EX-99.1 2 ef20037625_ex99-1.htm EXHIBIT 99.1
Exhibit 99.1

THIRD QUARTER 2024  EARNINGS RELEASE &  SUPPLEMENTAL DATA  Century Towers | San Jose, CA 
 

Third Quarter 2024
Earnings Release and Supplemental Data

 
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
Capital Expenditures
S-11
Co-Investments and Preferred Equity Investments
S-12
Assumptions for 2024 FFO Guidance Range
S-13
Reconciliation of Projected EPS, FFO and Core FFO per diluted share
S-13.1
Market Economic Rent Growth Trending Along the Pre-COVID Average
 S-13.2
Summary of Apartment Community Acquisitions and Dispositions Activity
S-14
Same-Property Delinquencies, Operating Statistics, and Revenue Growth on a GAAP basis
S-15
MSA Level Supply Forecast: 2023A - 2025E
S-16
2025E Early Building Blocks to Same-Property Revenue Growth
S-16.1
Reconciliations of Non-GAAP Financial Measures and Other Terms
S-17.1 – S-17.4

1100 Park Place Suite 200 San Mateo California 94403 telephone 650 655 7800 facsimile 650 655 7810
www.essex.com


Essex Announces Third Quarter 2024 Results and
Raises Full-Year 2024 Guidance

San Mateo, California—October 29, 2024—Essex Property Trust, Inc. (NYSE: ESS) (the “Company”) announced today its third quarter 2024 earnings results and related business activities.

Net Income, Funds from Operations (“FFO”), and Core FFO per diluted share for the quarter ended September 30, 2024 are detailed below.

                         
   
Three Months Ended
September 30,
    
%
    
Nine Months Ended
September 30,
    
%
  
   
2024
    
2023
    
Change
    
2024
    
2023
    
Change
  
Per Diluted Share
                                    
Net Income
  

$1.84
    

$1.36
      
35.3%

 

$7.54
    

$5.30
      
42.3%

Total FFO
  

$3.81
    

$3.69
      
3.3%

 
$12.30
    

$11.37
      
8.2%

Core FFO
  

$3.91
    

$3.78
      
3.4%

 

$11.68
    

$11.21
      
4.2%


Third Quarter 2024 Highlights:


 •
Reported Net Income per diluted share for the third quarter of 2024 of $1.84, compared to $1.36 in the third quarter of 2023. The increase is largely attributable to gains on remeasurements of co-investments recognized in the third quarter of 2024.


•
Grew Core FFO per diluted share by 3.4% compared to the third quarter of 2023, exceeding the midpoint of the Company’s guidance range by $0.04. The outperformance was primarily driven by favorable same-property revenue growth.


•
Achieved same-property revenue and net operating income (“NOI”) growth of 3.5% and 2.6%, respectively, compared to the third quarter of 2023. On a sequential basis, same-property revenues improved 1.2%.


•
Issued $200.0 million of 10-year senior unsecured notes due in April 2034 at an effective yield of 5.1%.


•
Acquired and consolidated two joint venture apartment home communities located in San Jose, CA at a combined valuation of $290.5 million on a gross basis.


•
Raised full-year 2024 guidance range as detailed in the table below:
 
Full-Year 2024 Revised Guidance
  
Revised
Range
    
Revised
Midpoint
  
Change at
Midpoint
  
Net Income per diluted share
  
$8.66 - $8.78
    
$8.72
  

+$0.37
  
Core FFO per diluted share
  
$15.50 - $15.62
    
$15.56
  

+$0.06
  
Same-Property Revenues
  
3.10% to 3.40%
    
3.25%
    
+0.25%

Same-Property Operating Expenses
  
4.50% to 5.00%
    
4.75%
  
Unchanged
  
Same-Property NOI
  
2.30% to 2.90%
    
2.60%
    
+0.30%


1100 Park Place Suite 200 San Mateo California 94403 telephone 650 655 7800 facsimile 650 655 7810
www.essex.com

Same-Property Operations

Same-property operating results exclude any properties that are not comparable for the periods presented. The table below illustrates the percentage change in same-property gross revenues for the quarter ended September 30, 2024 compared to the quarter ended September 30, 2023, and the sequential percentage change for the quarter ended September 30, 2024 compared to the quarter ended June 30, 2024, by submarket for the Company:

   
Q3 2024 vs.
Q3 2023
    
Q3 2024 vs.
Q2 2024
    
% of
Total
  
   
Revenue
Change
    
Revenue
Change
    
Q3 2024
Revenues
  
Southern California
                  
Los Angeles County
    
2.5%

   
1.0%

   
18.6%

Orange County
    
5.2%
   
1.5%

   
10.7%

San Diego County
    
5.3%
   
1.5%

   
9.1%

Ventura County
    
6.3%

   
1.6%

   
4.2%

Total Southern California
    
4.1%

   
1.3%

   
42.6%

Northern California
                        
Santa Clara County
    
2.4%

   
1.0%

   
19.6%
Alameda County
    
1.8%

   
1.1%
   
7.7%

San Mateo County
    
3.2%

   
1.1%

   
4.5%

Contra Costa County
    
3.3%

   
0.9%

   
5.4%

San Francisco
    
5.0%

   
1.4%

   
2.5%

Total Northern California
    
2.7%

   
1.0%

   
39.7%

Seattle Metro
    
3.8%

   
1.1%

   
17.7%

Same-Property Portfolio
    
3.5%

   
1.2%

   
100.0%


The table below illustrates the components that drove the change in same-property revenue on a year-over-year basis for the three- and nine-month periods ended September 30, 2024 and on a sequential basis for the quarter ended September 30, 2024.

Same-Property Revenue Components
  
Q3 2024
vs. Q3 2023
    
YTD 2024
vs. YTD 2023
    
Q3 2024
vs. Q2 2024
  
Scheduled Rents
    
1.7%

   
1.9%

   
0.9%

Delinquencies
    
1.3%

   
1.1%

   
0.2%

Cash Concessions
    
0.0%

   
0.1%

   
0.0%

Vacancy
    
-0.3%

   
-0.4%

   
0.0%

Other Income
    
0.8%

   
0.8%

   
0.1%

2024 Same-Property Revenue Growth
    
3.5%

   
3.5%

   
1.2%


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Year-Over-Year Change
    
Year-Over-Year Change
  
   
Q3 2024 compared to Q3 2023
    
YTD 2024 compared to YTD 2023
  
   
Revenues
    
Operating
Expenses
    
NOI
    
Revenues
    
Operating
Expenses
    
NOI
  
Southern California
    
4.1%

   
4.3%

   
4.0%

   
4.3%

   
4.1%

   
4.3%
Northern California
    
2.7%

   
6.8%

   
0.9%

   
2.8%

   
5.6%

   
1.6%
Seattle Metro
    
3.8%

   
5.4%

   
3.1%

   
3.2%

   
5.7%

   
2.1%

Same-Property Portfolio
    
3.5%

   
5.5%

   
2.6%

   
3.5%

   
5.0%

   
2.9%


   
Sequential Change
  
   
Q3 2024 compared to Q2 2024
  
   
Revenues
    
Operating
Expenses
    
NOI
  
Southern California
    
1.3%

   
4.7%

   
0.0%

Northern California
    
1.0%

   
7.5%

   
-1.7%

Seattle Metro
    
1.1%

   
3.6%

   
0.0%

Same-Property Portfolio
    
1.2%

   
5.6%

   
-0.7%


   
Financial Occupancies
  
   
Quarter Ended
  
   
9/30/2024
    
6/30/2024
    
9/30/2023
  
Southern California
    
95.9%

   
95.7%

   
96.3%

Northern California
    
96.4%

   
96.3%

   
96.6%

Seattle Metro
    
96.6%

   
97.1%

   
96.3%

Same-Property Portfolio
    
96.2%

   
96.2%

   
96.4%


Investment Activity

Acquisitions

In July, the Company acquired its joint venture partner’s 49.9% common equity interest in Patina at Midtown, a 269-unit apartment home community built in 2021 and located in San Jose, CA, for a total contract price of $117.0 million on a gross basis. This reflects an attractive valuation of $435,000 per unit. Concurrent with the closing, the Company repaid a $95.0 million secured mortgage encumbering the property and was fully redeemed on a preferred equity investment affiliated with the partnership. The Company recorded a gain on remeasurement of co-investments of $2.2 million, which has been excluded from Total and Core FFO.

In September, the Company acquired its joint venture partner’s 50% common equity interest in Century Towers, a 376-unit apartment home community built in 2017 and located in San Jose, CA, for a total contract price of $173.5 million on a gross basis. This reflects an attractive valuation of $458,000 per unit. Concurrent with the closing, the Company repaid a $110.5 million secured mortgage encumbering the property and was fully redeemed on a preferred equity investment affiliated with the partnership. The Company issued approximately $25.0 million of Operating Partnership Units (“OP Units”) to the seller at $305 per unit. The

- 3 -
Company recorded a gain on remeasurement of co-investments of $29.4 million, which has been excluded from Total and Core FFO.

Subsequent to quarter end, the Company acquired its joint venture partner’s 49.9% interest in the BEX II portfolio, comprising of four communities totaling 871 apartment homes, for a total contract price of $337.5 million on a gross basis. Concurrent with the closing, the Company assumed $95.0 million of secured mortgages.

Dispositions

Subsequent to quarter end, the Company sold its 81.5% interest in a 76-year-old apartment home community located in San Mateo, CA for a total contract price of $252.4 million on a gross basis. The 697-unit apartment home community was unencumbered and was classified as held for sale on the balance sheet as of September 30, 2024.

Other Investments

In July, the Company received cash proceeds of $40.1 million from the full redemption of a subordinated loan investment yielding an 11.5% rate of return.

Subsequent to quarter end, the Company received cash proceeds of $55.8 million from the full and partial redemptions of two structured finance investments yielding a 9.6% weighted average rate of return. Year-to-date through October, the Company has received cash proceeds of $106.2 million from redemptions of structured finance investments yielding a 10.4% weighted average rate of return.

Liquidity and Balance Sheet

Common Stock

Year-to-date through October 28, 2024, the Company has not issued any shares of common stock through its equity distribution program or repurchased any shares through its stock repurchase plan.

Balance Sheet

In August, the Company issued $200.0 million of 10-year senior unsecured notes due in April 2034 bearing an interest rate of 5.50% per annum and an effective yield of 5.11%. The notes were issued as additional notes to the previous offering conducted in March 2024.

In September, the Company extended the maturity date of its $1.2 billion unsecured line of credit facility to mature in January 2029 with two additional six-month extension options, exercisable at the Company’s option. The underlying interest rate on the line of credit is unchanged at Adjusted SOFR plus 0.765%, which is based on a tiered rate structure tied to the Company’s corporate ratings and further adjusted by the facility’s Sustainability Metric Adjustment feature.

As of October 28, 2024, the Company had approximately $1.2 billion in liquidity via undrawn capacity on its unsecured credit facilities, cash and cash equivalents, and marketable securities.

- 4 -
Guidance

For the third quarter of 2024, the Company exceeded the midpoint of the guidance range provided in its second quarter 2024 earnings release for Core FFO by $0.04 per diluted share. The outperformance primarily relates to favorable same-property revenue growth.

