
(51,659
|
)
|
(52,137
|
)
|
(104,822
|
)
|
(103,735
|
)
|
||||||||
Interest and other income
|
11,405
|
8,347
|
6,184
|
20,608
|
||||||||||||
Equity income from co-investments
|
17,257
|
16,959
|
38,554
|
33,235
|
||||||||||||
Deferred tax expense on unrealized gain on unconsolidated co-investment
|
(1,636
|
)
|
-
|
(1,636
|
)
|
-
|
||||||||||
(Loss) gain on early retirement of debt, net
|
(5,027
|
)
|
332
|
(4,706
|
)
|
1,668
|
||||||||||
Gain on remeasurement of co-investment
|
-
|
-
|
234,694
|
31,535
|
||||||||||||
Net income
|
90,076
|
98,061
|
418,841
|
223,566
|
||||||||||||
Net income attributable to noncontrolling interest
|
(5,618
|
)
|
(5,786
|
)
|
(19,377
|
)
|
(12,433
|
)
|
||||||||
Net income available to common stockholders
|
$
|
84,458
|
$
|
92,275
|
$
|
399,464
|
$
|
211,133
|
||||||||
Net income per share - basic
|
$
|
1.29
|
$
|
1.40
|
$
|
6.08
|
$
|
3.21
|
||||||||
Shares used in income per share - basic
|
65,412,407
|
65,718,806
|
65,728,119
|
65,710,842
|
||||||||||||
Net income per share - diluted
|
$
|
1.29
|
$
|
1.40
|
$
|
6.07
|
$
|
3.21
|
||||||||
Shares used in income per share - diluted
|
65,427,935
|
65,821,815
|
65,855,347
|
65,802,417
|
(1)
|
Refer to page S-16.2, the section titled “Interest Expense, Net” for additional information.
|
Consolidated Operating Results
Selected Line Item Detail
|
Three Months Ended
June 30,
|
Six Months Ended
June 30,
|
||||||||||||||
(Dollars in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Rental and other property
|
||||||||||||||||
Rental income
|
$
|
363,087
|
$
|
353,167
|
$
|
746,585
|
$
|
700,972
|
||||||||
Other property
|
5,062
|
6,208
|
11,314
|
12,291
|
||||||||||||
Rental and other property
|
$
|
368,149
|
$
|
359,375
|
$
|
757,899
|
$
|
713,263
|
||||||||
Property operating expenses
|
||||||||||||||||
Real estate taxes
|
$
|
44,994
|
$
|
36,285
|
$
|
88,006
|
$
|
75,703
|
||||||||
Administrative
|
21,579
|
20,396
|
44,336
|
41,506
|
||||||||||||
Maintenance and repairs
|
23,906
|
20,940
|
45,777
|
40,606
|
||||||||||||
Utilities
|
19,657
|
17,569
|
39,160
|
35,415
|
||||||||||||
Property operating expenses
|
$
|
110,136
|
$
|
95,190
|
$
|
217,279
|
$
|
193,230
|
||||||||
Interest and other income
|
||||||||||||||||
Marketable securities and other income
|
$
|
3,777
|
$
|
7,809
|
$
|
7,258
|
$
|
15,408
|
||||||||
Gain on sale of marketable securities
|
46
|
556
|
33
|
498
|
||||||||||||
Provision for credit losses
|
(147
|
)
|
-
|
(97
|
)
|
-
|
||||||||||
Unrealized gains (losses) on marketable securities
|
7,623
|
(56
|
)
|
(1,073
|
)
|
4,454
|
||||||||||
Insurance reimbursements, legal settlements, and other, net
|
106
|
38
|
63
|
248
|
||||||||||||
Interest and other income
|
$
|
11,405
|
$
|
8,347
|
$
|
6,184
|
$
|
20,608
|
||||||||
Equity income from co-investments
|
||||||||||||||||
Equity income from co-investments
|
$
|
246
|
$
|
5,116
|
$
|
3,309
|
$
|
10,101
|
||||||||
Income from preferred equity investments
|
12,277
|
10,241
|
23,956
|
20,309
|
||||||||||||
Equity income from non-core co-investment
|
4,696
|
-
|
4,586
|
314
|
||||||||||||
Gain on sale of co-investment communities
|
-
|
870
|
-
|
870
|
||||||||||||
Gain on early retirement of debt from unconsolidated co-investment
|
38
|
-
|
38
|
-
|
||||||||||||
Co-investment promote income
|
-
|
-
|
6,455
|
809
|
||||||||||||
Income from early redemption of preferred equity investments
|
-
|
732
|
210
|
832
|
||||||||||||
Equity income from co-investments
|
$
|
17,257
|
$
|
16,959
|
$
|
38,554
|
$
|
33,235
|
||||||||
Noncontrolling interest
|
||||||||||||||||
Limited partners of Essex Portfolio, L.P.
|
$
|
2,964
|
$
|
3,228
|
$
|
13,950
|
$
|
7,399
|
||||||||
DownREIT limited partners’ distributions
|
2,134
|
1,645
|
4,270
|
3,209
|
||||||||||||
Third-party ownership interest
|
520
|
913
|
1,157
|
1,825
|
||||||||||||
Noncontrolling interest
|
$
|
5,618
|
$
|
5,786
|
$
|
19,377
|
$
|
12,433
|
Consolidated Funds From Operations (1)
(Dollars in thousands, except share and per share amounts and in footnotes)
|
Three Months Ended
June 30, |
Six Months Ended
June 30, |
||||||||||||||||||||||
2020
|
2019
|
% Change
|
2020
|
2019
|
% Change
|
|||||||||||||||||||
Funds from operations attributable to common stockholders and unitholders (FFO)
|
||||||||||||||||||||||||
Net income available to common stockholders
|
$
|
84,458
|
$
|
92,275
|
$
|
399,464
|
$
|
211,133
|
||||||||||||||||
Adjustments:
|
||||||||||||||||||||||||
Depreciation and amortization
|
133,609
|
119,465
|
265,168
|
240,033
|
||||||||||||||||||||
Gains not included in FFO
|
(16,597
|
)
|
(870
|
)
|
(251,291
|
)
|
(32,405
|
)
|
||||||||||||||||
Depreciation and amortization from unconsolidated co-investments
|
12,764
|
14,631
|
25,308
|
29,821
|
||||||||||||||||||||
Noncontrolling interest related to Operating Partnership units
|
2,964
|
3,228
|
13,950
|
7,399
|
||||||||||||||||||||
Depreciation attributable to third party ownership and other (2)
|
(139
|
)
|
(236
|
)
|
(273
|
)
|
(466
|
)
|
||||||||||||||||
Funds from operations attributable to common stockholders and unitholders
|
$
|
217,059
|
$
|
228,493
|
$
|
452,326
|
$
|
455,515
|
||||||||||||||||
FFO per share-diluted
|
$
|
3.21
|
$
|
3.36
|
-4.5%
|
|
$
|
6.65
|
$
|
6.69
|
-0.6%
|
|||||||||||||
Components of the change in FFO
|
||||||||||||||||||||||||
Non-core items:
|
||||||||||||||||||||||||
Expensed acquisition and investment related costs
|
$
|
15
|
$
|
24
|
$
|
102
|
$
|
56
|
||||||||||||||||
Deferred tax expense on unrealized gain on unconsolidated co-investment (3)
|
1,636
|
-
|
1,636
|
-
|
||||||||||||||||||||
Gain on sale of marketable securities
|
(46
|
)
|
(556
|
)
|
(33
|
)
|
(498
|
)
|
||||||||||||||||
Unrealized (gains) losses on marketable securities
|
(7,623
|
)
|
56
|
1,073
|
(4,454
|
)
|
||||||||||||||||||
Provision for credit losses
|
147
|
-
|
97
|
-
|
||||||||||||||||||||
Equity income from non-core co-investment (4)
|
(4,696
|
)
|
-
|
(4,586
|
)
|
(314
|
)
|
|||||||||||||||||
Interest rate hedge ineffectiveness (5)
|
-
|
-
|
-
|
181
|
||||||||||||||||||||
Loss (gain) on early retirement of debt, net
|
5,027
|
(332
|
)
|
4,706
|
(1,668
|
)
|
||||||||||||||||||
Gain on early retirement of debt from unconsolidated co-investment
|
(38
|
)
|
-
|
(38
|
)
|
-
|
||||||||||||||||||
