Table of Contents
|
|
Earnings Press Release
|
Pages 1 - 9
|
Consolidated Operating Results
|
S-1 & S-2
|
Consolidated Funds from Operations
|
S-3
|
Consolidated Balance Sheets
|
S-4
|
Debt Summary
|
S-5
|
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios
|
S-6
|
Portfolio Summary by County
|
S-7
|
Operating Income by Quarter
|
S-8
|
Same-Property Revenue Results by County, Quarter-to-Date
|
S-9
|
Same-Property Revenue Results by County, Year-to-Date
|
S-9.1
|
Same-Property Operating Expenses, Quarter and Year-to-Date
|
S-10
|
Development Pipeline
|
S-11
|
Capital Expenditures
|
S-12
|
Co-Investments and Preferred Equity Investments
|
S-13
|
Assumptions for 2023 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
|
Same-Property Delinquencies, Operating Statistics, and Revenue Growth on a GAAP basis
|
S-16
|
MSA Level Supply Forecast: 2022A – 2024E
|
S-17
|
Reconciliations of Non-GAAP Financial Measures and Other Terms
|
S-18.1 - S-18.4
|
Three Months Ended
September 30,
|
%
|
Nine Months Ended
September 30,
|
%
|
|||||||||||||||||||||
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|||||||||||||||||||
Per Diluted Share
|
||||||||||||||||||||||||
Net Income
|
$1.36
|
$1.43
|
-4.9%
|
|
$5.30
|
$3.42
|
55.0%
|
|||||||||||||||||
Total FFO
|
$3.69
|
$3.45
|
7.0%
|
$11.37
|
$9.93
|
14.5%
|
||||||||||||||||||
Core FFO
|
$3.78
|
$3.69
|
2.4%
|
$11.21
|
$10.75
|
4.3%
|
• |
Reported Net Income per diluted share for the third quarter of 2023 of $1.36, compared to $1.43 in the third quarter of 2022.
|
• |
Achieved Core FFO per diluted share of $3.78, representing 2.4% growth compared to the third quarter of 2022 and exceeding the midpoint of the guidance range by $0.03.
|
• |
Achieved same-property revenues and net operating income (“NOI”) growth of 3.2% and 2.7%, respectively, compared to the third quarter of 2022. On a sequential basis,
same-property revenues improved 1.1%.
|
• |
Closed $298.0 million in 10-year secured loans priced at a 5.08% fixed interest
rate. The proceeds are intended to repay a majority of the Company’s $400.0 million unsecured notes due in May 2024 upon maturity. In the interim, the Company has reinvested the proceeds in short-term cash accounts, which will be
slightly accretive to Total and Core FFO until the notes are repaid.
|
• |
Committed $12.3 million to one preferred equity investment at a preferred return of 13.5%.
|
• |
Reaffirmed the midpoint of the full-year 2023 guidance ranges for Core FFO per diluted share, as well as same-property revenues, expenses, and NOI.
|
• |
As of October 24, 2023, the Company’s immediately available liquidity was approximately $1.6 billion.
|
Q3 2023 vs.
Q3 2022
|
Q3 2023 vs.
Q2 2023
|
% of Total
|
||||||||||
Revenue
Change
|
Revenue
Change
|
Q3 2023
Revenues
|
||||||||||
Southern California
|
||||||||||||
Los Angeles County
|
1.2%
|
|
0.7%
|
18.6%
|
||||||||
Orange County
|
4.2%
|
1.3%
|
10.5%
|
|||||||||
San Diego County
|
8.7%
|
2.5%
|
9.0%
|
|||||||||
Ventura County
|
4.7%
|
0.7%
|
4.1%
|
|||||||||
Total Southern California
|
3.8%
|
1.2%
|
42.2%
|
|||||||||
Northern California
|
||||||||||||
Santa Clara County
|
4.9%
|
1.4%
|
19.8%
|
|||||||||
Alameda County
|
1.4%
|
0.8%
|
7.8%
|
|||||||||
San Mateo County
|
2.0%
|
2.2%
|
4.6%
|
|||||||||
Contra Costa County
|
1.2%
|
0.8%
|
5.4%
|
|||||||||
San Francisco
|
-1.9%
|
-1.4%
|
2.5%
|
|||||||||
Total Northern California
|
2.9%
|
1.1%
|
40.1%
|
|||||||||
Seattle Metro
|
2.3%
|
0.6%
|
17.7%
|
|||||||||
Same-Property Portfolio
|
3.2%
|
|
1.1%
|
100.0%
|
Same-Property Revenue Components |
Q3 2023
vs. Q3 2022
|
YTD 2023
vs. YTD 2022
|
Q3 2023
vs. Q2 2023
|
|||||||||
Scheduled Rents
|
3.3%
|
5.1%
|
1.0%
|
|||||||||
Delinquencies (1)
|
-0.6%
|
-0.7%
|
0.0%
|
|||||||||
Cash Concessions
|
-0.2%
|
0.0%
|
0.2%
|
|||||||||
Vacancy
|
0.3%
|
0.2%
|
-0.3%
|
|||||||||
Other Income
|
0.4%
|
0.3%
|
0.2%
|
|||||||||
2023 Same-Property Revenue Growth
|
3.2%
|
4.9%
|
1.1%
|
(1)
|
The year-over-year negative impact from delinquencies is largely due to lower net delinquency in the prior period, which benefitted from Emergency
Rental Assistance payments of $7.4 million and $31.9 million in the third quarter 2022 and year-to-date 2022, respectively. This compares to Emergency Rental Assistance payments of $0.4 million and $2.1 million for the third
quarter of 2023 and year-to-date 2023, respectively. For additional details, please see page S-16 of the accompanying supplemental financial information.
|
Year-Over-Year Change
|
Year-Over-Year Change
|
|||||||||||||||||||||||
Q3 2023 compared to Q3 2022
|
YTD 2023 compared to YTD 2022
|
|||||||||||||||||||||||
Revenues
|
Operating
Expenses
|
NOI
|
Revenues
|
Operating
Expenses
|
NOI
|
|||||||||||||||||||
Southern California
|
3.8%
|
5.9%
|
2.9%
|
5.5%
|
6.4%
|
5.1%
|
||||||||||||||||||
Northern California
|
2.9%
|
3.1%
|
2.9%
|
4.3%
|
3.7%
|
4.5%
|
||||||||||||||||||
Seattle Metro
|
2.3%
|
3.9%
|
1.6%
|
4.9%
|
2.4%
|
6.0%
|
||||||||||||||||||
Same-Property Portfolio
|
3.2%
|
4.4%
|
2.7%
|
4.9%
|
4.6%
|
5.0%
|
Sequential Change
|
||||||||||||
Q3 2023 compared to Q2 2023
|
||||||||||||
Revenues
|
Operating
Expenses
|
NOI
|
||||||||||
Southern California
|
1.2%
|
6.2%
|
-0.7%
|
|||||||||
Northern California
|
1.1%
|
2.1%
|
0.7%
|
|||||||||
Seattle Metro
|
0.6%
|
6.0%
|
-1.5%
|
|||||||||
Same-Property Portfolio
|
1.1%
|
4.5%
|
-0.3%
|
Financial Occupancies
|
||||||||||||
Quarter Ended
|
||||||||||||
9/30/2023
|
6/30/2023
|
9/30/2022
|
||||||||||
Southern California
|
96.3%
|
96.4%
|
96.2%
|
|||||||||
Northern California
|
96.5%
|
96.7%
|
96.0%
|
|||||||||
Seattle Metro
|
96.3%
|
96.9%
|
95.3%
|
|||||||||
Same-Property Portfolio
|
96.4%
|
96.6%
|
96.0%
|
Previous
Range
|
Previous
Midpoint
|
Revised
Range
|
Revised
Midpoint
|
Change at
the Midpoint
|
||||||||||||||
Per Diluted Share
|
||||||||||||||||||
Net Income
|
$6.74 - $6.98
|
$6.86
|
$6.69 - $6.81
|
$6.75
|
($0.11)
|
|||||||||||||
Total FFO
|
$15.13 - $15.37
|
$15.25
|
$15.10 - $15.22
|
$15.16
|
($0.09)
|
|||||||||||||
Core FFO
|
$14.88 - $15.12
|
$15.00
|
$14.94 – $15.06
|
$15.00
|
-
|
|||||||||||||
Q4 2023 Core FFO
|
-
|
-
|
$3.73 - $3.85
|
$3.79
|
N/A
|
|||||||||||||
Same-Property Growth on a Cash-Basis(1)
|
||||||||||||||||||
Revenues
|
4.0% to 4.8%
|
4.4%
|
|
4.2% to 4.6%
|
4.4%
|
-
|
||||||||||||
Operating Expenses
|
3.75% to 4.25%
|
4.0%
|
3.75% to 4.25%
|
4.0%
|
-
|
|||||||||||||
NOI
|
3.9% to 5.1%
|
4.5%
|
4.1% to 4.9%
|
4.5%
|
-
|
(1) |
The Company’s guidance midpoint for same-property revenues and NOI growth on a GAAP basis is 4.6% and 4.9%, respectively.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
Funds from Operations attributable to common stockholders and unitholders
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Net income available to common stockholders
|
$
|
87,282
|
$
|
92,842
|
$
|
340,434
|
$
|
223,150
|
||||||||
Adjustments:
|
||||||||||||||||
Depreciation and amortization
|
137,357
|
135,511
|
410,422
|
403,561
|
||||||||||||
Gains not included in FFO
|
-
|
(17,423
|
)
|
(59,238
|
)
|
(17,423
|
)
|
|||||||||
Casualty loss
|
-
|
-
|
433
|
-
|
||||||||||||
Depreciation and amortization from unconsolidated co-investments
|
18,029
|
18,288
|
53,486
|
54,532
|
||||||||||||
Noncontrolling interest related to Operating Partnership units
|
3,072
|
3,247
|
11,982
|
7,800
|
||||||||||||
Depreciation attributable to third party ownership and other
|
(371
|
)
|
(357
|
)
|
(1,095
|
)
|
(1,064
|
)
|
||||||||
Funds from Operations attributable to common stockholders and unitholders
|
$
|
245,369
|
$
|
232,108
|
$
|
756,424
|
$
|
670,556
|
||||||||
FFO per share – diluted
|
$
|
3.69
|
$
|
3.45
|
$
|
11.37
|
$
|
9.93
|
||||||||
Expensed acquisition and investment related costs
|
$
|
31
|
$
|
230
|
$
|
375
|
$
|
248
|
||||||||
Tax expense (benefit) on unconsolidated co-investments (1)
|
404
|
1,755
|
1,237
|
(7,863
|
)
|
|||||||||||
Realized and unrealized losses (gains) on marketable securities, net
|
4,577
|
17,115
|
(4,294
|
)
|
51,126
|
|||||||||||
Provision for credit losses
|
17
|
(1
|
)
|
51
|
(64
|
)
|
||||||||||
Equity (income) loss from non-core co-investments (2)
|
(538
|
)
|
1,563
|
(1,422
|
)
|
31,117
|
||||||||||
Loss on early retirement of debt, net
|
-
|
2
|
-
|
2
|
||||||||||||
Loss on early retirement of debt from unconsolidated co-investment
|
-
|
1
|
-
|
988
|
||||||||||||
Co-investment promote income
|
-
|
-
|
-
|
(17,076
|
)
|
|||||||||||
Income from early redemption of preferred equity investments and notes receivable
|
-
|
-
|
(285
|
)
|
(858
|
)
|
||||||||||
General and administrative and other, net
|
1,743
|
882
|
2,570
|
2,327
|
||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
(283
|
)
|
(5,069
|
)
|
(9,082
|
)
|
(5,077
|
)
|
||||||||
Core Funds from Operations attributable to common stockholders and unitholders
|
$
|
251,320
|
$
|
248,586
|
$
|
745,574
|
$
|
725,426
|
||||||||
Core FFO per share – diluted
|
$
|
3.78
|
$
|
3.69
|
$
|
11.21
|
$
|
10.75
|
||||||||
Weighted average number of shares outstanding diluted (3)
|
66,445,256
|
67,341,189
|
66,537,111
|
67,503,403
|
(1) |
Represents tax related to net unrealized gains or losses on technology co-investments.