The following table provides a reconciliation of third quarter 2024 Core FFO per diluted share to the midpoint of the guidance provided in the Company’s second quarter 2024 earnings release.

   
Per Diluted
Share
  
Guidance midpoint of Core FFO per diluted share for Q3 2024
  
$
3.87
  
NOI from Consolidated Communities
    
0.04
  
FFO from Co-Investments
    
0.01
  
G&A and Other
    
(0.01)

Core FFO per diluted share for Q3 2024 reported
  
$
3.91
  

The table below provides key updates to the Company’s 2024 full-year assumptions for Net Income, Total FFO, Core FFO per diluted share, and same-property growth. For additional details regarding the Company’s 2024 Core FFO guidance range, please see page S-13 of the accompanying supplemental financial information.

2024 Full-Year and Fourth Quarter Guidance

   
Previous
Range
    
Previous Midpoint
    
Revised
Range
    
Revised Midpoint
    
Change at the
Midpoint
  
Per Diluted Share
                              
Net Income
  
$8.23 - $8.47
    
$8.35
    
$8.66 - $8.78
    
$8.72
    
+$0.37
  
Total FFO
  
$15.93 - $16.17
    
$16.05
    
$15.86 - $15.98
    
$15.92
    
($0.13)
Core FFO
  
$15.38 - $15.62
    
$15.50
    
$15.50 - $15.62
    
$15.56
    
+$0.06
  
Q4 2024 Core FFO
  
-
    
-
    
$3.82 - $3.94
    
$3.88
    
N/A
  
Same-Property Growth on a Cash-Basis (1)
                          
Revenues
  
2.70% to 3.30%
    
3.00%

 
3.10% to 3.40%
    
3.25%

 
+0.25%

Operating Expenses
  
4.50% to 5.00%
    
4.75%

 
4.50% to 5.00%
    
4.75%

 
Unchanged
  
NOI
  
1.80% to 2.80%
    
2.30%

 
2.30% to 2.90%
    
2.60%

 
+0.30%



(1)
The midpoint of the Company’s same-property revenues and NOI on a GAAP basis are 3.40% and 2.90%, respectively, representing a 0.20% and 0.40% increase to the Company’s previous guidance midpoints.

Conference Call with Management

The Company will host an earnings conference call with management to discuss its quarterly results on Wednesday, October 30, 2024 at 10:00 a.m. PT (1:00 p.m. ET), which will be broadcast live via the Internet at www.essex.com, and accessible via phone by dialing toll-free, (877) 407-0784, or toll/international, (201) 689-8560. No passcode is necessary.

- 5 -
A rebroadcast of the live call will be available online for 30 days and digitally for 7 days. To access the replay online, go to www.essex.com and select the third quarter 2024 earnings link. To access the replay, dial (844) 512-2921 using the replay pin number 13749248. If you are unable to access the information via the Company’s website, please contact the Investor Relations Department at investors@essex.com or calling (650) 655-7800.

Upcoming Events

The Company is scheduled to participate in the National Association of Real Estate Investment Trusts (“NAREIT”) REITWorld Conference held at the Wynn Las Vegas in Las Vegas, NV on November 19, 2024. A copy of any materials provided by the Company at the conference will be made available on the Investors section of the Company’s website at www.essex.com.

Corporate Profile

Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 254 apartment communities comprising approximately 62,000 apartment homes. Additional information about the Company can be found on the Company’s website at www.essex.com.

This press release and accompanying supplemental financial information has been furnished to the Securities and Exchange Commission electronically on Form 8-K and can be accessed from the Company’s website at www.essex.com. If you are unable to obtain the information via the Web, please contact the Investor Relations Department at (650) 655-7800.

FFO Reconciliation

FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, FFO adjusts the net income of equity REITs for non-cash charges such as depreciation and amortization of rental properties, impairment charges, gains on sales of real estate and extraordinary items. Management considers FFO and FFO which excludes non-core items, which is referred to as “Core FFO,” to be useful supplemental operating performance measures of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate the operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and to pay dividends. By excluding gains or losses related to sales of depreciated operating properties and land and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a real estate company between periods or as compared to different companies. By further adjusting for items that are not considered part of the Company’s core business operations, Core FFO allows investors to compare the core operating performance of the Company to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO and Core FFO do not represent net income or cash flows from operations as defined by U.S. generally accepted accounting principles (“GAAP”) and are not intended to indicate whether cash flows will be sufficient to fund cash needs. These measures should not be considered as alternatives to net income as an indicator of the REIT’s operating performance or to cash flows as a measure of liquidity. FFO and Core FFO do not measure whether cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to stockholders. FFO and Core FFO also do not represent cash flows generated from operating, investing or

- 6 -
financing activities as defined under GAAP. Management has consistently applied the NAREIT definition of FFO to all periods presented. However, there is judgment involved and other REITs’ calculation of FFO may vary from the NAREIT definition for this measure, and thus their disclosures of FFO may not be comparable to the Company’s calculation.

The following table sets forth the Company’s calculation of diluted FFO and Core FFO for the three and nine months ended September 30, 2024 and 2023 (in thousands, except for share and per share amounts):

   
Three Months Ended
September 30,
    
Nine Months Ended
September 30,
  
Funds from Operations attributable to common stockholders and unitholders
  
2024
    
2023
    
2024
    
2023
  
Net income available to common stockholders
  
$
118,424
    
$
87,282
    
$
484,069
    
$
340,434
  
Adjustments:
                                
Depreciation and amortization
    
146,439
      
137,357
      
431,785
      
410,422
  
Gains not included in FFO
    
(31,583
)
    
-
      
(169,909
)
    
(59,238
)
Casualty loss
    
-
      
-
      
-
      
433
  
Impairment loss from unconsolidated co-investments
    
-
      
-
      
3,726
      
-
  
Depreciation and amortization from unconsolidated co-investments
    
16,417
      
18,029
      
52,267
      
53,486
  
Noncontrolling interest related to Operating Partnership units
    
4,206
      
3,072
      
17,075
      
11,982
  
Depreciation attributable to third party ownership and other
    
(370
)
    
(371
)
    
(1,149
)
    
(1,095
)
Funds from Operations attributable to common stockholders and unitholders
  
$
253,533
    
$
245,369
    
$
817,864
    
$
756,424
  
FFO per share – diluted
  
$
3.81
    
$
3.69
    
$
12.30
    
$
11.37
  
Expensed acquisition and investment related costs
  
$
-
    
$
31
    
$
68
    
$
375
  
Tax (benefit) expense on unconsolidated co-investments (1)
    
(441
)
    
404
      
(1,199
)
    
1,237
  
Realized and unrealized (gains) losses on marketable securities, net
    
(5,697
)
    
4,577
      
(10,645
)
    
(4,294
)
Provision for credit losses
    
(182
)
    
17
      
(116
)
    
51
  
Equity income from non-core co-investments (2)
    
(555
)
    
(538
)
    
(6,282
)
    
(1,422
)
Co-investment promote income
    
-
      
-
      
(1,531
)
    
-
  
Income from early redemption of preferred equity investments and notes receivable
    
-
      
-
      
-
      
(285
)
General and administrative and other, net
    
13,956
      
1,743
      
22,403
      
2,570
  
Insurance reimbursements, legal settlements, and other, net (3)
    
(612
)
    
(283
)
    
(43,912
)
    
(9,082
)
Core Funds from Operations attributable to common stockholders and unitholders
  
$
260,002
    
$
251,320
    
$
776,650
    
$
745,574
  
Core FFO per share – diluted
  
$
3.91
    
$
3.78
    
$
11.68
    
$
11.21
  
Weighted average number of shares outstanding diluted (4)
    
66,551,838
      
66,445,256
      
66,500,412
      
66,537,111
  

(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)
Includes legal settlement gains of $42.5 million and $7.7 million for the nine months ended September 30, 2024 and 2023, respectively.
(4)
Assumes conversion of all outstanding limited partnership units in Essex Portfolio, L.P. (the “Operating Partnership”) into shares of the Company’s common stock and excludes DownREIT limited partnership units.

- 7 -
Net Operating Income (“NOI”) and Same-Property NOI Reconciliations

NOI and Same-Property NOI are considered by management to be important supplemental performance measures to earnings from operations included in the Company’s consolidated statements of income. The presentation of same-property NOI assists with the presentation of the Company’s operations prior to the allocation of depreciation and any corporate-level or financing-related costs. NOI reflects the operating performance of a community and allows for an easy comparison of the operating performance of individual communities or groups of communities. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impacts to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets. The Company defines same-property NOI as same-property revenues less same-property operating expenses, including property taxes. Please see the reconciliation of earnings from operations to NOI and same-property NOI, which in the table below is the NOI for stabilized properties consolidated by the Company for the periods presented (dollars in thousands):

   
Three Months Ended
September 30,
    
Nine Months Ended
September 30,
  
   
2024
    
2023
    
2024
    
2023
  
Earnings from operations
  
$
128,790
    
$
131,784
    
$
398,599
    
$
454,001
  
Adjustments:
                                
Corporate-level property management expenses
    
12,150
      
11,504
      
36,004
      
34,387
  
Depreciation and amortization
    
146,439
      
137,357
      
431,785
      
410,422
  
Management and other fees from affiliates
    
(2,563
)
    
(2,785
)
    
(7,849
)
    
(8,328
)
General and administrative
    
29,067
      
14,611
      
67,374
      
43,735
  
Expensed acquisition and investment related costs
    
-
      
31
      
68
      
375
  
Casualty loss
    
-
      
-
      
-
      
433
  
Gain on sale of real estate and land
    
-
      
-
      
-
      
(59,238
)
NOI
    
313,883
      
292,502
      
925,981
      
875,787
  
Less: Non-same property NOI
    
(26,431
)
    
(12,390
)
    
(66,748
)
    
(40,504
)
Same-Property NOI
  
$
287,452
    
$
280,112
    
$
859,233
    
$
835,283
  

Safe Harbor Statement Under The Private Litigation Reform Act of 1995:

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements which are not historical facts, including statements regarding the Company’s expectations, estimates, assumptions, hopes, intentions, beliefs and strategies regarding the future. Words such as “expects,” “assumes,” “anticipates,” “may,” “will,” “intends,” “plans,” “projects,” “believes,” “seeks,” “future,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, among other things, statements regarding the Company’s fourth quarter and full-year 2024 guidance (including net income, Total FFO and Core FFO, same-property growth and related assumptions) and anticipated yield on certain investments. While the Company’s management believes the assumptions underlying its forward-looking statements are reasonable, such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control, which could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or

- 8 -
achievements expressed or implied by such forward-looking statements. The Company cannot assure the future results or outcome of the matters described in these statements; rather, these statements merely reflect the Company’s current expectations of the approximate outcomes of the matters discussed.

