Three Months Ended
December 31,
|
%
|
Year Ended
December 31,
|
%
|
|||||||||||||||
2020
|
2019
|
Change
|
2020
|
2019
|
Change
|
|||||||||||||
Per Diluted Share
|
||||||||||||||||||
Net Income
|
$1.47
|
$1.95
|
-24.6%
|
|
$8.69
|
$6.66
|
30.5%
|
|
||||||||||
Total FFO
|
$3.24
|
$3.54
|
-8.5%
|
|
$12.78
|
$13.73
|
-6.9%
|
|
||||||||||
Core FFO
|
$3.02
|
$3.45
|
-12.5%
|
|
$12.82
|
$13.38
|
-4.2%
|
|||||||||||
|
• |
Reported Net Income per diluted share for the fourth quarter of 2020 of $1.47, compared to $1.95 in the fourth quarter of 2019 and $1.13 in the third quarter of 2020. For the
full-year, the Company reported Net Income per diluted share of $8.69.
|
• |
Core FFO per diluted share declined by 12.5% compared to the fourth quarter of 2019 and 4.2% for the full-year 2020.
|
• |
Core FFO per diluted share declined by $0.13 as compared to the third quarter of 2020. The impact of straight-line rent concessions accounted for $0.16 of the decline.
|
• |
Same-property gross revenue and net operating income (“NOI”) declined by 8.0% and 12.7%,
respectively, compared to the fourth quarter of 2019. For the full-year, same-property gross revenue and NOI declined by 3.9% and 6.8%, respectively.
|
• |
On a sequential basis, same-property gross revenue and NOI improved by 0.3% and 1.0%, respectively, compared to the third quarter of 2020.
|
• |
Disposed of one community during the fourth quarter for a total contract price of $60.0 million. For the full-year, the Company disposed of four apartment
communities for a total contract price of $343.5 million.
|
• |
Committed $206.0 million in structured finance investments in the fourth quarter of 2020. For the full-year, the Company committed $352.1 million in structured
finance investments, partially financed with $175.2 million in redemptions for the year.
|
• |
Repurchased 211,681 shares of common stock in the fourth quarter, totaling $46.3 million at an average price per share of $218.84 under the stock buyback
program. For the full-year, the Company repurchased 1,197,190 shares of common stock totaling $269.3 million at an average price per share of $224.96.
|
Q4 2020 vs.
Q4 2019
|
Q4 2020 vs.
Q3 2020
|
% of Total
|
|||||||
Gross
Revenues |
Gross
Revenues |
Q4 2020
Revenues
|
|||||||
Southern California
|
|||||||||
Los Angeles County
|
-13.0%
|
|
2.4%
|
|
18.1%
|
|
|||
Orange County
|
-3.5%
|
|
1.3%
|
|
11.4%
|
|
|||
San Diego County
|
-1.4%
|
|
2.4%
|
|
8.9%
|
|
|||
Ventura County
|
-1.3%
|
|
1.2%
|
|
4.3%
|
|
|||
Total Southern California
|
-7.2%
|
|
2.0%
|
|
42.7%
|
|
|||
Northern California
|
|||||||||
Santa Clara County
|
-10.0%
|
|
-1.5%
|
|
18.7%
|
|
|||
Alameda County
|
-11.5%
|
|
0.5%
|
|
6.8%
|
|
|||
San Mateo County
|
-12.0%
|
|
-0.2%
|
|
4.9%
|
|
|||
Contra Costa County
|
-4.2%
|
|
1.6%
|
|
5.1%
|
|
|||
San Francisco
|
-17.3%
|
|
-0.7%
|
3.0%
|
|
||||
Total Northern California
|
-10.4%
|
|
-0.5%
|
|
38.5%
|
|
|||
Seattle Metro
|
-4.9%
|
|
-1.7%
|
|
18.8%
|
|
|||
Same-Property Portfolio
|
-8.0%
|
|
0.3%
|
|
100.0%
|
|
Q4 2020 vs. Q4 2019
|
YTD 2020 vs. YTD 2019
|
|||||||||||||
Same-Property Revenue Components
|
$ Amount
(in Millions)
|
%
Contribution
|
$ Amount
(in Millions)
|
%
Contribution
|
||||||||||
Prior-Period Same-Property Revenues
|
$
|
340.7
|
$
|
1,338.7
|
||||||||||
Scheduled Rents
|
-6.3
|
-1.9%
|
|
9.0
|
0.7%
|
|
||||||||
Delinquencies
|
-7.9
|
-2.3%
|
|
-23.5
|
-1.8%
|
|
||||||||
Cash Concessions
|
-11.8
|
-3.5%
|
|
-31.8
|
-2.4%
|
|
||||||||
Vacancy
|
-1.6
|
-0.5%
|
|
-8.1
|
-0.6%
|
|
||||||||
Other Income
|
0.2
|
0.1%
|
|
2.4
|
0.2%
|
|
||||||||
2020 Same-Property Revenues/Change
|
$
|
313.3
|
-8.0%
|
|
$
|
1,286.7
|
-3.9%
|
|
Year-Over-Year Change
|
Year-Over-Year Change
|
|||||||||||||||||
Q4 2020 compared to Q4 2019
|
YTD 2020 compared to YTD 2019
|
|||||||||||||||||
Gross
Revenues
|
Operating
Expenses
|
NOI
|
Gross
Revenues
|
Operating
Expenses
|
NOI
|
|||||||||||||
Southern California
|
-7.2%
|
|
3.6%
|
|
-11.3%
|
|
-4.4%
|
2.9%
|
|
-7.3%
|
|
|||||||
Northern California
|
-10.4%
|
|
4.2%
|
|
-15.5%
|
|
-4.9%
|
|
3.2%
|
|
-7.7%
|
|
||||||
Seattle Metro
|
-4.9%
|
|
7.8%
|
|
-9.9%
|
|
-0.6%
|
|
7.8%
|
|
-4.0%
|
|
||||||
Same-Property Portfolio
|
-8.0%
|
|
4.6%
|
|
-12.7%
|
-3.9%
|
|
3.9%
|
|
-6.8%
|
|
Sequential Change
|
|||||||||
Q4 2020 compared to Q3 2020
|
|||||||||
Gross
Revenues
|
Operating
Expenses
|
NOI
|
|||||||
Southern California
|
2.0%
|
|
-2.3%
|
|
4.0%
|
|
|||
Northern California
|
-0.5%
|
|
0.2%
|
|
-0.8%
|
|
|||
Seattle Metro
|
-1.7%
|
|
-1.3%
|
|
-1.9%
|
|
|||
Same-Property Portfolio
|
0.3%
|
|
-1.2%
|
|
1.0%
|
|
Financial Occupancies
|
|||||||||
Quarter Ended
|
|||||||||
12/31/2020
|
9/30/2020
|
12/31/2019
|
|||||||
Southern California
|
96.8%
|
|
95.9%
|
|
97.0%
|
|
|||
Northern California
|
96.5%
|
|
96.2%
|
|
97.2%
|
|
|||
Seattle Metro
|
95.8%
|
|
95.9%
|
|
97.1%
|
||||
Same-Property Portfolio
|
96.5%
|
|
96.0%
|
|
97.1%
|
|
Project Name
|
Location
|
Total
Apartment
Homes
|
ESS
Ownership
|
% Leased
as of
02/01/21
|
Status
|
|||
500 Folsom
|
San Francisco, CA
|
537
|
50%
|
91.8%
|
In Lease-Up
|
|||
Mylo
|
Santa Clara, CA
|
476
|
100%
|
72.9%
|
In Lease-Up
|
|||
Patina at Midtown
|
San Jose, CA
|
269
|
50%
|
50.9%
|
In Lease-Up
|
|||
Total/Average % Leased
|
1,282
|
76.2%
|
Per Diluted Share
|
Range
|
Midpoint
|
|||
Net Income
|
$3.30 - $3.90
|
$3.60
|
|||
Total FFO
|
$11.86 - $12.46
|
$12.16
|
|||
Core FFO
|
$11.86 - $12.46
|
$12.16
|
Estimated Same-Property Portfolio Change based on 47,090 Apartment Homes
|
|||||
Gross Revenue
|
-3.50% to -1.50%
|
-2.5%
|
|
||
Operating Expense
|
2.00% to 3.00%
|
2.5%
|
|
||
Net Operating Income
|
-6.25% to -3.00%
|
-4.6%
|
|
2021 Core FFO Per Diluted Share Guidance versus 2020
|
Low-End
|
High-End
|
||||||
2020 Core FFO Per Diluted Share
|
$
|
12.82
|
$
|
12.82
|
||||
NOI from Consolidated Communities, Excluding Straight-Line Concessions
|
(0.99
|
)
|
(0.44
|
)
|
||||
Change in Straight-Line Concessions from Consolidated Communities
|
(0.41
|
)
|
(0.56
|
)
|
||||
Net Interest Expense
|
0.18
|
0.26
|
||||||
Interest and Other Income
|
0.10
|
0.12
|
||||||
FFO from Co-Investments
|
0.09
|
0.17
|
||||||
G&A and Other
|
(0.01
|
)
|
0.01
|
|||||
Impact from Weighted Average Shares Outstanding
|
0.08
|
0.08
|
||||||
2021 Core FFO Per Diluted Share Guidance
|
$
|
11.86
|
$
|
12.46
|
• |
The impact of recording lease concessions on a straight-line basis is expected to be a reduction to 2021 Core FFO by ($6.0 million) to ($16.0 million), as compared to $21.9 million
recorded in 2020. As such, this non-cash item will negatively impact year-over-year Core FFO per diluted share by ($0.41) to ($0.56).
|
• |
Acquisitions and dispositions of $300 - $500 million, subject to market conditions and cost of capital.
|
• |
Preferred equity commitments of $100 - $150 million, to be funded by redemptions.
|
• |
Total development spending in 2021 for existing projects under construction is expected to be approximately $60 million at the Company’s pro rata share. The Company does not
currently plan to start any new developments during 2021.
|
• |
Revenue generating capital expenditures are expected to be approximately $25 million at the Company’s pro rata share.