|
(2) |
Represents the Company's share of co-investment income or loss from technology co-investments.
|
(3) |
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 DownREIT limited partnership units.
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Earnings from operations
|
$
|
131,784
|
$
|
128,608
|
$
|
454,001
|
$
|
367,086
|
||||||||
Adjustments:
|
||||||||||||||||
Corporate-level property management expenses
|
11,504
|
10,184
|
34,387
|
30,532
|
||||||||||||
Depreciation and amortization
|
137,357
|
135,511
|
410,422
|
403,561
|
||||||||||||
Management and other fees from affiliates
|
(2,785
|
)
|
(2,886
|
)
|
(8,328
|
)
|
(8,313
|
)
|
||||||||
General and administrative
|
14,611
|
15,172
|
43,735
|
40,541
|
||||||||||||
Expensed acquisition and investment related costs
|
31
|
230
|
375
|
248
|
||||||||||||
Casualty loss
|
-
|
-
|
433
|
-
|
||||||||||||
Gain on sale of real estate and land
|
-
|
-
|
(59,238
|
)
|
-
|
|||||||||||
NOI
|
292,502
|
286,819
|
875,787
|
833,655
|
||||||||||||
Less: Non-same property NOI
|
(12,523
|
)
|
(14,108
|
)
|
(40,918
|
)
|
(38,755
|
)
|
||||||||
Same-Property NOI
|
$
|
279,979
|
$
|
272,711
|
$
|
834,869
|
$
|
794,900
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenues:
|
||||||||||||||||
Rental and other property
|
$
|
416,398
|
$
|
406,862
|
$
|
1,239,319
|
$
|
1,183,318
|
||||||||
Management and other fees from affiliates
|
2,785
|
2,886
|
8,328
|
8,313
|
||||||||||||
419,183
|
409,748
|
1,247,647
|
1,191,631
|
|||||||||||||
Expenses:
|
||||||||||||||||
Property operating
|
123,896
|
120,043
|
363,532
|
349,663
|
||||||||||||
Corporate-level property management expenses
|
11,504
|
10,184
|
34,387
|
30,532
|
||||||||||||
Depreciation and amortization
|
137,357
|
135,511
|
410,422
|
403,561
|
||||||||||||
General and administrative
|
14,611
|
15,172
|
43,735
|
40,541
|
||||||||||||
Expensed acquisition and investment related costs
|
31
|
230
|
375
|
248
|
||||||||||||
Casualty loss
|
-
|
-
|
433
|
-
|
||||||||||||
287,399
|
281,140
|
852,884
|
824,545
|
|||||||||||||
Gain on sale of real estate and land
|
-
|
-
|
59,238
|
-
|
||||||||||||
Earnings from operations
|
131,784
|
128,608
|
454,001
|
367,086
|
||||||||||||
Interest expense, net (1)
|
(53,471
|
)
|
(49,763
|
)
|
(155,262
|
)
|
(145,790
|
)
|
||||||||
Interest and other income (loss)
|
4,406
|
(6,796
|
)
|
29,055
|
(31,571
|
)
|
||||||||||
Equity income from co-investments
|
10,694
|
10,985
|
33,802
|
23,756
|
||||||||||||
Tax (expense) benefit on unconsolidated co-investments
|
(404
|
)
|
(1,755
|
)
|
(1,237
|
)
|
7,863
|
|||||||||
Loss on early retirement of debt, net
|
-
|
(2
|
)
|
-
|
(2
|
)
|
||||||||||
Gain on remeasurement of co-investment
|
-
|
17,423
|
-
|
17,423
|
||||||||||||
Net income
|
93,009
|
98,700
|
360,359
|
238,765
|
||||||||||||
Net income attributable to noncontrolling interest
|
(5,727
|
)
|
(5,858
|
)
|
(19,925
|
)
|
(15,615
|
)
|
||||||||
Net income available to common stockholders
|
$
|
87,282
|
$
|
92,842
|
$
|
340,434
|
$
|
223,150
|
||||||||
Net income per share - basic
|
$
|
1.36
|
$
|
1.43
|
$
|
5.30
|
$
|
3.42
|
||||||||
Shares used in income per share - basic
|
64,184,180
|
65,059,678
|
64,274,085
|
65,198,532
|
||||||||||||
Net income per share - diluted
|
$
|
1.36
|
$
|
1.43
|
$
|
5.30
|
$
|
3.42
|
||||||||
Shares used in income per share - diluted
|
64,186,020
|
65,067,790
|
64,275,279
|
65,225,767
|
(1)
|
Refer to page S-18.2, the section titled "Interest Expense, Net" for additional information.
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Rental and other property
|
||||||||||||||||
Rental income
|
$
|
410,438
|
$
|
401,467
|
$
|
1,222,859
|
$
|
1,166,670
|
||||||||
Other property
|
5,960
|
5,395
|
16,460
|
16,648
|
||||||||||||
Rental and other property
|
$
|
416,398
|
$
|
406,862
|
$
|
1,239,319
|
$
|
1,183,318
|
||||||||
Property operating expenses
|
||||||||||||||||
Real estate taxes
|
$
|
46,876
|
$
|
46,593
|
$
|
138,787
|
$
|
137,594
|
||||||||
Administrative
|
12,370
|
11,181
|
37,254
|
33,664
|
||||||||||||
Maintenance and repairs
|
15,361
|
15,293
|
44,629
|
40,013
|
||||||||||||
Personnel costs
|
22,756
|
21,952
|
68,609
|
67,364
|
||||||||||||
Utilities
|
26,533
|
25,024
|
74,253
|
71,028
|
||||||||||||
Property operating expenses
|
$
|
123,896
|
$
|
120,043
|
$
|
363,532
|
$
|
349,663
|
||||||||
Interest and other income (loss)
|
||||||||||||||||
Marketable securities and other income
|
$
|
8,830
|
$
|
5,275
|
$
|
16,581
|
$
|
14,631
|
||||||||
Realized and unrealized (losses) gains on marketable securities, net
|
(4,577
|
)
|
(17,115
|
)
|
4,294
|
(51,126
|
)
|
|||||||||
Provision for credit losses
|
(17
|
)
|
1
|
(51
|
)
|
64
|
||||||||||
Insurance reimbursements, legal settlements, and other, net
|
170
|
5,043
|
8,231
|
4,860
|
||||||||||||
Interest and other income (loss)
|
$
|
4,406
|
$
|
(6,796
|
)
|
$
|
29,055
|
$
|
(31,571
|
)
|
||||||
Equity income (loss) from co-investments
|
||||||||||||||||
Equity loss from co-investments
|
$
|
(3,267
|
)
|
$
|
(1,430
|
)
|
$
|
(9,115
|
)
|
$
|
(2,978
|
)
|
||||
Income from preferred equity investments
|
13,310
|
13,953
|
40,359
|
40,688
|
||||||||||||
Equity income (loss) from non-core co-investments
|
538
|
(1,563
|
)
|
1,422
|
(31,117
|
)
|
||||||||||
Non-core gain from unconsolidated co-investments
|
-
|
26
|
-
|
217
|
||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
113
|
-
|
851
|
-
|
||||||||||||
Loss on early retirement of debt from unconsolidated co-investments
|
-
|
(1
|
)
|
-
|
(988
|
)
|
||||||||||
Co-investment promote income
|
-
|
-
|
-
|
17,076
|
||||||||||||
Income from early redemption of preferred equity investments
|
-
|
-
|
285
|
858
|
||||||||||||
Equity income (loss) from co-investments
|
$
|
10,694
|
$
|
10,985
|
$
|
33,802
|
$
|
23,756
|
||||||||
Noncontrolling interest
|
||||||||||||||||
Limited partners of Essex Portfolio, L.P.