Factors that might cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following: assumptions related to our fourth quarter and full-year 2024 guidance; occupancy rates and rental demand may be adversely affected by competition and local economic and market conditions; there may be increased interest rates, inflation, escalated operating costs and possible recessionary impacts; geopolitical tensions and regional conflicts, and the related impacts on macroeconomic conditions, including, among other things, interest rates and inflation; the terms of any refinancing may not be as favorable as the terms of existing indebtedness; the Company’s inability to maintain our investment grade credit rating with the rating agencies; the Company may be unsuccessful in the management of its relationships with its co-investment partners; the Company may fail to achieve its business objectives; time of actual completion and/or stabilization of development and redevelopment projects; estimates of future income from an acquired property may prove to be inaccurate; future cash flows may be inadequate to meet operating requirements and/or may be insufficient to provide for dividend payments in accordance with REIT requirements; changes in laws or regulations and the anticipated or actual impact of future changes in laws or regulations; unexpected difficulties in leasing of future development projects; volatility in financial and securities markets; the Company’s failure to successfully operate acquired properties; unforeseen consequences from cyber-intrusion; government approvals, actions and initiatives, including the need for compliance with environmental requirements; and those further risks, special considerations, and other factors referred to in the Company’s annual report on Form 10-K for the year ended December 31, 2023, quarterly reports on Form 10-Q, and those risk factors and special considerations set forth in the Company’s other filings with the SEC which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements are made as of the date hereof, the Company assumes no obligation to update or supplement this information for any reason, and therefore, they may not represent the Company’s estimates and assumptions after the date of this press release.

Definitions and Reconciliations

Non-GAAP financial measures and certain other capitalized terms, as used in this earnings release, are defined and further explained on pages S-17.1 through S-17.4, “Reconciliations of Non-GAAP Financial Measures and Other Terms,” of the accompanying supplemental financial information. The supplemental financial information is available on the Company’s website at www.essex.com.

Contact Information
Loren Rainey
Director, Investor Relations
(650) 655-7800
lrainey@essex.com

- 9 -
E S S E X  P R O P E R T Y  T R U S T, I N C.

Consolidated Operating Results
(Dollars in thousands, except share and per share amounts)

     
Three Months Ended
September 30,
      
Nine Months Ended
September 30,
   
   
2024
    
2023
    
2024
    
2023
  
                         
Revenues:
                        
Rental and other property
  
$
448,135
    
$
416,398
    
$
1,312,132
    
$
1,239,319
  
Management and other fees from affiliates
    
2,563
      
2,785
      
7,849
      
8,328
  
     
450,698
      
419,183
      
1,319,981
      
1,247,647
  
                                 
Expenses:
                                
Property operating
    
134,252
      
123,896
      
386,151
      
363,532
  
Corporate-level property management expenses
    
12,150
      
11,504
      
36,004
      
34,387
  
Depreciation and amortization
    
146,439
      
137,357
      
431,785
      
410,422
  
General and administrative
    
29,067
      
14,611
      
67,374
      
43,735
  
Expensed acquisition and investment related costs
    
-
      
31
      
68
      
375
  
Casualty loss
    
-
      
-
      
-
      
433
  
 
    
321,908
      
287,399
      
921,382
      
852,884
  
Gain on sale of real estate and land
    
-
      
-
      
-
      
59,238
  
Earnings from operations
    
128,790
      
131,784
      
398,599
      
454,001
  
Interest expense, net (1)
    
(58,425
)
    
(53,471
)
    
(172,053
)
    
(155,262
)
Interest and other income
    
11,449
      
4,406
      
78,292
      
29,055
  
Equity income from co-investments
    
11,649
      
10,694
      
33,667
      
33,802
  
Tax benefit (expense) on unconsolidated co-investments
    
441
      
(404
)
    
1,199
      
(1,237
)
Gain on remeasurement of co-investment
    
31,583
      
-
      
169,909
      
-
  
Net income
    
125,487
      
93,009
      
509,613
      
360,359
  
Net income attributable to noncontrolling interest
    
(7,063
)
    
(5,727
)
    
(25,544
)
    
(19,925
)
Net income available to common stockholders
  
$
118,424
    
$
87,282
    
$
484,069
    
$
340,434
  
                                 
Net income per share - basic
  
$
1.84
    
$
1.36
    
$
7.54
    
$
5.30
  
                                 
Shares used in income per share - basic
    
64,227,662
      
64,184,180
      
64,214,258
      
64,274,085
  
                                 
Net income per share - diluted
  
$
1.84
    
$
1.36
    
$
7.54
    
$
5.30
  
                                 
Shares used in income per share - diluted
    
64,271,459
      
64,186,020
      
64,234,358
      
64,275,279
  

(1)
Refer to page S-17.2, the section titled “Interest Expense, Net” for additional information.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-1
E S S E X  P R O P E R T Y  T R U S T, I N C.

Consolidated Operating Results - Selected Line Item Detail
(Dollars in thousands)

   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
  
   
2024
    
2023
    
2024
    
2023
  
                         
Rental and other property
                        
Rental income
  
$
440,649
    
$
410,438
    
$
1,290,026
    
$
1,222,859
  
Other property
    
7,486
      
5,960
      
22,106
      
16,460
  
Rental and other property
  
$
448,135
    
$
416,398
    
$
1,312,132
    
$
1,239,319
  
                                 
Property operating expenses
                                
Real estate taxes
  
$
48,956
    
$
46,876
    
$
143,188
    
$
138,787
  
Administrative
    
13,782
      
12,370
      
42,881
      
37,254
  
Maintenance and repairs
    
16,197
      
15,361
      
44,987
      
44,629
  
Personnel costs
    
24,756
      
22,756
      
72,583
      
68,609
  
Utilities
    
30,561
      
26,533
      
82,512
      
74,253
  
Property operating expenses
  
$
134,252
    
$
123,896
    
$
386,151
    
$
363,532
  
                                 
Interest and other income
                                
Marketable securities and other income
  
$
5,044
    
$
8,830
    
$
23,729
    
$
16,581
  
Realized and unrealized gains (losses) on marketable securities, net
    
5,697
      
(4,577
)
    
10,645
      
4,294
  
Provision for credit losses
    
182
      
(17
)
    
116
      
(51
)
Insurance reimbursements, legal settlements, and other, net
    
526
      
170
      
43,802
      
8,231
  
Interest and other income
  
$
11,449
    
$
4,406
    
$
78,292
    
$
29,055
  
                                 
Equity income from co-investments
                                
Equity loss from co-investments
  
$
(862
)
  
$
(3,267
)
  
$
(6,736
)
  
$
(9,115
)
Income from preferred equity investments
    
11,870
      
13,310
      
36,206
      
40,359
  
Equity income from non-core co-investments
    
555
      
538
      
6,282
      
1,422
  
Insurance reimbursements, legal settlements, and other, net
    
86
      
113
      
110
      
851
  
Impairment loss from unconsolidated co-investment
    
-
      
-
      
(3,726
)
    
-
  
Co-investment promote income
    
-
      
-
      
1,531
      
-
  
Income from early redemption of preferred equity investments
    
-
      
-
      
-
      
285
  
Equity income from co-investments
  
$
11,649
    
$
10,694
    
$
33,667
    
$
33,802
  
                                 
Noncontrolling interest
                                
Limited partners of Essex Portfolio, L.P.
  
$
4,206
    
$
3,072
    
$
17,075
    
$
11,982
  
DownREIT limited partners’ distributions
    
2,284
      
2,162
      
6,867
      
6,493
  
Third-party ownership interest
    
573
      
493
      
1,602
      
1,450
  
Noncontrolling interest
  
$
7,063
    
$
5,727
    
$
25,544
    
$
19,925
  
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-2
E S S E X  P R O P E R T Y  T R U S T, I N C.

Consolidated Funds from Operations (1)
(Dollars in thousands, except share and per share amounts and in footnotes)
     
Three Months Ended
September 30,
               
Nine Months Ended
September 30,
            
   
2024
    
2023
    
% Change
    
2024
    
2023
    
%
Change
  
                                     
Funds from operations attributable to common stockholders and unitholders (FFO)
                                    
Net income available to common stockholders
  
$
118,424
    
$
87,282
          
$
484,069
    
$
340,434
        
Adjustments:
                                            
Depreciation and amortization
    
146,439
      
137,357
            
431,785
      
410,422
        
Gains not included in FFO
    
(31,583
)
    
-
            
(169,909
)
    
(59,238
)
      
Casualty loss
    
-
      
-
            
-
      
433
        
Impairment loss from unconsolidated co-investments
    
-
      
-
            
3,726
      
-
        
Depreciation and amortization from unconsolidated co-investments
    
16,417
      
18,029
            
52,267
      
53,486
        
Noncontrolling interest related to Operating Partnership units
    
4,206
      
3,072
            
17,075
      
11,982
        
Depreciation attributable to third party ownership and other (2)
    
(370
)
    
(371
)
          
(1,149
)
    
(1,095
)
      
Funds from operations attributable to common stockholders and unitholders
  
$
253,533
    
$
245,369
          
$
817,864
    
$
756,424
        
FFO per share-diluted
  
$
3.81
    
$
3.69
      
3.3%

 
$
12.30
    
$
11.37
      
8.2%

                                                 
Components of the change in FFO
                                                
Non-core items:
                                                
Expensed acquisition and investment related costs
  
$
-
    
$
31
            
$
68
    
$
375
          
Tax (benefit) expense on unconsolidated co-investments (3)
    
(441
)
    
404
              
(1,199
)
    
1,237
          
Realized and unrealized (gains) losses on marketable securities, net
    
(5,697
)
    
4,577
              
(10,645
)
    
(4,294
)
        
Provision for credit losses
    
(182
)
    
17
              
(116
)
    
51
          
Equity income from non-core co-investments (4)
    
(555
)
    
(538
)
            
(6,282
)
    
(1,422
)
        
Co-investment promote income
    
-
      
-
              
(1,531
)
    
-
          
Income from early redemption of preferred equity investments and notes receivable
    
-
      
-
              
-
      
(285
)
        
General and administrative and other, net
    
13,956
      
1,743
              
22,403
      
2,570
          
Insurance reimbursements, legal settlements, and other, net (5)
    
(612
)
    
(283
)
            
(43,912
)
    
(9,082
)
        
Core funds from operations attributable to common stockholders and unitholders
  
$
260,002
    
$
251,320
            
$
776,650
    
$
745,574
          
Core FFO per share-diluted
  
$
3.91
    
$
3.78
      
3.4%

 
$
11.68
    
$
11.21
      
4.2%

 
                                                
Weighted average number of shares outstanding diluted (6)
    
66,551,838
      
66,445,256
              
66,500,412
      
66,537,111
          

(1)
Refer to page S-17.2, 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, 2024 was $0.9 million and $2.6 million, respectively.
(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)
Includes legal settlement gains of $42.5 million and $7.7 million for the nine months ended September 30, 2024 and 2023, respectively.
(6)
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.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-3
E S S E X  P R O P E R T Y  T R U S T, I N C.