Co-investment promote income
|
-
|
-
|
(6,455
|
)
|
(809
|
)
|
||||||||||||||||||
Income from early redemption of preferred equity investments
|
-
|
(732
|
)
|
(210
|
)
|
(832
|
)
|
|||||||||||||||||
General and administrative and other, net
|
2,312
|
-
|
3,132
|
-
|
||||||||||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
(106
|
)
|
(38
|
)
|
(63
|
)
|
(248
|
)
|
||||||||||||||||
Core funds from operations attributable to common stockholders and unitholders
|
$
|
213,687
|
$
|
226,915
|
$
|
451,687
|
$
|
446,929
|
||||||||||||||||
Core FFO per share-diluted
|
$
|
3.16
|
$
|
3.33
|
-5.1%
|
|
$
|
6.64
|
$
|
6.57
|
1.1%
|
|
||||||||||||
Changes in core items:
|
||||||||||||||||||||||||
Same-property NOI
|
$
|
(18,288
|
)
|
$
|
(8,770
|
)
|
||||||||||||||||||
Non-same property NOI
|
12,116
|
29,357
|
||||||||||||||||||||||
Management and other fees, net
|
88
|
370
|
||||||||||||||||||||||
FFO from co-investments
|
(4,701
|
)
|
(7,658
|
)
|
||||||||||||||||||||
Interest and other income
|
(4,032
|
)
|
(8,150
|
)
|
||||||||||||||||||||
Interest expense
|
478
|
(1,268
|
)
|
|||||||||||||||||||||
General and administrative
|
1,287
|
1,584
|
||||||||||||||||||||||
Corporate-level property management expenses
|
(177
|
)
|
(507
|
)
|
||||||||||||||||||||
Other items, net
|
1
|
(200
|
)
|
|||||||||||||||||||||
$
|
(13,228
|
)
|
$
|
4,758
|
||||||||||||||||||||
Weighted average number of shares outstanding diluted (6)
|
67,682,034
|
68,079,855
|
68,017,414
|
68,063,937
|
(1) |
Refer to page S-16.2, the section titled “Funds from Operations (“FFO”) and Core FFO” for additional information on the Company’s definition and use of FFO and Core FFO.
|
(2) |
The Company consolidates certain co-investments. The noncontrolling interest’s share of net operating income in these investments for the three and six months ended June 30,
2020 was $0.9 million and $2.3 million, respectively.
|
(3) |
A deferred tax expense was recorded during the second quarter of 2020 related to the $4.7 million net unrealized gain on the Real Estate Technology Ventures, L.P.
co-investment discussed below.
|
(4) |
Represents the Company’s share of co-investment income from Real Estate Technology Ventures, L.P. Income for the second quarter of 2020 includes a net unrealized gain of $4.7
million.
|
(5) |
On January 1, 2019, the Company adopted ASU No. 2017-12 “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities,” which resulted in a cumulative
effect adjustment of approximately $181,000 from interest expense to accumulated other comprehensive income. As a result of the adoption of this standard, the Company recognizes qualifying hedge ineffectiveness through accumulated
other comprehensive income as opposed to current earnings.
|
(6) |
Assumes conversion of all outstanding limited partnership units in the Operating Partnership into shares of the Company’s common stock and excludes all DownREIT limited
partnership units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.
|
|
June 30, 2020
|
December 31, 2019
|
||||||
Real Estate:
|
||||||||
Land and land improvements
|
$
|
2,933,690
|
$
|
2,773,805
|
||||
Buildings and improvements
|
12,088,080
|
11,264,337
|
||||||
|
15,021,770
|
14,038,142
|
||||||
Less: accumulated depreciation
|
(3,927,746
|
)
|
(3,689,482
|
)
|
||||
11,094,024
|
10,348,660
|
|||||||
Real estate under development
|
467,915
|
546,075
|
||||||
Co-investments
|
1,008,758
|
1,335,339
|
||||||
Real estate held for sale, net
|
24,495
|
-
|
||||||
12,595,192
|
12,230,074
|
|||||||
Cash and cash equivalents, including restricted cash
|
256,475
|
81,094
|
||||||
Marketable securities
|
154,433
|
144,193
|
||||||
Notes and other receivables
|
44,748
|
134,365
|
||||||
Operating lease right-of-use assets
|
73,669
|
74,744
|
||||||
Prepaid expenses and other assets
|
52,894
|
40,935
|
||||||
Total assets
|
$
|
13,177,411
|
$
|
12,705,405
|
||||
Unsecured debt, net
|
$
|
5,615,795
|
$
|
4,763,206
|
||||
Mortgage notes payable, net
|
703,617
|
990,667
|
||||||
Lines of credit
|
-
|
55,000
|
||||||
Operating lease liabilities
|
75,626
|
76,740
|
||||||
Other liabilities
|
396,251
|
378,878
|
||||||
Total liabilities
|
6,791,289
|
6,264,491
|
||||||
Redeemable noncontrolling interest
|
33,241
|
37,410
|
||||||
Equity:
|
||||||||
Common stock
|
7
|
7
|
||||||
Additional paid-in capital
|
6,944,805
|
7,121,927
|
||||||
Distributions in excess of accumulated earnings
|
(760,028
|
)
|
(887,619
|
)
|
||||
Accumulated other comprehensive loss, net
|
(18,710
|
)
|
(13,888
|
)
|
||||
Total stockholders’ equity
|
6,166,074
|
6,220,427
|
||||||
Noncontrolling interest
|
186,807
|
183,077
|
||||||
Total equity6uj
|
6,352,881
|
6,403,504
|
||||||
Total liabilities and equity
|
$
|
13,177,411
|
$
|
12,705,405
|
Scheduled principal payments, unamortized premiums (discounts) and (debt issuance costs) are as follows - excludes lines of credit:
|
||||||||||||||||||||||||||||||||||||
Weighted Average
|
Unsecured
|
Secured
|
Total
|
Weighted
Average
Interest Rate
|
Percentage
of Total Debt
|
|||||||||||||||||||||||||||||||
Balance
Outstanding
|
Interest
Rate
|
Maturity
in Years
|
||||||||||||||||||||||||||||||||||
Unsecured Debt, net
|
||||||||||||||||||||||||||||||||||||
Bonds private - fixed rate
|
$
|
200,000
|
4.4
|
%
|
1.0
|
2020
|
$
|
-
|
$
|
1,983
|
$
|
1,983
|
3.5
|
%
|
0.0
|
%
|
||||||||||||||||||||
Bonds public - fixed rate
|
4,900,000
|
3.6
|
%
|
7.6
|
2021
|
500,000
|
31,653
|
531,653
|
4.3
|
%
|
8.4
|
%
|
||||||||||||||||||||||||
Term loan (1)
|
550,000
|
1.8
|
%
|
2.1
|
2022
|
650,000
|
43,188
|
693,188
|
2.8
|
%
|
10.9
|
%
|
||||||||||||||||||||||||
Unamortized net discounts and debt issuance costs
|
(34,205
|
)
|
-
|
-
|
2023
|
800,000
|
2,945
|
802,945
|
3.1
|
%
|
12.6
|
%
|
||||||||||||||||||||||||
5,615,795
|
3.5
|
%
|
6.8
|
2024
|
400,000
|
3,109
|
403,109
|
4.0
|
%
|
6.3
|
%
|
|||||||||||||||||||||||||
Mortgage Notes Payable, net
|
2025
|
500,000
|
133,054
|
633,054
|
3.5
|
%
|
10.0
|
%
|
||||||||||||||||||||||||||||
Fixed rate - secured
|
446,152
|
3.6
|
%
|
5.5
|
2026
|
450,000
|
99,405
|
549,405
|
3.5
|
%
|
8.7
|
%
|
||||||||||||||||||||||||
Variable rate - secured (2)
|
255,109
|
1.3
|
%
|
16.7
|
2027
|
350,000
|
153,955
|
503,955
|
3.4
|
%
|
7.9
|
%
|
||||||||||||||||||||||||