|
$
|
3,072
|
$
|
3,247
|
$
|
11,982
|
$
|
7,800
|
||||||||
DownREIT limited partners' distributions
|
2,162
|
2,069
|
6,493
|
6,362
|
||||||||||||
Third-party ownership interest
|
493
|
542
|
1,450
|
1,453
|
||||||||||||
Noncontrolling interest
|
$
|
5,727
|
$
|
5,858
|
$
|
19,925
|
$
|
15,615
|
|
Three Months Ended
|
Nine Months Ended
|
||||||||||||||||||||
|
September 30,
|
September 30,
|
||||||||||||||||||||
|
2023
|
2022
|
% Change
|
2023
|
2022
|
% Change
|
||||||||||||||||
|
||||||||||||||||||||||
Funds from operations attributable to common stockholders and unitholders (FFO)
|
||||||||||||||||||||||
Net income available to common stockholders
|
$
|
87,282
|
$
|
92,842
|
$
|
340,434
|
$
|
223,150
|
||||||||||||||
Adjustments:
|
||||||||||||||||||||||
Depreciation and amortization
|
137,357
|
135,511
|
410,422
|
403,561
|
||||||||||||||||||
Gains not included in FFO
|
-
|
(17,423
|
)
|
(59,238
|
)
|
(17,423
|
)
|
|||||||||||||||
Casualty loss
|
-
|
-
|
433
|
-
|
||||||||||||||||||
Depreciation and amortization from unconsolidated co-investments
|
18,029
|
18,288
|
53,486
|
54,532
|
||||||||||||||||||
Noncontrolling interest related to Operating Partnership units
|
3,072
|
3,247
|
11,982
|
7,800
|
||||||||||||||||||
Depreciation attributable to third party ownership and other (2)
|
(371
|
)
|
(357
|
)
|
(1,095
|
)
|
(1,064
|
)
|
||||||||||||||
Funds from operations attributable to common stockholders and unitholders
|
$
|
245,369
|
$
|
232,108
|
$
|
756,424
|
$
|
670,556
|
||||||||||||||
FFO per share-diluted
|
$
|
3.69
|
$
|
3.45
|
7.0%
|
|
$
|
11.37
|
$
|
9.93
|
14.5%
|
|
||||||||||
|
||||||||||||||||||||||
Components of the change in FFO
|
||||||||||||||||||||||
Non-core items:
|
||||||||||||||||||||||
Expensed acquisition and investment related costs
|
$
|
31
|
$
|
230
|
$
|
375
|
$
|
248
|
||||||||||||||
Tax expense (benefit) on unconsolidated co-investments (3)
|
404
|
1,755
|
1,237
|
(7,863
|
)
|
|||||||||||||||||
Realized and unrealized losses (gains) on marketable securities, net
|
4,577
|
17,115
|
(4,294
|
)
|
51,126
|
|||||||||||||||||
Provision for credit losses
|
17
|
(1
|
)
|
51
|
(64
|
)
|
||||||||||||||||
Equity (income) loss from non-core co-investments (4)
|
(538
|
)
|
1,563
|
(1,422
|
)
|
31,117
|
||||||||||||||||
Loss on early retirement of debt, net
|
-
|
2
|
-
|
2
|
||||||||||||||||||
Loss on early retirement of debt from unconsolidated co-investments
|
-
|
1
|
-
|
988
|
||||||||||||||||||
Co-investment promote income
|
-
|
-
|
-
|
(17,076
|
)
|
|||||||||||||||||
Income from early redemption of preferred equity investments and notes receivable
|
-
|
-
|
(285
|
)
|
(858
|
)
|
||||||||||||||||
General and administrative and other, net
|
1,743
|
882
|
2,570
|
2,327
|
||||||||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
(283
|
)
|
(5,069
|
)
|
(9,082
|
)
|
(5,077
|
)
|
||||||||||||||
Core funds from operations attributable to common stockholders and unitholders
|
$
|
251,320
|
$
|
248,586
|
$
|
745,574
|
$
|
725,426
|
||||||||||||||
Core FFO per share-diluted
|
$
|
3.78
|
$
|
3.69
|
2.4%
|
|
$
|
11.21
|
$
|
10.75
|
4.3%
|
|
||||||||||
|
||||||||||||||||||||||
Weighted average number of shares outstanding diluted (5)
|
66,445,256
|
67,341,189
|
66,537,111
|
67,503,403
|
(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 nine months ended
September 30, 2023 was $0.9 million and $2.5 million.
|
(3) |
Represents tax related to net unrealized gains or losses on technology co-investments.
|
(4) |
Represents the Company's share of co-investment income or loss from technology co-investments.
|
(5) |
Assumes conversion of all outstanding limited partnership units in the Operating Partnership into shares of the Company's common stock and excludes DownREIT limited
partnership units.
|
September 30, 2023
|
December 31, 2022
|
|||||||
Real Estate:
|
||||||||
Land and land improvements
|
$
|
3,036,912
|
$
|
3,043,321
|
||||
Buildings and improvements
|
13,036,033
|
12,922,906
|
||||||
16,072,945
|
15,966,227
|
|||||||
Less: accumulated depreciation
|
(5,527,559
|
)
|
(5,152,133
|
)
|
||||
10,545,386
|
10,814,094
|
|||||||
Real estate under development
|
23,067
|
24,857
|
||||||
Co-investments
|
1,133,515
|
1,127,491
|
||||||
11,701,968
|
11,966,442
|
|||||||
Cash and cash equivalents, including restricted cash
|
400,497
|
42,681
|
||||||
Marketable securities
|
90,186
|
112,743
|
||||||
Notes and other receivables
|
164,603
|
103,045
|
||||||
Operating lease right-of-use assets
|
64,636
|
67,239
|
||||||
Prepaid expenses and other assets
|
75,757
|
80,755
|
||||||
Total assets
|
$
|
12,497,647
|
$
|
12,372,905
|
||||
Unsecured debt, net
|
$
|
5,316,929
|
$
|
5,312,168
|
||||
Mortgage notes payable, net
|
888,010
|
593,943
|
||||||
Lines of credit
|
-
|
52,073
|
||||||
Distributions in excess of investments in co-investments
|
50,686
|
42,532
|
||||||
Operating lease liabilities
|
65,927
|
68,696
|
||||||
Other liabilities
|
439,688
|
381,227
|
||||||
Total liabilities
|
6,761,240
|
6,450,639
|
||||||
Redeemable noncontrolling interest
|
29,960
|
27,150
|
||||||
Equity:
|
||||||||
Common stock
|
6
|
6
|
||||||
Additional paid-in capital
|
6,660,916
|
6,750,076
|
||||||
Distributions in excess of accumulated earnings
|
(1,184,597
|
)
|
(1,080,176
|
)
|
||||
Accumulated other comprehensive income, net
|
55,358
|
46,466
|
||||||
Total stockholders' equity
|
5,531,683
|
5,716,372
|
||||||
Noncontrolling interest
|
174,764
|
178,744
|
||||||
Total equity
|
5,706,447
|
5,895,116
|
||||||
Total liabilities and equity
|
$
|
12,497,647
|
$
|
12,372,905
|
Scheduled principal payments, unamortized premiums (discounts) and (debt issuance costs) are as follows - excludes lines of credit:
|
||||||||||||||||||||||||||||||||||
Unsecured
|
Secured
|
Total
|
Weighted Average Interest
Rate
|
Percentage
of Total
Debt |
||||||||||||||||||||||||||||||
Weighted Average
|
||||||||||||||||||||||||||||||||||
Balance Outstanding
|
Interest
Rate
|
Maturity
in Years
|
||||||||||||||||||||||||||||||||
Unsecured Debt, net
|
||||||||||||||||||||||||||||||||||
Bonds public - fixed rate
|
$
|
5,050,000
|
3.3
|
%
|
7.4
|
2023
|
$
|
-
|
$
|
751
|
$
|
751
|
3.5
|
%
|
0.1
|
%
|
||||||||||||||||||
Term loan (1)
|
300,000
|
4.2
|
%
|
4.1
|
2024 (2)
|
400,000
|
3,109
|
403,109
|
4.0
|
%
|
6.5
|
%
|
||||||||||||||||||||||
Unamortized discounts and debt
|
2025
|
500,000
|
133,054
|
633,054
|
3.5
|
%
|
10.1
|
%
|
||||||||||||||||||||||||||
issuance costs, net
|
(33,071
|
)
|
-
|
-
|
2026
|
450,000
|
99,405
|
549,405
|
3.5
|
%
|
8.8
|
%
|
||||||||||||||||||||||
Total unsecured debt, net
|
5,316,929
|
3.3
|
%
|
7.2
|
2027 (1)
|
650,000
|
153,955
|
803,955
|
4.0
|
%
|
12.9
|
%
|
||||||||||||||||||||||
Mortgage Notes Payable, net
|
2028
|
450,000
|
68,332
|
518,332
|
2.2
|
%
|
8.3
|
%
|
||||||||||||||||||||||||||
Fixed rate - secured (2)
|
667,592
|
4.3
|
%
|
6.1
|
2029
|
500,000
|
1,456
|
501,456
|
4.1
|
%
|
8.0
|
%
|
||||||||||||||||||||||
Variable rate - secured (3)
|
222,951
|
4.4
|
%
|
14.4
|
2030
|
550,000
|
1,592
|
551,592
|
3.1
|
%
|
8.8
|
%
|
||||||||||||||||||||||
Unamortized premiums and debt
|
2031
|
600,000
|
1,740
|
601,740
|
2.3
|
%
|
9.6
|
%
|
||||||||||||||||||||||||||
issuance costs, net
|
(2,533
|
)
|
-
|
-
|
2032
|
650,000
|
1,903
|
651,903
|
2.6
|
%
|
10.5
|
%
|
||||||||||||||||||||||
Total mortgage notes payable, net
|
888,010
|
4.3
|
%
|
8.1
|
2033
|
-
|
330,126
|
330,126
|
5.0
|
%
|
5.3
|
%
|
||||||||||||||||||||||
Unsecured Lines of Credit
|
Thereafter
|
600,000
|
95,120
|
695,120
|
3.8
|
%
|
11.1
|
%
|
||||||||||||||||||||||||||
Line of credit (4)
|
-
|
6.2
|
%
|
N/A
|
Subtotal
|
5,350,000
|
890,543
|
6,240,543
|
3.4
|
%
|
100.0
|
%
|
||||||||||||||||||||||
Line of credit (5)
|
-
|
6.2
|
%
|
N/A
|
Debt Issuance Costs
|
(26,517
|
)
|
(3,214
|
)
|
(29,731
|
)
|
-
|
-
|
|||||||||||||||||||||
Total lines of credit
|
-
|
6.2
|
%
|
N/A
|
(Discounts)/Premiums
|
(6,554
|
)
|
681
|
(5,873
|
)
|
-
|
-
|
||||||||||||||||||||||
Total debt, net
|
$
|
6,204,939
|
3.4
|
%
|
7.3
|
Total
|
$
|
5,316,929
|
$
|
888,010
|
$
|
6,204,939
|
3.4
|
%
|
100.0
|
%
|
||||||||||||||||||
|
(1) |
The unsecured term loan has a variable interest rate of Adjusted SOFR plus 0.85% and matures in October 2024 with three 12-month extension options, exercisable at the
Company’s option. This loan has been swapped to an all-in fixed rate of 4.2% and the swap has a termination date of October 2026.