Consolidated Balance Sheets
(Dollars in thousands)

   
September 30, 2024
    
December 31, 2023
  
Real Estate:
            
Land and land improvements
  
$
3,174,058
    
$
3,036,912
  
Buildings and improvements
    
13,884,518
      
13,098,311
  
     
17,058,576
      
16,135,223
  
Less: accumulated depreciation
    
(6,004,325
)
    
(5,664,931
)
     
11,054,251
      
10,470,292
  
Real estate under development
    
25,087
      
23,724
  
Co-investments
    
1,007,252
      
1,061,733
  
Real estate held for sale
    
74,148
      
-
  
     
12,160,738
      
11,555,749
  
Cash and cash equivalents, including restricted cash
    
80,263
      
400,334
  
Marketable securities
    
75,245
      
87,795
  
Notes and other receivables
    
200,295
      
174,621
  
Operating lease right-of-use assets
    
52,470
      
63,757
  
Prepaid expenses and other assets
    
78,436
      
79,171
  
Total assets
  
$
12,647,447
    
$
12,361,427
  
                 
Unsecured debt, net
  
$
5,473,318
    
$
5,318,531
  
Mortgage notes payable, net
    
884,728
      
887,204
  
Lines of credit
    
7,885
      
-
  
Distributions in excess of investments in co-investments
    
79,985
      
65,488
  
Operating lease liabilities
    
53,510
      
65,091
  
Other liabilities
    
485,684
      
398,930
  
Total liabilities
    
6,985,110
      
6,735,244
  
Redeemable noncontrolling interest
    
33,977
      
32,205
  
Equity:
                
Common stock
    
6
      
6
  
Additional paid-in capital
    
6,671,264
      
6,656,720
  
Distributions in excess of accumulated earnings
    
(1,255,608
)
    
(1,267,536
)
Accumulated other comprehensive income, net
    
18,174
      
33,556
  
Total stockholders’ equity
    
5,433,836
      
5,422,746
  
Noncontrolling interest
    
194,524
      
171,232
  
Total equity
    
5,628,360
      
5,593,978
  
Total liabilities and equity
  
$
12,647,447
    
$
12,361,427
  
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-4
E S S E X  P R O P E R T Y  T R U S T, I N C.

Debt Summary - September 30, 2024
(Dollars in thousands, except in footnotes)

     
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
  
$
5,200,000
      
3.4
%
    
7.2
    
2024
    
$
-
    
$
794
    
$
794
      
3.5
%
    
0.0
%
Term loan (1)
    
300,000
      
4.2
%
    
3.0
    
2025
      
500,000
      
133,054
      
633,054
      
3.5
%
    
9.9
%
Unamortized discounts and debt
                          
2026
      
450,000
      
99,405
      
549,405
      
3.5
%
    
8.6
%
issuance costs, net
    
(26,682
)
    
-
      
-
    
   2027(1)

   
650,000
      
153,955
      
803,955
      
4.0
%
    
12.6
%
Total unsecured debt, net
    
5,473,318
      
3.5
%
    
7.0
    
2028
      
450,000
      
68,332
      
518,332
      
2.2
%
    
8.1
%
Mortgage Notes Payable, net
                          
2029
      
500,000
      
1,456
      
501,456
      
4.1
%
    
7.9
%
Fixed rate - secured
    
665,437
      
4.3
%
    
5.1
    
2030
      
550,000
      
1,592
      
551,592
      
3.1
%
    
8.6
%
Variable rate - secured (2)
    
222,040
      
4.1
%
    
13.3
    
2031
      
600,000
      
1,740
      
601,740
      
2.3
%
    
9.4
%
Unamortized premiums and debt
                          
2032
      
650,000
      
1,903
      
651,903
      
2.6
%
    
10.3
%
issuance costs, net
    
(2,749
)
    
-
      
-
    
2033
      
-
      
330,126
      
330,126
      
5.0
%
    
5.2
%
Total mortgage notes payable, net
    
884,728
      
4.2
%
    
7.1
    
2034
      
550,000
      
2,275
      
552,275
      
5.5
%
    
8.6
%
Unsecured Lines of Credit
                          
Thereafter
      
600,000
      
92,845
      
692,845
      
3.7
%
    
10.8
%
Line of credit (3)
    
-
      
6.3
%
    
N/A
    
Subtotal
      
5,500,000
      
887,477
      
6,387,477
      
3.6
%
    
100.0
%
Line of credit (4)
    
7,885
      
6.3
%
    
N/A
    
Debt Issuance Costs
      
(26,583
)
    
(2,717
)
    
(29,300
)
    
-
      
-
  
Total lines of credit
    
7,885
      
6.3
%
    
N/A
    
(Discounts)/Premiums
      
(99
)
    
(32
)
    
(131
)
    
-
      
-
  
Total debt, net
  
$
6,365,931
      
3.6
%
    
7.0
    
Total
    
$
5,473,318
    
$
884,728
    
$
6,358,046
      
3.6
%
    
100.0
%
                                                                       
Capitalized interest for both the three and nine months ended September 30, 2024 was approximately $0.1 million and $0.2 million, respectively.

(1)
The unsecured term loan has a variable interest rate of Adjusted SOFR plus 0.85% and matures in October 2025 with two remaining 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)
$222.0 million of variable rate debt is tax exempt to the note holders.
(3)
This unsecured line of credit facility has a capacity of $1.2 billion, a scheduled maturity date in January 2029 and two 6-month extension options, exercisable at the Company’s option. The underlying interest rate on this line is Adjusted SOFR plus 0.765%, which is based on a tiered rate structure tied to the Company’s corporate ratings and further adjusted by the facility’s Sustainability Metric Adjustment feature. In September 2024, the scheduled maturity date was extended from January 2027 to January 2029.
(4)
The unsecured line of credit facility has a capacity of $75 million and a scheduled maturity date in July 2026. The underlying interest rate on this line is Adjusted SOFR plus 0.765%, which is based on a tiered rate structure tied to the Company’s corporate ratings and further adjusted by the facility’s Sustainability Metric Adjustment feature.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-5
E S S E X  P R O P E R T Y  T R U S T, I N C.

Capitalization Data, Public Bond Covenants, Credit Ratings and Selected Credit Ratios - September 30, 2024
(Dollars and shares in thousands, except per share amounts)

                  
Capitalization Data
    
Public Bond Covenants (1)
  
Actual
  
Requirement
Total debt, net
  
$
6,365,931
                   
Common stock and potentially dilutive securities
          
Debt to Total Assets:
  
34%

< 65%
Common stock outstanding
    
64,267
                   
Limited partnership units (1)
    
2,332
    
Secured Debt to Total Assets:
  
5%

< 40%
Options-treasury method
    
53
                   
Total shares of common stock and potentially dilutive securities
    
66,652
    
Interest Coverage:
  
547%

> 150%
                                
Common stock price per share as of September 30, 2024
  
$
295.42
    
Unsecured Debt Ratio (2):
  
293%

> 150%
                                
Total equity capitalization
  
$
19,690,334
    



   
                                
Total market capitalization
  
$
26,056,265
    
Selected Credit Ratios (3)
  
Actual
      
           

 
   
Ratio of debt to total market capitalization
    
24.4
%
  
Net Indebtedness Divided by Adjusted EBITDAre,
normalized and annualized:		  
5.5
         
                                
Credit Ratings
          
Unencumbered NOI to Adjusted Total NOI:
  
93%

 
Rating Agency
Rating
Outlook
    
                 
Moody’s
Baa1
Stable
    
   
(1)    Refer to page S-17.4 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-17.1 to S-17.4, the section titled “Reconciliations of Non-GAAP Financial Measures and Other Terms” for additional information on the Company’s Selected Credit Ratios.

See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-6
E S S E X  P R O P E R T Y  T R U S T, I N C.

Portfolio Summary by County as of September 30, 2024

   
Apartment Homes
    
Average Monthly Rental Rate (1)
    
Percent of NOI (2)
  
                                                       
Region - County
  
Consolidated
    
Unconsolidated
Co-investments
    
Total
    
Consolidated
    
Unconsolidated
Co-investments (3)
    
Total (4)
    
Consolidated
    
Unconsolidated
Co-investments (3)
    
Total (4)
  
                                                       
Southern California
                                                      
Los Angeles County
    
9,542
      
1,586
      
11,128
    
$
2,677
    
$
2,560
    
$
2,667
      
16.6
%
    
17.5
%
    
16.7
%
Orange County
    
5,843
      
500
      
6,343
      
2,777
      
2,617
      
2,770
      
11.5
%
    
6.2
%
    
11.1
%
San Diego County
    
5,442
      
443
      
5,885
      
2,649
      
3,032
      
2,664
      
10.6
%
    
5.4
%
    
10.3
%
Ventura County and Other
    
2,435
      
693
      
3,128
      
2,443
      
2,863
      
2,499
      
4.6
%
    
9.5
%
    
4.9
%
Total Southern California
    
23,262
      
3,222
      
26,484
      
2,671
      
2,692
      
2,672
      
43.3
%
    
38.6
%
    
43.0
%
                                                                         
Northern California
                                                                        
Santa Clara County (5)
    
9,633
      
1,129
      
10,762
      
3,054
      
2,988
      
3,050
      
20.5
%
    
14.0
%
    
19.9
%
Alameda County
    
3,959
      
1,512
      
5,471
      
2,586
      
2,591
      
2,587
      
6.7
%
    
17.1
%
    
7.5
%
San Mateo County
    
2,561
      
195
      
2,756
      
3,136
      
3,783
      
3,160
      
5.4
%
    
3.3
%
    
5.2
%
Contra Costa County
    
2,619
      
-
      
2,619
      
2,746
      
-
      
2,746
      
4.9
%
    
0.0
%
    
4.6
%
San Francisco
    
1,356
      
537
      
1,893
      
2,899
      
3,283
      
2,962
      
2.3
%
    
6.7
%
    
2.6
%
Total Northern California
    
20,128
      
3,373
      
23,501
      
2,919
      
2,888
      
2,917
      
39.8
%
    
41.1
%
    
39.8
%
                                                                         
Seattle Metro
    
10,555
      
1,970
      
12,525
      
2,215
      
2,156
      
2,210
      
16.9
%
    
20.3
%
    
17.2
%
                                                                         
Total
    
53,945
      
8,565
      
62,510
    
$
2,673
    
$
2,647
    
$
2,671
      
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, 2024, divided by the number of apartment homes as of September 30, 2024.
(2)
Represents the percentage of actual NOI for the quarter ended September 30, 2024. See the section titled “Net Operating Income (“NOI”) and Same-Property NOI Reconciliations” on page S-17.3.
(3)
Co-investment amounts weighted at Company’s pro rata share.
(4)
At Company’s pro rata share.
(5)
Includes all communities in Santa Clara County and one community in Santa Cruz County.


See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-7
E S S E X  P R O P E R T Y  T R U S T, I N C.