Unamortized premiums and debt issuance costs, net
|
2,356
|
-
|
-
|
2028
|
-
|
68,332
|
68,332
|
4.1
|
%
|
1.1
|
%
|
|||||||||||||||||||||||||
Total mortgage notes payable
|
703,617
|
2.8
|
%
|
9.5
|
2029
|
500,000
|
31,156
|
531,156
|
4.0
|
%
|
8.4
|
%
|
||||||||||||||||||||||||
2030
|
550,000
|
1,592
|
551,592
|
3.1
|
%
|
8.7
|
%
|
|||||||||||||||||||||||||||||
Unsecured Lines of Credit
|
Thereafter
|
950,000
|
130,889
|
1,080,889
|
3.0
|
%
|
17.0
|
%
|
||||||||||||||||||||||||||||
Line of credit (3)
|
-
|
1.0
|
%
|
Subtotal
|
5,650,000
|
701,261
|
6,351,261
|
3.4
|
%
|
100.0
|
%
|
|||||||||||||||||||||||||
Line of credit (4)
|
-
|
1.0
|
%
|
Debt Issuance Costs
|
(28,496
|
)
|
(2,215
|
)
|
(30,711
|
)
|
NA
|
NA
|
||||||||||||||||||||||||
Total lines of credit
|
-
|
1.0
|
%
|
(Discounts)/Premiums
|
(5,709
|
)
|
4,571
|
(1,138
|
)
|
NA
|
NA
|
|||||||||||||||||||||||||
Total
|
$
|
5,615,795
|
$
|
703,617
|
$
|
6,319,412
|
3.4
|
%
|
100.0
|
%
|
||||||||||||||||||||||||||
Total debt, net
|
$
|
6,319,412
|
3.4
|
%
|
||||||||||||||||||||||||||||||||
(1) |
$350.0 million of the unsecured term loan has a variable interest rate of LIBOR plus 0.95%. The Company has interest rate swap contracts with an aggregate notional amount of
$175.0 million, which effectively converts the interest rate on $175.0 million of the term loan to a fixed rate of 2.3%. In April 2020, the Company obtained a $200.0 million unsecured term loan, that has an interest rate of LIBOR plus
1.20% with a one-year maturity and two 12-month extension options, exercisable at the Company’s option.
|
(2) |
$255.1 million of variable rate debt is tax exempt to the note holders.
|
(3) |
This unsecured line of credit facility has a capacity of $1.2 billion, with a scheduled maturity date in December 2023 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 0.825%.
|
(4) |
This unsecured line of credit facility has a capacity $35.0 million, with a scheduled maturity date in February 2021 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 0.825%.
|
Capitalization Data
|
Public Bond Covenants (1)
|
Actual
|
Requirement
|
||||||||||
Total debt, net
|
$
|
6,319,412
|
|||||||||||
Debt to Total Assets:
|
37%
|
|
< 65%
|
||||||||||
Common stock and potentially dilutive securities
|
|||||||||||||
Common stock outstanding
|
65,331
|
||||||||||||
Limited partnership units (1)
|
2,254
|
||||||||||||
Options-treasury method
|
12
|
Secured Debt to Total Assets:
|
4%
|
|
< 40%
|
||||||||
Total shares of common stock and potentially dilutive securities
|
67,597
|
||||||||||||
Common stock price per share as of June 30, 2020
|
$
|
229.17
|
|||||||||||
Interest Coverage:
|
484%
|
|
> 150%
|
||||||||||
Total equity capitalization
|
$
|
15,491,204
|
|||||||||||
Total market capitalization
|
$
|
21,810,616
|
Unsecured Debt Ratio (2):
|
265%
|
> 150%
|
||||||||
Ratio of debt to total market capitalization
|
29.0
|
%
|
|||||||||||
Selected Credit Ratios (3)
|
Actual
|
||||||||||||
Credit Ratings
|
|||||||||||||
Rating Agency
|
Rating
|
Outlook
|
Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized:
|
6.4
|
|||||||||
Fitch
|
BBB+
|
Stable
|
|||||||||||
Moody’s
|
Baa1
|
Stable
|
Unencumbered NOI to Adjusted Total NOI:
|
94%
|
|
||||||||
Standard & Poor’s
|
BBB+
|
Stable
|
|||||||||||
(1) Refer to page S-16.4 for additional information on the Company’s Public Bond
Covenants.
|
|||||||||||||
(1)Assumes conversion of all outstanding limited partnership units in the Operating
Partnership into shares of the Company’s common stock.
|
(2) Unsecured Debt Ratio is unsecured assets (excluding investments in
co-investments) divided by unsecured indebtedness.
|
||||||||||||
(3) Refer to pages S-16.1 to S-16.4, the section titled “Reconciliations of Non-GAAP
Financial Measures and Other Terms” for additional information on the Company’s Selected Credit Ratios.
|
Apartment Homes
|
Average Monthly Rental Rate (1)
|
Percent of NOI (2)
|
||||||||||||||||||||||||||||||||||||||
Region - County
|
Consolidated (3)
|
Unconsolidated
Co-investments (4)
|
Apartment
Homes in
Development (5)
|
Total
|
Consolidated
|
Unconsolidated
Co-investments (6)
|
Total (7)
|
Consolidated
|
Unconsolidated
Co-investments (6)
|
Total (7)
|
||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||||||||||||
Los Angeles County
|
9,097
|
1,563
|
200
|
10,860
|
$
|
2,481
|
$
|
2,191
|
$
|
2,457
|
16.7
|
%
|
15.0
|
%
|
16.5
|
%
|
||||||||||||||||||||||||
Orange County
|
5,554
|
1,149
|
-
|
6,703
|
2,252
|
1,975
|
2,226
|
9.9
|
%
|
11.0
|
%
|
10.0
|
%
|
|||||||||||||||||||||||||||
San Diego County
|
4,824
|
616
|
264
|
5,704
|
2,002
|
1,890
|
1,995
|
7.9
|
%
|
5.5
|
%
|
7.7
|
%
|
|||||||||||||||||||||||||||
Ventura County and Other
|
3,200
|
693
|
-
|
3,893
|
1,850
|
2,232
|
1,890
|
5.0
|
%
|
7.7
|
%
|
5.4
|
%
|
|||||||||||||||||||||||||||
Total Southern California
|
22,675
|
4,021
|
464
|
27,160
|
2,234
|
2,093
|
2,222
|
39.5
|
%
|
39.2
|
%
|
39.6
|
%
|
|||||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||||||
Santa Clara County (8)
|
8,747
|
1,237
|
269
|
10,253
|
2,895
|
2,960
|
2,899
|
21.0
|
%
|
16.2
|
%
|
20.6
|
%
|
|||||||||||||||||||||||||||
Alameda County
|
3,959
|
1,309
|
-
|
5,268
|
2,576
|
2,498
|
2,565
|
8.1
|
%
|
16.4
|
%
|
8.7
|
%
|
|||||||||||||||||||||||||||
San Mateo County
|
2,651
|
195
|
107
|
2,953
|
3,195
|
3,913
|
3,221
|
6.4
|
%
|
3.8
|
%
|
6.2
|
%
|
|||||||||||||||||||||||||||
Contra Costa County
|
2,619
|
-
|
-
|
2,619
|
2,489
|
-
|
2,489
|
5.2
|
%
|
0.0
|
%
|
4.8
|
%
|
|||||||||||||||||||||||||||
San Francisco
|
1,343
|
537
|
-
|
1,880
|
3,237
|
3,934
|
3,353
|
3.4
|
%
|
4.3
|
%
|
3.4
|
%
|
|||||||||||||||||||||||||||
Total Northern California
|
19,319
|
3,278
|
376
|
22,973
|
2,839
|
2,984
|
2,851
|
44.1
|
%
|
40.7
|
%
|
43.7
|
%
|
|||||||||||||||||||||||||||
Seattle Metro
|
10,343
|
1,890
|
-
|
12,233
|
1,947
|
1,944
|
1,947
|
16.4
|
%
|
20.1
|
%
|
16.7
|
%
|
|||||||||||||||||||||||||||
Total
|
52,337
|
9,189
|
840
|
62,366
|
$
|
2,401
|
$
|
2,376
|
$
|
2,399
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
(1)
|
Average monthly rental rate is defined as the total scheduled monthly rental income (actual rent for occupied apartment homes plus market rent for vacant apartment homes)
divided by the number of apartment homes.