|
Three Months Ended
December 31,
|
Year Ended
December 31,
|
|||||||||||||||
Funds from Operations attributable to common stockholders and unitholders
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
Net income available to common stockholders
|
$
|
95,745
|
$
|
128,818
|
$
|
568,870
|
$
|
439,286
|
||||||||
Adjustments:
|
||||||||||||||||
Depreciation and amortization
|
130,127
|
122,908
|
525,497
|
483,750
|
||||||||||||
Gains not included in FFO
|
(25,716
|
)
|
(47,063
|
)
|
(301,886
|
)
|
(79,468
|
)
|
||||||||
Impairment loss
|
1,825
|
7,105
|
1,825
|
7,105
|
||||||||||||
Impairment loss from unconsolidated co-investments
|
-
|
11,484
|
-
|
11,484
|
||||||||||||
Depreciation and amortization from unconsolidated co-investments
|
13,403
|
15,351
|
51,594
|
60,655
|
||||||||||||
Noncontrolling interest related to Operating Partnership units
|
3,369
|
4,480
|
19,912
|
15,343
|
||||||||||||
Depreciation attributable to third party ownership and other
|
(132
|
)
|
(1,097
|
)
|
(539
|
)
|
(1,805
|
)
|
||||||||
Funds from operations attributable to common stockholders and unitholders
|
$
|
218,621
|
$
|
241,986
|
$
|
865,273
|
$
|
936,350
|
||||||||
FFO per share – diluted
|
$
|
3.24
|
$
|
3.54
|
$
|
12.78
|
$
|
13.73
|
||||||||
Expensed acquisition and investment related costs
|
$
|
1,487
|
$
|
99
|
$
|
1,591
|
$
|
168
|
||||||||
Deferred tax (income) expense on unrealized gain on unconsolidated co-investment (1)
|
(105
|
)
|
-
|
1,531
|
1,457
|
|||||||||||
Gain on sale of marketable securities
|
(2,007
|
)
|
(534
|
)
|
(2,131
|
)
|
(1,271
|
)
|
||||||||
Unrealized gains on marketable securities
|
(10,300
|
)
|
(1,430
|
)
|
(12,515
|
)
|
(5,710
|
)
|
||||||||
Provision for credit losses
|
587
|
-
|
687
|
-
|
||||||||||||
Equity (income) loss from non-core co-investment (2)
|
(916
|
)
|
418
|
(5,289
|
)
|
(4,143
|
)
|
|||||||||
Interest rate hedge ineffectiveness (3)
|
-
|
-
|
-
|
181
|
||||||||||||
(Gain) loss on early retirement of debt, net
|
(937
|
)
|
3,426
|
22,883
|
(3,717
|
)
|
||||||||||
Gain on early retirement of debt from unconsolidated co-investment
|
-
|
-
|
(38
|
)
|
-
|
|||||||||||
Co-investment promote income
|
-
|
-
|
(6,455
|
)
|
(809
|
)
|
||||||||||
Income from early redemption of preferred equity investments
|
-
|
(1,031
|
)
|
(210
|
)
|
(3,562
|
)
|
|||||||||
Accelerated interest income from maturity of investment in mortgage backed security
|
(11,753
|
)
|
(7,032
|
)
|
(11,753
|
)
|
(7,032
|
)
|
||||||||
General and administrative and other, net
|
9,316
|
1,181
|
14,958
|
1,181
|
||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
(150
|
)
|
(595
|
)
|
(81
|
)
|
(858
|
)
|
||||||||
Core Funds from operations attributable to common stockholders and unitholders
|
$
|
203,843
|
$
|
236,488
|
$
|
868,451
|
$
|
912,235
|
||||||||
Core FFO per share – diluted
|
$
|
3.02
|
$
|
3.45
|
$
|
12.82
|
$
|
13.38
|
||||||||
Weighted average number of shares outstanding diluted (4)
|
67,398,487
|
68,449,008
|
67,725,692
|
68,198,785
|
(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.
|
(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
December 31,
|
Year Ended
December 31,
|
|||||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Earnings from operations
|
$
|
111,931
|
$
|
116,818
|
$
|
491,441
|
$
|
481,112
|
||||||||
Adjustments:
|
||||||||||||||||
Corporate-level property management expenses
|
8,549
|
8,616
|
34,573
|
34,067
|
||||||||||||
Depreciation and amortization
|
130,127
|
122,908
|
525,497
|
483,750
|
||||||||||||
Management and other fees from affiliates
|
(2,286
|
)
|
(2,504
|
)
|
(9,598
|
)
|
(9,527
|
)
|
||||||||
General and administrative
|
23,144
|
15,531
|
65,388
|
54,262
|
||||||||||||
Expensed acquisition and investment related costs
|
1,487
|
99
|
1,591
|
168
|
||||||||||||
Impairment loss
|
1,825
|
7,105
|
1,825
|
7,105
|
||||||||||||
(Gain) Loss on sale of real estate and land
|
(25,716
|
)
|
3,164
|
(64,967
|
)
|
3,164
|
||||||||||
NOI
|
249,061
|
271,737
|
1,045,750
|
1,054,101
|
||||||||||||
Less: Non-same property NOI
|
(31,988
|
)
|
(22,995
|
)
|
(140,782
|
)
|
(82,644
|
)
|
||||||||
Same-Property NOI
|
$
|
217,073
|
$
|
248,742
|
$
|
904,968
|
$
|
971,457
|
Page(s)
|
|
Consolidated Operating Results
|
S-1 – S-2
|
Consolidated Funds From Operations
|
S-3
|
Consolidated Balance Sheets
|
S-4
|
Debt Summary – December 31, 2020
|
S-5
|
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – December 31, 2020
|
S-6
|
Portfolio Summary by County – December 31, 2020
|
S-7
|
Operating Income by Quarter – December 31, 2020
|
S-8
|
Same-Property Revenue Results by County – Quarters ended December 31, 2020 and 2019, and September 30, 2020
|
S-9
|
Same-Property Revenue Results by County – Years ended December 31, 2020 and 2019
|
S-9.1
|
Same-Property Operating Expenses – Quarter and Years ended as of December 31, 2020 and 2019
|
S-10
|
Development Pipeline – December 31, 2020
|
S-11
|
Redevelopment Pipeline – December 31, 2020
|
S-12
|
Capital Expenditures – December 31, 2020
|
S-12.1
|
Co-investments and Preferred Equity Investments – December 31, 2020
|
S-13
|
Assumptions for 2021 FFO Guidance Range
|
S-14
|
Reconciliation of Projected EPS, FFO and Core FFO per diluted share
|
S-14.1
|
Summary of Apartment Community Acquisitions and Dispositions Activity
|
S-15
|
Delinquencies, Operating Statistics, and Same-Property Revenue Growth with Concessions on a GAAP basis
|
S-16
|
2021 MSA Level Forecast: Supply, Jobs, and Apartment Market Conditions
|
S-17
|
Tech Sector Initial Public Offerings ("IPOs") and Re-accelerating Job Postings Set the Stage for 2021 Job Growth in Essex Metros
|
S-17.1
|
Record $130 Billion in Venture Capital Financing is Poised to Support the Next Generation of Tech Employers
|
S-17.2
|
Reconciliations of Non-GAAP Financial Measures and Other Terms
|
S-18.1 – S-18.4
|
Consolidated Operating Results
|
Three Months Ended
|
Twelve Months Ended
|
||||||||||||||
(Dollars in thousands, except share and per share amounts)
|
December 31,
|
December 31,
|
||||||||||||||
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
|
||||||||||||||||
Revenues:
|
||||||||||||||||
Rental and other property
|
$
|
359,787
|
$
|
372,861
|
$
|
1,486,150
|
$
|
1,450,628
|
||||||||
Management and other fees from affiliates
|
2,286
|
2,504
|
9,598
|
9,527
|
||||||||||||
362,073
|
375,365
|
1,495,748
|
1,460,155
|
|||||||||||||
Expenses:
|
||||||||||||||||
Property operating
|
110,726
|
101,124
|
440,400
|
396,527
|
||||||||||||
Corporate-level property management expenses
|
8,549
|
8,616
|
34,573
|
34,067
|
||||||||||||
Depreciation and amortization
|
130,127
|
122,908
|
525,497
|
483,750
|
||||||||||||
General and administrative
|
23,144
|
15,531
|
65,388
|
54,262
|
||||||||||||
Expensed acquisition and investment related costs
|
1,487
|
99
|
1,591
|
168
|
||||||||||||
Impairment loss
|
1,825
|
7,105
|
1,825
|
7,105
|
||||||||||||
275,858
|
255,383
|
1,069,274
|
975,879
|
|||||||||||||
Gain (loss) on sale of real estate and land
|
25,716
|
(3,164
|
)
|
64,967
|
(3,164
|
)
|
||||||||||
Earnings from operations
|
111,931
|
116,818
|
491,441
|
481,112
|
||||||||||||
Interest expense, net (1)
|
(52,625
|
)
|
(52,416
|
)
|
(209,900
|
)
|
(208,893
|
)
|
||||||||
Interest and other income
|
28,303
|
17,005
|
40,999
|
46,298
|
||||||||||||
Equity income from co-investments
|
12,998
|
57,201
|
66,512
|
112,136
|
||||||||||||
Deferred tax income (expense) on unrealized gain on unconsolidated co-investment
|
105
|
-
|
(1,531
|
)
|
(1,457
|
)
|
||||||||||
Gain (loss) on early retirement of debt, net
|
937
|
(3,426
|
)
|
(22,883
|
)
|
3,717
|
||||||||||
Gain on remeasurement of co-investment
|
-
|
-
|
234,694
|
31,535
|
||||||||||||
Net income
|
101,649
|
135,182
|
599,332
|
464,448
|
||||||||||||
Net income attributable to noncontrolling interest
|
(5,904
|
)
|
(6,364
|
)
|
(30,462
|
)
|
(25,162
|
)
|
||||||||
Net income available to common stockholders
|
$
|
95,745
|
$
|
128,818
|
$
|
568,870
|
$
|
439,286
|
||||||||
Net income per share - basic
|
$
|
1.47
|
$
|
1.95
|
$
|
8.69
|
$
|
6.67
|
||||||||
Shares used in income per share - basic
|
65,133,112
|
66,085,254
|
65,454,057
|
65,840,422
|
||||||||||||
Net income per share - diluted
|
$
|
1.47
|
$
|
1.95
|
$
|
8.69
|
$
|
6.66
|
||||||||
Shares used in income per share - diluted
|
65,145,117
|
66,191,395
|
65,564,982
|
65,939,455
|
Consolidated Operating Results
|
Three Months Ended
|
Twelve Months Ended
|
||||||||||||||
Selected Line Item Detail
|
December 31,
|
December 31,
|
||||||||||||||
(Dollars in thousands)
|
2020
|
2019
|
2020
|
2019
|
||||||||||||
|
||||||||||||||||
Rental and other property
|
||||||||||||||||
Rental income
|
$
|
353,503
|
$
|
366,612
|
$
|
1,462,161
|
$
|
1,425,585
|
||||||||
Other property
|
6,284
|
6,249
|
23,989
|
25,043
|
||||||||||||
Rental and other property
|
$
|
359,787
|
$
|
372,861
|
$
|
1,486,150
|
$
|
1,450,628
|
||||||||
Property operating expenses
|
||||||||||||||||
Real estate taxes
|
$
|
44,647
|
$
|
40,177
|
$
|
177,011
|
$
|
155,170
|
||||||||
Administrative
|
21,799
|
21,752
|
89,290
|
84,638
|
||||||||||||
Maintenance and repairs
|
22,575
|
19,412
|
91,566
|
81,342
|
||||||||||||
Utilities
|
21,705
|
19,783
|
82,533
|
75,377
|
||||||||||||
Property operating expenses
|
$
|
110,726
|
$
|
101,124
|
$
|
440,400
|
$
|
396,527
|
||||||||
Interest and other income
|
||||||||||||||||
Marketable securities and other income
|
$
|
4,680
|
$
|
7,957
|
$
|
15,206
|
$
|
31,970
|
||||||||
Gain on sale of marketable securities
|
2,007
|
534
|
2,131
|
1,271
|
||||||||||||
Provision for credit losses
|
(587
|
)
|
-
|
(687
|
)
|
-
|
||||||||||
Unrealized gains on marketable securities
|
10,300
|
1,430
|
12,515
|
5,710
|
||||||||||||
Accelerated interest income from maturity of investment in mortgage backed security
|
11,753
|
7,032
|
11,753
|
7,032
|
||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
150
|
52
|
81
|
315
|
||||||||||||
Interest and other income
|
$
|
28,303
|
$
|
17,005
|
$
|
40,999
|
$
|
46,298
|
||||||||
Equity income from co-investments
|
||||||||||||||||
Equity (loss) income from co-investments
|
$
|
(362
|
)
|
$
|
5,911
|
$
|
3,938
|
$
|
20,442
|
|||||||
Income from preferred equity investments
|
12,444
|
11,391
|
48,357
|
43,024
|
||||||||||||
Equity income (loss) from non-core co-investment
|
916
|
(418
|
)
|
5,289
|
4,143
|
|||||||||||
Impairment loss from unconsolidated co-investment
|
-
|
(11,484
|
)
|
-
|
(11,484
|
)
|
||||||||||
Legal settlement from unconsolidated co-investment
|
-
|
543
|
-
|
543
|
||||||||||||
Gain on sale of co-investment communities
|
-
|
50,227
|
2,225
|
51,097
|
||||||||||||
Gain on early retirement of debt from unconsolidated co-investment
|
-
|
-
|
38
|
-
|
||||||||||||
Co-investment promote income
|
-
|
-
|
6,455
|
809
|
||||||||||||
Income from early redemption of preferred equity investments
|
-
|
1,031
|
210
|
3,562
|
||||||||||||
Equity income from co-investments
|
$
|
12,998
|
$
|
57,201
|
$
|
66,512
|
$
|
112,136
|
||||||||
Noncontrolling interest
|
||||||||||||||||
Limited partners of Essex Portfolio, L.P.