Operating Income by Quarter (1)
(Dollars in thousands)

   
Apartment Homes
    
Q3 ‘24
    
Q2 ‘24
    
Q1 ‘24
    
Q4 ‘23
    
Q3 ‘23
  
                                     
Rental and other property revenues:
                                    
Same-property
    
50,187
    
$
413,213
    
$
408,453
    
$
403,636
    
$
400,989
    
$
399,292
  
Acquisitions (2)
    
2,437
      
16,964
      
12,824
      
1,598
      
429
      
383
  
Redevelopment
    
178
      
1,671
      
1,565
      
1,541
      
1,536
      
1,564
  
Non-residential/other, net (3)
    
1,143
      
16,514
      
17,451
      
17,503
      
17,041
      
16,553
  
Straight-line rent concessions (4)
    
-
      
(227
)
    
(511
)
    
(63
)
    
(1,050
)
    
(1,394
)
Total rental and other property revenues
    
53,945
      
448,135
      
439,782
      
424,215
      
418,945
      
416,398
  
                                                 
Property operating expenses:
                                                
Same-property
            
125,761
      
119,067
      
121,241
      
116,972
      
119,180
  
Acquisitions (2)
            
4,870
      
3,585
      
479
      
153
      
137
  
Redevelopment
            
740
      
731
      
718
      
742
      
634
  
Non-residential/other, net (3) (5)
            
2,881
      
2,650
      
3,428
      
4,080
      
3,945
  
Total property operating expenses
            
134,252
      
126,033
      
125,866
      
121,947
      
123,896
  
                                                 
Net operating income (NOI):
                                                
Same-property
            
287,452
      
289,386
      
282,395
      
284,017
      
280,112
  
Acquisitions (2)
            
12,094
      
9,239
      
1,119
      
276
      
246
  
Redevelopment
            
931
      
834
      
823
      
794
      
930
  
Non-residential/other, net (3)
            
13,633
      
14,801
      
14,075
      
12,961
      
12,608
  
Straight-line rent concessions (4)
            
(227
)
    
(511
)
    
(63
)
    
(1,050
)
    
(1,394
)
Total NOI
          
$
313,883
    
$
313,749
    
$
298,349
    
$
296,998
    
$
292,502
  
                                                 
Same-property metrics
                                                
Operating margin
            
70
%
    
71
%
    
70
%
    
71
%
    
70
%
Annualized turnover (6)
            
46
%
    
41
%
    
37
%
    
39
%
    
48
%
Financial occupancy (7)
            
96.2
%
    
96.2
%
    
96.3
%
    
96.1
%
    
96.4
%

(1)
Includes consolidated communities only.
(2)
Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2023.
(3)
Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, 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.
(4)
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.
(5)
Includes other expenses and intercompany eliminations pertaining to self-insurance.
(6)
Annualized turnover is defined as the number of apartment homes turned over during the quarter, annualized, divided by the total number of apartment homes.
(7)
Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income. Actual rental income represents contractual rental income pursuant to leases without considering delinquency and concessions. Total scheduled rental income represents the value of all apartment homes, with occupied apartment homes valued at contractual rental rates pursuant to leases and vacant apartment homes valued at estimated market rents.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-8
E S S E X  P R O P E R T Y  T R U S T, I N C.

Same-Property Revenue Results by County - Third Quarter 2024 vs. Third Quarter 2023 and Second Quarter 2024
(Dollars in thousands, except average monthly rental rates)

               
Average Monthly Rental Rate
    
Financial Occupancy
    
Gross Revenues
    
Sequential Gross Revenues
  
Region - County
  
Apartment Homes
    
Q3 ‘24
% of 
Actual NOI
    
Q3 ‘24
    
Q3 ‘23
    
% Change
    
Q3 ‘24
    
Q3 ‘23
    
% Change
    
Q3 ‘24
    
Q3 ‘23
    
% Change
    
Q2 ‘24
    
% Change
  
                                                                               
Southern California
                                                                              
Los Angeles County
    
9,542
      
17.8
%
  
$
2,677
    
$
2,687
      
-0.4
%
    
95.1
%
    
96.2
%
    
-1.1
%
  
$
77,050
    
$
75,166
      
2.5
%
  
$
76,251
      
1.0
%
Orange County
    
5,193
      
11.1
%
    
2,815
      
2,729
      
3.2
%
    
96.1
%
    
96.0
%
    
0.1
%
    
44,123
      
41,946
      
5.2
%
    
43,464
      
1.5
%
San Diego County
    
4,584
      
9.7
%
    
2,671
      
2,570
      
3.9
%
    
96.6
%
    
96.6
%
    
0.0
%
    
37,689
      
35,794
      
5.3
%
    
37,129
      
1.5
%
Ventura County
    
2,254
      
4.5
%
    
2,435
      
2,333
      
4.4
%
    
96.7
%
    
96.8
%
    
-0.1
%
    
17,181
      
16,165
      
6.3
%
    
16,918
      
1.6
%
Total Southern California
    
21,573
      
43.1
%
    
2,684
      
2,635
      
1.9
%
    
95.9
%
    
96.3
%
    
-0.4
%
    
176,043
      
169,071
      
4.1
%
    
173,762
      
1.3
%
                                                                                                         
Northern California
                                                                                                        
Santa Clara County
    
8,653
      
20.3
%
    
3,035
      
2,973
      
2.1
%
    
96.7
%
    
96.8
%
    
-0.1
%
    
80,808
      
78,888
      
2.4
%
    
80,006
      
1.0
%
Alameda County
    
3,959
      
7.2
%
    
2,586
      
2,602
      
-0.6
%
    
96.3
%
    
96.4
%
    
-0.1
%
    
31,716
      
31,148
      
1.8
%
    
31,374
      
1.1
%
San Mateo County
    
1,864
      
4.2
%
    
3,226
      
3,165
      
1.9
%
    
96.1
%
    
97.0
%
    
-0.9
%
    
18,722
      
18,139
      
3.2
%
    
18,513
      
1.1
%
Contra Costa County
    
2,619
      
5.3
%
    
2,746
      
2,688
      
2.2
%
    
96.3
%
    
96.6
%
    
-0.3
%
    
22,174
      
21,464
      
3.3
%
    
21,974
      
0.9
%
San Francisco
    
1,178
      
2.1
%
    
2,867
      
2,841
      
0.9
%
    
94.8
%
    
94.6
%
    
0.2
%
    
10,450
      
9,952
      
5.0
%
    
10,306
      
1.4
%
Total Northern California
    
18,273
      
39.1
%
    
2,905
      
2,863
      
1.5
%
    
96.4
%
    
96.6
%
    
-0.2
%
    
163,870
      
159,591
      
2.7
%
    
162,173
      
1.0
%
                                                                                                         
Seattle Metro
    
10,341
      
17.8
%
    
2,222
      
2,176
      
2.1
%
    
96.6
%
    
96.3
%
    
0.3
%
    
73,300
      
70,630
      
3.8
%
    
72,518
      
1.1
%
                                                                                                         
Total Same-Property
    
50,187
      
100.0
%
  
$
2,669
    
$
2,623
      
1.8
%
    
96.2
%
    
96.4
%
    
-0.2
%
  
$
413,213
    
$
399,292
      
3.5
%
  
$
408,453
      
1.2
%
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-9
E S S E X  P R O P E R T Y  T R U S T, I N C.

Same-Property Revenue Results by County - Nine months ended September 30, 2024 vs. Nine months ended September 30, 2023
(Dollars in thousands, except average monthly rental rates)


           
YTD 2024
% of
Actual NOI
    
Average Monthly Rental Rate
    
Financial Occupancy
    
Gross Revenues
  
Region - County
  
Apartment
Homes
        
YTD 2024
    
YTD 2023
    
% Change
    
YTD 2024
    
YTD 2023
    
% Change
    
YTD 2024
    
YTD 2023
    
% Change
  
                                                                   
Southern California
                                                                  
Los Angeles County
    
9,542
      
17.7
%
  
$
2,674
    
$
2,665
      
0.3
%
    
95.3
%
    
96.4
%
    
-1.2
%
  
$
228,571
    
$
223,390
      
2.3
%
Orange County
    
5,193
      
11.1
%
  

2,783
    

2,683
      
3.7
%
    
96.0
%
    
96.1
%
    
-0.2
%
  
130,723
    
124,205
      
5.2
%
San Diego County
    
4,584
      
9.7
%
  

2,638
    
2,515
      
4.9
%
    
96.5
%
    
96.9
%
    
-0.5
%
  
111,531
    
104,972
      
6.2
%
Ventura County
    
2,254
      
4.5
%
  

2,400
    
2,289
      
4.8
%
    
96.7
%
    
97.0
%
    
-0.2
%
  
50,802
    
47,777
      
6.3
%
Total Southern California
    
21,573
      
43.0
%
  

2,664
    

2,598
      
2.5
%
    
95.8
%
    
96.5
%
    
-0.8
%
  
521,627
    
500,344
      
4.3
%
                                                                                         
Northern California
                                                                                        
Santa Clara County
    
8,653
      
20.4
%
  

3,005
    

2,948
      
1.9
%
    
96.7
%
    
96.8
%
    
-0.1
%
  
239,707
    
232,796
      
3.0
%
Alameda County
    
3,959
      
7.1
%
  

2,588
    

2,597
      
-0.3
%
    
95.7
%
    
96.6
%
    
-0.9
%
  
94,251
    
92,746
      
1.6
%
San Mateo County
    
1,864
      
4.2
%
  

3,202
    

3,147
      
1.7
%
    
96.1
%
    
96.7
%
    
-0.6
%
  
55,238
    
53,324
      
3.6
%
Contra Costa County
    
2,619
      
5.4
%
  

2,724
    

2,666
      
2.2
%
    
96.3
%
    
96.8
%
    
-0.5
%
  
65,883
    
63,830
      
3.2
%
San Francisco
    
1,178
      
2.1
%
  

2,850
    

2,830
      
0.7
%
    
95.5
%
    
95.3
%
    
0.2
%
  
30,994
    
30,093
      
3.0
%
Total Northern California
    
18,273
      
39.2
%
  

2,885
    

2,844
      
1.4
%
    
96.3
%
    
96.6
%
    
-0.2
%
  
486,073
    
472,789
      
2.8
%
                                                                                         
Seattle Metro
    
10,341
      
17.8
%
  

2,195
    

2,165
      
1.4
%
    
96.9
%
    
96.6
%
    
0.3
%
  

217,602
    

210,885
      
3.2
%
                                                                                         
Total Same-Property
    
50,187
      
100.0
%
  
$
2,648
    
$
2,598
      
1.9
%
    
96.2
%
    
96.6
%
    
-0.4
%
  
$
1,225,302
    
$
1,184,018
      
3.5
%

See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information
 
S-9.1
E S S E X  P R O P E R T Y  T R U S T, I N C.

Same-Property Operating Expenses - Quarter to Date and Year to Date as of September 30, 2024 and 2023
(Dollars in thousands)

Based on 50,187 apartment homes
  
                         
   
Q3 ‘24
    
Q3 ‘23
    
% Change
    
% of Op. Ex.
  
                         
Same-property operating expenses:
                        
Real estate taxes
  
$
45,514
    
$
44,494
      
2.3
%
    
36.2
%
Utilities
    
27,372
      
24,775
      
10.5
%
    
21.8
%
Personnel costs
    
22,928
      
21,841
      
5.0
%
    
18.2
%
Maintenance and repairs
    
14,918
      
14,699
      
1.5
%
    
11.9
%
Administrative
    
7,116
      
6,758
      
5.3
%
    
5.7
%
Insurance and other
    
7,913
      
6,613
      
19.7
%
    
6.2
%
Total same-property operating expenses
  
$
125,761
    
$
119,180
      
5.5
%
    
100.0
%
                                 
                                 
   
YTD 2024
    
YTD 2023
    
% Change
    
% of Op. Ex.
  