|
(2) |
Represents the percentage of actual NOI for the quarter ended June 30, 2020. See the section titled “Net Operating Income (“NOI”) and Same-Property NOI Reconciliations” on
page S-16.3.
|
(3) |
Includes two communities consisting of 648 apartment homes that are producing partial income due to lease-up.
|
(4) |
Includes one community consisting of 537 apartment homes that is producing partial income due to lease-up.
|
(5) |
Includes development communities with no rental income.
|
(6) |
Co-investment amounts weighted for Company’s pro rata share.
|
(7) |
At Company’s pro rata share.
|
(8) |
Includes all communities in Santa Clara County and one community in Santa Cruz County.
|
Apartment
Homes
|
Q2 '20
|
Q1 '20
|
Q4 '19
|
Q3 '19
|
Q2 '19
|
|||||||||||||||||||
Rental and other property revenues:
|
||||||||||||||||||||||||
Same-property
|
47,104
|
$
|
323,651
|
$
|
344,636
|
$
|
344,404
|
$
|
338,613
|
$
|
336,492
|
|||||||||||||
Acquisitions (2)
|
2,557
|
19,885
|
18,879
|
4,238
|
2,991
|
475
|
||||||||||||||||||
Development (3)
|
968
|
4,420
|
4,075
|
3,417
|
1,883
|
1,217
|
||||||||||||||||||
Redevelopment
|
621
|
5,096
|
5,401
|
5,317
|
5,272
|
5,240
|
||||||||||||||||||
Non-residential/other, net (4)
|
1,087
|
15,097
|
16,759
|
15,485
|
15,745 |
15,951
|
||||||||||||||||||
Total rental and other property revenues
|
52,337
|
368,149
|
389,750
|
372,861
|
364,504
|
359,375
|
||||||||||||||||||
Property operating expenses:
|
||||||||||||||||||||||||
Same-property
|
95,971
|
94,141
|
92,914
|
94,867
|
90,524
|
|||||||||||||||||||
Acquisitions (2)
|
6,714
|
5,804
|
1,200
|
961
|
103
|
|||||||||||||||||||
Development (3)
|
1,445
|
1,447
|
1,208
|
706
|
506
|
|||||||||||||||||||
Redevelopment
|
1,752
|
1,663
|
1,725
|
1,734
|
1,586
|
|||||||||||||||||||
Non-residential/other, net (4) (5)
|
4,254
|
4,088
|
4,077
|
3,905
|
2,471
|
|||||||||||||||||||
Total property operating expenses
|
110,136
|
107,143
|
101,124
|
102,173
|
95,190
|
|||||||||||||||||||
Net operating income (NOI):
|
||||||||||||||||||||||||
Same-property
|
227,680
|
250,495
|
251,490
|
243,746
|
245,968
|
|||||||||||||||||||
Acquisitions (2)
|
13,171
|
13,075
|
3,038
|
2,030
|
372
|
|||||||||||||||||||
Development (3)
|
2,975
|
2,628
|
2,209
|
1,177
|
711
|
|||||||||||||||||||
Redevelopment
|
3,344
|
3,738
|
3,592
|
3,538
|
3,654
|
|||||||||||||||||||
Non-residential/other, net (4)
|
10,843
|
12,671
|
11,408
|
11,840
|
13,480
|
|||||||||||||||||||
Total NOI
|
$
|
258,013
|
$
|
282,607
|
$
|
271,737
|
$
|
262,331
|
$
|
264,185
|
||||||||||||||
Same-property metrics
|
||||||||||||||||||||||||
Operating margin
|
70%
|
|
73%
|
73%
|
72%
|
73%
|
||||||||||||||||||
Annualized turnover (6)
|
46%
|
|
39%
|
41%
|
55%
|
48%
|
||||||||||||||||||
Financial occupancy (7)
|
94.9%
|
|
96.8%
|
97.1%
|
96.0%
|
96.6%
|
(1) |
Includes consolidated communities only.
|
(2) |
Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2019.
|
(3) |
Development includes properties developed which did not have comparable stabilized results as of January 1, 2019.
|
(4) |
Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, student housing,
properties undergoing significant construction activities that do not meet our redevelopment criteria, and three communities located in the California counties of Riverside, Santa Barbara, and Santa Cruz, which the Company does not
consider its core markets and straight-line adjustments for concessions.
|
(5) |
Includes other expenses and intercompany eliminations pertaining to self-insurance.
|
(6) |
Annualized turnover is defined as the number of apartment homes turned over during the quarter, annualized, divided by the total number of apartment homes.
|
(7) |
Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income (actual rent for occupied apartment homes plus
market rent for vacant apartment homes).