|
$
|
3,369
|
$
|
4,480
|
$
|
19,912
|
$
|
15,343
|
||||||||
DownREIT limited partners' distributions
|
2,114
|
2,016
|
8,507
|
7,241
|
||||||||||||
Third-party ownership interest
|
421
|
(132
|
)
|
2,043
|
2,578
|
|||||||||||
Noncontrolling interest
|
$
|
5,904
|
$
|
6,364
|
$
|
30,462
|
$
|
25,162
|
Consolidated Funds From Operations (1)
|
Three Months Ended
|
Twelve Months Ended
|
||||||||||||||||||||||
(Dollars in thousands, except share and per share amounts and in footnotes)
|
December 31,
|
December 31,
|
||||||||||||||||||||||
|
2020
|
2019
|
% Change
|
2020
|
2019
|
% Change
|
||||||||||||||||||
Funds from operations attributable to common stockholders and unitholders (FFO)
|
||||||||||||||||||||||||
Net income available to common stockholders
|
$
|
95,745
|
$
|
128,818
|
$
|
568,870
|
$
|
439,286
|
||||||||||||||||
Adjustments:
|
||||||||||||||||||||||||
Depreciation and amortization
|
130,127
|
122,908
|
525,497
|
483,750
|
||||||||||||||||||||
Gains not included in FFO
|
(25,716
|
)
|
(47,063
|
)
|
(301,886
|
)
|
(79,468
|
)
|
||||||||||||||||
Impairment loss
|
1,825
|
7,105
|
1,825
|
7,105
|
||||||||||||||||||||
Impairment loss from unconsolidated co-investments
|
-
|
11,484
|
-
|
11,484
|
||||||||||||||||||||
Depreciation and amortization from unconsolidated co-investments
|
13,403
|
15,351
|
51,594
|
60,655
|
||||||||||||||||||||
Noncontrolling interest related to Operating Partnership units
|
3,369
|
4,480
|
19,912
|
15,343
|
||||||||||||||||||||
Depreciation attributable to third party ownership and other (2)
|
(132
|
)
|
(1,097
|
)
|
(539
|
)
|
(1,805
|
)
|
||||||||||||||||
Funds from operations attributable to common stockholders and unitholders
|
$
|
218,621
|
$
|
241,986
|
$
|
865,273
|
$
|
936,350
|
||||||||||||||||
FFO per share-diluted
|
$
|
3.24
|
$
|
3.54
|
-8.5
|
%
|
$
|
12.78
|
$
|
13.73
|
-6.9
|
%
|
||||||||||||
Components of the change in FFO
|
||||||||||||||||||||||||
Non-core items:
|
||||||||||||||||||||||||
Expensed acquisition and investment related costs
|
$
|
1,487
|
$
|
99
|
$
|
1,591
|
$
|
168
|
||||||||||||||||
Deferred tax (income) expense on unrealized gain on unconsolidated co-investment (3)
|
(105
|
)
|
-
|
1,531
|
1,457
|
|||||||||||||||||||
Gain on sale of marketable securities
|
(2,007
|
)
|
(534
|
)
|
(2,131
|
)
|
(1,271
|
)
|
||||||||||||||||
Unrealized gains on marketable securities
|
(10,300
|
)
|
(1,430
|
)
|
(12,515
|
)
|
(5,710
|
)
|
||||||||||||||||
Provision for credit losses
|
587
|
-
|
687
|
-
|
||||||||||||||||||||
Equity (income) loss from non-core co-investment (4)
|
(916
|
)
|
418
|
(5,289
|
)
|
(4,143
|
)
|
|||||||||||||||||
Interest rate hedge ineffectiveness (5)
|
-
|
-
|
-
|
181
|
||||||||||||||||||||
(Gain) loss on early retirement of debt, net
|
(937
|
)
|
3,426
|
22,883
|
(3,717
|
)
|
||||||||||||||||||
Gain on early retirement of debt from unconsolidated co-investment
|
-
|
-
|
(38
|
)
|
-
|
|||||||||||||||||||
Co-investment promote income
|
-
|
-
|
(6,455
|
)
|
(809
|
)
|
||||||||||||||||||
Income from early redemption of preferred equity investments
|
-
|
(1,031
|
)
|
(210
|
)
|
(3,562
|
)
|
|||||||||||||||||
Accelerated interest income from maturity of investment in mortgage backed security
|
(11,753
|
)
|
(7,032
|
)
|
(11,753
|
)
|
(7,032
|
)
|
||||||||||||||||
General and administrative and other, net
|
9,316
|
1,181
|
14,958
|
1,181
|
||||||||||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
(150
|
)
|
(595
|
)
|
(81
|
)
|
(858
|
)
|
||||||||||||||||
Core funds from operations attributable to common stockholders and unitholders
|
$
|
203,843
|
$
|
236,488
|
$
|
868,451
|
$
|
912,235
|
||||||||||||||||
Core FFO per share-diluted
|
$
|
3.02
|
$
|
3.45
|
-12.5
|
%
|
$
|
12.82
|
$
|
13.38
|
-4.2
|
%
|
||||||||||||
Weighted average number of shares outstanding diluted (6)
|
67,398,487
|
68,449,008
|
67,725,692
|
68,198,785
|
(1) |
Refer to page S-18.2, 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 twelve months ended December 31, 2020 was $0.8 million and $3.9 million, respectively.
|
(3) |
Represents deferred tax (income) expense recorded during the year related to net unrealized gains on the Real Estate Technology Ventures, L.P. co-investment.
|
(4) |
Represents the Company's share of co-investment income from Real Estate Technology Ventures, L.P.
|
(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.
