|
|
|
|
|
|
(State or Other Jurisdiction of Incorporation)
|
(I.R.S. Employer Identification No.)
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading
Symbol(s)
|
Name of each exchange on which registered
|
||
|
|
|
Essex Property Trust, Inc.
|
Emerging growth company
|
|
Essex Portfolio, L.P.
|
Emerging growth company
|
|
Item 2.02. |
Results of Operations and Financial Condition.
|
Item 9.01. |
Financial Statements and Exhibits.
|
Exhibit No.
|
Description
|
|
Press Release and Supplemental Information for the three and twelve months ended December 31, 2023.
|
||
104
|
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
|
Date: February 6, 2024
|
ESSEX PROPERTY TRUST, INC.
|
|
/s/ Barbara Pak
|
||
Name:
|
Barbara Pak
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
|
ESSEX PORTFOLIO, L.P.
|
||
By:
|
Essex Property Trust, Inc.
|
|
Its:
|
General Partner
|
|
/s/ Barbara Pak
|
||
Name:
|
Barbara Pak
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
Table of Contents
|
|
Earnings Press Release
|
Pages 1 - 10
|
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 2024 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
|
2024E Economic and Supply Forecast
|
S-17
|
Components to 2024E Same-Property Revenue Growth
|
S-17.1
|
Reconciliations of Non-GAAP Financial Measures and Other Terms
|
S-18.1 – S-18.4
|
Three Months Ended
December 31,
|
%
|
Twelve Months Ended
December 31,
|
%
|
|||||||||||||||
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
|||||||||||||
Per Diluted Share
|
||||||||||||||||||
Net Income
|
$1.02
|
$2.86
|
-64.3%
|
|
$6.32
|
$6.27
|
0.8%
|
|||||||||||
Total FFO
|
$3.87
|
$3.77
|
2.7%
|
$15.24
|
$13.70
|
11.2%
|
||||||||||||
Core FFO
|
$3.83
|
$3.77
|
1.6%
|
$15.03
|
$14.51
|
3.6%
|
• |
Reported Net Income per diluted share for the fourth quarter of 2023 of $1.02, compared to $2.86 in the fourth quarter of 2022. For the full-year 2023, the Company reported Net
Income per diluted share of $6.32 compared to $6.27 in 2022.
|
• |
Grew Core FFO per diluted share by 1.6% compared to the fourth quarter of 2022 and 3.6% compared to the full-year 2022, exceeding the high-end of the Company’s original guidance
range.
|
• |
Achieved same-property revenues and net operating income (“NOI”) growth of 2.9% and 2.3%, respectively, compared to the fourth quarter of 2022. For the full-year 2023,
same-property revenues and NOI grew 4.4% and 4.3%, respectively, both exceeding the midpoint of the Company’s original guidance range.
|
• |
For the full-year 2023, the Company disposed of one apartment community in a non-core market for a total contract price of $91.7 million.
|
• |
For the full-year 2023, the Company committed $18.8 million to two preferred equity investments at a weighted average return rate of 12.6%. The Company received $72.3 million in
redemption proceeds from four preferred equity investments at a weighted average return rate of 9.1%.
|
• |
For the full-year 2023, the Company repurchased 437,026 shares of its common stock, totaling $95.7 million at an average price per share of $218.88.
|
• |
As of February 2, 2024, the Company’s immediately available liquidity was approximately $1.6 billion.
|
Q4 2023 vs.
Q4 2022
|
Q4 2023 vs.
Q3 2023
|
% of Total
|
||||||||||
Revenue
Change
|
Revenue
Change
|
Q4 2023
Revenues
|
||||||||||
Southern California
|
||||||||||||
Los Angeles County
|
-0.4%
|
-0.6%
|
18.4%
|
|||||||||
Orange County
|
4.0%
|
1.8%
|
10.7%
|
|||||||||
San Diego County
|
8.2%
|
1.3%
|
9.1%
|
|||||||||
Ventura County
|
7.2%
|
1.5%
|
4.1%
|
|||||||||
Total Southern California
|
3.2%
|
0.6%
|
42.3%
|
|||||||||
Northern California
|
|
|||||||||||
Santa Clara County
|
3.7%
|
-0.7%
|
19.6%
|
|||||||||
Alameda County
|
1.6%
|
-0.5%
|
7.7%
|
|||||||||
San Mateo County
|
6.1%
|
1.7%
|
4.7%
|
|||||||||
Contra Costa County
|
3.4%
|
1.6%
|
5.4%
|
|||||||||
San Francisco
|
0.0%
|
2.3%
|
2.5%
|
|||||||||
Total Northern California
|
3.3%
|
0.1%
|
39.9%
|
|||||||||
Seattle Metro
|
1.3%
|
0.8%
|
17.8%
|
|||||||||
Same-Property Portfolio
|
2.9%
|
0.5%
|
100.0%
|
Same-Property Revenue Components
|
Q4 2023
vs. Q4 2022
|
YTD 2023
vs. YTD 2022
|
Q4 2023
vs. Q3 2023
|
|||||||||
Scheduled Rents
|
2.4%
|
4.4%
|
0.1%
|
|||||||||
Delinquencies (1)
|
-0.4%
|
-0.7%
|
0.5%
|
|||||||||
Cash Concessions
|
0.7%
|
0.1%
|
0.0%
|
|||||||||
Vacancy
|
0.0%
|
0.2%
|
-0.3%
|
|||||||||
Other Income
|
0.2%
|
0.4%
|
0.2%
|
|||||||||
2023 Same-Property Revenue Growth
|
2.9%
|
4.4%
|
0.5%
|
(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 $2.6 million and $34.5 million in the fourth quarter and full-year 2022, respectively. This compares to Emergency Rental Assistance payments of $0.5
million and $2.6 million in the fourth quarter and full-year 2023, respectively. For additional details, please see page S-16 of the accompanying supplemental financial information.
|
Year-Over-Year Change
|
Year-Over-Year Change
|
|||||||||||||||||||||||
Q4 2023 compared to Q4 2022
|
YTD 2023 compared to YTD 2022
|
|||||||||||||||||||||||
Revenues
|
Operating
Expenses
|
NOI
|
Revenues
|
Operating
Expenses
|
NOI
|
|||||||||||||||||||
Southern California
|
3.2%
|
6.1%
|
2.1%
|
4.9%
|
6.3%
|
4.3%
|
||||||||||||||||||
Northern California
|
3.3%
|
5.5%
|
2.4%
|
4.0%
|
4.1%
|
4.0%
|
||||||||||||||||||
Seattle Metro
|
1.3%
|
-1.6%
|
2.5%
|
4.0%
|
1.4%
|
5.1%
|
||||||||||||||||||
Same-Property Portfolio
|
2.9%
|
4.5%
|
2.3%
|
4.4%
|
4.5%
|
4.3%
|
Sequential Change
|
||||||||||||
Q4 2023 compared to Q3 2023
|
||||||||||||
Revenues
|
Operating
Expenses
|
NOI
|
||||||||||
Southern California
|
0.6%
|
-1.4%
|
1.5%
|
|||||||||
Northern California
|
0.1%
|
-0.1%
|
0.3%
|
|||||||||
Seattle Metro
|
0.8%
|
-5.5%
|
3.5%
|
|||||||||
Same-Property Portfolio
|
0.5%
|
-1.6%
|
1.3%
|
Financial Occupancies
|
||||||||||||
Quarter Ended
|
||||||||||||
12/31/2023
|
9/30/2023
|
12/31/2022
|
||||||||||
Southern California
|
95.9%
|
96.3%
|
96.4%
|
|||||||||
Northern California
|
96.2%
|
96.5%
|
95.8%
|
|||||||||
Seattle Metro
|
96.5%
|
96.3%
|
95.8%
|
|||||||||
Same-Property Portfolio
|
96.1%
|
96.4%
|
96.0%
|
Per Diluted Share
|
Range
|
Midpoint
|
||||
Net Income
|
$5.05 - $5.59
|
$5.32
|
||||
Total FFO
|
$14.46 - $15.00
|
$14.73
|
||||
Core FFO
|
$14.76 - $15.30
|
$15.03
|
||||
Q1 2024 Core FFO
|
$3.68 - $3.80
|
$3.74
|
||||
U.S. Economic Assumptions
|
||||||
GDP Growth
|
1.30%
|
|||||
Job Growth
|
1.20%
|
|||||
ESS Markets Economic Assumptions
|
||||||
Job Growth
|
1.30%
|
|||||
Market Rent Growth
|
1.25%
|
|||||
Estimated Same-Property Portfolio Growth
Based on 50,884 Apartment Homes
|
Range
|
Midpoint
Cash-Basis
|
Midpoint
GAAP-Basis
|
|||
Revenues
|
0.70% to 2.70%
|
1.70%
|
1.80%
|
|||
Operating Expenses
|
3.50% to 5.00%
|
4.25%
|
4.25%
|
|||
Net Operating Income
|
-1.10% to 2.30%
|
0.60%
|
0.70%
|
• |
Acquisition and disposition activities will be influenced by market conditions and cost of capital, consistent with the Company’s historical practice of creating NAV and FFO per
share.