|
Average Monthly Rental Rate
|
Financial Occupancy
|
Gross Revenues
|
Sequential Gross
Revenues
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Region - County
|
Apartment
Homes
|
Q2 ‘20 %
of Actual
NOI
|
Q2 '20
|
Q2 '19
|
% Change
|
Q2 '20
|
Q2 '19
|
% Change
|
Q2 '20
|
Q2 '19
|
% Change
|
Q1 '20
|
% Change
|
|||||||||||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Los Angeles County
|
8,641
|
17.5
|
%
|
$
|
2,490
|
$
|
2,456
|
1.4
|
%
|
93.4
|
%
|
96.6
|
%
|
-3.3
|
%
|
$
|
59,232
|
$
|
64,790
|
-8.6
|
%
|
$
|
65,959
|
-10.2
|
%
|
|||||||||||||||||||||||||||
Orange County
|
5,554
|
10.9
|
%
|
2,252
|
2,209
|
1.9
|
%
|
95.0
|
%
|
96.3
|
%
|
-1.3
|
%
|
35,565
|
37,182
|
-4.3
|
%
|
38,050
|
-6.5
|
%
|
||||||||||||||||||||||||||||||||
San Diego County
|
4,582
|
8.4
|
%
|
1,996
|
1,951
|
2.3
|
%
|
96.1
|
%
|
97.1
|
%
|
-1.0
|
%
|
27,110
|
27,663
|
-2.0
|
%
|
28,381
|
-4.5
|
%
|
||||||||||||||||||||||||||||||||
Ventura County
|
2,577
|
4.6
|
%
|
1,878
|
1,844
|
1.8
|
%
|
95.8
|
%
|
97.0
|
%
|
-1.2
|
%
|
14,324
|
14,805
|
-3.2
|
%
|
15,131
|
-5.3
|
%
|
||||||||||||||||||||||||||||||||
Total Southern California
|
21,354
|
41.4
|
%
|
2,248
|
2,209
|
1.8
|
%
|
94.5
|
%
|
96.6
|
%
|
-2.2
|
%
|
136,231
|
144,440
|
-5.7
|
%
|
147,521
|
-7.7
|
%
|
||||||||||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Santa Clara County
|
7,406
|
20.6
|
%
|
2,864
|
2,809
|
2.0
|
%
|
95.3
|
%
|
96.7
|
%
|
-1.4
|
%
|
62,618
|
63,559
|
-1.5
|
%
|
65,145
|
-3.9
|
%
|
||||||||||||||||||||||||||||||||
Alameda County
|
2,954
|
7.0
|
%
|
2,612
|
2,588
|
0.9
|
%
|
94.4
|
%
|
96.1
|
%
|
-1.8
|
%
|
22,278
|
23,428
|
-4.9
|
%
|
23,818
|
-6.5
|
%
|
||||||||||||||||||||||||||||||||
San Mateo County
|
1,830
|
5.3
|
%
|
3,095
|
3,024
|
2.3
|
%
|
95.1
|
%
|
96.3
|
%
|
-1.2
|
%
|
16,253
|
17,037
|
-4.6
|
%
|
17,525
|
-7.3
|
%
|
||||||||||||||||||||||||||||||||
Contra Costa County
|
2,270
|
4.8
|
%
|
2,385
|
2,363
|
0.9
|
%
|
96.3
|
%
|
96.8
|
%
|
-0.5
|
%
|
15,609
|
16,487
|
-5.3
|
%
|
16,730
|
-6.7
|
%
|
||||||||||||||||||||||||||||||||
San Francisco
|
1,178
|
3.1
|
%
|
3,122
|
3,101
|
0.7
|
%
|
92.9
|
%
|
96.5
|
%
|
-3.7
|
%
|
10,568
|
11,304
|
-6.5
|
%
|
11,467
|
-7.8
|
%
|
||||||||||||||||||||||||||||||||
Total Northern California
|
15,638
|
40.8
|
%
|
2,794
|
2,749
|
1.6
|
%
|
95.0
|
%
|
96.6
|
%
|
-1.7
|
%
|
127,326
|
131,815
|
-3.4
|
%
|
134,685
|
-5.5
|
%
|
||||||||||||||||||||||||||||||||
Seattle Metro
|
10,112
|
17.8
|
%
|
1,946
|
1,877
|
3.7
|
%
|
95.4
|
%
|
96.4
|
%
|
-1.0
|
%
|
60,094
|
60,237
|
-0.2
|
%
|
62,430
|
-3.7
|
%
|
||||||||||||||||||||||||||||||||
Total Same-Property
|
47,104
|
100.0
|
%
|
$
|
2,364
|
$
|
2,317
|
2.0
|
%
|
94.9
|
%
|
96.6
|
%
|
-1.7
|
%
|
$
|
323,651
|
$
|
336,492
|
-3.8
|
%
|
$
|
344,636
|
-6.1
|
%
|
|
YTD
|
Average Monthly Rental Rate
|
Financial Occupancy
|
Gross Revenues
|
||||||||||||||||||||||||||||||||||||||||
Region - County
|
Apartment
Homes
|
2020 % of
Actual
NOI
|
YTD 2020
|
YTD 2019
|
% Change
|
YTD 2020
|
YTD 2019
|
% Change
|
YTD 2020
|
YTD 2019
|
% Change
|
|||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||||||||||||||||
Los Angeles County
|
8,641
|
18.0
|
%
|
$
|
2,491
|
$
|
2,444
|
1.9
|
%
|
94.9
|
%
|
96.7
|
%
|
-1.9
|
%
|
$
|
125,191
|
$
|
129,353
|
-3.2
|
%
|
|||||||||||||||||||||||
Orange County
|
5,554
|
10.9
|
%
|
2,250
|
2,199
|
2.3
|
%
|
95.7
|
%
|
96.5
|
%
|
-0.8
|
%
|
73,615
|
74,086
|
-0.6
|
%
|
|||||||||||||||||||||||||||
San Diego County
|
4,582
|
8.3
|
%
|
1,992
|
1,942
|
2.6
|
%
|
96.6
|
%
|
96.8
|
%
|
-0.2
|
%
|
55,491
|
55,022
|
0.9
|
%
|
|||||||||||||||||||||||||||
Ventura County
|
2,577
|
4.6
|
%
|
1,876
|
1,836
|
2.2
|
%
|
96.5
|
%
|
97.1
|
%
|
-0.6
|
%
|
29,455
|
29,563
|
-0.4
|
%
|
|||||||||||||||||||||||||||
Total Southern California
|
21,354
|
41.8
|
%
|
2,247
|
2,199
|
2.2
|
%
|
95.6
|
%
|
96.7
|
%
|
-1.1
|
%
|
283,752
|
288,024
|
-1.5
|
%
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||||||||||
Santa Clara County
|
7,406
|
20.2
|
%
|
2,861
|
2,788
|
2.6
|
%
|
96.2
|
%
|
97.0
|
%
|
-0.8
|
%
|
127,763
|
126,565
|
0.9
|
%
|
|||||||||||||||||||||||||||
Alameda County
|
2,954
|
7.0
|
%
|
2,612
|
2,573
|
1.5
|
%
|
95.4
|
%
|
96.4
|
%
|
-1.0
|
%
|
46,096
|
46,721
|
-1.3
|
%
|
|||||||||||||||||||||||||||
San Mateo County
|
1,830
|
5.3
|
%
|
3,091
|
2,995
|
3.2
|
%
|
96.0
|
%
|
96.9
|
%
|
-0.9
|
%
|
33,778
|
33,997
|
-0.6
|
%
|
|||||||||||||||||||||||||||
Contra Costa County
|
2,270
|
4.9
|
%
|
2,385
|
2,345
|
1.7
|
%
|
96.7
|
%
|
97.0
|
%
|
-0.3
|
%
|
32,339
|
32,871
|
-1.6
|
%
|
|||||||||||||||||||||||||||
San Francisco
|
1,178
|
3.1
|
%
|
3,140
|
3,074
|
2.1
|
%
|
94.6
|
%
|
96.3
|
%
|
-1.8
|
%
|
22,035
|
22,319
|
-1.3
|
%
|
|||||||||||||||||||||||||||
Total Northern California
|
15,638
|
40.5
|
%
|
2,793
|
2,729
|
2.3
|
%
|
96.0
|
%
|
96.8
|
%
|
-0.8
|
%
|
262,011
|
262,473
|
-0.2
|
%
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Seattle Metro
|
10,112
|
17.7
|
%
|
1,939
|
1,862
|
4.1
|
%
|
96.1
|
%
|
96.7
|
%
|
-0.6
|
%
|
122,524
|
119,890
|
2.2
|
%
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Total Same-Property
|
47,104
|
100.0
|
%
|
$
|
2,362
|
$
|
2,302
|
2.6
|
%
|
95.8
|
%
|
96.8
|
%
|
-1.0
|
%
|
$
|
668,287
|
$
|
670,387
|
-0.3
|
%
|
Based on 47,104 apartment homes
|
||||||||||||||||||||||||||||||||
Q2 '20
|
Q2 '19
|
% Change
|
% of Op. Ex.
|
YTD 2020
|
YTD 2019
|
% Change
|
% of Op. Ex.
|
|||||||||||||||||||||||||
Same-property operating expenses:
|
||||||||||||||||||||||||||||||||
Real estate taxes
|
$
|
37,628
|
$
|
34,317
|
9.6
|
%
|
39.2
|
%
|
$
|
74,343
|
$
|
71,121
|
4.5
|
%
|
39.1
|
%
|
||||||||||||||||
Maintenance and repairs
|
21,165
|
19,590
|
8.0
|
%
|
22.1
|
%
|
40,358
|
38,079
|
6.0
|
%
|
21.2 |
%
|
||||||||||||||||||||
Administrative
|
15,844
|
16,213
|
-2.3
|
%
|
16.5
|
%
|
32,389 |
32,617
|
-0.7
|
%
|
17.0
|
%
|
||||||||||||||||||||
Utilities
|
17,152
|
16,178
|
6.0
|
%
|
17.9
|
%
|
34,238
|
33,005
|
3.7
|
%
|
18.0
|
%
|
||||||||||||||||||||
Insurance and other
|
4,182
|
4,226
|
-1.0
|
%
|
4.3
|
%
|
8,784
|
8,620
|
1.9
|
%
|
4.7 |
%
|
||||||||||||||||||||
Total same-property operating expenses
|
$
|
95,971
|
$
|
90,524
|
6.0
|
%
|
100.0
|
%
|
$
|
190,112 |
$
|
183,442
|
3.6 |
%
|
100.0
|
%
|
||||||||||||||||
Project Name
|
Location
|
Ownership
%
|
Estimated
Apartment
Homes |
Estimated
Commercial
sq. feet
|
Incurred to
Date
|
Remaining
Costs
|
Estimated
Total Cost
|
Essex Est.