|
(2) |
In July, the Company closed $298.0 million in 10-year secured loans priced at a 5.08% fixed interest rate. The proceeds are intended to repay a majority of the Company's
$400.0 million unsecured public bonds due in May 2024 upon maturity.
|
(3) |
$223.0 million of variable rate debt is tax exempt to the note holders.
|
(4) |
This unsecured line of credit facility has a capacity of $1.2 billion, a scheduled maturity date in January 2027 and two 6-month extension options, exercisable at the
Company’s option. The underlying interest rate on this line is Adjusted SOFR plus 0.75%, which is based on a tiered rate structure tied to the Company's corporate ratings and further adjusted by the facility's Sustainability Metric
Grid.
|
(5) |
This unsecured line of credit facility has a capacity of $35 million and a scheduled maturity date in July 2024. The underlying interest rate on this line is Adjusted SOFR
plus 0.75%, which is based on a tiered rate structure tied to the Company's corporate ratings and further adjusted by the facility's Sustainability Metric Grid.
|
Capitalization Data
|
Public Bond Covenants (1)
|
Actual
|
Requirement
|
|||||||||
Total debt, net
|
$
|
6,204,939
|
||||||||||
Common stock and potentially dilutive securities
|
Debt to Total Assets:
|
34%
|
|
< 65%
|
||||||||
Common stock outstanding
|
64,185
|
|||||||||||
Limited partnership units (1)
|
2,259
|
Secured Debt to Total Assets:
|
5%
|
|
< 40%
|
|||||||
Options-treasury method
|
1
|
|||||||||||
Total shares of common stock and potentially dilutive securities
|
66,445
|
Interest Coverage:
|
573%
|
|
> 150%
|
|||||||
Common stock price per share as of September 30, 2023
|
$
|
212.09
|
Unsecured Debt Ratio (2):
|
288%
|
|
> 150%
|
||||||
Total equity capitalization
|
$
|
14,092,320
|
Selected Credit Ratios (3)
|
Actual
|
||||||||
Total market capitalization
|
$
|
20,297,259
|
Net Indebtedness Divided by Adjusted EBITDAre,
|
|||||||||
normalized and annualized:
|
5.5
|
|||||||||||
Ratio of debt to total market capitalization
|
30.6
|
%
|
||||||||||
Credit Ratings
|
Unencumbered NOI to Adjusted Total NOI:
|
92%
|
|
|||||||||
Rating Agency
|
Rating
|
Outlook
|
||||||||||
Moody's
|
Baa1
|
Stable
|
(1) Refer to page S-18.4 for
additional information on the Company's Public Bond Covenants.
|
|||||||||
Standard & Poor's
|
BBB+
|
Stable
|
(2) Unsecured Debt Ratio is
unsecured assets (excluding investments in co-investments) divided by unsecured indebtedness.
|
|||||||||
(1) Assumes conversion of all
outstanding limited partnership units in the Operating Partnership into shares of the Company's common stock.
|
(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
|
Unconsolidated
Co-investments (3)
|
Total
|
Consolidated
|
Unconsolidated
Co-investments (4)
|
Total (5)
|
Consolidated
|
Unconsolidated
Co-investments (4)
|
Total (5)
|
|||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||||||||
Los Angeles County
|
9,538
|
1,586
|
11,124
|
$
|
2,687
|
$
|
2,566
|
$
|
2,676
|
17.4
|
%
|
14.4
|
%
|
17.2
|
%
|
|||||||||||||||||||||
Orange County
|
5,189
|
1,149
|
6,338
|
2,729
|
2,442
|
2,700
|
10.4
|
%
|
10.6
|
%
|
10.4
|
%
|
||||||||||||||||||||||||
San Diego County
|
4,824
|
1,059
|
5,883
|
2,570
|
2,666
|
2,580
|
9.6
|
%
|
8.2
|
%
|
9.4
|
%
|
||||||||||||||||||||||||
Ventura County and Other
|
2,435
|
693
|
3,128
|
2,339
|
2,737
|
2,392
|
4.7
|
%
|
7.6
|
%
|
4.9
|
%
|
||||||||||||||||||||||||
Total Southern California
|
21,986
|
4,487
|
26,473
|
2,633
|
2,585
|
2,628
|
42.1
|
%
|
40.8
|
%
|
41.9
|
%
|
||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||
Santa Clara County (6)
|
8,749
|
1,774
|
10,523
|
2,983
|
2,936
|
2,979
|
20.2
|
%
|
17.7
|
%
|
20.0
|
%
|
||||||||||||||||||||||||
Alameda County
|
3,959
|
1,512
|
5,471
|
2,602
|
2,591
|
2,600
|
7.3
|
%
|
15.6
|
%
|
8.1
|
%
|
||||||||||||||||||||||||
San Mateo County
|
2,561
|
195
|
2,756
|
3,074
|
3,624
|
3,094
|
5.5
|
%
|
2.3
|
%
|
5.3
|
%
|
||||||||||||||||||||||||
Contra Costa County
|
2,619
|
-
|
2,619
|
2,688
|
-
|
2,688
|
5.2
|
%
|
0.0
|
%
|
4.7
|
%
|
||||||||||||||||||||||||
San Francisco
|
1,357
|
537
|
1,894
|
2,879
|
3,309
|
2,950
|
2.5
|
%
|
5.2
|
%
|
2.7
|
%
|
||||||||||||||||||||||||
Total Northern California
|
19,245
|
4,018
|
23,263
|
2,869
|
2,877
|
2,870
|
40.7
|
%
|
40.8
|
%
|
40.8
|
%
|
||||||||||||||||||||||||
Seattle Metro
|
10,341
|
2,184
|
12,525
|
2,176
|
2,093
|
2,167
|
17.2
|
%
|
18.4
|
%
|
17.3
|
%
|
||||||||||||||||||||||||
Total
|
51,572
|
10,689
|
62,261
|
$
|
2,629
|
$
|
2,595
|
$
|
2,626
|
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)
for the quarter ended September 30, 2023, divided by the number of apartment homes as of September 30, 2023.
|
(2) |
Represents the percentage of actual NOI for the quarter ended September 30, 2023. See the section titled "Net Operating Income ("NOI") and Same-Property NOI
Reconciliations" on page S-18.3.
|
(3) |
Includes one community in San Diego County consisting of 264 apartment homes that is producing partial income due to lease-up.
|
(4) |
Co-investment amounts weighted for Company's pro rata share.
|
(5) |
At Company's pro rata share.
|
(6) |
Includes all communities in Santa Clara County and one community in Santa Cruz County.
|
Apartment Homes
|
Q3 '23
|
Q2 '23
|
Q1 '23
|
Q4 '22
|
Q3 '22
|
|||||||||||||||||||
Rental and other property revenues:
|
||||||||||||||||||||||||
Same-property
|
50,064
|
$
|
398,460
|
$
|
394,204
|
$
|
388,895
|
$
|
389,016
|
$
|
386,200
|
|||||||||||||
Acquisitions (2)
|
284
|
1,528
|
1,332
|
1,021
|
886
|
675
|
||||||||||||||||||
Development (3)
|
599
|
5,808
|
5,710
|
5,500
|
5,417
|
5,410
|
||||||||||||||||||
Redevelopment
|
179
|
1,564
|
1,595
|
1,537
|
1,418
|
1,422
|
||||||||||||||||||
Non-residential/other, net (4)
|
446
|
10,432
|
11,099
|
12,127
|
13,573
|
14,783
|
||||||||||||||||||
Straight-line rent concessions (5)
|
-
|
(1,394
|
)
|
(675
|
)
|
576
|
2,047
|
(1,628
|
)
|
|||||||||||||||
Total rental and other property revenues
|
51,572
|
416,398
|
413,265
|
409,656
|
412,357
|
406,862
|
||||||||||||||||||
Property operating expenses:
|
||||||||||||||||||||||||
Same-property
|
118,481
|
113,413
|
114,796
|
111,568
|
113,489
|
|||||||||||||||||||
Acquisitions (2)
|
549
|
495
|
430
|
536
|
288
|
|||||||||||||||||||
Development (3)
|
2,434
|
2,375
|
2,316
|
2,360
|
2,336
|
|||||||||||||||||||
Redevelopment
|
634
|
674
|
788
|
654
|
662
|
|||||||||||||||||||
Non-residential/other, net (4) (6)
|
1,798
|
2,267
|
2,082
|
2,488
|
3,268
|
|||||||||||||||||||
Total property operating expenses
|
123,896
|
119,224
|
120,412
|
117,606
|
120,043
|
|||||||||||||||||||
Net operating income (NOI):
|
||||||||||||||||||||||||
Same-property
|
279,979
|
280,791
|
274,099
|
277,448
|
272,711
|
|||||||||||||||||||
Acquisitions (2)
|
979
|
837
|
591
|
350
|
387
|
|||||||||||||||||||
Development (3)
|
3,374
|
3,335
|
3,184
|
3,057
|
3,074
|
|||||||||||||||||||
Redevelopment
|
930
|
921
|
749
|
764
|
760
|
|||||||||||||||||||
Non-residential/other, net (4)
|
8,634
|
8,832
|
10,045
|
11,085
|
11,515
|
|||||||||||||||||||
Straight-line rent concessions (5)
|
(1,394
|
)
|
(675
|
)
|
576
|
2,047
|
(1,628
|
)
|
||||||||||||||||
Total NOI
|
$
|
292,502
|
$
|
294,041
|
$
|
289,244
|
$
|
294,751
|
$
|
286,819
|
||||||||||||||
Same-property metrics
|
||||||||||||||||||||||||
Operating margin
|
70
|
%
|
71
|
%
|
70
|
%
|
71
|
%
|
71
|
%
|
||||||||||||||
Annualized turnover (7)
|
48
|
%
|
45
|
%
|
38
|
%
|
42
|
%
|
49
|
%
|
||||||||||||||
Financial occupancy (8)
|
96.4
|
%
|
96.6
|
%
|
96.7
|
%
|
96.0
|
%
|
96.0
|
%
|
(1) |
Includes consolidated communities only.