|
• |
Structured finance redemptions are expected to be $50 - $150 million. The proceeds will be prioritized to fund future acquisitions, subject to market conditions.
|
• |
The Company has minimal development funding needs and does not currently plan to start any new developments in 2024.
|
• |
Revenue generating capital expenditures are expected to be approximately $50 million at the Company’s pro rata share.
|
2024 Core FFO Per Diluted Share Guidance Midpoint versus 2023
|
Midpoint
|
|||
2023 Core FFO Per Diluted Share
|
$
|
15.03
|
||
NOI from Consolidated Communities
|
0.14
|
|||
Consolidated Net Interest Expense
|
0.04
|
|||
Interest and Other Income
|
0.02
|
|||
FFO from Co-Investments, including preferred equity
|
(0.16
|
)
|
||
G&A and Other
|
(0.04
|
)
|
||
2024 Core FFO Per Diluted Share Guidance Midpoint
|
$
|
15.03
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
|||||||||||||||
Funds from Operations attributable to common stockholders and unitholders
|
2023
|
2022
|
2023
|
2022
|
||||||||||||
Net income available to common stockholders
|
$
|
65,391
|
$
|
185,165
|
$
|
405,825
|
$
|
408,315
|
||||||||
Adjustments:
|
||||||||||||||||
Depreciation and amortization
|
138,016
|
135,758
|
548,438
|
539,319
|
||||||||||||
Gains not included in FFO
|
-
|
(94,416
|
)
|
(59,238
|
)
|
(111,839
|
)
|
|||||||||
Casualty loss
|
-
|
-
|
433
|
-
|
||||||||||||
Impairment loss from unconsolidated co-investments
|
33,700
|
2,105
|
33,700
|
2,105
|
||||||||||||
Depreciation and amortization from unconsolidated co-investments
|
18,259
|
18,053
|
71,745
|
72,585
|
||||||||||||
Noncontrolling interest related to Operating Partnership units
|
2,302
|
6,497
|
14,284
|
14,297
|
||||||||||||
Depreciation attributable to third party ownership and other
|
(379
|
)
|
(357
|
)
|
(1,474
|
)
|
(1,421
|
)
|
||||||||
Funds from Operations attributable to common stockholders and unitholders
|
$
|
257,289
|
$
|
252,805
|
$
|
1,013,713
|
$
|
923,361
|
||||||||
FFO per share – diluted
|
$
|
3.87
|
$
|
3.77
|
$
|
15.24
|
$
|
13.70
|
||||||||
Expensed acquisition and investment related costs
|
$
|
220
|
$
|
1,884
|
$
|
595
|
$
|
2,132
|
||||||||
Tax (benefit) expense on unconsolidated co-investments (1)
|
(540
|
)
|
(2,373
|
)
|
697
|
(10,236
|
)
|
|||||||||
Realized and unrealized (gains) losses on marketable securities, net
|
(5,712
|
)
|
(5,579
|
)
|
(10,006
|
)
|
45,547
|
|||||||||
Provision for credit losses
|
19
|
(317
|
)
|
70
|
(381
|
)
|
||||||||||
Equity (income) loss from non-core co-investments (2)
|
(263
|
)
|
6,928
|
(1,685
|
)
|
38,045
|
||||||||||
Loss on early retirement of debt, net
|
-
|
-
|
-
|
2
|
||||||||||||
Loss on early retirement of debt from unconsolidated co-investment
|
-
|
-
|
-
|
988
|
||||||||||||
Co-investment promote income
|
-
|
-
|
-
|
(17,076
|
)
|
|||||||||||
Income from early redemption of preferred equity investments and notes receivable
|
-
|
(811
|
)
|
(285
|
)
|
(1,669
|
)
|
|||||||||
General and administrative and other, net
|
4,059
|
209
|
6,629
|
2,536
|
||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
(739
|
)
|
(315
|
)
|
(9,821
|
)
|
(5,392
|
)
|
||||||||
Core Funds from Operations attributable to common stockholders and unitholders
|
$
|
254,333
|
$
|
252,431
|
$
|
999,907
|
$
|
977,857
|
||||||||
Core FFO per share – diluted
|
$
|
3.83
|
$
|
3.77
|
$
|
15.03
|
$
|
14.51
|
||||||||
Weighted average number of shares outstanding diluted (3)
|
66,447,394
|
67,003,718
|
66,514,456
|
67,374,526
|
(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
December 31,
|
Twelve Months Ended
December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Earnings from operations
|
$
|
130,341
|
$
|
228,143
|
$
|
584,342
|
$
|
595,229
|
||||||||
Adjustments:
|
||||||||||||||||
Corporate-level property management expenses
|
11,485
|
10,172
|
45,872
|
40,704
|
||||||||||||
Depreciation and amortization
|
138,016
|
135,758
|
548,438
|
539,319
|
||||||||||||
Management and other fees from affiliates
|
(2,803
|
)
|
(2,826
|
)
|
(11,131
|
)
|
(11,139
|
)
|
||||||||
General and administrative
|
19,739
|
16,036
|
63,474
|
56,577
|
||||||||||||
Expensed acquisition and investment related costs
|
220
|
1,884
|
595
|
2,132
|
||||||||||||
Casualty loss
|
-
|
-
|
433
|
-
|
||||||||||||
Gain on sale of real estate and land
|
-
|
(94,416
|
)
|
(59,238
|
)
|
(94,416
|
)
|
|||||||||
NOI
|
296,998
|
294,751
|
1,172,785
|
1,128,406
|
||||||||||||
Less: Non-same property NOI
|
(13,261
|
)
|
(17,303
|
)
|
(54,179
|
)
|
(56,058
|
)
|
||||||||
Same-Property NOI
|
$
|
283,737
|
$
|
277,448
|
$
|
1,118,606
|
$
|
1,072,348
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Revenues:
|
||||||||||||||||
Rental and other property
|
$
|
418,945
|
$
|
412,357
|
$
|
1,658,264
|
$
|
1,595,675
|
||||||||
Management and other fees from affiliates
|
2,803
|
2,826
|
11,131
|
11,139
|
||||||||||||
421,748
|
415,183
|
1,669,395
|
1,606,814
|
|||||||||||||
Expenses:
|
||||||||||||||||
Property operating
|
121,947
|
117,606
|
485,479
|
467,269
|
||||||||||||
Corporate-level property management expenses
|
11,485
|
10,172
|
45,872
|
40,704
|
||||||||||||
Depreciation and amortization
|
138,016
|
135,758
|
548,438
|
539,319
|
||||||||||||
General and administrative
|
19,739
|
16,036
|
63,474
|
56,577
|
||||||||||||
Expensed acquisition and investment related costs
|
220
|
1,884
|
595
|
2,132
|
||||||||||||
Casualty loss
|
-
|
-
|
433
|
-
|
||||||||||||
291,407
|
281,456
|
1,144,291
|
1,106,001
|
|||||||||||||
Gain on sale of real estate and land
|
-
|
94,416
|
59,238
|
94,416
|
||||||||||||
Earnings from operations
|
130,341
|
228,143
|
584,342
|
595,229
|
||||||||||||
Interest expense, net (1)
|
(54,495
|
)
|
(51,101
|
)
|
(209,757
|
)
|
(196,891
|
)
|
||||||||
Interest and other income (loss)
|
17,204
|
12,531
|
46,259
|
(19,040
|
)
|
|||||||||||
Equity (loss) income from co-investments
|
(23,241
|
)
|
2,274
|
10,561
|
26,030
|
|||||||||||
Tax benefit (expense) on unconsolidated co-investments
|
540
|
2,373
|
(697
|
)
|
10,236
|
|||||||||||
Loss on early retirement of debt, net
|
-
|
-
|
-
|
(2
|
)
|
|||||||||||
Gain on remeasurement of co-investment
|
-
|
-
|
-
|
17,423
|
||||||||||||
Net income
|
70,349
|
194,220
|
430,708
|
432,985
|
||||||||||||
Net income attributable to noncontrolling interest
|
(4,958
|
)
|
(9,055
|
)
|
(24,883
|
)
|
(24,670
|
)
|
||||||||
Net income available to common stockholders
|
$
|
65,391
|
$
|
185,165
|
$
|
405,825
|
$
|
408,315
|
||||||||
Net income per share - basic
|
$
|
1.02
|
$
|
2.86
|
$
|
6.32
|
$
|
6.27
|
||||||||
Shares used in income per share - basic
|
64,187,384
|
64,727,333
|
64,252,232
|
65,079,764
|
||||||||||||
Net income per share - diluted
|
$
|
1.02
|
$
|
2.86
|
$
|
6.32
|
$
|
6.27
|
||||||||
Shares used in income per share - diluted
|
64,188,581
|
64,731,222
|
64,253,385
|
65,098,186
|
(1) |
Refer to page S-18.2, the section titled "Interest Expense, Net" for additional information.