Total Cost (1)
|
Cost per
Apartment
Home (2)
|
Average
%
Occupied
|
%
Leased as
of 6/30/20
(3)
|
%
Leased as
of 7/31/20
(3)
|
Construction
Start
|
Initial
Occupancy
|
Stabilized
Operations
|
||||||||||||||||||||||||||||||||||||||||||
Development Projects - Consolidated (4)
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Station Park Green - Phase III
|
San Mateo, CA
|
100
|
%
|
172
|
-
|
126
|
8
|
134
|
134
|
779
|
61
|
%
|
70
|
%
|
88 | % |
Q3 2017
|
Q1 2020
|
Q3 2020
|
||||||||||||||||||||||||||||||||||||||
Station Park Green - Phase IV
|
San Mateo, CA
|
100
|
%
|
107
|
-
|
37
|
57
|
94
|
94
|
879
|
0
|
%
|
0
|
%
|
0 | % |
Q3 2019
|
Q4 2021
|
Q2 2022
|
||||||||||||||||||||||||||||||||||||||
Mylo (5)
|
Santa Clara, CA
|
100
|
%
|
476
|
-
|
209
|
17
|
226
|
226
|
475
|
30
|
%
|
40
|
%
|
46 | % |
Q3 2016
|
Q3 2019
|
Q2 2021
|
||||||||||||||||||||||||||||||||||||||
Wallace on Sunset (6)
|
Hollywood, CA
|
100
|
%
|
200
|
4,700
|
86
|
19
|
105
|
105
|
500
|
0
|
%
|
0
|
%
|
0 | % |
Q4 2017
|
Q1 2021
|
Q4 2021
|
||||||||||||||||||||||||||||||||||||||
Total Development Projects - Consolidated
|
|
955
|
4,700
|
458 |
101
|
559
|
559
|
580
|
|||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Land Held for Future Development - Consolidated
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Projects
|
Various
|
100
|
%
|
21
|
-
|
21
|
21
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Total Development Pipeline - Consolidated
|
|
955
|
4,700
|
479 |
101
|
580
|
580
|
||||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Development Projects - Joint Venture (4)
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Patina at Midtown
|
San Jose, CA
|
50
|
%
|
269
|
-
|
133
|
3
|
136
|
68
|
506
|
0
|
%
|
0
|
%
|
9 | % |
Q3 2017
|
Q3 2020
|
Q2 2021
|
||||||||||||||||||||||||||||||||||||||
500 Folsom (7)
|
San Francisco, CA
|
50
|
%
|
537
|
6,000
|
396
|
19
|
415
|
208
|
763
|
60
|
%
|
64
|
%
|
73 | % |
Q4 2015
|
Q3 2019
|
Q1 2021
|
||||||||||||||||||||||||||||||||||||||
Scripps Mesa Apartments (7)
|
San Diego, CA
|
51
|
%
|
264
|
-
|
4
|
98
|
102
|
52
|
386
|
0
|
%
|
0
|
%
|
0 | % |
Q3 2020
|
Q4 2022
|
Q3 2023
|
||||||||||||||||||||||||||||||||||||||
Total Development Projects - Joint Venture
|
|
1,070
|
6,000
|
533
|
120
|
653
|
328
|
$
|
605
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grand Total - Development Pipeline
|
|
2,025
|
10,700
|
$
|
1,012 |
$
|
221
|
$
|
1,233
|
908
|
|||||||||||||||||||||||||||||||||||||||||||||||
Essex Cost Incurred to Date - Pro Rata
|
|
(746
|
)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
Essex Remaining Commitment
|
|
$
|
162 |
(1) |
The Company’s share of the estimated total cost of the project.
|
(2) |
Net of the estimated allocation to the retail component of the project.
|
(3) |
Calculations are based on multifamily operations only.
|
(4) |
For the second quarter of 2020, the Company’s cost includes $4.1 million of capitalized interest, $1.3 million of capitalized overhead and $0.3 million of development fees
(such development fees reduced G&A expenses).
|
(5) |
Cost incurred to date does not include a deduction of $4.7 million for accumulated depreciation recorded during the period when the property was held as a retail operating
asset.
|
(6) |
Cost incurred to date does not include a deduction of $6.3 million for accumulated depreciation recorded during the period when the property was held as a retail operating
asset.
|
(7) |
Estimated cost incurred to date and total cost are net of a projected value for low income housing tax credit proceeds and the value of the tax exempt bond structure.
|
Total
|
Estimated
|
Estimated
|
NOI
|
|||||||||||||||||||||||||||
Apartment
|
Incurred
|
Remaining
|
Total
|
Project
|
Six Months Ended
|
|||||||||||||||||||||||||
Region/Project Name
|
Location |
Homes
|
To Date
|
Cost
|
Cost
|
Start Date
|
2020
|
2019
|
||||||||||||||||||||||
Consolidated - Redevelopment Projects
|
||||||||||||||||||||||||||||||
Same-Property (1)
|
||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||
The Henley
|
Glendale, CA |
215
|
$
|
21,000
|
$
|
2,600
|
$
|
23,600
|
Q1 2014
|
|||||||||||||||||||||
The Blake LA
|
Los Angeles, CA |
196
|
10,700
|
1,500
|
12,200
|
Q4 2016
|
||||||||||||||||||||||||
The Palms at Laguna Niguel
|
Laguna Niguel, CA |
460
|
6,700
|
2,800
|
9,500
|
Q4 2016
|
||||||||||||||||||||||||
Total Same-Property - Redevelopment Projects
|
871
|
$
|
38,400
|
$
|
6,900
|
$
|
45,300
|
$
|
8,100
|
$
|
8,509
|
|||||||||||||||||||
Non-Same Property
|
||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||
Bunker Hill Towers
|
Los Angeles, CA |
456
|
$
|
84,400
|
$
|
3,000
|
$
|
87,400
|
Q3 2013
|
|||||||||||||||||||||
Total Non-Same Property - Redevelopment Projects
|
456
|
$
|
84,400
|
$
|
3,000
|
$
|
87,400
|
$
|
4,277
|
$
|
4,310
|
(1) |
Redevelopment activities are ongoing at these communities, but the communities have stabilized operations, therefore results are classified in same-property results.
|
Revenue Generating Capital Expenditures (2)
|
Q2 '20
|
Q1 '20
|
Q4 '19
|
Q3 '19
|
Trailing 4
Quarters
|
||||||||||||||||
Same-property portfolio
|
$
|
7,693
|
$
|
18,059
|
$
|
14,845
|
$
|
21,038
|
$
|
61,635
|
|||||||||||
Non-same property portfolio
|
1,389
|
3,586
|
1,430
|
3,152
|
9,557
|
||||||||||||||||
Total revenue generating capital expenditures
|
$
|
9,082
|
$
|
21,645
|
$
|
16,275
|
$
|
24,190
|
$
|
71,192
|
|||||||||||
Number of same-property interior renovations
|
492
|
777
|
993
|
1,302
|
3,564
|
||||||||||||||||
Number of total consolidated interior renovations
|
574
|
917
|
1,154
|
1,396
|
4,041
|
Non-Revenue Generating Capital Expenditures (3)
|
Q2 '20
|
Q1 '20
|
Q4 '19
|
Q3 '19
|
Trailing 4
Quarters
|
||||||||||||||||
Non-revenue generating capital expenditures (4)
|
$
|
16,559
|
$
|
15,315
|
$
|
26,282
|
$
|
25,273
|
$
|
83,429
|
|||||||||||
Average apartment homes in quarter
|
52,552
|
51,670
|
50,521
|
50,065
|
51,202
|
||||||||||||||||
Capital expenditures per apartment homes in the quarter
|
$
|
315
|
$
|
296
|
$
|
520
|
$
|
505
|
$
|
1,629
|
(1)
|
The Company incurred $0.1 million of capitalized interest, $3.2 million of capitalized overhead and $0.1 million of co-investment fees related to redevelopment in Q2
2020.