|
Consolidated Balance Sheets
|
||||||||
(Dollars in thousands)
|
||||||||
|
December 31, 2020
|
December 31, 2019
|
||||||
Real Estate:
|
||||||||
Land and land improvements
|
$
|
2,929,009
|
$
|
2,773,805
|
||||
Buildings and improvements
|
12,132,736
|
11,264,337
|
||||||
|
15,061,745
|
14,038,142
|
||||||
Less: accumulated depreciation
|
(4,133,959
|
)
|
(3,689,482
|
)
|
||||
10,927,786
|
10,348,660
|
|||||||
Real estate under development
|
386,047
|
546,075
|
||||||
Co-investments
|
1,018,010
|
1,335,339
|
||||||
Real estate held for sale
|
57,938
|
-
|
||||||
12,389,781
|
12,230,074
|
|||||||
Cash and cash equivalents, including restricted cash
|
84,041
|
81,094
|
||||||
Marketable securities
|
147,768
|
144,193
|
||||||
Notes and other receivables
|
195,104
|
134,365
|
||||||
Operating lease right-of-use assets
|
72,143
|
74,744
|
||||||
Prepaid expenses and other assets
|
47,340
|
40,935
|
||||||
Total assets
|
$
|
12,936,177
|
$
|
12,705,405
|
||||
Unsecured debt, net
|
$
|
5,607,985
|
$
|
4,763,206
|
||||
Mortgage notes payable, net
|
643,550
|
990,667
|
||||||
Lines of credit
|
-
|
55,000
|
||||||
Operating lease liabilities
|
74,037
|
76,740
|
||||||
Other liabilities
|
395,174
|
378,878
|
||||||
Total liabilities
|
6,720,746
|
6,264,491
|
||||||
Redeemable noncontrolling interest
|
32,239
|
37,410
|
||||||
Equity:
|
||||||||
Common stock
|
6
|
7
|
||||||
Additional paid-in capital
|
6,876,326
|
7,121,927
|
||||||
Distributions in excess of accumulated earnings
|
(861,193
|
)
|
(887,619
|
)
|
||||
Accumulated other comprehensive loss, net
|
(14,729
|
)
|
(13,888
|
)
|
||||
Total stockholders' equity
|
6,000,410
|
6,220,427
|
||||||
Noncontrolling interest
|
182,782
|
183,077
|
||||||
Total equity
|
6,183,192
|
6,403,504
|
||||||
Total liabilities and equity
|
$
|
12,936,177
|
$
|
12,705,405
|
|
||||||||||||||||||||||||||||||||||||
Scheduled principal payments, unamortized premiums (discounts) and (debt issuance costs) are as follows - excludes lines of credit:
|
||||||||||||||||||||||||||||||||||||
Weighted
Average
Interest Rate
|
Percentage
of Total Debt
|
|||||||||||||||||||||||||||||||||||
Weighted Average
|
||||||||||||||||||||||||||||||||||||
Balance
Outstanding
|
Interest
Rate
|
Maturity
in Years
|
Unsecured
|
Secured
|
Total
|
|||||||||||||||||||||||||||||||
Unsecured Debt, net
|
||||||||||||||||||||||||||||||||||||
Bonds private - fixed rate
|
$
|
200,000
|
4.4
|
%
|
0.5
|
2021
|
$
|
200,000
|
$
|
3,501
|
$
|
203,501
|
4.3
|
%
|
3.2
|
%
|
||||||||||||||||||||
Bonds public - fixed rate
|
4,900,000
|
3.4
|
%
|
9.4
|
2022
|
350,000
|
43,188
|
393,188
|
2.0
|
%
|
6.2
|
%
|
||||||||||||||||||||||||
Term loan (1)
|
550,000
|
1.7
|
%
|
1.5
|
2023
|
800,000
|
2,945
|
802,945
|
3.1
|
%
|
12.8
|
%
|
||||||||||||||||||||||||
Unamortized net discounts and debt issuance costs
|
(42,015
|
)
|
-
|
-
|
2024
|
400,000
|
3,109
|
403,109
|
4.0
|
%
|
6.4
|
%
|
||||||||||||||||||||||||
5,607,985
|
3.3
|
%
|
8.3
|
2025
|
500,000
|
133,054
|
633,054
|
3.5
|
%
|
10.1
|
%
|
|||||||||||||||||||||||||
Mortgage Notes Payable, net
|
2026
|
450,000
|
99,405
|
549,405
|
3.5
|
%
|
8.7
|
%
|
||||||||||||||||||||||||||||
Fixed rate - secured
|
416,350
|
3.5
|
%
|
5.3
|
2027
|
350,000
|
153,955
|
503,955
|
3.3
|
%
|
8.0
|
%
|
||||||||||||||||||||||||
Variable rate - secured (2)
|
225,076
|
1.2
|
%
|
17.2
|
2028
|
-
|
68,332
|
68,332
|
4.1
|
%
|
1.1
|
%
|
||||||||||||||||||||||||
Unamortized premiums and debt issuance costs, net
|
2,124
|
-
|
-
|
2029
|
500,000
|
1,456
|
501,456
|
4.1
|
%
|
8.0
|
%
|
|||||||||||||||||||||||||
Total mortgage notes payable
|
643,550
|
2.7
|
%
|
9.5
|
2030
|
550,000
|
1,592
|
551,592
|
3.1
|
%
|
8.8
|
%
|
||||||||||||||||||||||||
2031
|
300,000
|
1,740
|
301,740
|
1.8
|
%
|
4.8
|
%
|
|||||||||||||||||||||||||||||
Unsecured Lines of Credit
|
Thereafter
|
1,250,000
|
129,149
|
1,379,149
|
2.9
|
%
|
21.9
|
%
|
||||||||||||||||||||||||||||
Line of credit (3)
|
-
|
1.0
|
%
|
Subtotal
|
5,650,000
|
641,426
|
6,291,426
|
3.2
|
%
|
100.0
|
%
|
|||||||||||||||||||||||||
Line of credit (4)
|
-
|
1.0
|
%
|
Debt Issuance Costs
|
(31,910
|
)
|
(1,761
|
)
|
(33,671
|
)
|
NA
|
NA
|
||||||||||||||||||||||||
Total lines of credit
|
-
|
1.0
|
%
|
(Discounts)/Premiums
|
(10,105
|
)
|
3,885
|
(6,220
|
)
|
NA
|
NA
|
|||||||||||||||||||||||||
|
Total
|
$
|
5,607,985
|
$
|
643,550
|
$
|
6,251,535
|
3.2
|
%
|
100.0
|
%
|
|||||||||||||||||||||||||
Total debt, net
|
$
|
6,251,535
|
3.2
|
%
|
8.4
|
|||||||||||||||||||||||||||||||
|
(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) |
$225.1 million of variable rate debt is tax exempt to the note holders. This amount excludes $29.7 million of mortgage notes payable related to real estate held for sale that is included in other liabilities on consolidated balance sheet.
|
(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 2023. 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 (1)
|
|
|
$
|
6,251,535
|
|
||||||||
|
|
|
Debt to Total Assets:
|
37
|
%
|
< 65%
|
|||||||
Common stock and potentially dilutive securities
|
|
|
|||||||||||
Common stock outstanding
|
|
64,999
|
|
|
|||||||||
Limited partnership units (2)
|
|
2,253
|
|
|
|||||||||
Options-treasury method
|
|
14
|
Secured Debt to Total Assets:
|
4
|
%
|
< 40%
|
|||||||
Total shares of common stock and potentially dilutive securities
|
67,266
|
|
|
||||||||||
|
|
|
|
|
|||||||||
Common stock price per share as of December 31, 2020
|
$
|
237.42
|
|
|
|||||||||
|
|
|
Interest Coverage:
|
475
|
%
|
> 150%
|
|||||||
Total equity capitalization
|
|
$
|
15,970,294
|
|
|
||||||||
|
|
|
|
|
|||||||||
Total market capitalization
|
|
$
|
22,221,829
|
Unsecured Debt Ratio (2):
|
267
|
%
|
> 150%
|
||||||
|
|
|
|
||||||||||
Ratio of debt to total market capitalization
|
|
28.1
|
%
|
|
|||||||||
|
|
|
Selected Credit Ratios (3)
|
Actual
|
|||||||||
Credit Ratings
|
|
|
|
||||||||||
Rating Agency
|
Rating
|
Outlook
|
Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized:
|
6.6
|
|||||||||
Moody's
|
Baa1
|
Stable
|
|
||||||||||
Standard & Poor's
|
BBB+
|
Stable
|
Unencumbered NOI to Adjusted Total NOI:
|
95
|
%
|
||||||||
(1) This amount excludes $29.4 million of mortgage notes payable, net of unamortized debt issuance costs, related to real estate held for sale that is included in other
liabilities on consolidated balance sheet.
(2) Assumes conversion of all outstanding limited partnership units in the Operating Partnership into shares of the Company's common stock.
|
(1) Refer to page S-18.4 for additional information on the Company's Public Bond Covenants.
(2) Unsecured Debt Ratio is unsecured assets (excluding investments in co-investments) divided by unsecured
indebtedness.
(3) Refer to pages S-18.1 to S-18.4, 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
|
8,982
|
1,563
|
200
|
10,745
|
$
|
2,428
|
$
|
2,157
|
$
|
2,405
|
16.1
|
%
|
15.1
|
%
|
16.0
|
%
|
||||||||||||||||||||||||
Orange County
|
5,554
|
1,149
|
-
|
6,703
|
2,244
|
1,978
|
2,219
|
10.7
|
%
|
11.9
|
%
|
10.8
|
%
|
|||||||||||||||||||||||||||
San Diego County
|
4,824
|
616
|
264
|
5,704
|
2,003
|
1,883
|
1,996
|
8.6
|
%
|
5.7
|
%
|
8.3
|
%
|
|||||||||||||||||||||||||||
Ventura County and Other
|
3,200
|
693
|
-
|
3,893
|
1,852
|
2,232
|
1,892
|
5.2
|
%
|
8.4
|
%
|
5.6
|
%
|
|||||||||||||||||||||||||||
Total Southern California
|
22,560
|
4,021
|
464
|
27,045
|
2,210
|
2,080
|
2,199
|
40.6
|
%
|
41.1
|
%
|
40.7
|
%
|
|||||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||||||
Santa Clara County (8)
|
8,747
|
1,506
|
-
|
10,253
|
2,752
|
2,758
|
2,753
|
20.1
|
%
|
15.9
|
%
|
19.7
|
%
|
|||||||||||||||||||||||||||
Alameda County
|
3,959
|
1,309
|
-
|
5,268
|
2,485
|
2,426
|
2,476
|
8.1
|
%
|
16.2
|
%
|
8.7
|
%
|
|||||||||||||||||||||||||||
San Mateo County
|
2,651
|
195
|
107
|
2,953
|
2,971
|
3,607
|
2,994
|
6.2
|
%
|
3.0
|
%
|
5.9
|
%
|
|||||||||||||||||||||||||||
Contra Costa County
|
2,619
|
-
|
-
|
2,619
|
2,452
|
-
|
2,452
|
5.6
|
%
|
0.0
|
%
|
5.2
|
%
|
|||||||||||||||||||||||||||
San Francisco
|
1,343
|
537
|
-
|
1,880
|
2,875
|
3,304
|
2,946
|
2.7
|
%
|
3.8
|
%
|
2.8
|
%
|
|||||||||||||||||||||||||||
Total Northern California
|
19,319
|
3,547
|
107
|
22,973
|
2,695
|
2,760
|
2,701
|
42.7
|
%
|
38.9
|
%
|
42.3
|
%
|
|||||||||||||||||||||||||||
Seattle Metro
|
10,217
|
1,890
|
-
|
12,107
|
1,911
|
1,899
|
1,910
|
16.7
|
%
|
20.0
|
%
|
17.0
|
%
|
|||||||||||||||||||||||||||
Total
|
52,096
|
9,458
|
571
|
62,125
|
$
|
2,331
|
$
|
2,294
|
$
|
2,328
|
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 December 31, 2020. See the section titled "Net Operating Income ("NOI") and Same-Property NOI Reconciliations" on page S-18.3.
|
(3) |
Includes one community consisting of 476 apartment homes that is producing partial income due to lease-up.