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
Rental and other property
|
||||||||||||||||
Rental income
|
$
|
413,211
|
$
|
406,698
|
$
|
1,636,070
|
$
|
1,573,368
|
||||||||
Other property
|
5,734
|
5,659
|
22,194
|
22,307
|
||||||||||||
Rental and other property
|
$
|
418,945
|
$
|
412,357
|
$
|
1,658,264
|
$
|
1,595,675
|
||||||||
Property operating expenses
|
||||||||||||||||
Real estate taxes
|
$
|
47,020
|
$
|
46,324
|
$
|
185,807
|
$
|
183,918
|
||||||||
Administrative
|
12,399
|
11,893
|
49,653
|
45,557
|
||||||||||||
Maintenance and repairs
|
13,909
|
13,803
|
58,538
|
53,816
|
||||||||||||
Personnel costs
|
22,274
|
21,147
|
90,883
|
88,511
|
||||||||||||
Utilities
|
26,345
|
24,439
|
100,598
|
95,467
|
||||||||||||
Property operating expenses
|
$
|
121,947
|
$
|
117,606
|
$
|
485,479
|
$
|
467,269
|
||||||||
Interest and other income (loss)
|
||||||||||||||||
Marketable securities and other income
|
$
|
10,835
|
$
|
5,488
|
$
|
27,416
|
$
|
20,119
|
||||||||
Realized and unrealized gains (losses) on marketable securities, net
|
5,712
|
5,579
|
10,006
|
(45,547
|
)
|
|||||||||||
Income from early redemption of notes receivable
|
-
|
811
|
-
|
811
|
||||||||||||
Provision for credit losses
|
(19
|
)
|
317
|
(70
|
)
|
381
|
||||||||||
Insurance reimbursements, legal settlements, and other, net
|
676
|
336
|
8,907
|
5,196
|
||||||||||||
Interest and other income (loss)
|
$
|
17,204
|
$
|
12,531
|
$
|
46,259
|
$
|
(19,040
|
)
|
|||||||
|
||||||||||||||||
Equity income (loss) from co-investments
|
||||||||||||||||
Equity loss from co-investments
|
$
|
(2,792
|
)
|
$
|
(1,930
|
)
|
$
|
(11,907
|
)
|
$
|
(4,908
|
)
|
||||
Income from preferred equity investments
|
12,925
|
13,258
|
53,284
|
53,946
|
||||||||||||
Equity income (loss) from non-core co-investments
|
263
|
(6,928
|
)
|
1,685
|
(38,045
|
)
|
||||||||||
Non-core (loss) gain from unconsolidated co-investments
|
-
|
(21
|
)
|
-
|
196
|
|||||||||||
Insurance reimbursements, legal settlements, and other, net
|
63
|
-
|
914
|
-
|
||||||||||||
Impairment loss from unconsolidated co-investment
|
(33,700
|
)
|
(2,105
|
)
|
(33,700
|
)
|
(2,105
|
)
|
||||||||
Loss on early retirement of debt from unconsolidated co-investments
|
-
|
-
|
-
|
(988
|
)
|
|||||||||||
Co-investment promote income
|
-
|
-
|
-
|
17,076
|
||||||||||||
Income from early redemption of preferred equity investments
|
-
|
-
|
285
|
858
|
||||||||||||
Equity income (loss) from co-investments
|
$
|
(23,241
|
)
|
$
|
2,274
|
$
|
10,561
|
$
|
26,030
|
|||||||
Noncontrolling interest
|
||||||||||||||||
Limited partners of Essex Portfolio, L.P.
|
$
|
2,302
|
$
|
6,497
|
$
|
14,284
|
$
|
14,297
|
||||||||
DownREIT limited partners' distributions
|
2,163
|
2,065
|
8,656
|
8,427
|
||||||||||||
Third-party ownership interest
|
493
|
493
|
1,943
|
1,946
|
||||||||||||
Noncontrolling interest
|
$
|
4,958
|
$
|
9,055
|
$
|
24,883
|
$
|
24,670
|
Three Months Ended
December 31,
|
Twelve Months Ended
December 31,
|
|||||||||||||||||||||
2023
|
2022
|
% Change
|
2023
|
2022
|
% Change
|
|||||||||||||||||
Funds from operations attributable to common stockholders and
unitholders (FFO)
|
||||||||||||||||||||||
Net income available to common stockholders
|
$
|
65,391
|
$
|
185,165
|
$
|
405,825
|
$
|
408,315
|
||||||||||||||
Adjustments:
|
||||||||||||||||||||||
Depreciation and amortization
|
138,016
|
135,758
|
548,438
|
539,319
|
||||||||||||||||||
Gains not included in FFO
|
-
|
(94,416
|
)
|
(59,238
|
)
|
(111,839
|
)
|
|||||||||||||||
Casualty loss
|
-
|
-
|
433
|
-
|
||||||||||||||||||
Impairment loss from unconsolidated co-investments
|
33,700
|
2,105
|
33,700
|
2,105
|
||||||||||||||||||
Depreciation and amortization from unconsolidated co-investments
|
18,259
|
18,053
|
71,745
|
72,585
|
||||||||||||||||||
Noncontrolling interest related to Operating Partnership units
|
2,302
|
6,497
|
14,284
|
14,297
|
||||||||||||||||||
Depreciation attributable to third party ownership and other (2)
|
(379
|
)
|
(357
|
)
|
(1,474
|
)
|
(1,421
|
)
|
||||||||||||||
Funds from operations attributable to common stockholders and unitholders
|
$
|
257,289
|
$
|
252,805
|
$
|
1,013,713
|
$
|
923,361
|
||||||||||||||
FFO per share-diluted
|
$
|
3.87
|
$
|
3.77
|
2.7%
|
$
|
15.24
|
$
|
13.70
|
11.2%
|
||||||||||||
Components of the change in FFO
|
||||||||||||||||||||||
Non-core items:
|
||||||||||||||||||||||
Expensed acquisition and investment related costs
|
$
|
220
|
$
|
1,884
|
$
|
595
|
$
|
2,132
|
||||||||||||||
Tax (benefit) expense on unconsolidated co-investments (3)
|
(540
|
)
|
(2,373
|
)
|
697
|
(10,236
|
)
|
|||||||||||||||
Realized and unrealized (gains) losses on marketable securities, net
|
(5,712
|
)
|
(5,579
|
)
|
(10,006
|
)
|
45,547
|
|||||||||||||||
Provision for credit losses
|
19
|
(317
|
)
|
70
|
(381
|
)
|
||||||||||||||||
Equity (income) loss from non-core co-investments (4)
|
(263
|
)
|
6,928
|
(1,685
|
)
|
38,045
|
||||||||||||||||
Loss on early retirement of debt, net
|
-
|
-
|
-
|
2
|
||||||||||||||||||
Loss on early retirement of debt from unconsolidated co-investments
|
-
|
-
|
-
|
988
|
||||||||||||||||||
Co-investment promote income
|
-
|
-
|
-
|
(17,076
|
)
|
|||||||||||||||||
Income from early redemption of preferred equity investments and notes receivable
|
-
|
(811
|
)
|
(285
|
)
|
(1,669
|
)
|
|||||||||||||||
General and administrative and other, net
|
4,059
|
209
|
6,629
|
2,536
|
||||||||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
(739
|
)
|
(315
|
)
|
(9,821
|
)
|
(5,392
|
)
|
||||||||||||||
Core funds from operations attributable to common stockholders and unitholders
|
$
|
254,333
|
$
|
252,431
|
$
|
999,907
|
$
|
977,857
|
||||||||||||||
Core FFO per share-diluted
|
$
|
3.83
|
$
|
3.77
|
1.6%
|
$
|
15.03
|
$
|
14.51
|
3.6%
|
||||||||||||
Weighted average number of shares outstanding diluted (5)
|
66,447,394
|
67,003,718
|
66,514,456
|
67,374,526
|
(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,
2023 was $0.8 million and $3.3 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.