|
(2) |
Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2022.
|
(3) |
Development includes properties developed which did not have comparable stabilized results as of January 1, 2022.
|
(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 two communities located in the California counties of Santa Barbara and Santa Cruz, which the Company does not consider its
core markets.
|
(5) |
Represents straight-line concessions for residential operating communities. 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
|
Q3 '23
% of
Actual NOI
|
Q3 '23
|
Q3 '22
|
% Change
|
Q3 '23
|
Q3 '22
|
% Change
|
Q3 '23
|
Q3 '22
|
% Change
|
Q2 '23
|
% Change
|
|||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Los Angeles County
|
9,327
|
17.6
|
%
|
$
|
2,705
|
$
|
2,624
|
3.1
|
%
|
96.2
|
%
|
96.2
|
%
|
0.0
|
%
|
$
|
74,021
|
$
|
73,160
|
1.2
|
%
|
$
|
73,488
|
0.7
|
%
|
|||||||||||||||||||||||||||
Orange County
|
5,189
|
10.7
|
%
|
2,729
|
2,586
|
5.5
|
%
|
96.0
|
%
|
96.3
|
%
|
-0.3
|
%
|
41,946
|
40,253
|
4.2
|
%
|
41,417
|
1.3
|
%
|
||||||||||||||||||||||||||||||||
San Diego County
|
4,582
|
9.6
|
%
|
2,570
|
2,392
|
7.4
|
%
|
96.6
|
%
|
96.3
|
%
|
0.3
|
%
|
35,794
|
32,941
|
8.7
|
%
|
34,921
|
2.5
|
%
|
||||||||||||||||||||||||||||||||
Ventura County
|
2,254
|
4.4
|
%
|
2,333
|
2,186
|
6.7
|
%
|
96.8
|
%
|
96.1
|
%
|
0.7
|
%
|
16,165
|
15,439
|
4.7
|
%
|
16,054
|
0.7
|
%
|
||||||||||||||||||||||||||||||||
Total Southern California
|
21,352
|
42.3
|
%
|
2,643
|
2,519
|
4.9
|
%
|
96.3
|
%
|
96.2
|
%
|
0.1
|
%
|
167,926
|
161,793
|
3.8
|
%
|
165,880
|
1.2
|
%
|
||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Santa Clara County
|
8,653
|
20.5
|
%
|
2,973
|
2,875
|
3.4
|
%
|
96.8
|
%
|
96.1
|
%
|
0.7
|
%
|
78,886
|
75,201
|
4.9
|
%
|
77,773
|
1.4
|
%
|
||||||||||||||||||||||||||||||||
Alameda County
|
3,959
|
7.5
|
%
|
2,602
|
2,585
|
0.7
|
%
|
96.4
|
%
|
96.4
|
%
|
0.0
|
%
|
31,148
|
30,713
|
1.4
|
%
|
30,899
|
0.8
|
%
|
||||||||||||||||||||||||||||||||
San Mateo County
|
1,962
|
4.5
|
%
|
3,033
|
2,966
|
2.3
|
%
|
96.5
|
%
|
95.6
|
%
|
0.9
|
%
|
18,453
|
18,088
|
2.0
|
%
|
18,054
|
2.2
|
%
|
||||||||||||||||||||||||||||||||
Contra Costa County
|
2,619
|
5.3
|
%
|
2,688
|
2,629
|
2.2
|
%
|
96.6
|
%
|
95.3
|
%
|
1.4
|
%
|
21,464
|
21,210
|
1.2
|
%
|
21,286
|
0.8
|
%
|
||||||||||||||||||||||||||||||||
San Francisco
|
1,178
|
2.2
|
%
|
2,841
|
2,784
|
2.0
|
%
|
94.6
|
%
|
95.7
|
%
|
-1.1
|
%
|
9,952
|
10,141
|
-1.9
|
%
|
10,095
|
-1.4
|
%
|
||||||||||||||||||||||||||||||||
Total Northern California
|
18,371
|
40.0
|
%
|
2,851
|
2,781
|
2.5
|
%
|
96.5
|
%
|
96.0
|
%
|
0.5
|
%
|
159,903
|
155,353
|
2.9
|
%
|
158,107
|
1.1
|
%
|
||||||||||||||||||||||||||||||||
Seattle Metro
|
10,341
|
17.7
|
%
|
2,176
|
2,149
|
1.3
|
%
|
96.3
|
%
|
95.3
|
%
|
1.0
|
%
|
70,631
|
69,054
|
2.3
|
%
|
70,217
|
0.6
|
%
|
||||||||||||||||||||||||||||||||
Total Same-Property
|
50,064
|
100.0
|
%
|
$
|
2,623
|
$
|
2,539
|
3.3
|
%
|
96.4
|
%
|
96.0
|
%
|
0.4
|
%
|
$
|
398,460
|
$
|
386,200
|
3.2
|
%
|
$
|
394,204
|
1.1
|
%
|
Average Monthly Rental Rate
|
Financial Occupancy
|
Gross Revenues
|
||||||||||||||||||||||||||||||||||||||||||
Region - County
|
Apartment Homes
|
YTD 2023
% of
Actual NOI
|
YTD 2023
|
YTD 2022
|
%
Change
|
YTD 2023
|
YTD 2022
|
%
Change
|
YTD 2023
|
YTD 2022
|
%
Change
|
|||||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||||||||||||||||
Los Angeles County
|
9,327
|
17.7
|
%
|
$
|
2,683
|
$
|
2,564
|
4.6
|
%
|
96.4
|
%
|
96.1
|
%
|
0.3
|
%
|
$
|
220,117
|
$
|
215,504
|
2.1
|
%
|
|||||||||||||||||||||||
Orange County
|
5,189
|
10.7
|
%
|
2,683
|
2,503
|
7.2
|
%
|
96.1
|
%
|
95.9
|
%
|
0.2
|
%
|
124,205
|
115,814
|
7.2
|
%
|
|||||||||||||||||||||||||||
San Diego County
|
4,582
|
9.4
|
%
|
2,515
|
2,299
|
9.4
|
%
|
96.9
|
%
|
96.4
|
%
|
0.5
|
%
|
104,972
|
95,721
|
9.7
|
%
|
|||||||||||||||||||||||||||
Ventura County
|
2,254
|
4.4
|
%
|
2,289
|
2,118
|
8.1
|
%
|
97.0
|
%
|
96.1
|
%
|
0.9
|
%
|
47,777
|
44,228
|
8.0
|
%
|
|||||||||||||||||||||||||||
Total Southern California
|
21,352
|
42.2
|
%
|
2,605
|
2,445
|
6.5
|
%
|
96.5
|
%
|
96.1
|
%
|
0.4
|
%
|
497,071
|
471,267
|
5.5
|
%
|
|||||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||||||||||
Santa Clara County
|
8,653
|
20.3
|
%
|
2,948
|
2,806
|
5.1
|
%
|
96.8
|
%
|
96.5
|
%
|
0.3
|
%
|
232,794
|
219,648
|
6.0
|
%
|
|||||||||||||||||||||||||||
Alameda County
|
3,959
|
7.5
|
%
|
2,597
|
2,541
|
2.2
|
%
|
96.6
|
%
|
96.0
|
%
|
0.6
|
%
|
92,746
|
90,316
|
2.7
|
%
|
|||||||||||||||||||||||||||
San Mateo County
|
1,962
|
4.4
|
%
|
3,004
|
2,908
|
3.3
|
%
|
96.3
|
%
|
96.1
|
%
|
0.2
|
%
|
54,139
|
52,266
|
3.6
|
%
|
|||||||||||||||||||||||||||
Contra Costa County
|
2,619
|
5.4
|
%
|
2,666
|
2,573
|
3.6
|
%
|
96.8
|
%
|
96.1
|
%
|
0.7
|
%
|
63,830
|
61,847
|
3.2
|
%
|
|||||||||||||||||||||||||||
San Francisco
|
1,178
|
2.2
|
%
|
2,830
|
2,744
|
3.1
|
%
|
95.3
|
%
|
96.1
|
%
|
-0.8
|
%
|
30,093
|
30,181
|
-0.3
|
%
|
|||||||||||||||||||||||||||
Total Northern California
|
18,371
|
39.8
|
%
|
2,831
|
2,722
|
4.0
|
%
|
96.6
|
%
|
96.2
|
%
|
0.4
|
%
|
473,602
|
454,258
|
4.3
|
%
|
|||||||||||||||||||||||||||
Seattle Metro
|
10,341
|
18.0
|
%
|
2,165
|
2,075
|
4.3
|
%
|
96.6
|
%
|
95.8
|
%
|
0.8
|
%
|
210,886
|
200,964
|
4.9
|
%
|
|||||||||||||||||||||||||||
Total Same-Property
|
50,064
|
100.0
|
%
|
$
|
2,597
|
$
|
2,470
|
5.1
|
%
|
96.6
|
%
|
96.1
|
%
|
0.5
|
%
|
$
|
1,181,559
|
$
|
1,126,489
|
4.9
|
%
|
Based on 50,064 apartment homes
|
||||||||||||||||
Q3 '23
|
Q3 '22
|
% Change
|
% of Op. Ex.