|
(4) |
Includes two communities consisting of 806 apartment homes that are 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
|
Q4 '20
|
Q3 '20
|
Q2 '20
|
Q1 '20
|
Q4 '19
|
||||||||||||||||||
Rental and other property revenues:
|
||||||||||||||||||||||||
Same-property
|
46,550
|
$
|
313,254
|
$
|
312,364
|
$
|
320,179
|
$
|
340,889
|
$
|
340,663
|
|||||||||||||
Acquisitions (2)
|
2,557
|
19,759
|
20,143
|
19,885
|
18,879
|
4,238
|
||||||||||||||||||
Development (3)
|
968
|
6,094
|
5,461
|
4,420
|
4,075
|
3,417
|
||||||||||||||||||
Redevelopment
|
621
|
4,280
|
4,277
|
5,096
|
5,401
|
5,317
|
||||||||||||||||||
Non-residential/other, net (4)
|
1,400
|
12,250
|
11,488
|
15,594
|
20,506
|
19,226
|
||||||||||||||||||
Straight-line rent concessions (5)
|
-
|
4,150
|
14,731
|
2,975
|
-
|
-
|
||||||||||||||||||
Total rental and other property revenues
|
52,096
|
359,787
|
368,464
|
368,149
|
389,750
|
372,861
|
||||||||||||||||||
Property operating expenses:
|
||||||||||||||||||||||||
Same-property
|
96,181
|
97,358
|
94,976
|
93,203
|
91,921
|
|||||||||||||||||||
Acquisitions (2)
|
6,475
|
6,506
|
6,714
|
5,804
|
1,200
|
|||||||||||||||||||
Development (3)
|
2,438
|
1,977
|
1,445
|
1,447
|
1,208
|
|||||||||||||||||||
Redevelopment
|
1,845
|
2,049
|
1,752
|
1,663
|
1,725
|
|||||||||||||||||||
Non-residential/other, net (4) (6)
|
3,787
|
4,505
|
5,249
|
5,026
|
5,070
|
|||||||||||||||||||
Total property operating expenses
|
110,726
|
112,395
|
110,136
|
107,143
|
101,124
|
|||||||||||||||||||
Net operating income (NOI):
|
||||||||||||||||||||||||
Same-property
|
217,073
|
215,006
|
225,203
|
247,686
|
248,742
|
|||||||||||||||||||
Acquisitions (2)
|
13,284
|
13,637
|
13,171
|
13,075
|
3,038
|
|||||||||||||||||||
Development (3)
|
3,656
|
3,484
|
2,975
|
2,628
|
2,209
|
|||||||||||||||||||
Redevelopment
|
2,435
|
2,228
|
3,344
|
3,738
|
3,592
|
|||||||||||||||||||
Non-residential/other, net (4)
|
8,463
|
6,983
|
10,345
|
15,480
|
14,156
|
|||||||||||||||||||
Straight-line rent concessions (5)
|
4,150
|
14,731
|
2,975
|
-
|
-
|
|||||||||||||||||||
Total NOI
|
$
|
249,061
|
$
|
256,069
|
$
|
258,013
|
$
|
282,607
|
$
|
271,737
|
||||||||||||||
Same-property metrics
|
||||||||||||||||||||||||
Operating margin
|
69
|
%
|
69
|
%
|
70
|
%
|
73
|
%
|
73
|
%
|
||||||||||||||
Annualized turnover (7)
|
46
|
%
|
58
|
%
|
46
|
%
|
39
|
%
|
41
|
%
|
||||||||||||||
Financial occupancy (8)
|
96.5
|
%
|
96.0
|
%
|
94.9
|
%
|
96.8
|
%
|
97.1
|
%
|
(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.
|
(5) |
Same-property revenues reflect concessions on a cash basis. Total Rental and Other Property Revenues reflect concessions on a straight-line basis in accordance with U.S. GAAP.
|
(6) |
Includes other expenses and intercompany eliminations pertaining to self-insurance.
|
(7) |
Annualized turnover is defined as the number of apartment homes turned over during the quarter, annualized, divided by the total number of apartment homes.
|
(8) |
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
|
Q4 '20 %
of Actual
NOI
|
Q4 '20
|
Q4 '19
|
% Change
|
Q4 '20
|
Q4 '19
|
% Change
|
Q4 '20
|
Q4 '19
|
% Change
|
Q3 '20
|
% Change
|
|||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Los Angeles County
|
8,526
|
17.1
|
%
|
$
|
2,435
|
$
|
2,482
|
-1.9
|
%
|
95.9
|
%
|
97.1
|
%
|
-1.2
|
%
|
$
|
56,733
|
$
|
65,185
|
-13.0
|
%
|
$
|
55,415
|
2.4
|
%
|
|||||||||||||||||||||||||||
Orange County
|
5,439
|
11.6
|
%
|
2,234
|
2,231
|
0.1
|
%
|
97.2
|
%
|
96.6
|
%
|
0.6
|
%
|
35,809
|
37,122
|
-3.5
|
%
|
35,359
|
1.3
|
%
|
||||||||||||||||||||||||||||||||
San Diego County
|
4,582
|
9.2
|
%
|
1,999
|
1,977
|
1.1
|
%
|
97.7
|
%
|
97.3
|
%
|
0.4
|
%
|
27,804
|
28,197
|
-1.4
|
%
|
27,149
|
2.4
|
%
|
||||||||||||||||||||||||||||||||
Ventura County
|
2,253
|
4.5
|
%
|
1,895
|
1,878
|
0.9
|
%
|
98.7
|
%
|
97.0
|
%
|
1.8
|
%
|
13,064
|
13,240
|
-1.3
|
%
|
12,905
|
1.2
|
%
|
||||||||||||||||||||||||||||||||
Total Southern California
|
20,800
|
42.4
|
%
|
2,228
|
2,240
|
-0.5
|
%
|
96.8
|
%
|
97.0
|
%
|
-0.2
|
%
|
133,410
|
143,744
|
-7.2
|
%
|
130,828
|
2.0
|
%
|
||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Santa Clara County
|
7,406
|
19.5
|
%
|
2,739
|
2,849
|
-3.9
|
%
|
96.9
|
%
|
97.2
|
%
|
-0.3
|
%
|
58,506
|
65,016
|
-10.0
|
%
|
59,421
|
-1.5
|
%
|
||||||||||||||||||||||||||||||||
Alameda County
|
2,954
|
6.8
|
%
|
2,515
|
2,603
|
-3.4
|
%
|
96.3
|
%
|
97.3
|
%
|
-1.0
|
%
|
21,282
|
24,044
|
-11.5
|
%
|
21,178
|
0.5
|
%
|
||||||||||||||||||||||||||||||||
San Mateo County
|
1,830
|
4.9
|
%
|
2,906
|
3,072
|
-5.4
|
%
|
96.0
|
%
|
97.1
|
%
|
-1.1
|
%
|
15,413
|
17,511
|
-12.0
|
%
|
15,440
|
-0.2
|
%
|
||||||||||||||||||||||||||||||||
Contra Costa County
|
2,270
|
5.3
|
%
|
2,369
|
2,384
|
-0.6
|
%
|
97.6
|
%
|
97.3
|
%
|
0.3
|
%
|
16,112
|
16,811
|
-4.2
|
%
|
15,864
|
1.6
|
%
|
||||||||||||||||||||||||||||||||
San Francisco
|
1,178
|
2.6
|
%
|
2,794
|
3,154
|
-11.4
|
%
|
93.3
|
%
|
96.5
|
%
|
-3.3
|
%
|
9,502
|
11,496
|
-17.3
|
%
|
9,571
|
-0.7
|
%
|
||||||||||||||||||||||||||||||||
Total Northern California
|
15,638
|
39.1
|
%
|
2,667
|
2,784
|
-4.2
|
%
|
96.5
|
%
|
97.2
|
%
|
-0.7
|
%
|
120,815
|
134,878
|
-10.4
|
%
|
121,474
|
-0.5
|
%
|
||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Seattle Metro
|
10,112
|
18.5
|
%
|
1,912
|
1,914
|
-0.1
|
%
|
95.8
|
%
|
97.1
|
%
|
-1.3
|
%
|
59,029
|
62,041
|
-4.9
|
%
|
60,062
|
-1.7
|
%
|
||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Same-Property
|
46,550
|
100.0
|
%
|
$
|
2,307
|
$
|
2,352
|
-1.9
|
%
|
96.5
|
%
|
97.1
|
%
|
-0.6
|
%
|
$
|
313,254
|
$
|
340,663
|
-8.0
|
%
|
$
|
312,364
|
0.3
|
%
|
|
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
|
8,526
|
17.5
|
%
|
$
|
2,467
|
$
|
2,460
|
0.3
|
%
|
95.1
|
%
|
96.6
|
%
|
-1.6
|
%
|
235,531
|
256,720
|
-8.3
|
%
|
|||||||||||||||||||||||||
Orange County
|
5,439
|
11.1
|
%
|
2,236
|
2,207
|
1.3
|
%
|
96.3
|
%
|
96.2
|
%
|
0.1
|
%
|
142,897
|
145,534
|
-1.8
|
%
|
|||||||||||||||||||||||||||
San Diego County
|
4,582
|
8.7
|
%
|
1,995
|
1,958
|
1.9
|
%
|
97.0
|
%
|
96.9
|
%
|
0.1
|
%
|
110,444
|
110,945
|
-0.5
|
%
|
|||||||||||||||||||||||||||
Ventura County
|
2,253
|
4.2
|
%
|
1,890
|
1,862
|
1.5
|
%
|
97.3
|
%
|
97.0
|
%
|
0.3
|
%
|
51,899
|
52,395
|
-0.9
|
%
|
|||||||||||||||||||||||||||
Total Southern California
|
20,800
|
41.5
|
%
|
2,240
|
2,219
|
0.9
|
%
|
96.0
|
%
|
96.6
|
%
|
-0.6
|
%
|
540,771
|
565,594
|
-4.4
|
%
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||||||||||
Santa Clara County
|
7,406
|
20.1
|
%
|
2,818
|
2,819
|
0.0
|
%
|
96.4
|
%
|
96.8
|
%
|
-0.4
|
%
|
245,690
|
255,628
|
-3.9
|
%
|
|||||||||||||||||||||||||||
Alameda County
|
2,954
|
6.9
|
%
|
2,577
|
2,590
|
-0.5
|
%
|
95.7
|
%
|
96.7
|
%
|
-1.0
|
%
|
88,556
|
94,531
|
-6.3
|
%
|
|||||||||||||||||||||||||||
San Mateo County
|
1,830
|
5.2
|
%
|
3,027
|
3,035
|
-0.3
|
%
|
96.0
|
%
|
96.4
|
%
|
-0.4
|
%
|
64,631
|
68,506
|
-5.7
|
%
|
|||||||||||||||||||||||||||
Contra Costa County
|
2,270
|
5.1
|
%
|
2,377
|
2,366
|
0.5
|
%
|
97.2
|
%
|
96.8
|
%
|
0.4
|
%
|
64,315
|
66,303
|
-3.0
|
%
|
|||||||||||||||||||||||||||
San Francisco
|
1,178
|
3.0
|
%
|
3,007
|
3,114
|
-3.4
|
%
|
94.1
|
%
|
96.2
|
%
|
-2.2
|
%
|
41,108
|
45,146
|
-8.9
|
%
|
|||||||||||||||||||||||||||
Total Northern California
|
15,638
|
40.3
|
%
|
2,747
|
2,757
|
-0.4
|
%
|
96.1
|
%
|
96.7
|
%
|
-0.6
|
%
|
504,300
|
530,114
|
-4.9
|
%
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Seattle Metro
|
10,112
|
18.2
|
%
|
1,932
|
1,886
|
2.4
|
%
|
96.0
|
%
|
96.6
|
%
|
-0.6
|
%
|
241,615
|
242,982
|
-0.6
|
%
|
|||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Total Same-Property
|
46,550
|
100.0
|
%
|
$
|
2,343
|
$
|
2,327
|
0.7
|
%
|
96.0
|
%
|
96.6
|
%
|
-0.6
|
%
|
$
|
1,286,686
|
$
|
1,338,690
|
-3.9
|
%
|
Based on 46,550 apartment homes
|
|||||||||||||||||||||||||||||||||
Q4 '20
|
Q4 '19
|
% Change
|
% of Op. Ex.