|
December 31, 2023
|
December 31, 2022
|
|||||||
Real Estate:
|
||||||||
Land and land improvements
|
$
|
3,036,912
|
$
|
3,043,321
|
||||
Buildings and improvements
|
13,098,311
|
12,922,906
|
||||||
|
16,135,223
|
15,966,227
|
||||||
Less: accumulated depreciation
|
(5,664,931
|
)
|
(5,152,133
|
)
|
||||
10,470,292
|
10,814,094
|
|||||||
Real estate under development
|
23,724
|
24,857
|
||||||
Co-investments
|
1,061,733
|
1,127,491
|
||||||
11,555,749
|
11,966,442
|
|||||||
Cash and cash equivalents, including restricted cash
|
400,334
|
42,681
|
||||||
Marketable securities
|
87,795
|
112,743
|
||||||
Notes and other receivables
|
174,621
|
103,045
|
||||||
Operating lease right-of-use assets
|
63,757
|
67,239
|
||||||
Prepaid expenses and other assets
|
79,171
|
80,755
|
||||||
Total assets
|
$
|
12,361,427
|
$
|
12,372,905
|
||||
Unsecured debt, net
|
$
|
5,318,531
|
$
|
5,312,168
|
||||
Mortgage notes payable, net
|
887,204
|
593,943
|
||||||
Lines of credit
|
-
|
52,073
|
||||||
Distributions in excess of investments in co-investments
|
65,488
|
42,532
|
||||||
Operating lease liabilities
|
65,091
|
68,696
|
||||||
Other liabilities
|
398,930
|
381,227
|
||||||
Total liabilities
|
6,735,244
|
6,450,639
|
||||||
Redeemable noncontrolling interest
|
32,205
|
27,150
|
||||||
Equity:
|
||||||||
Common stock
|
6
|
6
|
||||||
Additional paid-in capital
|
6,656,720
|
6,750,076
|
||||||
Distributions in excess of accumulated earnings
|
(1,267,536
|
)
|
(1,080,176
|
)
|
||||
Accumulated other comprehensive income, net
|
33,556
|
46,466
|
||||||
Total stockholders' equity
|
5,422,746
|
5,716,372
|
||||||
Noncontrolling interest
|
171,232
|
178,744
|
||||||
Total equity
|
5,593,978
|
5,895,116
|
||||||
Total liabilities and equity
|
$
|
12,361,427
|
$
|
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
|
%
|
7.1
|
2024 (2)
|
$
|
400,000
|
$
|
3,109
|
$
|
403,109
|
4.0
|
%
|
6.5
|
%
|
||||||||||||||||||
Term loan (1)
|
300,000
|
4.2
|
%
|
3.8
|
2025
|
500,000
|
133,054
|
633,054
|
3.5
|
%
|
10.1
|
%
|
||||||||||||||||||||||
Unamortized discounts and debt
|
2026
|
450,000
|
99,405
|
549,405
|
3.5
|
%
|
8.8
|
%
|
||||||||||||||||||||||||||
issuance costs, net
|
(31,469
|
)
|
-
|
-
|
2027 (1)
|
650,000
|
153,955
|
803,955
|
4.0
|
%
|
12.9
|
%
|
||||||||||||||||||||||
Total unsecured debt, net
|
5,318,531
|
3.3
|
%
|
6.9
|
2028
|
450,000
|
68,332
|
518,332
|
2.2
|
%
|
8.3
|
%
|
||||||||||||||||||||||
Mortgage Notes Payable, net
|
2029
|
500,000
|
1,456
|
501,456
|
4.1
|
%
|
8.0
|
%
|
||||||||||||||||||||||||||
Fixed rate - secured (2)
|
667,061
|
4.3
|
%
|
5.8
|
2030
|
550,000
|
1,592
|
551,592
|
3.1
|
%
|
8.8
|
%
|
||||||||||||||||||||||
Variable rate - secured (3)
|
222,731
|
4.6
|
%
|
14.1
|
2031
|
600,000
|
1,740
|
601,740
|
2.3
|
%
|
9.6
|
%
|
||||||||||||||||||||||
Unamortized premiums and debt
|
2032
|
650,000
|
1,903
|
651,903
|
2.6
|
%
|
10.5
|
%
|
||||||||||||||||||||||||||
issuance costs, net
|
(2,588
|
)
|
-
|
-
|
2033
|
-
|
330,126
|
330,126
|
5.0
|
%
|
5.3
|
%
|
||||||||||||||||||||||
Total mortgage notes payable, net
|
887,204
|
4.3
|
%
|
7.9
|
2034
|
-
|
2,275
|
2,275
|
4.8
|
%
|
0.1
|
%
|
||||||||||||||||||||||
Unsecured Lines of Credit
|
Thereafter
|
600,000
|
92,845
|
692,845
|
3.8
|
%
|
11.1
|
%
|
||||||||||||||||||||||||||
Line of credit (4)
|
-
|
6.3
|
%
|
N/A
|
Subtotal
|
5,350,000
|
889,792
|
6,239,792
|
3.4
|
%
|
100.0
|
%
|
||||||||||||||||||||||
Line of credit (5)
|
-
|
6.3
|
%
|
N/A
|
Debt Issuance Costs
|
(25,344
|
)
|
(3,090
|
)
|
(28,434
|
)
|
-
|
-
|
|||||||||||||||||||||
Total lines of credit
|
-
|
6.3
|
%
|
N/A
|
(Discounts)/Premiums
|
(6,125
|
)
|
502
|
(5,623
|
)
|
-
|
-
|
||||||||||||||||||||||
Total debt, net
|
$
|
6,205,735
|
3.4
|
%
|
7.1
|
Total
|
$
|
5,318,531
|
$
|
887,204
|
$
|
6,205,735
|
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 2023, 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) |
$222.7 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
|
$
|
6,205,735
|
||||||||||
Common stock and potentially dilutive securities
|
Debt to Total Assets:
|
34%
|
< 65%
|
|||||||||
Common stock outstanding
|
64,203
|
|||||||||||
Limited partnership units (1)
|
2,259
|
Secured Debt to Total Assets:
|
5%
|
< 40%
|
||||||||
Options-treasury method
|
6
|
|||||||||||
Total shares of common stock and potentially dilutive securities
|
66,468
|
Interest Coverage:
|
566%
|
> 150%
|
||||||||
Common stock price per share as of December 29, 2023
|
$
|
247.94
|
Unsecured Debt Ratio (2):
|
289%
|
> 150%
|
|||||||
Total equity capitalization
|
$
|
16,480,076
|
Selected Credit Ratios (3)
|
Actual
|
||||||||
Total market capitalization
|
$
|
22,685,811
|
Net Indebtedness Divided by Adjusted EBITDAre,
|
|||||||||
normalized and annualized:
|
5.4
|
|||||||||||
Ratio of debt to total market capitalization
|
27.4
|
%
|
||||||||||
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
|
$
|
2,685
|
$
|
2,562
|
$
|
2,674
|
17.0
|
%
|
14.5
|
%
|
16.7
|
%
|
|||||||||||||||||||||
Orange County
|
5,189
|
1,149
|
6,338
|
2,743
|
2,461
|
2,714
|
10.8
|
%
|
10.6
|
%
|
10.8
|
%
|
||||||||||||||||||||||||
San Diego County
|
4,824
|
1,059
|
5,883
|
2,592
|
2,690
|
2,602
|
9.8
|
%
|
9.1
|
%
|
9.7
|
%
|
||||||||||||||||||||||||
Ventura County and Other
|
2,435
|
693
|
3,128
|
2,357
|
2,765
|
2,411
|
4.6
|
%
|
7.7
|
%
|
5.0
|
%
|
||||||||||||||||||||||||
Total Southern California
|
21,986
|
4,487
|
26,473
|
2,642
|
2,598
|
2,637
|
42.2
|
%
|
41.9
|
%
|
42.2
|
%
|
||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||
Santa Clara County (6)
|
8,749
|
1,774
|
10,523
|
2,983
|
2,931
|
2,978
|
20.0
|
%
|
16.8
|
%
|
19.7
|
%
|
||||||||||||||||||||||||
Alameda County
|
3,959
|
1,512
|
5,471
|
2,592
|
2,586
|
2,591
|
7.0
|
%
|
14.6
|
%
|
7.7
|
%
|
||||||||||||||||||||||||
San Mateo County
|
2,561
|
195
|
2,756
|
3,076
|
3,646
|
3,097
|
5.5
|
%
|
2.5
|
%
|
5.2
|
%
|
||||||||||||||||||||||||
Contra Costa County
|
2,619
|
-
|
2,619
|
2,693
|
-
|
2,693
|
5.3
|
%
|
0.0
|
%
|
4.8
|
%
|
||||||||||||||||||||||||
San Francisco
|
1,357
|
537
|
1,894
|
2,874
|
3,280
|
2,941
|
2.4
|
%
|
5.5
|
%
|
2.7
|
%
|
||||||||||||||||||||||||
Total Northern California
|
19,245
|
4,018
|
23,263
|
2,868
|
2,870
|
2,868
|
40.2
|
%
|
39.4
|
%
|
40.1
|
%
|
||||||||||||||||||||||||
Seattle Metro
|
10,341
|
2,184
|
12,525
|
2,166
|
2,083
|
2,158
|
17.6
|
%
|
18.7
|
%
|
17.7
|
%
|
||||||||||||||||||||||||
Total
|
51,572
|
10,689
|
62,261
|
$
|
2,631
|
$
|
2,595
|
$
|
2,627
|
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 December 31, 2023, divided by the number of apartment homes as of December 31, 2023.