|
|||||||||||||
Same-property operating expenses:
|
||||||||||||||||
Real estate taxes
|
$
|
43,233
|
$
|
42,674
|
1.3
|
%
|
36.5
|
%
|
||||||||
Utilities
|
25,259
|
23,615
|
7.0
|
%
|
21.3
|
%
|
||||||||||
Personnel costs
|
21,877
|
20,814
|
5.1
|
%
|
18.5
|
%
|
||||||||||
Maintenance and repairs
|
14,850
|
14,565
|
2.0
|
%
|
12.5
|
%
|
||||||||||
Administrative
|
6,720
|
6,640
|
1.2
|
%
|
5.7
|
%
|
||||||||||
Insurance and other
|
6,542
|
5,181
|
26.3
|
%
|
5.5
|
%
|
||||||||||
Total same-property operating expenses
|
$
|
118,481
|
$
|
113,489
|
4.4
|
%
|
100.0
|
%
|
YTD 2023
|
YTD 2022
|
% Change
|
% of Op. Ex.
|
|||||||||||||
Same-property operating expenses:
|
||||||||||||||||
Real estate taxes
|
$
|
127,827
|
$
|
126,412
|
1.1
|
%
|
36.9
|
%
|
||||||||
Utilities
|
70,970
|
67,277
|
5.5
|
%
|
20.5
|
%
|
||||||||||
Personnel costs
|
65,653
|
64,205
|
2.3 |
%
|
18.9
|
%
|
||||||||||
Maintenance and repairs
|
42,844
|
38,060
|
12.6
|
%
|
(1) |
12.4
|
%
|
|||||||||
Administrative
|
20,169
|
19,226
|
4.9
|
%
|
5.8
|
%
|
||||||||||
Insurance and other
|
19,227
|
16,409
|
17.2
|
%
|
5.5
|
%
|
||||||||||
Total same-property operating expenses
|
$
|
346,690
|
$
|
331,589
|
4.6
|
%
|
100.0
|
%
|
(1) |
The increase in maintenance and repairs expense is primarily due to storm and flood damage clean-up.
|
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)
|
%
Occupied
|
%
Leased as of
9/30/23 (3)
|
%
Leased as of
10/24/23 (3)
|
Construction Start
|
Initial Occupancy
|
Stabilized Operations
|
|||||||||||||||||||||||||||||||||
Land Held for Future Development - Consolidated
|
|||||||||||||||||||||||||||||||||||||||||||||||
Other Projects - Various
|
100%
|
|
-
|
-
|
$
|
23
|
$
|
-
|
$
|
23
|
$
|
23
|
|||||||||||||||||||||||||||||||||||
Total Development Pipeline - Consolidated
|
-
|
-
|
23
|
-
|
23
|
23
|
|||||||||||||||||||||||||||||||||||||||||
Development Projects - Joint Venture (4)
|
|||||||||||||||||||||||||||||||||||||||||||||||
LIVIA at Scripps Ranch (5) -
San Diego, CA
|
51%
|
|
264
|
2,000
|
89
|
13
|
102
|
52
|
383
|
44%
|
|
46%
|
|
49%
|
|
Q3 2020
|
Q3 2023
|
Q1 2024
|
|||||||||||||||||||||||||||||
Total Development Projects - Joint Venture
|
264
|
2,000
|
89
|
13
|
102
|
52
|
$
|
383
|
|||||||||||||||||||||||||||||||||||||||
Grand Total - Development Pipeline
|
264
|
2,000
|
$
|
112
|
$
|
13
|
$
|
125
|
75
|
||||||||||||||||||||||||||||||||||||||
Essex Cost Incurred to Date - Pro Rata
|
(68
|
)
|
|||||||||||||||||||||||||||||||||||||||||||||
Essex Remaining Commitment
|
$
|
7
|
(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, as applicable.
|
(3) |
Calculations are based on multifamily operations only.
|
(4) |
For the third quarter of 2023, the Company's cost includes $0.1 million of capitalized interest, $0.7 million of capitalized overhead and $0.4 million of development fees
(such development fees reduced G&A expenses).
|
(5) |
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.
|
Revenue Generating Capital Expenditures (2)
|
Q3 '23
|
Trailing 4
Quarters
|
||||||
Same-property portfolio
|
$
|
10,972
|
$
|
70,109
|
||||
Non-same property portfolio
|
432
|
1,528
|
||||||
Total revenue generating capital expenditures
|
$
|
11,404
|
$
|
71,637
|
||||
Number of same-property interior renovations
|
525
|
2,664
|
||||||
Number of total consolidated interior renovations
|
528
|
2,720
|
Non-Revenue Generating Capital Expenditures (3)
|
Q3 '23
|
Trailing 4
Quarters
|
||||||
Non-revenue generating capital expenditures
|
$
|
37,881
|
$
|
134,952
|
||||
Average apartment homes in quarter
|
51,572
|
51,642
|
||||||
Capital expenditures per apartment homes in the quarter
|
$
|
735
|
$
|
2,613
|
(1) |
The Company incurred $0.1 million of capitalized interest, $4.0 million of capitalized overhead and $0.1 million of co-investment fees related to redevelopment in Q3 2023.
|
(2) |
Represents revenue generating or expense saving expenditures, such as full-scale redevelopments, interior unit turn renovations, enhanced amenities and certain resource
management initiatives. Excludes costs related to smart home automation.
|
(3) |
Represents roof replacements, paving, building and mechanical systems, exterior painting, siding, etc. Non-revenue generating capital expenditures does not include costs
related to retail, furniture and fixtures, expenditures in which the Company has been reimbursed or expects to be reimbursed, and expenditures incurred due to changes in governmental regulation that the Company would not have
incurred otherwise.
|
|
Weighted
Average
Essex
Ownership
Percentage
|
Apartment
Homes
|
Total
Undepreciated
Book Value
|
Debt
Amount
|
Essex
Book Value
|
Weighted
Average
Borrowing
Rate (1)
|
Remaining
Term of Debt
(in Years)
|
Three Months
Ended
September 30,
2023 |
Nine Months
Ended
September 30,
2023
|
||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
Operating and Other Non-Consolidated Joint Ventures
|
NOI
|
||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
Wesco I, III, IV, V, VI (2)
|
54%
|
|
5,975
|
$
|
2,145,244
|
$
|
1,438,612
|
$
|
164,756
|
3.4
|
%
|
3.1
|
$
|
28,764
|
$
|
85,896
|
|||||||||||||||||||
BEXAEW, BEX II, BEX IV, and 500 Folsom
|
50%
|
|
3,083
|
1,254,523
|
546,666
|
228,926
|
5.2
|
%
|
8.0
|
(5) |
15,663
|
47,854
|
|||||||||||||||||||||||
Other (3)
|
52%
|
|
1,367
|
560,217
|
407,775
|
67,653
|
4.7
|
%
|
2.3
|
7,055
|
21,117
|
||||||||||||||||||||||||
Total Operating and Other Non-Consolidated Joint Ventures
|
10,425
|
$
|
3,959,984
|
$
|
2,393,053
|
$
|
461,335
|
4.1
|
%
|
4.1
|
$
|
51,482
|
$
|
154,867
|
|||||||||||||||||||||
Development Non-Consolidated Joint Ventures (4)
|
51%
|
|
264
|
88,830
|
89,250
|
14,612
|
4.2
|
%
|
36.7
|
(6) |
552
|
552
|
|||||||||||||||||||||||
Total Non-Consolidated Joint Ventures
|
10,689
|
$
|
4,048,814
|
$
|
2,482,303
|
$
|
475,947
|
4.1
|
%
|
5.2
|
$
|
52,034
|
$
|
155,419
|
|||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
|
Essex Portion of NOI and
Expenses
|
||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
NOI
|
$
|
27,868
|
$
|
83,181
|
|||||||||||||||||||||||||||||||
Depreciation
|
(18,029
|
)
|
(53,486
|
)
|
|||||||||||||||||||||||||||||||
Interest expense and other
|
(13,106
|
)
|
(38,810
|
)
|
|||||||||||||||||||||||||||||||
Equity income from non-core co-investments
|
538
|
1,422
|
|||||||||||||||||||||||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
113
|
851
|
|||||||||||||||||||||||||||||||||
Net loss from operating and other co-investments
|
$
|
(2,616
|
)
|
$
|
(6,842
|
)
|
|||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
|
Weighted
Average
Preferred
Return
|
Weighted
Average
Expected
Term
|
Income from Preferred Equity
Investments
|
||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
Income from preferred equity investments
|
$
|
13,310
|
$
|
40,359
|
|||||||||||||||||||||||||||||||
Income from early redemption of preferred equity investments
|
-
|
285
|
|||||||||||||||||||||||||||||||||
Preferred Equity Investments (7)
|
$
|
606,882
|
9.5
|
%
|
2.2
|
$
|
13,310
|
$
|
40,644
|
||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
Total Co-investments
|
$
|
1,082,829
|
$
|
10,694
|
$
|
33,802
|
(1) |
Represents the year-to-date annual weighted average borrowing rate.
|
(2) |
As of September 30, 2023, the Company’s investments in Wesco I, Wesco III, and Wesco IV were classified as a liability of $47.9 million due to distributions received in
excess of the Company's investment.