                                 
Same-property operating expenses:
                                
Real estate taxes
  
$
134,551
    
$
131,573
      
2.3
%
    
36.8
%
Utilities
    
75,236
      
69,396
      
8.4
%
    
20.6
%
Personnel costs
    
68,001
      
65,579
      
3.7
%
    
18.6
%
Maintenance and repairs
    
41,992
      
42,507
      
-1.2
%
    
11.5
%
Administrative
    
21,357
      
20,251
      
5.5
%
    
5.8
%
Insurance and other
    
24,932
      
19,429
      
28.3
%
    
6.7
%
Total same-property operating expenses
  
$
366,069
    
$
348,735
      
5.0
%
    
100.0
%

See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-10
E S S E X  P R O P E R T Y  T R U S T, I N C.

Capital Expenditures - September 30, 2024 (1)
(Dollars in thousands, except in footnotes and per apartment home amounts)

Revenue Generating Capital Expenditures (2)
  
Q3 ‘24
    
Trailing 4
Quarters
  
             
Same-property portfolio
  
$
17,381
    
$
55,593
  
Non-same property portfolio
    
1,213
      
1,890
  
Total revenue generating capital expenditures
  
$
18,594
    
$
57,483
  
                 
Number of same-property interior renovations
    
650
      
1,477
  
Number of total consolidated interior renovations
    
652
      
1,498
  
                 
Non-Revenue Generating Capital Expenditures (3)
  
Q3 ‘24
    
Trailing 4
Quarters
  
                 
Non-revenue generating capital expenditures
  
$
35,979
    
$
135,162
  
Average apartment homes in quarter
    
53,623
      
52,673
  
Capital expenditures per apartment home
  
$
671
    
$
2,566
  

(1)
The Company incurred $0.1 million of capitalized interest, $4.4 million of capitalized overhead and $0.2 million of co-investment fees related to redevelopment in Q3 2024.
(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.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-11
E S S E X  P R O P E R T Y  T R U S T, I N C.

Co-investments and Preferred Equity Investments - September 30, 2024
(Dollars in thousands, except in footnotes )


   
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,
2024
    
Nine Months
Ended
September 30,
2024
  
                                                       
Operating and Other Non-Consolidated Joint Ventures
                                            
NOI
  
Wesco I, III, IV, V, VI (2)
  
54%

   
5,976
    
$
2,166,870
    
$
1,434,678
    
$
119,031
      
3.5
%
    
2.1
    
$
29,241
    
$
88,581
  
BEXAEW (3), BEX II, BEX IV, and 500 Folsom
  
50%

   
1,603
      
943,611
      
325,025
      
207,089
      
4.6
%
    
12.2
      
9,733
      
34,758
  
Other (4) (5)
  
53%

   
986
      
384,945
      
291,476
      
83,160
      
3.8
%
    
12.8
      
7,040
      
24,308
  
Total Operating and Other Non-Consolidated Joint Ventures
          
8,565
    
$
3,495,426
    
$
2,051,179
    
$
409,280
      
3.7
%
    
5.2
    
$
46,014
    
$
147,647
  
                                                                       
                                                         
Essex Portion of NOI and
Expenses
  
NOI
                                                        
$
25,054
    
$
79,606
  
Depreciation
                                                          
(16,417
)
    
(52,267
)
Interest expense and other, net
                                                          
(9,499
)
    
(34,075
)
Equity (loss) income from non-core co-investments
                                                          
555
      
6,282
  
Insurance reimbursements, legal settlements, and other, net
                                                          
86
      
110
  
Co-investment promote income
                                                          
-
      
1,531
  
Net income from operating and other co-investments
                                                        
$
(221
)
  
$
1,187
  
                                                                       
                                         
Weighted
Average
Preferred
Return
    
Weighted
Average
Expected
Term
    
Income from Preferred Equity
Investments
  
Income from preferred equity investments
                                                        
$
11,870
    
$
36,206
  
Impairment loss from unconsolidated co-investment
                                                          
-
      
(3,726
)
Preferred Equity Investments (6)
                                
$
517,987
      
9.5
%
    
1.6
    
$
11,870
    
$
32,480
  
                                                                       
Total Co-investments
                                
$
927,267
                    
$
11,649
    
$
33,667
  

(1)
Represents the year-to-date annual weighted average borrowing rate.
(2)
As of September 30, 2024, the Company’s investments in Wesco I, Wesco III, and Wesco IV were classified as a liability of $78.2 million due to distributions received in excess of the Company’s investment.
(3)
In March 2024, the Company acquired BEXAEW LLC’s 49.9% interest in four communities totaling 1,480 apartment homes. The NOI included in the nine months ended September 30, 2024 represents the Company’s pro-rata share prior to the acquisition.
(4)
In the third quarter of 2024, the Company acquired its joint venture partner’s interest of 49.9% in Patina at Midtown comprising 269 apartment homes, followed by the acquisition of its joint venture partner’s interest of 50% in Century Towers comprising 376 apartment homes. The NOI included in the three and nine months ended September 30, 2024 represents the Company’s pro-rata share prior to the acquisitions.
(5)
As of September 30, 2024, the Company’s investment in Expo was classified as a liability of $1.8 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.
(6)
As of September 30, 2024, the Company has invested in 21 preferred equity investments.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-12
E S S E X  P R O P E R T Y  T R U S T, I N C.

Assumptions for 2024 FFO Guidance Range
(Dollars in thousands, except per share data)

The guidance projections below are based on current expectations and are forward-looking. The guidance on this page is given for Net Operating Income (“NOI”) and Total and Core FFO. See pages S-17.1 to S-17.4 for the definitions of non-GAAP financial measures and other terms.

   
Nine Months Ended
    
2024 Full-Year Guidance Range
    
   
September 30, 2024 (1)
    
Low End
    
High End
  
Comments about 2024 Full-Year Guidance
                         
Total NOI from Consolidated Communities
  
$
925,981
    
$
1,240,600
    
$
1,247,200
  
Includes a range of same-property NOI growth of 2.3% to 2.9%, an increase from the prior range of 1.8% to 2.8%.  Reflects transactions completed through October
                               
Management Fees
    
7,849
      
10,100
      
10,300
    
                               
Interest Expense
                             
Interest expense, before capitalized interest
    
(172,222
)
    
(232,600
)
    
(232,000
)
 Updated to reflect refinancing and investment activities
Interest capitalized
    
169
      
100
      
300
    
Net interest expense
    
(172,053
)
    
(232,500
)
    
(231,700
)
  
Recurring Income and Expenses
                             
Interest and other income
    
23,729
      
28,400
      
28,800
    
FFO from co-investments
    
81,737
      
104,200
       104,800  
 Reflects updated timing of preferred equity redemptions and includes investment activity through October
General and administrative
    
(44,971
)
    
(58,800
)
    
(59,200
)
  
Corporate-level property management expenses
    
(36,004
)
    
(48,000
)
    
(48,400
)
  
Non-controlling interest
    
(9,618
)
    
(12,300
)
    
(12,100
)
 Reflects impact from sale of one apartment community in October
  Total recurring income and expenses
    
14,873
      
13,500
      
13,900
    
Non-Core Income and Expenses
                             
Expensed acquisition and investment related costs
    
(68
)
    
(68
)
    
(68
)
  
Tax benefit on unconsolidated co-investments
    
1,199
      
1,199
      
1,199
    
Realized and unrealized gains on marketable securities, net
    
10,645
      
10,645
      
10,645
    
Provision for credit losses
    
116
      
116
      
116
    
Equity income from non-core co-investments
    
6,282
      
6,282
      
6,282
    
Co-Investment promote income
    
1,531
      
1,531
      
1,531
    
General and administrative and other, net
    
(22,403
)
    
(40,000
)
    
(40,000
)
 Includes increased advocacy costs
Insurance reimbursements, legal settlements, and other, net
    
43,912
      
43,912
      
43,912
    
Total non-core income and expenses
    
41,214
      
23,617
      
23,617
    
Funds from Operations (2)
  
$
817,864
    
$
1,055,317
    
$
1,063,317
    
Funds from Operations per diluted Share
  
$
12.30
    
$
15.86
    
$
15.98
    
% Change - Funds from Operations
    
8.2
%
    
4.1
%
    
4.9
%
  
Core Funds from Operations (excludes non-core items)
  
$
776,650
    
$
1,031,700
    
$
1,039,700
    
Core Funds from Operations per diluted Share
  
$
11.68
    
$
15.50
    
$
15.62
    
% Change - Core Funds from Operations
    
4.2
%
    
3.1
%
    
3.9
%
  
EPS - Diluted
  
$
7.54
    
$
8.66
    
$
8.78
    
Weighted average shares outstanding - FFO calculation
    
66,500
      
66,550
      
66,550
    

(1)
All non-core items are excluded from the 2024 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.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-13
E S S E X  P R O P E R T Y  T R U S T, I N C.

Reconciliation of Projected EPS, FFO and Core FFO per diluted share
With respect to the Company’s guidance regarding its projected FFO and Core FFO, which guidance is set forth in the earnings release and on page S-13 of this supplement, a reconciliation of projected net income per share to projected FFO per share and projected Core FFO per share, as set forth in such guidance, is presented in the table below.

         
2024 Guidance Range (1)
  
       
Nine Months
Ended
September 30, 2024
                          
   
4th Quarter 2024
    
Full-Year 2024
  
   
Low
    
High
    
Low
    
High
  
                               
EPS - diluted
  
$
7.54
    
$
1.12
    
$
1.24
    
$
8.66
    
$
8.78
  
Conversion from GAAP share count
    
(0.26
)
    
(0.04
)
    
(0.04
)
    
(0.30
)
    
(0.30
)
Impairment loss from unconsolidated co-investments
    
0.06
      
-
      
-
      
0.06
      
0.06
  
Depreciation and amortization
    
7.28
      
2.44
      
2.44
      
9.72
      
9.72
  
Noncontrolling interest related to Operating Partnership units
    
0.24
      
0.04
      
0.04
      
0.28
      
0.28
  
Gain on remeasurement of co-investment
    
(2.56
)
    
-
      
-
      
(2.56
)
    
(2.56
)
FFO per share - diluted
  
$
12.30
    
$
3.56
    
$
3.68
    
$
15.86
    
$
15.98
  
                                         
Expensed acquisition and investment related costs
    
-
      
-
      
-
      
-
      
-
  
Tax benefit on unconsolidated co-investments
    
(0.02
)
    
-
      
-
      
(0.02
)
    
(0.02
)
Realized and unrealized gains on marketable securities, net
    
(0.16
)
    
-
      
-
      
(0.16
)
    
(0.16
)
Provision for credit losses
    
-
      
-
      
-
      
-
      
-
  
Equity income from non-core co-investments
    
(0.09
)
    
-
      
-
      
(0.09
)
    
(0.09
)
Co-Investment promote income
    
(0.02
)
    
-
      
-
      
(0.02
)
    
(0.02
)
General and administrative and other, net
    
0.33
      
0.26
      
0.26
      
0.59
      
0.59
  
Insurance reimbursements, legal settlements, and other, net
    
(0.66
)
    
-
      
-
      
(0.66
)
    
(0.66
)
Core FFO per share - diluted
  
$
11.68
    
$
3.82
    
$
3.94
    
$
15.50
    
$
15.62
  

(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.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-13.1
 ESSEX PROPERTY TRUST, INC.                                Market Economic Rent Growth Trending Along the Pre-COVID Average                                                        See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information  S-13.2  Source: Essex  Reflects economic rent growth compared to December of the prior year.   Year-to-date through October, economic rent has grown on trend with the pre-COVID average. This is a positive shift from the atypical volatility in recent years.   Blended lease rate growth softened in September and October primarily due to a challenging year-over year comp. We remain on plan for 2024.   2023 Prolonged Peak: Challenging Comp September-October 
 
E S S E X  P R O P E R T Y  T R U S T, I N C.