|
(2) |
Represents the percentage of actual NOI for the quarter ended December 31, 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
|
Q4 '23
|
Q3 '23
|
Q2 '23
|
Q1 '23
|
Q4 '22
|
|||||||||||||||||||
Rental and other property revenues:
|
||||||||||||||||||||||||
Same-property
|
50,064
|
$
|
400,331
|
$
|
398,460
|
$
|
394,204
|
$
|
388,895
|
$
|
389,016
|
|||||||||||||
Acquisitions (2)
|
284
|
1,568
|
1,528
|
1,332
|
1,021
|
886
|
||||||||||||||||||
Development (3)
|
599
|
5,865
|
5,808
|
5,710
|
5,500
|
5,417
|
||||||||||||||||||
Redevelopment
|
179
|
1,536
|
1,564
|
1,595
|
1,537
|
1,418
|
||||||||||||||||||
Non-residential/other, net (4)
|
446
|
10,695
|
10,432
|
11,099
|
12,127
|
13,573
|
||||||||||||||||||
Straight-line rent concessions (5)
|
-
|
(1,050
|
)
|
(1,394
|
)
|
(675
|
)
|
576
|
2,047
|
|||||||||||||||
Total rental and other property revenues
|
51,572
|
418,945
|
416,398
|
413,265
|
409,656
|
412,357
|
||||||||||||||||||
Property operating expenses:
|
||||||||||||||||||||||||
Same-property
|
116,594
|
118,481
|
113,413
|
114,796
|
111,568
|
|||||||||||||||||||
Acquisitions (2)
|
534
|
549
|
495
|
430
|
536
|
|||||||||||||||||||
Development (3)
|
2,394
|
2,434
|
2,375
|
2,316
|
2,360
|
|||||||||||||||||||
Redevelopment
|
742
|
634
|
674
|
788
|
654
|
|||||||||||||||||||
Non-residential/other, net (4) (6)
|
1,683
|
1,798
|
2,267
|
2,082
|
2,488
|
|||||||||||||||||||
Total property operating expenses
|
121,947
|
123,896
|
119,224
|
120,412
|
117,606
|
|||||||||||||||||||
Net operating income (NOI):
|
||||||||||||||||||||||||
Same-property
|
283,737
|
279,979
|
280,791
|
274,099
|
277,448
|
|||||||||||||||||||
Acquisitions (2)
|
1,034
|
979
|
837
|
591
|
350
|
|||||||||||||||||||
Development (3)
|
3,471
|
3,374
|
3,335
|
3,184
|
3,057
|
|||||||||||||||||||
Redevelopment
|
794
|
930
|
921
|
749
|
764
|
|||||||||||||||||||
Non-residential/other, net (4)
|
9,012
|
8,634
|
8,832
|
10,045
|
11,085
|
|||||||||||||||||||
Straight-line rent concessions (5)
|
(1,050
|
)
|
(1,394
|
)
|
(675
|
)
|
576
|
2,047
|
||||||||||||||||
Total NOI
|
$
|
296,998
|
$
|
292,502
|
$
|
294,041
|
$
|
289,244
|
$
|
294,751
|
||||||||||||||
Same-property metrics
|
||||||||||||||||||||||||
Operating margin
|
71
|
%
|
70
|
%
|
71
|
%
|
70
|
%
|
71
|
%
|
||||||||||||||
Annualized turnover (7)
|
40
|
%
|
48
|
%
|
45
|
%
|
38
|
%
|
42
|
%
|
||||||||||||||
Financial occupancy (8)
|
96.1
|
%
|
96.4
|
%
|
96.6
|
%
|
96.7
|
%
|
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
|
Q4 '23
% of
Actual NOI
|
Q4 '23
|
Q4 '22
|
%
Change
|
Q4 '23
|
Q4 '22
|
%
Change
|
Q4 '23
|
Q4 '22
|
%
Change
|
Q3 '23
|
%
Change
|
|||||||||||||||||||||||||||||||||||||||
Southern California
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Los Angeles County
|
9,327
|
17.2
|
%
|
$
|
2,703
|
$
|
2,653
|
1.9
|
%
|
95.3
|
%
|
96.4
|
%
|
-1.1
|
%
|
$
|
73,591
|
$
|
73,856
|
-0.4
|
%
|
$
|
74,021
|
-0.6
|
%
|
|||||||||||||||||||||||||||
Orange County
|
5,189
|
11.1
|
%
|
2,743
|
2,619
|
4.7
|
%
|
96.3
|
%
|
96.5
|
%
|
-0.2
|
%
|
42,715
|
41,056
|
4.0
|
%
|
41,946
|
1.8
|
%
|
||||||||||||||||||||||||||||||||
San Diego County
|
4,582
|
9.5
|
%
|
2,593
|
2,434
|
6.5
|
%
|
96.2
|
%
|
96.4
|
%
|
-0.2
|
%
|
36,277
|
33,513
|
8.2
|
%
|
35,794
|
1.3
|
%
|
||||||||||||||||||||||||||||||||
Ventura County
|
2,254
|
4.5
|
%
|
2,349
|
2,223
|
5.7
|
%
|
96.7
|
%
|
96.1
|
%
|
0.6
|
%
|
16,408
|
15,304
|
7.2
|
%
|
16,165
|
1.5
|
%
|
||||||||||||||||||||||||||||||||
Total Southern California
|
21,352
|
42.3
|
%
|
2,652
|
2,552
|
3.9
|
%
|
95.9
|
%
|
96.4
|
%
|
-0.5
|
%
|
168,991
|
163,729
|
3.2
|
%
|
167,926
|
0.6
|
%
|
||||||||||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||||||||||||||||||
Santa Clara County
|
8,653
|
20.3
|
%
|
2,974
|
2,902
|
2.5
|
%
|
96.4
|
%
|
95.8
|
%
|
0.6
|
%
|
78,368
|
75,541
|
3.7
|
%
|
78,886
|
-0.7
|
%
|
||||||||||||||||||||||||||||||||
Alameda County
|
3,959
|
7.2
|
%
|
2,592
|
2,597
|
-0.2
|
%
|
95.7
|
%
|
95.9
|
%
|
-0.2
|
%
|
30,995
|
30,496
|
1.6
|
%
|
31,148
|
-0.5
|
%
|
||||||||||||||||||||||||||||||||
San Mateo County
|
1,962
|
4.4
|
%
|
3,039
|
2,966
|
2.5
|
%
|
96.0
|
%
|
95.0
|
%
|
1.1
|
%
|
18,770
|
17,684
|
6.1
|
%
|
18,453
|
1.7
|
%
|
||||||||||||||||||||||||||||||||
Contra Costa County
|
2,619
|
5.5
|
%
|
2,693
|
2,639
|
2.0
|
%
|
96.6
|
%
|
96.2
|
%
|
0.4
|
%
|
21,818
|
21,096
|
3.4
|
%
|
21,464
|
1.6
|
%
|
||||||||||||||||||||||||||||||||
San Francisco
|
1,178
|
2.2
|
%
|
2,839
|
2,808
|
1.1
|
%
|
95.5
|
%
|
95.2
|
%
|
0.3
|
%
|
10,183
|
10,186
|
0.0
|
%
|
9,952
|
2.3
|
%
|
||||||||||||||||||||||||||||||||
Total Northern California
|
18,371
|
39.6
|
%
|
2,850
|
2,800
|
1.8
|
%
|
96.2
|
%
|
95.8
|
%
|
0.4
|
%
|
160,134
|
155,003
|
3.3
|
%
|
159,903
|
0.1
|
%
|
||||||||||||||||||||||||||||||||
Seattle Metro
|
10,341
|
18.1
|
%
|
2,166
|
2,164
|
0.1
|
%
|
96.5
|
%
|
95.8
|
%
|
0.7
|
%
|
71,206
|
70,284
|
1.3
|
%
|
70,631
|
0.8
|
%
|
||||||||||||||||||||||||||||||||
Total Same-Property
|
50,064
|
100.0
|
%
|
$
|
2,624
|
$
|
2,563
|
2.4
|
%
|
96.1
|
%
|
96.0
|
%
|
0.1
|
%
|
$
|
400,331
|
$
|
389,016
|
2.9
|
%
|
$
|
398,460
|
0.5
|
%
|
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
|
17.6
|
%
|
$
|
2,688
|
$
|
2,586
|
3.9
|
%
|
96.2
|
%
|
96.1
|
%
|
0.1
|
%
|
$
|
293,708
|
$
|
289,360
|
1.5
|
%
|
|||||||||||||||||||||||
Orange County
|
5,189
|
10.8
|
%
|
2,698
|
2,532
|
6.6
|
%
|
96.2
|
%
|
96.1
|
%
|
0.1
|
%
|
166,920
|
156,870
|
6.4
|
%
|
|||||||||||||||||||||||||||
San Diego County
|
4,582
|
9.4
|
%
|
2,535
|
2,332
|
8.7
|
%
|
96.7
|
%
|
96.4
|
%
|
0.3
|
%
|
141,249
|
129,234
|
9.3
|
%
|
|||||||||||||||||||||||||||
Ventura County
|
2,254
|
4.4
|
%
|
2,304
|
2,144
|
7.5
|
%
|
96.9
|
%
|
96.1
|
%
|
0.8
|
%
|
64,185
|
59,532
|
7.8
|
%
|
|||||||||||||||||||||||||||
Total Southern California
|
21,352
|
42.2
|
%
|
2,617
|
2,472
|
5.9
|
%
|
96.3
|
%
|
96.2
|
%
|
0.1
|
%
|
666,062
|
634,996
|
4.9
|
%
|
|||||||||||||||||||||||||||
Northern California
|
||||||||||||||||||||||||||||||||||||||||||||
Santa Clara County
|
8,653
|
20.4
|
%
|
2,954
|
2,830
|
4.4
|
%
|
96.7
|
%
|
96.3
|
%
|
0.4
|
%
|
311,162
|
295,189
|
5.4
|
%
|
|||||||||||||||||||||||||||
Alameda County
|
3,959
|
7.4
|
%
|
2,596
|
2,555
|
1.6
|
%
|
96.4
|
%
|
96.0
|
%
|
0.4
|
%
|
123,741
|
120,812
|
2.4
|
%
|
|||||||||||||||||||||||||||
San Mateo County
|
1,962
|
4.4
|
%
|
3,013
|
2,922
|
3.1
|
%
|
96.2
|
%
|
95.8
|
%
|
0.4
|
%
|
72,909
|
69,950
|
4.2
|
%
|
|||||||||||||||||||||||||||
Contra Costa County
|
2,619
|
5.4
|
%
|
2,673
|
2,589
|
3.2
|
%
|
96.8
|
%
|
96.1
|
%
|
0.7
|
%
|
85,648
|
82,943
|
3.3
|
%
|
|||||||||||||||||||||||||||
San Francisco
|
1,178
|
2.2
|
%
|
2,832
|
2,760
|
2.6
|
%
|
95.3
|
%
|
95.9
|
%
|
-0.6
|
%
|
40,276
|
40,367
|
-0.2
|
%
|
|||||||||||||||||||||||||||
Total Northern California
|
18,371
|
39.8
|
%
|
2,835
|
2,742
|
3.4
|
%
|
96.5
|
%
|
96.1
|
%
|
0.4
|
%
|
633,736
|
609,261
|
4.0
|
%
|
|||||||||||||||||||||||||||
Seattle Metro
|
10,341
|
18.0
|
%
|
2,165
|
2,097
|
3.2
|
%
|
96.6
|
%
|
95.8
|
%
|
0.8
|
%
|
282,092
|
271,248
|
4.0
|
%
|
|||||||||||||||||||||||||||
Total Same-Property
|
50,064
|
100.0
|
%
|
$
|
2,604
|
$
|
2,493
|
4.5
|
%
|
96.4
|
%
|
96.1
|
%
|
0.3
|
%
|
$
|
1,581,890
|
$
|
1,515,505
|
4.4
|
%
|
Based on 50,064 apartment homes
|
|||||||||||||||||
Q4 '23
|
Q4 '22
|
% Change
|
% of Op. Ex.