|
(3) |
As of September 30, 2023, the Company’s investments in Expo and Century Towers were classified as a liability of $2.8 million due to distributions received in excess of the
Company's investment. The weighted average Essex ownership percentage excludes our investments in non-core technology co-investments which are carried at fair value.
|
(4) |
The Company has ownership interests in development co-investments, which are detailed on page S-11.
|
(5) |
$132.0 million of the debt related to 500 Folsom, one of the Company's co-investments, is financed by tax exempt bonds with a maturity date of January 2052.
|
(6) |
LIVIA at Scripps Ranch has $89.3 million of long-term tax-exempt bond debt that is subject to a total return swap that matures in 2025.
|
(7) |
As of September 30, 2023, the Company has invested in 25 preferred equity investments.
|
Nine Months
|
|||||||||||||
Ended
|
|||||||||||||
September 30,
|
2023 Full-Year Guidance Range
|
||||||||||||
2023 (1)
|
Low End
|
High End
|
Comments about 2023 Full-Year Guidance
|
||||||||||
Total NOI from Consolidated Communities - Excluding Straight-Line Rent Concessions
|
$
|
877,280
|
$
|
1,171,300
|
$
|
1,179,700
|
Includes a range of same-property NOI growth of 4.1% to 4.9%, compared to the prior range of 3.9% to 5.1%
|
||||||
Straight-Line Rent Concessions from Consolidated Communities
|
(1,493
|
)
|
(2,100
|
)
|
(3,300
|
)
|
|||||||
Management Fees
|
8,328
|
11,000
|
11,200
|
||||||||||
Interest Expense
|
|||||||||||||
Interest expense, before capitalized interest
|
(155,933
|
)
|
(210,800
|
)
|
(210,400
|
)
|
|||||||
Interest capitalized
|
671
|
700
|
900
|
||||||||||
Net interest expense
|
(155,262
|
)
|
(210,100
|
)
|
(209,500
|
)
|
|||||||
Recurring Income and Expenses
|
|||||||||||||
Interest and other income
|
16,581
|
25,300
|
25,900
|
||||||||||
FFO from co-investments
|
84,730
|
112,000
|
112,600
|
||||||||||
General and administrative
|
(41,165
|
)
|
(56,000
|
)
|
(57,000
|
)
|
|||||||
Corporate-level property management expenses
|
(34,387
|
)
|
(45,500
|
)
|
(45,900
|
)
|
|||||||
Non-controlling interest
|
(9,038
|
)
|
(12,100
|
)
|
(11,900
|
)
|
|||||||
Total recurring income and expenses
|
16,721
|
23,700
|
23,700
|
||||||||||
Non-Core Income and Expenses
|
|||||||||||||
Expensed acquisition and investment related costs
|
(375
|
)
|
(375
|
)
|
(375
|
)
|
|||||||
Tax expense on unconsolidated co-investments
|
(1,237
|
)
|
(1,237
|
)
|
(1,237
|
)
|
|||||||
Realized and unrealized gains on marketable securities, net
|
4,294
|
4,294
|
4,294
|
||||||||||
Provision for credit losses
|
(51
|
)
|
(51
|
)
|
(51
|
)
|
|||||||
Equity income from non-core co-investments
|
1,422
|
1,422
|
1,422
|
||||||||||
Loss on early retirement of debt from unconsolidated co-investments
|
-
|
-
|
-
|
||||||||||
Co-investment promote income
|
-
|
-
|
-
|
||||||||||
Income from early redemption of preferred equity investments
|
285
|
285
|
285
|
||||||||||
General and administrative and other, net
|
(2,570
|
)
|
(2,570
|
)
|
(2,570
|
)
|
|||||||
Insurance reimbursements, legal settlements, and other, net
|
9,082
|
9,082
|
9,082
|
||||||||||
Total non-core income and expenses
|
10,850
|
10,850
|
10,850
|
||||||||||
Funds from Operations (2)
|
$
|
756,424
|
$
|
1,004,650
|
$
|
1,012,650
|
|||||||
Funds from Operations per diluted Share
|
$
|
11.37
|
$
|
15.10
|
$
|
15.22
|
|||||||
% Change - Funds from Operations
|
14.5
|
%
|
10.2
|
%
|
11.1
|
%
|
|||||||
Core Funds from Operations (excludes non-core items)
|
$
|
745,574
|
$
|
993,800
|
$
|
1,001,800
|
|||||||
Core Funds from Operations per diluted Share
|
$
|
11.21
|
$
|
14.94
|
$
|
15.06
|
|||||||
% Change - Core Funds from Operations
|
4.3
|
%
|
3.0
|
%
|
3.8
|
%
|
|||||||
EPS - Diluted
|
$
|
5.30
|
$
|
6.69
|
$
|
6.81
|
|||||||
Weighted average shares outstanding - FFO calculation
|
66,537
|
66,525
|
66,525
|
(1) |
All non-core items are excluded from the 2023 actuals and included in the non-core income and expense section of the FFO reconciliation.
|
(2) |
2023 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.
|
Nine Months
|
2023 Guidance Range (1)
|
|||||||||||||||||||
Ended
|
||||||||||||||||||||
September 30,
|
4th Quarter 2023
|
Full-Year 2023
|
||||||||||||||||||
2023
|
Low
|
High
|
Low
|
High
|
||||||||||||||||
EPS - diluted
|
$
|
5.30
|
$
|
1.39
|
$
|
1.51
|
$
|
6.69 |
$
|
6.81
|
||||||||||
Conversion from GAAP share count
|
(0.18
|
)
|
(0.05
|
)
|
(0.05
|
)
|
(0.23
|
)
|
(0.23
|
)
|
||||||||||
Casualty loss
|
0.01
|
-
|
-
|
0.01
|
0.01
|
|||||||||||||||
Depreciation and amortization
|
6.97
|
2.34
|
2.34
|
9.31
|
9.31
|
|||||||||||||||
Noncontrolling interest related to Operating Partnership units
|
0.16
|
0.05
|
0.05
|
0.21
|
0.21
|
|||||||||||||||
Gain on sale of real estate and land
|
(0.89
|
)
|
-
|
-
|
(0.89
|
)
|
(0.89
|
)
|
||||||||||||
FFO per share - diluted
|
$
|
11.37
|
$
|
3.73
|
$
|
3.85
|
$
|
15.10
|
$
|
15.22
|
||||||||||
Expensed acquisition and investment related costs
|
0.01
|
-
|
-
|
0.01
|
0.01
|
|||||||||||||||
Tax expense on unconsolidated co-investments
|
0.02
|
-
|
-
|
0.02
|
0.02
|
|||||||||||||||
Realized and unrealized gains on marketable securities, net
|
(0.07
|
)
|
-
|
-
|
(0.07
|
)
|
(0.07
|
)
|
||||||||||||
Provision for credit losses
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Equity income from non-core co-investments
|
(0.02
|
)
|
-
|
-
|
(0.02
|
)
|
(0.02
|
)
|
||||||||||||
Loss on early retirement of debt from unconsolidated co-investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Co-investment promote income
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Income from early redemption of preferred equity investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
General and administrative and other, net
|
0.04
|
-
|
-
|
0.04
|
0.04
|
|||||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
(0.14
|
)
|
-
|
-
|
(0.14
|
)
|
(0.14
|
)
|
||||||||||||
Core FFO per share - diluted
|
$
|
11.21
|
$
|
3.73
|
$
|
3.85
|
$
|
14.94
|
$
|
15.06
|
(1)
|
2023 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
|
Essex
|
Total
|
||||||||||||||||||||||||
Apartment
|
Ownership
|
Contract
|
Price per
|
Average
|
||||||||||||||||||||||
Property Name
|
Location
|
Homes
|
Percentage
|
Entity
|
Date
|
Price
|
Apartment Home
|
Monthly Rent
|
||||||||||||||||||
Hacienda at Camarillo Oaks
|
Camarillo, CA
|
73
|
100%
|
|
EPLP
|
Apr-23
|
$
|
23,100
|
$
|
316
|
$
|
2,376
|
||||||||||||||
Q2 2023
|
73
|
$
|
23,100
|
$
|
316
|
|||||||||||||||||||||
2023 Total
|
73
|
$
|
23,100
|
$
|
316
|
|||||||||||||||||||||
Dispositions
|
Essex
|
|||||||||||||||||||||||||
Apartment
|
Ownership
|
Total Sale
|
Price per
|
|||||||||||||||||||||||
Property Name
|
Location
|
Homes
|
Percentage
|
Entity
|
Date
|
Price
|
Apartment Home
|
|||||||||||||||||||
CBC and The Sweeps
|
Goleta, CA
|
239
|
100%
|
|
EPLP
|
Mar-23
|
$
|
91,675
|
$
|
384
|
||||||||||||||||
Q1 2023
|
239
|
$
|
91,675
|
$
|
384
|
|||||||||||||||||||||
2023 Total
|
239
|
$
|
91,675
|
$
|
384
|
Same-Property Delinquencies - Third Quarter 2023 vs. 2022 and Preliminary October 2023
|
Same-Property Cash Delinquencies as % of Scheduled Rent, by Region
|
||||||
Preliminary
Oct. 2023
|
3Q23
|
3Q22
|
Preliminary
Oct. 2023
|
3Q 2023
|
|||
Gross delinquencies as % of scheduled rent, excluding rental assistance
|
1.4%
|
2.1%
|
3.3%
|
||||
Southern California, excl. Los Angeles
|
0.9%
|
1.6%
|
|||||
Northern California, excl. Alameda
|
0.0%
|
1.0%
|
|||||
Rental assistance funds as % of scheduled rent (1)
|
-0.1%
|
-0.1%
|
-1.9%
|
Seattle
|
0.7%
|
1.2%
|
|
Los Angeles & Alameda Counties (3)
|
3.5%
|
4.2%
|
|||||
Cash delinquencies as % of scheduled rent, including
rental assistance (2)
|
1.3%
|
2.0%
|
1.4%
|
Total Same-Property Portfolio (1)(2)
|
1.3%
|
2.0%
|
|
(1)
|
The Company's same-property portfolio received Emergency Rental Assistance payments of $0.1 million and $0.4 million for preliminary
October 2023 and the three months ended September 30, 2023, respecitvely. This compares to $0.9 million and $7.4 million in October 2022 and the three months ended September 30, 2022, respectively.