Summary of Apartment Community Acquisitions and Dispositions Activity - Year to date as of September 30, 2024
(Dollars in thousands, except for average monthly rent)

Acquisitions
                    
                   
Property Name
  
Location
    
Apartment
Homes
    
Essex
Ownership
 Percentage
  
Entity
Date
  
Total Contract
Price at Pro
 Rata Share
    
Price per
Apartment Home (1)
    
Average
Monthly Rent
  
                     
                   
BEXAEW Portfolio (2)
  
Various
      
1,480
      
100%
EPLP
Mar-24
  
$
251,995
    
$
341
    
$
2,375
  
 
  
Q1 2024
      
1,480
            
     
$
251,995
    
$
341
          
 
                        
                         
Maxwell Sunnyvale (3)
  
Sunnyvale, CA
      
75
      
100%

EPLP
Apr-24
  
$
46,600
    
$
621
    
$
3,712
  
ARLO Mountain View
  
Mountain View, CA
      
164
      
100%

EPLP
May-24
    
101,100
    

592
    
$
3,799
  
 
  
Q2 2024
      
239
            
     
$
147,700
    
$
601
          
 
                        
                         
Patina at Midtown (4)
  
San Jose, CA
      
269
      
100%

EPLP
Jul-24
  
$
58,383
    
$
435
    
$
2,748
  
Century Towers (5)
  
San Jose, CA
      
376
      
100%
EPLP
Sep-24
  

86,750
    

458
    
$
3,060
  
   
Q3 2024
      
645
            
     
$
145,133
    
$
448
          
                         
                         
   
2024 Total
      
2,364
            
     
$
544,828
    
$
397
          

(1)
Price per apartment home excludes value allocated to retail space.
(2)
In March 2024, the Company acquired its joint venture partner’s 49.9% interest in the BEWAEW portfolio comprising four communities totaling 1,480 apartment homes, for a total purchase price of $505.0 million on a gross basis.
(3)
In April 2024, the Company accepted the third-party sponsor’s common equity interest affiliated with its $14.7 million preferred equity investment and acquired Maxwell Sunnyvale based on a property valuation of $46.6 million.
(4)
In July 2024, the Company acquired its joint venture partner’s 49.9% interest in Patina at Midtown, a 269-unit apartment home community, for a total purchase price of $117.0 million on a gross basis.
(5)
In September 2024, the Company acquired its joint venture partner’s 50% interest in Century Towers, a 376-unit apartment home community, for a total purchase price of $173.5 million on a gross basis.
Dispositions

Neither Essex nor its unconsolidated joint ventures sold any apartment communities during the first, second, or third quarters of 2024.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-14
E S S E X  P R O P E R T Y  T R U S T, I N C.

Same-Property Delinquencies, Operating Statistics, and Revenue Growth with Concessions on a GAAP basis
(Dollars in millions, except in footnotes and per share amounts)
Same-Property Delinquencies - Third Quarter 2024 vs. 2023 and October 2024
  
Same-Property Cash Delinquencies as % of Scheduled Rent, by Region
               
 
Preliminary
Oct. 2024
Q3
2024
Q3
2023
    
Preliminary Oct. 2024
Q3
2024
               
Gross delinquencies as % of scheduled rent, excluding rental assistance
0.6%
0.8%
2.1%
Southern California, excl. Los Angeles
0.3%
0.7%
         
Northern California, excl. Alameda
0.2%
0.3%
Rental assistance funds as % of scheduled rent (1)
0.0%
-0.1%
-0.1%

Seattle
0.7%
0.7%
         
Los Angeles & Alameda Counties (3)
1.1%
1.3%
Cash delinquencies as % of scheduled rent, including rental assistance (2)
0.6%
0.7%
2.0%

Total Same-Property Portfolio (1)(2)
0.6%
0.7%

(1)
The Company’s same-property portfolio received Emergency Rental Assistance payments of less than $0.1 million and $0.2 million for preliminary October 2024 and the three months ended September 30, 2024, respectively. This compares to $0.3 million for the three months ended September 30, 2023.
(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 Operating Statistics
  
Same-Property Revenue Growth with Concessions on a GAAP basis
                                               
   
Preliminary
Oct. 2024
      
Q3
2024
          
Q3
2024
      
Q3
2023
    
YTD
2024
    
YTD
2023
  
                                               
New lease rates (1)
  
-1.5%
      
0.5%
    
Reported rental revenue (1)
  
$
413.2
    
$
399.3
    
$
1,225.3
    
$
1,184.0
  
Renewal rates (1)
  
3.6%
      
3.8%
    
Straight-line rent impact to rental revenue
    
(0.2
)
    
(1.3
)
    
(0.7
)
    
(1.4
)
Blended rates
  
1.6%
      
2.5%
    
GAAP rental revenue
  
$
413.0
    
$
398.0
    
$
1,224.6
    
$
1,182.6
  
                                                   
Financial occupancy
  
96.1%

   
96.2%
    
% change - reported rental revenue
    
3.5%

           
3.5%

       
                                                   
Same-Property Operating Statistics, Excl. Los Angeles and Alameda Counties (2)
    
% change - GAAP rental revenue
    
3.8%

           
3.5%

       

                                     
   
Preliminary
Oct. 2024
      
Q3
2024
                                      
                                                   
New lease rates (1)
  
-1.2%
      
1.8%
                                      
Renewal rates (1)
  
4.0%
      
4.4%
                                      
Blended rates
  
2.1%
      
3.4%
                                      
                                                   
Financial occupancy
  
96.3%

   
96.4%
                                      
                                                   
(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.
          
(2)   Excludes Los Angeles and Alameda counties, which are most impacted by elevated delinquency related turnover, to illustrate the Company’s same-property portfolio performance outside of these regions.
                                     
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-15
 Data based on Essex Data Analytics forecasts and third-party projections.  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.                                         ESSEX PROPERTY TRUST, INC.                                MSA Level Supply Forecast: 2023A – 2025E                                                        See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information  S-16  Residential Supply Forecast (1)     2023A     2024E     2025E  Market  Total   Supply  Total Supply as a % of Stock     Multifamily Supply  Total   Supply  Total Supply as a % of Stock     Multifamily Supply  Total   Supply  Total Supply as a % of Stock                                   Los Angeles  19,400  0.5%     8,700  16,900  0.5%      8,900    17,400   0.5%  Orange County  5,300  0.5%     1,800  4,100  0.4%      1,800    4,600   0.4%  San Diego  5,800  0.5%     4,200  6,900  0.6%      5,100    8,000   0.6%  Ventura  600  0.2%     800  1,100  0.4%      300    600   0.2%  Southern California  31,100  0.5%     15,500  29,000  0.5%      16,100    30,600   0.5%                                   San Francisco  2,200  0.3%     1,800  2,300  0.3%      1,300    1,700   0.2%  Oakland  5,300  0.5%     1,900  4,000  0.4%      1,200    3,500   0.3%  San Jose  3,900  0.5%     2,400  4,400  0.6%      3,800    6,000   0.8%  Northern California  11,400  0.4%     6,100  10,700  0.4%      6,300    11,200   0.4%                                   Seattle  9,700  0.7%     10,900  14,600  1.1%      10,200    14,200   1.0%                                   Total  52,200  0.5%     32,500  54,300  0.5%      32,600    56,000   0.5% 
 ESSEX PROPERTY TRUST, INC.                                2025E Early Building Blocks to Same-Property Revenue Growth                                                        See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information  S-16.1  Year-to-date rent growth positions the Company to achieve 80-100 basis points of earn-in in 2025.   The Company’s diligent efforts in recapturing non-paying units has generated a notable tailwind to earnings growth in 2024. The Company expects to achieve a further 40-60 basis point tailwind in 2025 as we approach the historical run rate.  Source: Essex  Embedded revenue growth potential or “earn-in” is the contribution to revenue growth in the forthcoming year, calculated by annualizing forecasted scheduled rent at year-end compared against full-year scheduled rent. Based on leases signed to date through preliminary October 2024 and projections though year-end and excludes vacancy and concessions.   Excludes the impacts of market rent growth, financial occupancy, concessions, and other income in 2025.   (1)  (2)  High-End:  1.0%  0.6%  1.6%  Low-End:   0.8%  0.4%  1.2% 
 
E S S E X  P R O P E R T Y  T R U S T, I N C.

Reconciliations of Non-GAAP Financial Measures and Other Terms
Adjusted EBITDAre Reconciliation

The National Association of Real Estate Investment Trusts (“NAREIT”) defines earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) (September 2017 White Paper) as net income (computed in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”)) before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, impairment write-downs of depreciated operating properties, impairment write-downs of investments in unconsolidated entities caused by a decrease in value of depreciated operating properties within the joint venture and adjustments to reflect the Company’s share of EBITDAre of investments in unconsolidated entities.

The Company believes that EBITDAre is useful to investors, creditors and rating agencies as a supplemental measure of the Company’s ability to incur and service debt because it is a recognized measure of performance by the real estate industry, and by excluding gains or losses related to sales or impairment of depreciated operating properties, EBITDAre can help compare the Company’s credit strength between periods or as compared to different companies.

Adjusted EBITDAre represents EBITDAre further adjusted for non-comparable items and is a component of the credit ratio, “Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized,” presented on page S-6, in the section titled “Selected Credit Ratios,” and it is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as income tax payments, debt service requirements, capital expenditures and other fixed charges.

Adjusted EBITDAre is an important metric in evaluating the credit strength of the Company and its ability to service its debt obligations.  The Company believes that Adjusted EBITDAre is useful to investors, creditors and rating agencies because it allows investors to compare the Company’s credit strength to prior reporting periods and to other companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual credit quality.

EBITDAre and Adjusted EBITDAre are not recognized measurements under U.S. GAAP. Because not all companies use identical calculations, the Company’s presentation of EBITDAre and Adjusted EBITDAre may not be comparable to similarly titled measures of other companies.