|
||||||||||||||
Same-property operating expenses:
|
|||||||||||||||||
Real estate taxes
|
$
|
43,468
|
$
|
42,749
|
1.7
|
%
|
37.3
|
%
|
|||||||||
Utilities
|
25,276
|
23,310
|
8.4
|
%
|
21.7
|
%
|
|||||||||||
Personnel costs
|
21,333
|
20,094
|
6.2
|
%
|
18.3
|
%
|
|||||||||||
Maintenance and repairs
|
13,357
|
13,036
|
2.5
|
%
|
11.5
|
%
|
|||||||||||
Administrative
|
6,266
|
6,742
|
-7.1
|
%
|
5.4
|
%
|
|||||||||||
Insurance and other
|
6,894
|
5,637
|
22.3
|
%
|
5.8
|
%
|
|||||||||||
Total same-property operating expenses
|
$
|
116,594
|
$
|
111,568
|
4.5
|
%
|
100.0
|
%
|
|||||||||
YTD 2023
|
YTD 2022
|
% Change
|
% of Op. Ex.
|
||||||||||||||
Same-property operating expenses:
|
|||||||||||||||||
Real estate taxes
|
$
|
171,295
|
$
|
169,161
|
1.3
|
%
|
37.0
|
%
|
|||||||||
Utilities
|
96,246
|
90,587
|
6.2
|
%
|
20.8
|
%
|
|||||||||||
Personnel costs
|
86,986
|
84,299
|
3.2
|
%
|
18.8
|
%
|
|||||||||||
Maintenance and repairs
|
56,201
|
51,096
|
10.0
|
%
|
(1) |
12.1
|
%
|
||||||||||
Administrative
|
26,435
|
25,968
|
1.8
|
%
|
5.7
|
%
|
|||||||||||
Insurance and other
|
26,121
|
22,046
|
18.5
|
%
|
5.6
|
%
|
|||||||||||
Total same-property operating expenses
|
$
|
463,284
|
$
|
443,157
|
4.5
|
%
|
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
12/31/23 (3)
|
%
Leased as of
2/2/24 (3)
|
Construction
Start
|
Initial
Occupancy
|
Stabilized
Operations
|
|||||||||||||||||||||||||||||||||
Land Held for Future Development - Consolidated
|
|||||||||||||||||||||||||||||||||||||||||||||||
Other Projects - Various
|
100%
|
|
-
|
-
|
$
|
24
|
$
|
-
|
$
|
24
|
$
|
24
|
|||||||||||||||||||||||||||||||||||
Total Development Pipeline - Consolidated
|
-
|
-
|
24
|
-
|
24
|
24
|
|||||||||||||||||||||||||||||||||||||||||
Development Projects - Joint Venture (4)
|
|||||||||||||||||||||||||||||||||||||||||||||||
LIVIA at Scripps Ranch (5) - San Diego, CA
|
51%
|
|
264
|
2,000
|
90
|
12
|
102
|
52
|
383
|
77%
|
|
79%
|
|
85%
|
|
Q3 2020
|
Q3 2023
|
Q1 2024
|
|||||||||||||||||||||||||||||
Total Development Projects - Joint Venture
|
264
|
2,000
|
90
|
12
|
102
|
52
|
$
|
383
|
|||||||||||||||||||||||||||||||||||||||
Grand Total - Development Pipeline
|
264
|
2,000
|
$
|
114
|
$
|
12
|
$
|
126
|
76
|
||||||||||||||||||||||||||||||||||||||
Essex Cost Incurred to Date - Pro Rata
|
(69
|
)
|
|||||||||||||||||||||||||||||||||||||||||||||
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 fourth quarter of 2023, the Company's cost includes $0.1 million of capitalized interest, $0.7 million of capitalized overhead and $0.2 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)
|
Q4 '23
|
Trailing 4
Quarters
|
||||||
Same-property portfolio
|
$
|
16,910
|
$
|
62,754
|
||||
Non-same property portfolio
|
253
|
1,434
|
||||||
Total revenue generating capital expenditures
|
$
|
17,163
|
$
|
64,188
|
||||
Number of same-property interior renovations
|
366
|
2,211
|
||||||
Number of total consolidated interior renovations
|
379
|
2,263
|
Non-Revenue Generating Capital Expenditures (3)
|
Q4 '23
|
Trailing 4
Quarters
|
||||||
Non-revenue generating capital expenditures
|
$
|
42,165
|
$
|
130,535
|
||||
Average apartment homes in quarter
|
51,572
|
51,573
|
||||||
Capital expenditures per apartment homes in the quarter
|
$
|
818
|
$
|
2,531
|
(1) |
The Company incurred $0.1 million of capitalized interest, $4.1 million of capitalized overhead and $0.1 million of co-investment fees related to redevelopment in Q4 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
December 31,
2023
|
Twelve Months
Ended
December 31,
2023
|
|||||||||||||||||||||||||||
Operating and Other Non-Consolidated Joint Ventures
|
NOI
|
||||||||||||||||||||||||||||||||||
Wesco I, III, IV, V, VI (2)
|
54%
|
|
5,975
|
$
|
2,152,321
|
$
|
1,437,874
|
$
|
144,766
|
3.5
|
%
|
2.8
|
$
|
29,326
|
$
|
115,222
|
|||||||||||||||||||
BEXAEW, BEX II, BEX IV, and 500 Folsom
|
50%
|
3,083
|
1,257,029
|
545,774
|
224,119
|
5.3
|
%
|
7.8
|
(5)
|
16,758
|
64,612
|
||||||||||||||||||||||||
Other (3)
|
52%
|
1,367
|
560,922
|
407,775
|
68,493
|
4.7
|
%
|
2.0
|
7,008
|
28,125
|
|||||||||||||||||||||||||
Total Operating and Other Non-Consolidated Joint Ventures
|
10,425
|
$
|
3,970,272
|
$
|
2,391,423
|
$
|
437,378
|
4.1
|
%
|
3.8
|
$
|
53,092
|
$
|
207,959
|
|||||||||||||||||||||
Development Non-Consolidated Joint Ventures (4)
|
51%
|
264
|
90,434
|
89,250
|
14,605
|
4.4
|
%
|
36.4
|
(6)
|
979
|
1,531
|
||||||||||||||||||||||||
Total Non-Consolidated Joint Ventures
|
10,689
|
$
|
4,060,706
|
$
|
2,480,673
|
$
|
451,983
|
4.1
|
%
|
5.0
|
$
|
54,071
|
$
|
209,490
|
|||||||||||||||||||||
Essex Portion of NOI and
Expenses
|
|||||||||||||||||||||||||||||||||||
NOI
|
$
|
28,919
|
$
|
112,100
|
|||||||||||||||||||||||||||||||
Depreciation
|
(18,259
|
)
|
(71,745
|
)
|
|||||||||||||||||||||||||||||||
Interest expense and other
|
(13,452
|
)
|
(52,262
|
)
|
|||||||||||||||||||||||||||||||
Equity income from non-core co-investments
|
263
|
1,685
|
|||||||||||||||||||||||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
63
|
914
|
|||||||||||||||||||||||||||||||||
Net loss from operating and other co-investments
|
$
|
(2,466
|
)
|
$
|
(9,308
|
)
|
|||||||||||||||||||||||||||||
Weighted
Average
Preferred
Return
|
Weighted
Average
Expected
Term
|
Income from Preferred Equity
Investments
|
|||||||||||||||||||||||||||||||||
Income from preferred equity investments
|
$
|
12,925
|
$
|
53,284
|
|||||||||||||||||||||||||||||||
Income from early redemption of preferred equity investments
|
-
|
285
|
|||||||||||||||||||||||||||||||||
Impairment loss from unconsolidated co-investment
|
(33,700
|
)
|
(33,700
|
)
|
|||||||||||||||||||||||||||||||
Preferred Equity Investments (7)
|
$
|
544,262
|
9.8
|
%
|
2.1
|
$
|
(20,775
|
)
|
$
|
19,869
|
|||||||||||||||||||||||||
Total Co-investments
|
$
|
996,245
|
$
|
(23,241
|
)
|
$
|
10,561
|
(1) |
Represents the year-to-date annual weighted average borrowing rate.