|
(2)
|
Represents revenue generating or expense saving expenditures, such as full-scale redevelopments shown on page S-12, interior unit turn renovations, enhanced amenities
and certain resource management initiatives.
|
(3)
|
Represents roof replacements, paving, building and mechanical systems, exterior painting, siding, etc.
|
(4)
|
Non-revenue generating capital expenditures does not include expenditures incurred due to changes in governmental regulations that the Company would not have incurred
otherwise and retail, furniture and fixtures, and expenditures in which the Company expects to be reimbursed.
|
|
Weighted
Average Essex |
Apartment
Homes |
Total
Undepreciated
Book Value |
Debt
Amount
|
Essex
BookValue
|
Weighted
AverageBorrowing Rate
|
Remaining
Term of |
Three Months
Ended
June 30, 2020
|
Six Months
Ended June 30, 2020 |
|||||||||||||||||||||||||
Operating and Other Non-Consolidated Joint Ventures |
NOI
|
|||||||||||||||||||||||||||||||||
Wesco I, III, IV, and V
|
51%
|
5,310
|
$
|
1,723,805
|
$
|
1,062,237
|
$
|
186,509
|
3.5%
|
3.9
|
$
|
23,592
|
$
|
49,439
|
||||||||||||||||||||
BEXAEW, BEX II, BEX III, and BEX IV
|
50%
|
2,691
|
825,809
|
422,506
|
155,759
|
3.4%
|
3.5
|
11,057
|
23,248
|
|||||||||||||||||||||||||
CPPIB (1)
|
-
|
-
|
-
|
- |
-
|
-
|
-
|
-
|
2,008
|
|||||||||||||||||||||||||
Other
|
47%
|
651
|
213,908
|
166,867
|
25,991
|
3.3%
|
3.5
|
3,131
|
6,726
|
|||||||||||||||||||||||||
Total Operating and Other Non-Consolidated Joint Ventures
|
8,652
|
$
|
2,763,522
|
$
|
1,651,610
|
$
|
368,259
|
3.5%
|
3.8
|
$
|
37,780
|
$
|
81,421
|
|||||||||||||||||||||
Pre-Development and Development Non-Consolidated Joint Ventures(2) |
50%
|
1,070
|
533,317
|
272,367
|
167,774
|
2.1%
|
28.4
|
(3)(4) |
1,778
|
3,643
|
||||||||||||||||||||||||
Total Non-Consolidated Joint Ventures
|
9,722
|
$
|
3,296,839
|
$
|
1,923,977
|
$
|
536,033
|
3.3%
|
7.3
|
$
|
39,558
|
$
|
85,064
|
|
Essex Portion of NOI and Expenses
|
|||||||||||||||||||||||||||||||||
NOI
|
$
|
20,544
|
$
|
44,229
|
||||||||||||||||||||||||||||||
Depreciation
|
(12,764
|
)
|
(25,308
|
)
|
||||||||||||||||||||||||||||||
Interest expense and other
|
(7,534
|
)
|
(15,612
|
)
|
||||||||||||||||||||||||||||||
Equity income from non-core co-investment
|
4,696
|
4,586
|
||||||||||||||||||||||||||||||||
Gain on early retirement of debt from unconsolidated co-investment
|
38
|
38
|
||||||||||||||||||||||||||||||||
Co-investment promote income
|
-
|
6,455
|
||||||||||||||||||||||||||||||||
Net income from operating and other co-investments
|
$
|
4,980
|
$
|
14,388
|
|
Weighted
Average
Preferred
Return
|
Weighted
Average
Expected
Term
|
Income from Preferred Equity
Investments
|
|||||||||||||||||||||||||||||||
Income from preferred equity investments
|
$
|
12,277
|
$
|
23,956
|
||||||||||||||||||||||||||||||
Income from early redemption of preferred equity investments
|
-
|
210
|
||||||||||||||||||||||||||||||||
Preferred Equity Investments (5)
|
$
|
472,725
|
10.1
|
%
|
2.2
|
$
|
12,277
|
$
|
24,166
|
|||||||||||||||||||||||||
Total Co-investments
|
$
|
1,008,758
|
$
|
17,257
|
$
|
38,554
|
(1)
|
In January 2020, the Company purchased CPPIB’s 45% interest in each of a land parcel and six communities totaling 2,020 apartment homes. The NOI
included in the six months ended June 30, 2020 represents the Company’s pro-rata share prior to the acquisition.
|
(2)
|
The Company has ownership interests in development co-investments, which are detailed on page S-11.
|
(3)
|
$132.0 million of the debt related to 500 Folsom, one of the Company’s development co-investments, is financed by tax exempt bonds with a maturity date
of January 2052.
|
(4)
|
Scripps Mesa Apartments has a $89.3 million of long-term tax-exempt bond debt that is subject to a total return swap that matures in 2025.
|
(5)
|
As of June 30, 2020, the Company has invested in 18 preferred equity investments.
|
Acquisitions
Property Name
|
Location
|
Apartment
Homes
|
Essex
Ownership |
Entity
|
Date
|
Total
Contract
Price |
Price per
Apartment Home (2) |
Average
Rent |
|||||||||||||||||
CPPIB Portfolio (1)
|
Various
|
2,020
|
100%
|
|
EPLP
|
Jan-20
|
$
|
463,400
|
$
|
497
|
$
|
2,732
|
|||||||||||||
Q1 2020
|
2,020
|
|
|
$
|
463,400
|
$
|
497
|
Dispositions
|
Location
|
Apartment
Homes
|
Essex
Ownership |
Entity
|
Date
|
Total
Sales
Price
|
Price per
Apartment Home (2) |
||||||||||||||||||
One South Market and Museum Park
|
San Jose, CA
|
429
|
100%
|
|
EPLP
|
Jun-20
|
$
|
232,000
|
$
|
534
|
|||||||||||||||
Q2 2020
|
429
|
|
|
$
|
232,000
|
$
|
534
|
(1)
|
In January 2020, the Company purchased the joint venture partner’s 45% membership interest in a land parcel and six communities representing 2,020
apartments homes based on a total valuation of approximately $1.0 billion.
|
(2)
|
Price per apartment home excludes value allocated to retail space.
|
Delinquencies for Second Quarter 2020
|
Same-Property
|
Non-Same
Property and
Co-investments
|
Total Operating
Communities
|
Commercial
|
Total
|
|||||||||||||||||
Operating apartment community units
|
47,104
|
13,237
|
60,341
|
N/A
|
N/A
|
|||||||||||||||||
|
||||||||||||||||||||||
Cash delinquencies as % of scheduled rent
|
4.3
|
%
|
4.0
|
%
|
4.3
|
%
|
N/A
|
N/A
|
||||||||||||||
Reported delinquencies as % of scheduled rent (1)
|
3.3
|
%
|
3.1
|
%
|
3.2
|
%
|
N/A
|
N/A
|
||||||||||||||
Reported delinquencies in 2Q 2020 (2)
|
$
|
(10.9
|
)
|
$
|
(2.0
|
)
|
$
|
(12.9
|
)
|
$
|
(3.2
|
)
|
(3)
|
|
$
|
(16.1
|
)
|
|||||
Reported delinquencies in 2Q 2019 (2)
|
$
|
(1.1
|
)
|
$
|
(0.1
|
)
|
$
|
(1.2
|
)
|
$
|
-
|
$
|
(1.2
|
)
|
||||||||
|
||||||||||||||||||||||
Impact to 2Q 2020 Core FFO per share
|
$
|
(0.14
|
)
|
$
|
(0.03
|
)
|
$
|
(0.17
|
)
|
$
|
(0.05
|
)
|
$
|
(0.22
|
)
|
|||||||
Impact to Core FFO per share growth
|
-4.3
|
%
|
-0.8
|
%
|
-5.2
|
%
|
-1.4
|
%
|
-6.6
|
%
|
(1)
|
Represents total residential portfolio delinquencies as a % of scheduled rent reflected in the financial statements for the three months ended June 30,
2020.