The reconciliations of Net Income available to common stockholders to EBITDAre and Adjusted EBITDAre are presented in the table below:

   
(Dollars in thousands)
     
Three
Months Ended
September 30,
2024
     
       
Net income available to common stockholders
  
$
118,424
  
Adjustments:
        
Net income attributable to noncontrolling interest
    
7,063
  
Interest expense, net (1)
    
58,425
  
Depreciation and amortization
    
146,439
  
Income tax provision
    
106
  
Gain on remeasurement of co-investment
    
(31,583
)
Co-investment EBITDAre adjustments
    
26,227
  
EBITDAre
    
325,101
  
         
Realized and unrealized gains on marketable securities, net
    
(5,697
)
Provision for credit losses
    
(182
)
Equity loss from non-core co-investments
    
(555
)
Tax benefit on unconsolidated co-investments
    
(441
)
General and administrative and other, net
    
13,956
  
Insurance reimbursements and legal settlements, and other, net
    
(612
)
Adjusted EBITDAre
  
$
331,570
  
         

(1)
Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-17.1
E S S E X  P R O P E R T Y  T R U S T, I N C.

Reconciliations of Non-GAAP Financial Measures and Other Terms
Disposition Yield

Net operating income that the Company anticipates giving up in the next 12 months less an estimate of property management costs allocated to the project divided by the gross sales price of the asset.

Acquisition Yield

Net operating income that the Company expects to achieve in the next 12 months less an estimate of property management costs allocated to the project and less an estimate for capital expenditures per unit divided by the gross sales price of the asset.

Encumbered

Encumbered means any mortgage, deed of trust, lien, charge, pledge, security interest, security agreement or other encumbrance of any kind.

Funds From Operations (“FFO”) and Core FFO

FFO, as defined by NAREIT, is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, FFO adjusts the net income of equity REITs for non-cash charges such as depreciation and amortization of rental properties, impairment charges, gains on sales of real estate and extraordinary items. Management considers FFO and FFO which excludes non-core items, which is referred to as “Core FFO,” to be useful supplemental operating performance measures of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate the operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and to pay dividends. By excluding gains or losses related to sales of depreciated operating properties and land and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a real estate company between periods or as compared to different companies. By further adjusting for items that are not considered part of the Company’s core business operations, Core FFO allows investors to compare the core operating performance of the Company to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results.

FFO and Core FFO do not represent net income or cash flows from operations as defined by U.S. GAAP and are not intended to indicate whether cash flows will be sufficient to fund cash needs. These measures should not be considered as alternatives to net income as an indicator of the REIT’s operating performance or to cash flows as a measure of liquidity. FFO and Core FFO do not measure whether cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to stockholders. FFO and Core FFO also do not represent cash flows generated from operating, investing or financing activities as defined under GAAP. Management has consistently applied the NAREIT definition of FFO to all periods presented. However, there is judgment involved and other REITs’ calculation of FFO may vary from the NAREIT definition for this measure, and thus their disclosures of FFO may not be comparable to the Company’s calculation.

The reconciliations of diluted FFO and Core FFO are detailed on page S-3 in the section titled “Consolidated Funds From Operations”.

Interest Expense, Net

Interest expense, net is presented on page S-1 in the section titled “Consolidated Operating Results”. Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges and is presented in the table below:


(Dollars in thousands)
Three
Months Ended
September 30,
2024

Nine
Months Ended
September 30,
2024
  
 
 
 
             
Interest expense
  
$
59,232
    
$
174,285
  
Adjustments:
                
Total return swap income
    
(807
)
    
(2,232
)
Interest expense, net
  
$
58,425
    
$
172,053
  

Immediately Available Liquidity

The Company’s immediately available liquidity as of October 28, 2024, consisted of the following:

(Dollars in millions)
   
October 28,
2024
   
       
Unsecured credit facility - committed
  
$
1,275
  
Balance outstanding
    
154
  
Undrawn portion of line of credit
  
$
1,121
  
Cash, cash equivalents & marketable securities
    
113
  
Total liquidity
  
$
1,234
  

See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-17.2
E S S E X  P R O P E R T Y  T R U S T, I N C.

Reconciliations of Non-GAAP Financial Measures and Other Terms
Net Indebtedness Divided by Adjusted EBITDAre

This credit ratio is presented on page S-6 in the section titled “Selected Credit Ratios.” This credit ratio is calculated by dividing net indebtedness by Adjusted EBITDAre, as annualized based on the most recent quarter, and adjusted for estimated net operating income from properties acquired or disposed of during the quarter. This ratio is presented by the Company because it provides rating agencies and investors an additional means of comparing the Company’s ability to service debt obligations to that of other companies. Net indebtedness is total debt, net less unamortized premiums, discounts, debt issuance costs, unrestricted cash and cash equivalents, and marketable securities. The reconciliation of Adjusted EBITDAre is set forth in “Adjusted EBITDAre Reconciliation” on page S-17.1 The calculation of this credit ratio and a reconciliation of net indebtedness to total debt at pro rata share for co-investments, net is presented in the table below:

   
September 30,
  
(Dollars in thousands)
  
2024
  
       
Total consolidated debt, net
  
$
6,365,931
  
Total debt from co-investments at pro rata share
    
1,056,821
  
Adjustments:
        
Consolidated unamortized premiums, discounts, and debt issuance costs
    
29,431
  
Pro rata co-investments unamortized premiums, discounts,
and debt issuance costs
    
4,138
  
Consolidated cash and cash equivalents-unrestricted
    
(71,288
)
Pro rata co-investment cash and cash equivalents-unrestricted
    
(37,333
)
Marketable securities
    
(75,245
)
Net Indebtedness
  
$
7,272,455
  
         
Adjusted EBITDAre, annualized (1)
  
$
1,326,280
  
Other EBITDAre normalization adjustments, net, annualized (2)
    
1,513
  
Adjusted EBITDAre, normalized and annualized
  
$
1,327,793
  
         
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.

Net Operating Income (“NOI”) and Same-Property NOI Reconciliations

NOI and same-property NOI are considered by management to be important supplemental performance measures to earnings from operations included in the Company’s consolidated statements of income. The presentation of same-property NOI assists with the presentation of the Company’s operations prior to the allocation of depreciation and any corporate-level or financing-related costs. NOI reflects the operating performance of a community and allows for an easy comparison of the operating performance of individual communities or groups of communities.

In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impacts to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets. The Company defines same-property NOI as same-property revenues less same-property operating expenses, including property taxes. Please see the reconciliation of earnings from operations to NOI and same-property NOI, which in the table below is the NOI for stabilized properties consolidated by the Company for the periods presented:

   
Three Months Ended
    
Nine Months Ended
  
   
September 30,
    
September 30,
    
September 30,
    
September 30,
  
(Dollars in thousands)
  
2024
    
2023
    
2024
    
2023
  
                         
Earnings from operations
  
$
128,790
    
$
131,784
    
$
398,599
    
$
454,001
  
Adjustments:
                                
Corporate-level property management expenses
    
12,150
      
11,504
      
36,004
      
34,387
  
Depreciation and amortization
    
146,439
      
137,357
      
431,785
      
410,422
  
Management and other fees from affiliates
    
(2,563
)
    
(2,785
)
    
(7,849
)
    
(8,328
)
General and administrative
    
29,067
      
14,611
      
67,374
      
43,735
  
Expensed acquisition and investment related costs
    
-
      
31
      
68
      
375
  
Casualty loss
    
-
      
-
      
-
      
433
  
Gain on sale of real estate and land
    
-
      
-
      
-
      
(59,238
)
NOI
    
313,883
      
292,502
      
925,981
      
875,787
  
Less: Non-same property NOI
    
(26,431
)
    
(12,390
)
    
(66,748
)
    
(40,504
)
Same-Property NOI
  
$
287,452
    
$
280,112
    
$
859,233
    
$
835,283
  
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-17.3
E S S E X  P R O P E R T Y  T R U S T, I N C.

Reconciliations of Non-GAAP Financial Measures and Other Terms

Public Bond Covenants

Public Bond Covenants refer to certain covenants set forth in instruments governing the Company’s unsecured indebtedness. These instruments require the Company to meet specified financial covenants, including covenants relating to net worth, fixed charge coverage, debt service coverage, the amounts of total indebtedness and secured indebtedness, leverage and certain investment limitations. These covenants may restrict the Company’s ability to expand or fully pursue its business strategies. The Company’s ability to comply with these covenants may be affected by changes in the Company’s operating and financial performance, changes in general business and economic conditions, adverse regulatory developments or other events adversely impacting it. The breach of any of these covenants could result in a default under the Company’s indebtedness, which could cause those and other obligations to become due and payable. If any of the Company’s indebtedness is accelerated, the Company may not be able to repay it. For risks related to failure to comply with these covenants, see “Item 1A: Risk Factors - Risks Related to Our Indebtedness and Financings” in the Company’s annual report on Form 10-K and other reports filed by the Company with the Securities and Exchange Commission (“SEC”).

The ratios set forth on page S-6 in the section titled “Public Bond Covenants” are provided only to show the Company’s compliance with certain specified covenants that are contained in indentures related to the Company’s issuance of Senior Notes, which indentures are filed by the Company with the SEC. See, for example, the indenture and supplemental indenture dated March 14, 2024, filed by the Company as Exhibit 4.1 and Exhibit 4.2 to the Company’s Form 8-K, filed on March 14, 2024. These ratios should not be used for any other purpose, including without limitation to evaluate the Company’s financial condition or results of operations, nor do they indicate the Company’s covenant compliance as of any other date or for any other period. The capitalized terms in the disclosure are defined in the indentures filed by the Company with the SEC and may differ materially from similar terms used by other companies that present information about their covenant compliance.

Secured Debt

Secured Debt means debt of the Company or any of its subsidiaries which is secured by an encumbrance on any property or assets of the Company or any of its subsidiaries. The Company’s total amount of Secured Debt is set forth on page S-5.

Unencumbered NOI to Adjusted Total NOI

This ratio is presented on page S-6 in the section titled “Selected Credit Ratios”. Unencumbered NOI means the sum of NOI for those real estate assets which are not subject to an encumbrance securing debt. The ratio of Unencumbered NOI to Adjusted Total NOI for the three months ended September 30, 2024, annualized, is calculated by dividing Unencumbered NOI, annualized for the three months ended September 30, 2024 and as further adjusted for pro forma NOI for properties acquired or sold during the recent quarter, by Adjusted Total NOI as annualized. The calculation and reconciliation of NOI is set forth in “Net Operating Income (“NOI”) and Same-Property NOI Reconciliations” above. This ratio is presented by the Company because it provides rating agencies and investors an additional means of comparing the Company’s ability to service debt obligations to that of other companies.

The calculation of this ratio is presented in the table below:

(Dollars in thousands)
   
Annualized
Q3 ‘24 (1)
   
       
NOI
  
$
1,255,532
  
Adjustments:
        
NOI from real estate assets sold
    
-
  
Other, net (2)
    
(6,739
)
Adjusted Total NOI
    
1,248,793
  
Less: Encumbered NOI
    
(91,734
)
Unencumbered NOI
  
$
1,157,059
  
         
Encumbered NOI
  
$
91,734
  
Unencumbered NOI
    
1,157,059
  
Adjusted Total NOI
  
$
1,248,793
  
         
Unencumbered NOI to Adjusted Total NOI
    
93
%
(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.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information


S-17.4