|
(2) |
As of December 31, 2023, the Company’s investments in Wesco I, Wesco III, and Wesco IV were classified as a liability of $61.8 million due to distributions received in excess
of the Company's investment.
|
(3) |
As of December 31, 2023, the Company’s investments in Expo and Century Towers were classified as a liability of $3.7 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 December 31, 2023, the Company has invested in 24 preferred equity investments.
|
2023
|
2024 Full-Year Guidance Range
|
||||||||||||
Actuals (1)
|
Low End
|
High End
|
Comments about 2024 Full-Year Guidance
|
||||||||||
Total NOI from Consolidated Communities
|
$
|
1,172,785
|
$
|
1,167,000
|
$
|
1,197,000
|
Includes a range of same-property NOI growth of -1.10% to 2.30%
|
||||||
Management Fees
|
11,131
|
10,600
|
11,600
|
||||||||||
Interest Expense
|
|||||||||||||
Interest expense, before capitalized interest
|
(210,592
|
)
|
(208,700
|
)
|
(206,300
|
)
|
|||||||
Interest capitalized
|
835
|
100
|
500
|
||||||||||
Net interest expense
|
(209,757
|
)
|
(208,600
|
)
|
(205,800
|
)
|
|||||||
Recurring Income and Expenses
|
|||||||||||||
Interest and other income
|
27,416
|
28,200
|
29,200
|
||||||||||
FFO from co-investments
|
113,122
|
101,100
|
104,300
|
Reflects $100M of preferred equity redemptions and a forecasted reduction in preferred equity income on the remaining book
|
|||||||||
General and administrative
|
(56,845
|
)
|
(56,700
|
)
|
(58,700
|
)
|
|||||||
Corporate-level property management expenses
|
(45,872
|
)
|
(46,100
|
)
|
(47,100
|
)
|
|||||||
Non-controlling interest
|
(12,073
|
)
|
(13,500
|
)
|
(12,500
|
)
|
|||||||
Total recurring income and expenses
|
25,748
|
13,000
|
15,200
|
||||||||||
Non-Core Income and Expenses
|
|||||||||||||
Expensed acquisition and investment related costs
|
(595
|
)
|
-
|
-
|
|||||||||
Tax expense on unconsolidated co-investments
|
(697
|
)
|
-
|
-
|
|||||||||
Realized and unrealized gains on marketable securities, net
|
10,006
|
-
|
-
|
||||||||||
Provision for credit losses
|
(70
|
)
|
-
|
-
|
|||||||||
Equity income from non-core co-investments
|
1,685
|
-
|
-
|
||||||||||
Income from early redemption of preferred equity investments
|
285
|
-
|
-
|
||||||||||
General and administrative and other, net
|
(6,629
|
)
|
(20,000
|
)
|
(20,000
|
)
|
|||||||
Insurance reimbursements, legal settlements, and other, net
|
9,821
|
-
|
-
|
||||||||||
Total non-core income and expenses
|
13,806
|
(20,000
|
)
|
(20,000
|
)
|
||||||||
Funds from Operations (2)
|
$
|
1,013,713
|
$
|
962,000
|
$
|
998,000
|
|||||||
Funds from Operations per diluted Share
|
$
|
15.24
|
$
|
14.46
|
$
|
15.00
|
|||||||
% Change - Funds from Operations
|
11.2
|
%
|
-5.1
|
%
|
-1.6
|
%
|
|||||||
Core Funds from Operations (excludes non-core items)
|
$
|
999,907
|
$
|
982,000
|
$
|
1,018,000
|
|||||||
Core Funds from Operations per diluted Share
|
$
|
15.03
|
$
|
14.76
|
$
|
15.30
|
|||||||
% Change - Core Funds from Operations
|
3.6
|
%
|
-1.8
|
%
|
1.8
|
%
|
|||||||
EPS - Diluted
|
$
|
6.32
|
$
|
5.05
|
$
|
5.59
|
|||||||
Weighted average shares outstanding - FFO calculation
|
66,514
|
66,550
|
66,550
|
(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) |
2024 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.
|
2024 Guidance Range (1)
|
||||||||||||||||||||
2023
|
1st Quarter 2024
|
Full-Year 2024
|
||||||||||||||||||
Actuals
|
Low
|
High
|
Low
|
High
|
||||||||||||||||
EPS - diluted
|
$
|
6.32
|
$
|
1.26
|
$
|
1.38
|
$
|
5.05
|
$
|
5.59
|
||||||||||
Conversion from GAAP share count
|
(0.21
|
)
|
(0.04
|
)
|
(0.04
|
)
|
(0.18
|
)
|
(0.18
|
)
|
||||||||||
Impairment loss from unconsolidated co-investments
|
0.51
|
- |
- | - | - | |||||||||||||||
Depreciation and amortization
|
9.32
|
2.35
|
2.35
|
9.41
|
9.41
|
|||||||||||||||
Noncontrolling interest related to Operating Partnership units
|
0.19
|
0.04
|
0.04
|
0.18
|
0.18
|
|||||||||||||||
Gain on sale of real estate and land
|
(0.89
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
FFO per share - diluted
|
$
|
15.24
|
$
|
3.61
|
$
|
3.73
|
$
|
14.46
|
$
|
15.00
|
||||||||||
Expensed acquisition and investment related costs
|
0.01
|
-
|
-
|
-
|
-
|
|||||||||||||||
Tax expense on unconsolidated co-investments
|
0.01
|
-
|
-
|
-
|
-
|
|||||||||||||||
Realized and unrealized gains on marketable securities, net
|
(0.15
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Provision for credit losses
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
Equity income from non-core co-investments
|
(0.03
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Income from early redemption of preferred equity investments
|
-
|
-
|
-
|
-
|
-
|
|||||||||||||||
General and administrative and other, net
|
0.10
|
0.07
|
0.07
|
0.30
|
0.30
|
|||||||||||||||
Insurance reimbursements, legal settlements, and other, net
|
(0.15
|
)
|
-
|
-
|
-
|
-
|
||||||||||||||
Core FFO per share - diluted
|
$
|
15.03
|
$
|
3.68
|
$
|
3.80
|
$
|
14.76
|
$
|
15.30
|
(1) |
2024 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 - Fourth Quarter 2023 vs. 2022 and January 2024
|
Same-Property Cash Delinquencies as % of Scheduled Rent, by Region
|
||||||
Jan. 2024
|
4Q23
|
4Q22
|
Jan. 2024
|
4Q 2023
|
|||
Gross delinquencies as % of scheduled rent, excluding rental assistance
|
2.2%
|
1.5%
|
1.8%
|
Southern California, excl. Los Angeles
|
2.2%
|
1.1%
|
|
Northern California, excl. Alameda
|
1.0%
|
0.1%
|
|||||
Seattle
|
1.5%
|
0.8%
|
|||||
Rental assistance funds as % of scheduled rent (1)
|
0.0%
|
-0.1%
|
-0.7%
|
Los Angeles & Alameda Counties (3)
|
4.0%
|
3.5%
|
|
Total Same-Property Portfolio (1)(2)
|
2.2%
|
1.4%
|
|||||
Cash delinquencies as % of scheduled rent, including
rental assistance (2)
|
2.2%
|
1.4%
|
1.1%
|
|
|
|
|
(1) |
The Company's same-property portfolio received Emergency Rental Assistance payments of $0.1 million and $0.5 million for January 2024 and the three months ended December 31,
2023, respectively. This compares to $0.3 million and $2.6 million in January 2023 and the three months ended December 31, 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
|
||||||||||||||||||||||
Jan. 2024
|
4Q 2023
|
4Q 2023
|
4Q 2022
|
YTD 2023
|
YTD 2022
|
||||||||||||||||||
New lease rates (1)
|
-0.2%
|
-1.7%
|
|
Reported rental revenue (1)
|
$
|
400.3
|
$
|
389.0
|
$
|
1,581.9
|
$
|
1,515.5
|
|||||||||||
Renewal rates (1)
|
4.8%
|
4.9%
|
Straight-line rent impact to rental revenue
|
(1.0
|
)
|
2.1
|
(2.0
|
)
|
(5.6
|
)
|
|||||||||||||
Blended rates
|
2.6%
|
1.7%
|
GAAP rental revenue
|
$
|
399.3
|
$
|
391.1
|
$
|
1,579.9
|
$
|
1,509.9
|
||||||||||||
Financial occupancy
|
96.2%
|
96.1%
|
% change - reported rental revenue
|
2.9
|
%
|
4.4
|
%
|
||||||||||||||||
% change - GAAP rental revenue
|
2.1
|
%
|
4.6
|
%
|
|||||||||||||||||||
(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.