|
(2)
|
Represents same-property portfolio delinquencies as a percentage of scheduled rent reflected in the financial statements.
|
(3)
|
Eviction protections for the city and county of Los Angeles ended on April 1, 2023, and Alameda county protections ended on April 29,
2023.
|
Same-Property Portfolio Operating Statistics
|
Same-Property Revenue Growth with Concessions on a GAAP basis
|
||||||||||||||||||||||||
■ The reduction to the Company's same-property delinquency is temporarily impacting new lease rates and
financial occupancy, as the Company focuses on leasing recently captured non-paying units.
|
|||||||||||||||||||||||||
Preliminary
Oct. 2023
|
3Q 2023
|
3Q 2023
|
3Q 2022
|
YTD 2023
|
YTD 2022
|
||||||||||||||||||||
New lease rates (1)
|
0.1%
|
|
1.2%
|
|
Reported rental revenue (1)
|
$
|
398.5
|
$
|
386.2
|
$
|
1,181.6
|
$
|
1,126.5
|
||||||||||||
Renewal rates (1)
|
5.3%
|
|
3.0%
|
|
Straight-line rent impact to rental revenue
|
(1.3
|
)
|
(1.6
|
)
|
(1.0
|
)
|
(7.7
|
)
|
||||||||||||
Blended rates
|
2.9%
|
|
2.1%
|
|
GAAP rental revenue
|
$
|
397.2
|
$
|
384.6
|
$
|
1,180.6
|
$
|
1,118.8
|
||||||||||||
Financial occupancy
|
95.9%
|
|
96.4%
|
|
% change - reported rental revenue
|
3.2
|
%
|
4.9
|
%
|
||||||||||||||||
% change - GAAP rental revenue
|
3.3
|
%
|
5.5
|
%
|
|||||||||||||||||||||
(1) Represents the percentage
change in similar term lease tradeouts, including the impact of leasing incentives.
|
(1) Same-property rental revenue reflects concessions on a cash
basis.
|
Residential Supply Forecast (1)
|
||||||||||||||||||||||||||||
2022A
|
2023E
|
2024E |
||||||||||||||||||||||||||
Market
|
Total
MF/SF
Supply
|
Total
Supply as of %
of Total Stock
|
Total
MF/SF
Supply
|
Total
Supply as of %
of Total Stock
|
Multifamily
Supply
|
Total
MF/SF
Supply
|
Total
Supply as of %
of Total Stock
|
|||||||||||||||||||||
Los Angeles
|
15,850
|
0.4%
|
|
16,600
|
0.4%
|
10,200
|
17,000
|
0.4%
|
||||||||||||||||||||
Orange County
|
6,000
|
0.6%
|
4,900
|
0.5%
|
2,900
|
5,400
|
0.5%
|
|||||||||||||||||||||
San Diego
|
6,150
|
0.6%
|
6,400
|
0.6%
|
3,600
|
6,100
|
0.6%
|
|||||||||||||||||||||
Ventura
|
750
|
0.3%
|
1,100
|
0.4%
|
500
|
800
|
0.3%
|
|||||||||||||||||||||
Southern California
|
28,750
|
0.5%
|
29,000
|
0.5%
|
17,200
|
29,300
|
0.5%
|
|||||||||||||||||||||
San Francisco
|
2,200
|
0.5%
|
2,700
|
0.6%
|
1,600
|
2,100
|
0.5%
|
|||||||||||||||||||||
Oakland
|
7,200
|
0.7%
|
5,100
|
0.5%
|
2,400
|
4,700
|
0.5%
|
|||||||||||||||||||||
San Jose
|
5,400
|
0.8%
|
4,500
|
0.7%
|
2,800
|
5,200
|
0.8%
|
|||||||||||||||||||||
Northern California
|
14,800
|
0.7%
|
12,300
|
0.6%
|
6,800
|
12,000
|
0.6%
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Seattle
|
15,850
|
1.1%
|
12,300
|
0.9%
|
8,900
|
13,000
|
0.9%
|
|||||||||||||||||||||
|
||||||||||||||||||||||||||||
Total/Weighted Avg.
|
59,400
|
0.6%
|
53,600
|
0.5%
|
32,900
|
54,300
|
0.5%
|
(1) |
Residential Supply: Total supply
includes the Company's estimate of multifamily (“MF”) deliveries of properties with 50+ units and excludes student, senior and 100% affordable housing communities. Multifamily estimates incorporate a methodological enhancement
("delay-adjusted supply") to reflect the anticipated impact of continued construction delays in Essex markets. Single-family (“SF”) estimates are based on trailing single-family permits.
|
(Dollars in thousands)
|
Three
Months Ended
September 30,
2023
|
|||
Net income available to common stockholders
|
$
|
87,282
|
||
Adjustments:
|
||||
Net income attributable to noncontrolling interest
|
5,727
|
|||
Interest expense, net (1)
|
53,471
|
|||
Depreciation and amortization
|
137,357
|
|||
Income tax provision
|
86
|
|||
Co-investment EBITDAre adjustments
|
31,911
|
|||
EBITDAre
|
315,834
|
|||
Realized and unrealized gains on marketable securities, net
|
4,577
|
|||
Provision for credit losses
|
17
|
|||
Equity income from non-core co-investments
|
(538
|
)
|
||
Tax expense on unconsolidated co-investments
|
404
|
|||
General and administrative and other, net
|
1,743
|
|||
Insurance reimbursements and legal settlements, net
|
(283
|
)
|
||
Expensed acquisition and investment related costs
|
31
|
|||
Adjusted EBITDAre
|
$
|
321,785
|
(1) |
Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges.
|
(Dollars in thousands)
|
Three
Months Ended
September 30,
2023
|
Nine
Months Ended
September 30,
2023
|
||||||
Interest expense
|
$
|
54,161
|
$
|
157,806
|
||||
Adjustments:
|
||||||||
Total return swap income
|
(690
|
)
|
(2,544
|
)
|
||||
Interest expense, net
|
$
|
53,471
|
$
|
155,262
|
(Dollars in millions)
|
October 24,
2023 |
|||
Unsecured credit facility - committed
|
$
|
1,235
|
||
Balance outstanding
|
-
|
|||
Undrawn portion of line of credit
|
$
|
1,235
|
||
Cash, cash equivalents & marketable securities
|
367
|
|||
Total liquidity
|
$
|
1,602
|
(Dollars in thousands)
|
September 30,
2023 |
|||
Total consolidated debt, net
|
$
|
6,204,939
|
||
Total debt from co-investments at pro rata share
|
1,326,463
|
|||
Adjustments:
|
||||
Consolidated unamortized premiums, discounts, and debt issuance costs
|
35,604
|
|||
Pro rata co-investments unamortized premiums, discounts,
|
|
|||
and debt issuance costs
|
5,622
|
|||
Consolidated cash and cash equivalents-unrestricted
|
(391,994
|
)
|
||
Pro rata co-investment cash and cash equivalents-unrestricted
|
(44,655
|
)
|
||
Marketable securities
|
(95,188
|
)
|
||
Net Indebtedness
|
$
|
7,040,791
|
||
Adjusted EBITDAre, annualized (1)
|
$
|
1,287,140
|
||
Other EBITDAre normalization adjustments, net, annualized (2)
|
1,212
|
|||
Adjusted EBITDAre, normalized and annualized
|
$
|
1,288,352
|
||
Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized
|
5.5
|
(1) |
Based on the amount for the most recent quarter, multiplied by four.
|
(2) |
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
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
September 30,
|
September 30,
|
|||||||||||||
(Dollars in thousands)
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Earnings from operations
|
$
|
131,784
|
$
|
128,608
|
$
|
454,001
|
$
|
367,086
|
||||||||
Adjustments:
|
||||||||||||||||
Corporate-level property management expenses
|
11,504
|
10,184
|
34,387
|
30,532
|
||||||||||||
Depreciation and amortization
|
137,357
|
135,511
|
410,422
|
403,561
|
||||||||||||
Management and other fees from affiliates
|
(2,785
|
)
|
(2,886
|
)
|
(8,328
|
)
|
(8,313
|
)
|
||||||||
General and administrative
|
14,611
|
15,172
|
43,735
|
40,541
|
||||||||||||
Expensed acquisition and investment related costs
|
31
|
230
|
375
|
248
|
||||||||||||
Casualty loss
|
-
|
-
|
433
|
-
|
||||||||||||
Gain on sale of real estate and land
|
-
|
-
|
(59,238
|
)
|
-
|
|||||||||||
NOI
|
292,502
|
286,819
|
875,787
|
833,655
|
||||||||||||
Less: Non-same property NOI
|
(12,523
|
)
|
(14,108
|
)
|
(40,918
|
)
|
(38,755
|
)
|
||||||||
Same-Property NOI
|
$
|
279,979
|
$
|
272,711
|
$
|
834,869
|
$
|
794,900
|
(Dollars in thousands)
|
Annualized
Q3'23 (1) |
|||
NOI
|
$
|
1,170,008
|
||
Adjustments:
|
||||
NOI from real estate assets sold or held for sale
|
-
|
|||
Other, net (2)
|
1,870
|
|||
Adjusted Total NOI
|
1,171,878
|
|||
Less: Encumbered NOI
|
(89,232
|
)
|
||
Unencumbered NOI
|
$
|
1,082,646
|
||
Encumbered NOI
|
$
|
89,232
|
||
Unencumbered NOI
|
1,082,646
|
|||
Adjusted Total NOI
|
$
|
1,171,878
|
||
Unencumbered NOI to Adjusted Total NOI
|
92
|
%
|
(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.
|