|
YTD 2020
|
YTD 2019
|
% Change
|
% of Op. Ex.
|
||||||||||||||||||||||||||
Same-property operating expenses:
|
|||||||||||||||||||||||||||||||||
Real estate taxes
|
$
|
37,579
|
$
|
36,090
|
4.1
|
%
|
39.1
|
%
|
$
|
148,575
|
$
|
141,895
|
4.7
|
%
|
38.9
|
%
|
|||||||||||||||||
Maintenance and repairs (1)
|
19,790
|
17,645
|
12.2
|
%
|
20.6
|
%
|
80,259
|
74,754
|
7.4
|
%
|
21.0
|
%
|
|||||||||||||||||||||
Administrative
|
15,529
|
16,502
|
-5.9
|
%
|
16.1
|
%
|
63,991
|
65,396
|
-2.1
|
%
|
16.8
|
%
|
|||||||||||||||||||||
Utilities
|
18,822
|
17,454
|
7.8
|
%
|
19.6
|
%
|
71,675
|
68,434
|
4.7
|
%
|
18.8
|
%
|
|||||||||||||||||||||
Insurance and other
|
4,461
|
4,230
|
5.5
|
%
|
4.6
|
%
|
17,218
|
16,754
|
2.8
|
%
|
4.5
|
%
|
|||||||||||||||||||||
Total same-property operating expenses
|
$
|
96,181
|
$
|
91,921
|
4.6
|
%
|
100.0
|
%
|
$
|
381,718
|
$
|
367,233
|
3.9
|
%
|
100.0
|
%
|
|||||||||||||||||
(1) Maintenance and repairs includes expenses related to COVID-19 of $0.4 million and $3.6 million for the three
and twelve months ended December 31, 2020, respectively.
|
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
12/31/20 (3)
|
%
Leased as of
2/1/21 (3)
|
Construction
Start
|
Initial
Occupancy
|
Stabilized
Operations
|
|||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Development Projects - Consolidated (4)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Station Park Green - Phase IV
|
San Mateo, CA
|
100
|
%
|
107
|
-
|
66
|
28
|
94
|
94
|
879
|
0
|
%
|
0
|
%
|
0
|
%
|
Q3 2019
|
Q4 2021
|
Q2 2022
|
|||||||||||||||||||||||||||||||||||||||
Mylo (5)
|
Santa Clara, CA
|
100
|
%
|
476
|
-
|
213
|
13
|
226
|
226
|
475
|
63
|
%
|
67
|
%
|
73
|
%
|
Q3 2016
|
Q3 2019
|
Q2 2021
|
|||||||||||||||||||||||||||||||||||||||
Wallace on Sunset (6)
|
Hollywood, CA
|
100
|
%
|
200
|
4,700
|
97
|
19
|
116
|
116
|
550
|
0
|
%
|
0
|
%
|
0
|
%
|
Q4 2017
|
Q2 2021
|
Q4 2021
|
|||||||||||||||||||||||||||||||||||||||
Total Development Projects - Consolidated
|
783
|
4,700
|
376
|
60
|
436
|
436
|
549
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
Land Held for Future Development - Consolidated
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Projects
|
Various
|
100
|
%
|
21
|
-
|
21
|
21
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
Total Development Pipeline - Consolidated
|
783
|
4,700
|
397
|
60
|
457
|
457
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Development Projects - Joint Venture (4)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Patina at Midtown
|
San Jose, CA
|
50
|
%
|
269
|
-
|
135
|
13
|
148
|
74
|
550
|
43
|
%
|
46
|
%
|
51
|
%
|
Q3 2017
|
Q3 2020
|
Q2 2021
|
|||||||||||||||||||||||||||||||||||||||
500 Folsom (7)
|
San Francisco, CA
|
50
|
%
|
537
|
6,000
|
400
|
15 |
415
|
208
|
763
|
86
|
%
|
89
|
%
|
92
|
%
|
Q4 2015
|
Q3 2019
|
Q1 2021
|
|||||||||||||||||||||||||||||||||||||||
Scripps Mesa Apartments (7)
|
San Diego, CA
|
51
|
%
|
264
|
2,000
|
16
|
86
|
102
|
52
|
383
|
0
|
%
|
0
|
%
|
0
|
%
|
Q3 2020
|
Q4 2022
|
Q3 2023
|
|||||||||||||||||||||||||||||||||||||||
Total Development Projects - Joint Venture
|
1,070
|
8,000
|
551
|
114
|
665 |
334
|
$ | 615 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Grand Total - Development Pipeline
|
1,853
|
12,700
|
$
|
948
|
$
|
174
|
$
|
1,122
|
791
|
|||||||||||||||||||||||||||||||||||||||||||||||||
Essex Cost Incurred to Date - Pro Rata
|
(673
|
)
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Essex Remaining Commitment
|
$
|
118
|
(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 fourth quarter of 2020, the Company's cost includes $2.3 million of capitalized interest, $1.1 million of capitalized overhead and $0.2 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 and is net of cost
incurred on the adjacent theatre at the property.
|
(7) |
Cost incurred to date and estimated total cost are net of a projected value for low income housing tax credit proceeds and the value of the tax exempt bond structure.
|
Region/Project Name
|
Location
|
Apartment
Homes |
Total
Incurred
To Date
|
Estimated
Remaining
Cost
|
Estimated
Total
Cost
|
Project
Start Date |
NOI
Twelve Months Ended
|
|||||||||||||||||||||||
2020
|
2019
|
|||||||||||||||||||||||||||||
Consolidated - Redevelopment Projects
|
||||||||||||||||||||||||||||||
Same-Property (1)
|
||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||
The Blake LA
|
Los Angeles, CA
|
196
|
$
|
11,500
|
$
|
700
|
$
|
12,200
|
Q4 2016
|
|||||||||||||||||||||
The Palms at Laguna Niguel
|
Laguna Niguel, CA
|
460
|
7,600
|
1,900
|
9,500
|
Q4 2016
|
||||||||||||||||||||||||
Total Same-Property - Redevelopment Projects
|
656
|
$
|
19,100
|
$
|
2,600
|
$
|
21,700
|
$
|
11,594
|
$
|
12,260
|
|||||||||||||||||||
Non-Same Property
|
||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||
Bunker Hill Towers
|
Los Angeles, CA
|
456
|
$
|
85,500
|
$
|
1,900
|
$
|
87,400
|
Q3 2013
|
|||||||||||||||||||||
Total Non-Same Property - Redevelopment Projects
|
456
|
$
|
85,500
|
$
|
1,900
|
$
|
87,400
|
$
|
7,253
|
$
|
8,482
|
(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)
|
Q4 '20
|
Q3 '20
|
Q2 '20
|
Q1 '20
|
Trailing 4
Quarters
|
||||||||||||||||
Same-property portfolio
|
$
|
6,762
|
$
|
5,676
|
$
|
7,659
|
$
|
18,065
|
$
|
38,162
|
|||||||||||
Non-same property portfolio
|
124
|
3,116
|
1,423
|
3,580
|
8,243
|
||||||||||||||||
Total revenue generating capital expenditures
|
$
|
6,886
|
$
|
8,792
|
$
|
9,082
|
$
|
21,645
|
$
|
46,405
|
|||||||||||
Number of same-property interior renovations
|
246
|
414
|
491
|
771
|
1,922
|
||||||||||||||||
Number of total consolidated interior renovations
|
394
|
485
|
574
|
917
|
2,370
|
||||||||||||||||
Non-Revenue Generating Capital Expenditures (3)
|
Q4 '20
|
Q3 '20
|
Q2 '20
|
Q1 '20
|
Trailing 4 Quarters
|
||||||||||||||||
Non-revenue generating capital expenditures (4)
|
$
|
18,614
|
$
|
21,009
|
$
|
16,559
|
$
|
15,315
|
$
|
71,497
|
|||||||||||
Average apartment homes in quarter
|
52,154
|
52,274
|
52,552
|
51,670
|
52,163
|
||||||||||||||||
Capital expenditures per apartment homes in the quarter
|
$
|
357
|
$
|
402
|
$
|
315
|
$
|
296
|
$
|
1,371
|
(1) |
The Company incurred $30 thousand of capitalized interest, $2.9 million of capitalized overhead and $0.1 million of co-investment fees related to redevelopment in Q4 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, costs related to the
COVID-19 pandemic, retail, furniture and fixtures, and expenditures in which the Company expects to be reimbursed.