|
2024E Economic and Supply Forecast
|
|
U.S. Economic Assumptions:
|
Essex Markets Economic Forecast:
|
GDP Growth = +1.3%
|
Job Growth(1) = +1.3% (TTM YOY)
|
Job Growth(1) = +1.2% (TTM YOY)
|
Rent Growth(2) = +1.25% (TTM YOY)
|
Unemployment Rate = 4.2% (Dec’ 24)
|
Residential Supply Forecast (3)
|
||||||||||||||||||||
2023A
|
2024E | |||||||||||||||||||
|
|
Total
MF/SF
Supply
|
Total
Supply as a % of
Stock
|
Multifamily
Supply
|
Total
MF/SF
Supply
|
Total
Supply as a % of
Stock
|
||||||||||||||
Market | ||||||||||||||||||||
Los Angeles
|
19,400
|
0.5%
|
|
10,200
|
16,100
|
0.4%
|
||||||||||||||
Orange County
|
5,300
|
0.5%
|
2,900
|
4,900
|
0.4%
|
|||||||||||||||
San Diego
|
5,800
|
0.5%
|
3,600
|
5,600
|
0.4%
|
|||||||||||||||
Ventura
|
600
|
0.2%
|
500
|
800
|
0.3%
|
|||||||||||||||
Southern California
|
31,100
|
0.5%
|
17,200
|
27,400
|
0.4%
|
|||||||||||||||
San Francisco
|
2,200
|
0.3%
|
1,600
|
2,000
|
0.2%
|
|||||||||||||||
Oakland
|
5,300
|
0.5%
|
2,400
|
4,100
|
0.4%
|
|||||||||||||||
San Jose
|
3,900
|
0.5%
|
2,800
|
4,400
|
0.6%
|
|||||||||||||||
Northern California
|
11,400
|
0.4%
|
6,800
|
10,500
|
0.4%
|
|||||||||||||||
Seattle
|
9,700
|
0.7%
|
8,900
|
11,700
|
0.9%
|
|||||||||||||||
Total/Weighted Avg.
|
52,200
|
0.5%
|
32,900
|
49,600
|
0.5%
|
|
(1) |
Job Forecast: Refers to the difference between total non-farm industry employment
(not seasonally adjusted) projected for the full-year 2024E as compared to the full-year 2023A.
|
(2) |
Rent Forecast: Represents the forecasted change in economic rents for full-year
2024E compared to the full-year 2023A and excludes submarkets not targeted by Essex.
|
(3) |
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
December 31,
2023
|
|||
Net income available to common stockholders
|
$
|
65,391
|
||
Adjustments:
|
||||
Net income attributable to noncontrolling interest
|
4,958
|
|||
Interest expense, net (1)
|
54,495
|
|||
Depreciation and amortization
|
138,016
|
|||
Income tax provision
|
48
|
|||
Impairment loss from unconsolidated co-investment
|
33,700
|
|||
Co-investment EBITDAre adjustments
|
31,363
|
|||
EBITDAre
|
327,971
|
|||
|
||||
Realized and unrealized gains on marketable securities, net
|
(5,712
|
)
|
||
Provision for credit losses
|
19
|
|||
Equity income from non-core co-investments
|
(263
|
)
|
||
Tax benefit on unconsolidated co-investments
|
(540
|
)
|
||
General and administrative and other, net
|
4,059
|
|||
Insurance reimbursements and legal settlements, net
|
(739
|
)
|
||
Expensed acquisition and investment related costs
|
220
|
|||
Adjusted EBITDAre
|
$
|
325,015
|
(1) |
Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges.
|
(Dollars in thousands)
|
Three
Months Ended
December 31,
2023
|
Twelve
Months Ended
December 31,
2023
|
||||||
Interest expense
|
$
|
55,099
|
$
|
212,905
|
||||
Adjustments:
|
||||||||
Total return swap income
|
(604
|
)
|
(3,148
|
)
|
||||
Interest expense, net
|
$
|
54,495
|
$
|
209,757
|
(Dollars in millions)
|
February 2,
2024
|
|||
Unsecured credit facility - committed
|
$
|
1,235
|
||
Balance outstanding
|
-
|
|||
Undrawn portion of line of credit
|
$
|
1,235
|
||
Cash, cash equivalents & marketable securities
|
384
|
|||
Total liquidity
|
$
|
1,619
|
(Dollars in thousands)
|
December 31,
2023
|
|||
Total consolidated debt, net
|
$
|
6,205,735
|
||
Total debt from co-investments at pro rata share
|
1,325,612
|
|||
Adjustments:
|
||||
Consolidated unamortized premiums, discounts, and debt issuance costs
|
34,057
|
|||
Pro rata co-investments unamortized premiums, discounts, and debt issuance costs
|
5,226
|
|||
Consolidated cash and cash equivalents-unrestricted
|
(391,749
|
)
|
||
Pro rata co-investment cash and cash equivalents-unrestricted
|
(35,147
|
)
|
||
Marketable securities
|
(92,808
|
)
|
||
Net Indebtedness
|
$
|
7,050,926
|
||
Adjusted EBITDAre, annualized (1)
|
$
|
1,300,060
|
||
Other EBITDAre normalization adjustments, net, annualized (2)
|
(2,332
|
)
|
||
Adjusted EBITDAre, normalized and annualized
|
$
|
1,297,728
|
||
Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized
|
5.4
|
(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
|
Twleve Months Ended
|
|||||||||||||||
(Dollars in thousands)
|
December 31,
2023
|
December 31,
2022
|
December 31,
2023
|
December 31,
2022
|
||||||||||||
Earnings from operations
|
$
|
130,341
|
$
|
228,143
|
$
|
584,342
|
$
|
595,229
|
||||||||
Adjustments:
|
||||||||||||||||
Corporate-level property management expenses
|
11,485
|
10,172
|
45,872
|
40,704
|
||||||||||||
Depreciation and amortization
|
138,016
|
135,758
|
548,438
|
539,319
|
||||||||||||
Management and other fees from affiliates
|
(2,803
|
)
|
(2,826
|
)
|
(11,131
|
)
|
(11,139
|
)
|
||||||||
General and administrative
|
19,739
|
16,036
|
63,474
|
56,577
|
||||||||||||
Expensed acquisition and investment related costs
|
220
|
1,884
|
595
|
2,132
|
||||||||||||
Casualty loss
|
-
|
-
|
433
|
-
|
||||||||||||
Gain on sale of real estate and land
|
-
|
(94,416
|
)
|
(59,238
|
)
|
(94,416
|
)
|
|||||||||
NOI
|
296,998
|
294,751
|
1,172,785
|
1,128,406
|
||||||||||||
Less: Non-same property NOI
|
(13,261
|
)
|
(17,303
|
)
|
(54,179
|
)
|
(56,058
|
)
|
||||||||
Same-Property NOI
|
$
|
283,737
|
$
|
277,448
|
$
|
1,118,606
|
$
|
1,072,348
|
(Dollars in thousands)
|
Annualized
Q4 '23 (1)
|
|||
NOI
|
$
|
1,187,992
|
||
Adjustments:
|
||||
NOI from real estate assets sold or held for sale
|
-
|
|||
Other, net (2)
|
1,446
|
|||
Adjusted Total NOI
|
1,189,438
|
|||
Less: Encumbered NOI
|
(92,184
|
)
|
||
Unencumbered NOI
|
$
|
1,097,254
|
||
Encumbered NOI
|
$
|
92,184
|
||
Unencumbered NOI
|
1,097,254
|
|||
Adjusted Total NOI
|
$
|
1,189,438
|
||
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.
|
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