|
(2)
|
Co-investment delinquencies reported at Company’s pro rata share.
|
(3)
|
Commercial delinquencies in 2Q 2020 includes a straight-line rent reserve of $1.4 million.
|
Operating Statistics
|
Same-Property Portfolio Growth with Concessions on a GAAP basis
|
|||||||||||||||||
|
||||||||||||||||||
Same-Property Portfolio (47,104 units)
|
July 2020
|
2Q 2020
|
2Q 2020
|
2Q 2019
|
||||||||||||||
Cash delinquencies as % of scheduled rent
|
2.7
|
%
|
4.3
|
%
|
Reported rental revenue (cash basis)
|
$
|
323.7
|
$
|
336.5
|
|||||||||
|
Straight-line rent impact to rental revenue
|
2.9
|
-
|
|||||||||||||||
New lease rates (1)
|
-5.8
|
%
|
-1.9
|
%
|
GAAP rental revenue
|
$
|
326.6
|
$
|
336.5
|
|||||||||
Renewal rates (2)
|
-1.9
|
%
|
0.4
|
%
|
||||||||||||||
|
% change - cash rental revenue
|
-3.8
|
%
|
|||||||||||||||
Financial occupancy
|
96.2
|
%
|
94.9
|
%
|
% change - GAAP rental revenue
|
-2.9
|
%
|
|||||||||||
Physical occupancy
|
95.8
|
%
|
94.9
|
%
|
(1)
|
Represents % change on a gross basis and does not include leasing incentives, which were on average 4-8 weeks.
|
(2)
|
Represents % change in similar term lease tradeouts, excluding the impact of leasing incentives.
|
Three Months Ended
June 30, 2020 |
||||
Net income available to common stockholders
|
$
|
84,458
|
||
Adjustments:
|
||||
Net income attributable to noncontrolling interest
|
5,618
|
|||
Interest expense, net (1)
|
51,659
|
|||
Depreciation and amortization
|
133,609
|
|||
Income tax provision
|
(290
|
)
|
||
Gain on sale of real estate and land
|
(16,597
|
)
|
||
Co-investment EBITDAre adjustments
|
20,117
|
|||
EBITDAre
|
278,574
|
|||
Gain on sale of marketable securities
|
(46
|
)
|
||
Unrealized gains on marketable securities
|
(7,623
|
)
|
||
Provision for credit losses
|
147
|
|||
Equity income from non-core co-investment
|
(4,696
|
)
|
||
Deferred tax expense on unrealized gain on unconsolidated co-investment
|
1,636
|
|||
General and administrative and other, net
|
2,312
|
|||
Insurance reimbursements and legal settlements, net
|
(106
|
)
|
||
Expensed acquisition and investment related costs
|
15
|
|||
Gain on early retirement of debt from unconsolidated co-investment
|
(38
|
)
|
||
Gain on early retirement of debt, net
|
5,027
|
|||
Adjusted EBITDAre
|
$
|
275,202
|
(1)
|
Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges.
|
Three Months Ended
June 30, 2020 |
Six Months Ended
June 30, 2020 |
|||||||
Interest expense
|
$
|
54,447
|
$
|
109,594
|
||||
Adjustments:
|
||||||||
Total return swap income
|
(2,788
|
)
|
(4,772
|
)
|
||||
Interest expense, net
|
$
|
51,659
|
$
|
104,822
|
July 31, 2020
|
||||
Unsecured credit facility - committed
|
$
|
1,235
|
||
Balance outstanding
|
-
|
|||
Undrawn portion of line of credit
|
$
|
1,235
|
||
Cash, cash equivalents & marketable securities (1)
|
203
|
|||
Total liquidity
|
$
|
1,438
|
(1)
|
Excludes an investment in a mortgage backed security.
|
Total consolidated debt, net
|
$
|
6,319,412
|
||
Total debt from co-investments at pro rata share
|
983,668
|
|||
Adjustments:
|
||||
Consolidated unamortized premiums, discounts, and debt issuance costs
|
31,849
|
|||
Pro rata co-investments unamortized premiums, discounts, and debt issuance costs
|
4,245
|
|||
Consolidated cash and cash equivalents-unrestricted
|
(246,204
|
)
|
||
Pro rata co-investment cash and cash equivalents-unrestricted
|
(18,733
|
)
|
||
Marketable securities (1)
|
(121,993
|
)
|
||
Net Indebtedness
|
$
|
6,952,244
|
||
Adjusted EBITDAre, annualized (2)
|
$
|
1,100,808
|
||
Other EBITDAre normalization adjustments, net, annualized (3)
|
(8,943
|
)
|
||
Adjusted EBITDAre, normalized and annualized
|
$
|
1,091,865
|
||
Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized
|
6.4
|
(1)
|
Excludes investment in mortgage backed security
|
(2)
|
Based on the amount for the most recent quarter, multiplied by four.
|
(3)
|
Adjustments made for properties in lease-up, acquired, or disposed of during the most recent quarter
and other partial quarter activity, multiplied by four.
|
Three Months Ended
June 30,
2020 |
Three Months Ended
June 30, |
Six Months Ended
June 30, |
Six Months Ended
June 30, |
|||||||||||||
Earnings from operations
|
$
|
119,736
|
$
|
124,560
|
$
|
250,573
|
$
|
240,255
|
||||||||
Adjustments:
|
||||||||||||||||
Corporate-level property management expenses
|
8,646
|
8,469
|
17,405
|
16,898
|
||||||||||||
Depreciation and amortization
|
133,609
|
119,465
|
265,168
|
240,033
|
||||||||||||
Management and other fees from affiliates
|
(2,348
|
)
|
(2,260
|
)
|
(4,965
|
)
|
(4,595
|
)
|
||||||||
General and administrative
|
14,952
|
13,927
|
28,934
|
27,386
|
||||||||||||
Expensed acquisition and investment related costs
|
15
|
24
|
102
|
56
|
||||||||||||
Gain on sale of real estate and land
|
(16,597
|
)
|
-
|
(16,597
|
)
|
-
|
||||||||||
NOI
|
258,013
|
264,185
|
540,620
|
520,033
|
||||||||||||
Less: Non-same property NOI
|
(30,333
|
)
|
(18,217
|
)
|
(62,445
|
)
|
(33,088
|
)
|
||||||||
Same-Property NOI
|
$
|
227,680
|
$
|
245,968
|
$
|
478,175
|
$
|
486,945
|
||||||||
Annualized
Q2'20 (1)
|
||||
NOI
|
$
|
1,032,052
|
||
Adjustments:
|
||||
NOI from real estate assets sold
|
(9,499
|
)
|
||
Other, net (2)
|
(14,443
|
)
|
||
Adjusted Total NOI
|
1,008,110
|
|||
Less: Encumbered NOI
|
(65,595
|
)
|
||
Unencumbered NOI
|
$
|
942,515
|
||
Encumbered NOI
|
$
|
65,595
|
||
Unencumbered NOI
|
942,515
|
|||
Adjusted Total NOI
|
$
|
1,008,110
|
||
Unencumbered NOI to Adjusted Total NOI
|
94
|
%
|
(1)
|
This table is based on the amounts for the most recent quarter, multiplied by four.
|
(2)
|
Includes intercompany eliminations pertaining to self-insurance and other expenses.
|