|
Weighted
Average Essex
Ownership
Percentage
|
Apartment Homes
|
Total Undepreciated Book Value
|
Debt Amount
|
Essex Book Value
|
Weighted
Average
Borrowing Rate
|
Remaining
Term of
Debt (in Years)
|
Three Months Ended
December 31, 2020 |
Twelve Months Ended
December 31, 2020 |
||||||||||||||||||||||||||||||
Operating and Other Non-Consolidated Joint Ventures
|
NOI
|
|||||||||||||||||||||||||||||||||||||
Wesco I, III, IV, and V
|
51
|
%
|
5,310
|
$
|
1,731,131
|
$
|
1,058,322
|
$
|
178,322
|
3.4
|
%
|
3.4
|
$
|
23,174
|
$
|
96,258
|
||||||||||||||||||||||
BEXAEW, BEX II, BEX III, and BEX IV
|
50
|
%
|
2,691
|
829,222
|
420,723
|
152,309
|
3.3
|
%
|
3.0
|
10,996
|
45,481
|
|||||||||||||||||||||||||||
CPPIB (1)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
2,524
|
|||||||||||||||||||||||||||||
Other
|
47
|
%
|
651
|
214,566
|
166,433
|
27,635
|
3.0
|
%
|
2.9
|
3,143
|
12,945
|
|||||||||||||||||||||||||||
Total Operating and Other Non-Consolidated Joint Ventures
|
8,652
|
$
|
2,774,919
|
$
|
1,645,478
|
$
|
358,266
|
3.3
|
%
|
3.3
|
$
|
37,313
|
$
|
157,208
|
||||||||||||||||||||||||
Pre-Development and Development Non-Consolidated Joint Ventures (2)
|
50
|
%
|
1,070
|
550,863
|
278,607
|
157,433
|
1.8
|
%
|
27.5
|
(3)
|
(4) |
1,890
|
7,761
|
|||||||||||||||||||||||||
Total Non-Consolidated Joint Ventures
|
9,722
|
$
|
3,325,782
|
$
|
1,924,085
|
$
|
515,699
|
3.1
|
%
|
6.8
|
$
|
39,203
|
$
|
164,969
|
||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
|
Essex Portion of NOI and Expenses
|
|||||||||||||||||||||||||||||||||||||
NOI
|
$
|
20,373
|
$
|
85,758
|
||||||||||||||||||||||||||||||||||
Depreciation
|
(13,403
|
)
|
(51,594
|
)
|
||||||||||||||||||||||||||||||||||
Interest expense and other
|
(7,332
|
)
|
(30,226
|
)
|
||||||||||||||||||||||||||||||||||
Equity (loss) income from non-core co-investment
|
916
|
5,289
|
||||||||||||||||||||||||||||||||||||
Gain on sale of co-investment communities
|
-
|
2,225
|
||||||||||||||||||||||||||||||||||||
Gain on early retirement of debt from unconsolidated co-investment
|
-
|
38
|
||||||||||||||||||||||||||||||||||||
Co-investment promote income
|
-
|
6,455
|
||||||||||||||||||||||||||||||||||||
Net income from operating and other co-investments
|
$
|
554
|
$
|
17,945
|
||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
|
Weighted
Average
Preferred
Return
|
Weighted
Average
Expected
Term
|
Income from Preferred Equity
Investments
|
|||||||||||||||||||||||||||||||||||
Income from preferred equity investments
|
$
|
12,444
|
$
|
48,357
|
||||||||||||||||||||||||||||||||||
Income from early redemption of preferred equity investments
|
-
|
210
|
||||||||||||||||||||||||||||||||||||
Preferred Equity Investments (5)
|
$
|
502,311
|
10.2
|
%
|
2.0
|
$
|
12,444
|
$
|
48,567
|
|||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||
Total Co-investments
|
$
|
1,018,010
|
$
|
12,998
|
$
|
66,512
|
(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 for the twelve months ended December 31, 2020 includes
NOI 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 $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 December 31, 2020, the Company has invested in 18 preferred equity investments.
|
2020
|
2021 Full-Year Guidance Range
|
||||||||||||
(Dollars in thousands, except per share data)
|
Actuals (1)
|
Low End
|
High End
|
Comments About 2021 Full-Year Guidance
|
|||||||||
Total NOI from Consolidated Communities - Excluding Straight-Line Rent Concessions
|
$
|
1,023,894
|
$
|
957,500
|
$
|
994,500
|
Reflects a range of same-property NOI growth of -6.25% to -3.00%. Includes the sale of three properties totaling $275 million under contract to close in Q1 '21
|
||||||
Straight-Line Rent Concessions from Consolidated Communities
|
21,856
|
(6,000
|
)
|
(16,000
|
)
|
Reflects the non-cash impact of recording lease concessions on a straight-line basis
|
|||||||
Accretion from Acquisitions/Dispositions/Preferred Equity
|
-
|
800
|
2,800
|
||||||||||
Management Fees
|
9,598
|
8,500
|
9,500
|
||||||||||
Interest Expense
|
|||||||||||||
Interest expense, before capitalized interest
|
(224,516
|
)
|
(202,200
|
)
|
(198,300
|
)
|
|||||||
Interest capitalized
|
14,616
|
4,000
|
6,000
|
||||||||||
Net interest expense
|
(209,900
|
)
|
(198,200
|
)
|
(192,300
|
)
|
|||||||
Recurring Income and Expenses
|
|||||||||||||
Interest and other income
|
15,206
|
22,000
|
23,000
|
||||||||||
FFO from co-investments
|
103,889
|
109,800
|
115,400
|
||||||||||
General and administrative
|
(50,430
|
)
|
(49,500
|
)
|
(51,500
|
)
|
|||||||
Corporate-level property management expenses
|
(34,573
|
)
|
(35,100
|
)
|
(36,100
|
)
|
|||||||
Non-controlling interest
|
(11,089
|
)
|
(11,800
|
)
|
(10,800
|
)
|
|||||||
Total recurring income and expenses
|
23,003
|
35,400
|
40,000
|
||||||||||
Non-Core Income and Expenses
|
|||||||||||||
Expensed acquisition and investment related costs
|
(1,591
|
)
|
|||||||||||
Deferred tax expense on unrealized gain on unconsolidated co-investments
|
(1,531
|
)
|
|||||||||||
Gain on sale of marketable securities
|
2,131
|
||||||||||||
Unrealized gains on marketable securities
|
12,515
|
||||||||||||
Equity income from non-core co-investments
|
5,289
|
||||||||||||
Gain on early retirement of debt, net
|
(22,883
|
)
|
|||||||||||
Gain on early retirement of debt from unconsolidated co-investment
|
38
|
||||||||||||
Co-investment promote income
|
6,455
|
||||||||||||
Income from early redemption of preferred equity investments
|
210
|
||||||||||||
Accelerated interest income from maturity of investment in mortgage backed security
|
11,753
|
||||||||||||
General and administrative and other, net
|
(14,958
|
)
|
|||||||||||
Insurance reimbursements and legal settlements, net
|
81
|
||||||||||||
Provision for Credit Losses
|
(687
|
)
|
|||||||||||
Total non-core income and expenses
|
(3,178
|
)
|
-
|
-
|
|||||||||
Funds from Operations (2)
|
$
|
865,273
|
$
|
798,000
|
$
|
838,500
|
|||||||
Funds from Operations per diluted Share
|
$
|
12.78
|
$
|
11.86
|
$
|
12.46
|
|||||||
% Change - Funds from Operations
|
-6.9
|
%
|
-7.2
|
%
|
-2.5
|
%
|
|||||||
Core Funds from Operations (excludes non-core items)
|
$
|
868,451
|
$
|
798,000
|
$
|
838,500
|
|||||||
Core Funds from Operations per diluted Share
|
$
|
12.82
|
$
|
11.86
|
$
|
12.46
|
|||||||
% Change - Core Funds from Operations
|
-4.2
|
%
|
-7.5
|
%
|
-2.8
|
%
|
|||||||
EPS - Diluted
|
$
|
8.69
|
$
|
3.30
|
$
|
3.90
|
|||||||
Weighted average shares outstanding - FFO calculation
|
67,726
|
67,300
|
67,300
|
(1)
|
All non-core items are excluded from the 2020 actuals and included in the non-core income and expense section of the FFO reconciliation.
|
(2)
|
2021 guidance excludes inestimable projected gain on sale of marketable securities, loss on early retirement of debt, political/legislative costs, and
promote income until they are realized within the reporting period presented in the report.
|
2021 Guidance Range (1)
|
||||||||||||||||||||
1st Quarter 2021
|
Full-Year 2021
|
|||||||||||||||||||
2020
|
||||||||||||||||||||
Actuals
|
Low
|
High
|
Low
|
High
|
||||||||||||||||
EPS - diluted
|
$
|
8.69
|
$
|
0.82
|
$
|
0.96
|
$
|
3.30
|
$
|
3.90
|
||||||||||
Conversion from GAAP share count
|
(0.28
|
)
|
(0.03
|
)
|
(0.03
|
)
|
(0.12
|
)
|
(0.12
|
)
|
||||||||||
Impairment Loss
|
0.03
|
-
|
-
|
-
|
-
|
|||||||||||||||
Depreciation and amortization
|
8.52
|
2.14
|
2.14
|
8.56
|
8.56
|
|||||||||||||||
Noncontrolling interest related to Operating Partnership units
|
0.28
|
0.03
|
0.03
|
0.12
|
0.12
|
|||||||||||||||
Gain on sale of real estate
|
(0.99
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Gain on remeasurement of co-investment
|
(3.47
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
FFO per share - diluted
|
$
|
12.78
|
$
|
2.96
|
$
|
3.10
|
$
|
11.86
|
$
|
12.46
|
||||||||||
Expensed acquisition and investment related costs
|
0.02
|
-
|
-
|
-
|
-
|
|||||||||||||||
Deferred tax expense on unrealized gain on unconsolidated co-investments
|
0.02
|
-
|
-
|
-
|
-
|
|||||||||||||||
Gain on sale of marketable securities
|
(0.03
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Unrealized gains on marketable securities
|
(0.18
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Equity income from non-core co-investments
|
(0.08
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Gain on early retirement of debt, net
|
0.34
|
-
|
-
|
-
|
-
|
|||||||||||||||
Gain on early retirement of debt from unconsolidated co-investment
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Co-investment promote income
|
(0.11
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Income from early redemption of preferred equity investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Accelerated interest income from maturity of investment in mortgage backed security
|
(0.17
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
General and administrative and other, net
|
0.22
|
-
|
-
|
-
|
-
|
|||||||||||||||
Insurance reimbursements and legal settlements, net
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Provision for Credit Losses
|
0.01
|
-
|
-
|
-
|
-
|
|||||||||||||||
Core FFO per share - diluted
|
$
|
12.82
|
$
|
2.96
|
$
|
3.10
|
$
|
11.86
|
$
|
12.46
|
(1) |
2021 guidance excludes inestimable projected gain on sale of real estate and land, gain on sale of marketable securities, loss on early retirement of debt, political/legislative costs, and promote
income until they are realized within the reporting period presented in the report.
|
Acquisitions
|
|||||||||||||||||||||
Property Name
|
Location
|
Apartment
Homes |
Essex
Ownership
Percentage
|
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
|
|||||||||||||||||||||
Property Name
|
Location
|
Apartment
Homes |
Essex
Ownership
Percentage
|
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
|
|||||||||||||
|
|
|
|||||||||||||||||||
Delano
|
Redmond, WA
|
126
|
100%
|
|
EPLP
|
Jul-20
|
$
|
51,500
|
$
|
409
|
|||||||||||
|
Q3 2020
|
126
|
|
|
$
|
51,500
|
$
|
409
|
|||||||||||||
|
|
|
|||||||||||||||||||
416 on Broadway
|
Glendale, CA
|
115
|
100%
|
|
EPLP
|
Oct-20
|
$
|
60,000
|
$
|
500
|
|||||||||||
|
Q4 2020
|
115
|
|
|
$
|
60,000
|
$
|
500
|
|||||||||||||
|
|
|
|||||||||||||||||||
2020 Total
|
670
|
|
|
$
|
343,500
|
$
|
504
|
(1)
|
In January 2020, the Company purchased the joint venture partner's 45% membership interest in each of a land parcel and six communities
totaling 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 Fourth Quarter 2020
|
Same-Property
|
Non-Same
Property and Co-investments |
Total Operating
Communities
|
Commercial
|
Total
|
||||||||||||||
Operating apartment community units
|
46,550
|
12,791
|
59,341
|
N/A
|
N/A
|
||||||||||||||
|
|||||||||||||||||||
Cash delinquencies as % of scheduled rent
|
2.7
|
%
|
2.9
|
%
|
2.7
|
%
|
N/A
|
N/A
|
|||||||||||
Reported delinquencies as % of scheduled rent (1)
|
2.7
|
%
|
2.9
|
%
|
2.7
|
%
|
N/A
|
N/A
|
|||||||||||
Reported delinquencies in 4Q 2020 (2)
|
$
|
(8.7
|
)
|
$
|
(1.8
|
)
|
$
|
(10.5
|
)
|
$
|
(1.2)
|
(3)
|
$
|
(11.7
|
)
|
||||
Reported delinquencies in 4Q 2019 (2)
|
$
|
(0.8
|
)
|
$
|
-
|
$
|
(0.8
|
)
|
$
|
-
|
$
|
(0.8
|
)
|
||||||
|
|||||||||||||||||||
Impact to 4Q 2020 Core FFO per share
|
$
|
(0.12
|
)
|
$
|
(0.03
|
)
|
$
|
(0.14
|
)
|
$
|
(0.02
|
$
|
(0.16
|
)
|
|||||
Impact to Core FFO per share growth
|
-3.4
|
%
|
-0.8
|
%
|
-4.2
|
%
|
-0.5
|
% |
-4.7
|
%
|
(1) |
Represents total residential portfolio delinquencies as a percentage of scheduled rent reflected in the financial statements for the
three months ended December 31, 2020.
|
(2)
|
Co-investment delinquencies reported at the Company's pro rata share.
|
(3)
|
Commercial delinquencies in 4Q 2020 includes a straight-line rent reserve of $1.0 million and includes co-investment amounts at the
Company's pro rata share.
|
Operating Statistics
|
Same-Property Revenue Growth with Concessions on a GAAP basis
|
|||||||||||||||||||||||||
Same-Property Portfolio (46,550 units)
|
January 2021 (1)
|
4Q 2020
|
4Q 2020
|
4Q 2019
|
YTD 2020
|
YTD 2019
|
||||||||||||||||||||
Cash delinquencies as % of scheduled rent
|
2.8
|
%
|
2.7
|
%
|
Reported rental revenue (cash basis)
|
$
|
313.3
|
$
|
340.7
|
$
|
1,286.7
|
$
|
1,338.7
|
|||||||||||||
Straight-line rent impact to rental revenue
|
3.2
|
-
|
19.0
|
-
|
||||||||||||||||||||||
New lease rates (2)
|
-8.8
|
%
|
-8.9
|
%
|
GAAP rental revenue
|
$
|
316.5
|
$
|
340.7
|
$
|
1,305.7
|
$
|
1,338.7
|
|||||||||||||
Renewal rates (3)
|
-1.4
|
%
|
-2.5
|
%
|
||||||||||||||||||||||
Blended rates
|
-5.5
|
%
|
-6.0
|
%
|
% change - cash rental revenue
|
-8.0
|
%
|
-3.9
|
%
|
|||||||||||||||||
|
% change - GAAP rental revenue
|
-7.1
|
%
|
-2.5
|
%
|
|||||||||||||||||||||
Financial occupancy
|
96.7
|
%
|
96.5
|
%
|
(1)
|
Preliminary January 2021 estimate.
|
(2)
|
Represents % change on a net-effective basis, including the impact of leasing incentives.
|
(3)
|
Represents % change in similar term lease tradeouts, including the impact of leasing incentives.
|
Three Months Ended
December 31,
2020
|
||||
Net income available to common stockholders
|
$
|
95,745
|
||
Adjustments:
|
||||
Net income attributable to noncontrolling interest
|
5,904
|
|||
Interest expense, net (1)
|
52,625
|
|||
Depreciation and amortization
|
130,127
|
|||
Income tax provision
|
592
|
|||
Gain on sale of real estate and land
|
(25,716
|
)
|
||
Impairment loss
|
1,825
|
|||
Co-investment EBITDAre adjustments
|
20,643
|
|||
EBITDAre
|
281,745
|
|||
Gain on sale of marketable securities
|
(2,007
|
)
|
||
Unrealized gains on marketable securities
|
(10,300
|
)
|
||
Provision for credit losses
|
587
|
|||
Equity income from non-core co-investment
|
(916
|
)
|
||
Deferred tax expense on unrealized gain on unconsolidated co-investment
|
(105
|
)
|
||
General and administrative and other, net
|
9,316
|
|||
Insurance reimbursements and legal settlements, net
|
(150
|
)
|
||
Accelerated interest income from maturity of investment in mortgage backed security
|
(11,753
|
)
|
||
Expensed acquisition and investment related costs
|
1,487
|
|||
Gain on early retirement of debt, net
|
(937
|
)
|
||
Adjusted EBITDAre
|
$
|
266,967
|
(1)
|
Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges.
|
Three Months Ended
December 31, |
Twelve Months Ended
December 31, |
|||||||
2020
|
2020
|
|||||||
Interest expense
|
$
|
55,608
|
$
|
220,633
|
||||
Adjustments:
|
||||||||
Total return swap income
|
(2,983
|
)
|
(10,733
|
)
|
||||
Interest expense, net
|
$
|
52,625
|
$
|
209,900
|
February 1, 2021
|
||||
Unsecured credit facility - committed
|
$
|
1,235
|
||
Balance outstanding
|
200
|
|||
Undrawn portion of line of credit
|
$
|
1,035
|
||
Cash, cash equivalents & marketable securities
|
168
|
|||
Total liquidity
|
$
|
1,203
|
Total consolidated debt, net
|
$
|
6,251,535
|
||
Mortgage debt associated with real estate held for sale, net (1)
|
29,422
|
|||
Total debt from co-investments at pro rata share
|
983,198
|
|||
Adjustments:
|
||||
Consolidated unamortized premiums, discounts, and debt issuance costs
|
39,891
|
|||
Pro rata co-investments unamortized premiums, discounts, and debt issuance costs
|
4,642
|
|||
Consolidated cash and cash equivalents-unrestricted
|
(73,629
|
)
|
||
Pro rata co-investment cash and cash equivalents-unrestricted
|
(20,342
|
)
|
||
Marketable securities
|
(195,868
|
)
|
||
Net Indebtedness
|
$
|
7,018,849
|
||
Adjusted EBITDAre, annualized (2)
|
$
|
1,067,868
|
||
Other EBITDAre normalization adjustments, net, annualized (3)
|
(528
|
)
|
||
Adjusted EBITDAre, normalized and annualized
|
$
|
1,067,340
|
||
Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized
|
6.6
|
(1) |
Amount is net of unamortized debt issuance costs and is included in other liabilities on the consolidated balance sheet.
|
(2) |
Based on the amount for the most recent quarter, multiplied by four.
|
(3) |
Adjustments made for properties in lease-up, acquired, or disposed during the most recent quarter and other partial quarter activity, multiplied by four.
|
Three Months Ended
December 31, |
Three Months Ended
December 31, |
Twelve Months Ended
December 31, |
Twelve Months Ended
December 31, |
|||||||||||||
2020
|
2019
|
2020
|
2019
|
|||||||||||||
Earnings from operations
|
$
|
111,931
|
$
|
116,818
|
$
|
491,441
|
$
|
481,112
|
||||||||
Adjustments:
|
||||||||||||||||
Corporate-level property management expenses
|
8,549
|
8,616
|
34,573
|
34,067
|
||||||||||||
Depreciation and amortization
|
130,127
|
122,908
|
525,497
|
483,750
|
||||||||||||
Management and other fees from affiliates
|
(2,286
|
)
|
(2,504
|
)
|
(9,598
|
)
|
(9,527
|
)
|
||||||||
General and administrative
|
23,144
|
15,531
|
65,388
|
54,262
|
||||||||||||
Expensed acquisition and investment related costs
|
1,487
|
99
|
1,591
|
168
|
||||||||||||
Impairment loss
|
1,825
|
7,105
|
1,825
|
7,105
|
||||||||||||
(Gain) loss on sale of real estate and land
|
(25,716
|
)
|
3,164
|
(64,967
|
)
|
3,164
|
||||||||||
NOI
|
249,061
|
271,737
|
1,045,750
|
1,054,101
|
||||||||||||
Less: Non-same property NOI
|
(31,988
|
)
|
(22,995
|
)
|
(140,782
|
)
|
(82,644
|
)
|
||||||||
Same-Property NOI
|
$
|
217,073
|
$
|
248,742
|
$
|
904,968
|
$
|
971,457
|
Annualized
Q4'20 (1) |
||||
NOI
|
$
|
996,244
|
||
Adjustments:
|
||||
NOI from real estate assets sold or held for sale
|
(5,897
|
)
|
||
Other, net (2)
|
(19,257
|
)
|
||
Adjusted Total NOI
|
971,090
|
|||
Less: Encumbered NOI
|
(52,735
|
)
|
||
Unencumbered NOI
|
$
|
918,355
|
||
Encumbered NOI
|
$
|
52,735
|
||
Unencumbered NOI
|
918,355
|
|||
Adjusted Total NOI
|
$
|
971,090
|
||
Unencumbered NOI to Adjusted Total NOI
|
95
|
%
|
(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.
|