Exhibit 99.1
 
 

 

Essex Announces Fourth Quarter 2017 Results and 2018 Guidance
 
San Mateo, California—February 7, 2018—Essex Property Trust, Inc. (NYSE:ESS) announced today its fourth quarter 2017 earnings results and related business activities.

Net Income and Funds from Operations (“FFO”) per diluted share for the quarter ended December 31, 2017 are detailed below. Core FFO excludes acquisition and investment related costs and certain non-routine items.

                         
   
Three Months Ended
December 31,
   
%
   
Year Ended
December 31,
   
%
 
   
2017
   
2016
   
Change
   
2017
   
2016
   
Change
 
Per Diluted Share
                                   
  Net Income
 
$
1.57
   
$
2.98
     
-47.3
%
 
$
6.57
   
$
6.27
     
4.8
%
  Total FFO
 
$
3.01
   
$
2.85
     
5.6
%
 
$
11.91
   
$
11.12
     
7.1
%
  Core FFO
 
$
3.01
   
$
2.81
     
7.1
%
 
$
11.91
   
$
11.04
     
7.9
%
                                                 


Fourth Quarter and Full-Year Highlights:

·
Reported Net Income per diluted share for the fourth quarter of 2017 of $1.57, compared to $2.98 in the fourth quarter of 2016.  The decrease is primarily due to gains on sale of real estate that occurred in the fourth quarter of 2016.
 
·
Grew Core FFO per diluted share by 7.1% compared to the fourth quarter of 2016 and 7.9% for the full-year 2017.
 
·
Achieved same-property gross revenue and net operating income (“NOI”) growth of 3.0% and 3.4%, respectively, compared to the fourth quarter of 2016. For the full-year, achieved same-property gross revenue and NOI growth near the high-end of the guidance range of 3.7% and 4.2%.
 
·
Sold two communities during the fourth quarter of 2017 for a total contract price of $160.3 million. For the full-year, the Company sold four communities for a total contract price of $375.8 million.
 
·
Acquired one community during the fourth quarter of 2017 for a total contract price of $59.0 million. For the full-year, the Company acquired five communities for a total contract price of $566.8 million, near the high-end of the guidance range.
 
·
Originated $64.5 million in three preferred equity developments during the fourth quarter of 2017. For the full-year, the Company committed $167.0 million in nine preferred equity and subordinated debt investments, exceeding the original guidance range for the year.

“Essex delivered another year of solid growth in 2017 with Core FFO growth of 7.9%, which exceeded the high-end of our initial guidance range for the year. The Essex team responded skillfully to challenging market conditions by focusing on occupancy, other income, expense management and investment transactions. Looking forward to 2018, we expect demand for housing will outpace supply in our coastal markets of California and Washington which will lead to market rent growth near long-term averages. We believe the West Coast will continue to outperform the nation in both rent growth and job growth in 2018,” commented Michael Schall, President and CEO of the Company.
 
 
 
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 December 31, 2017 compared to the quarter ended December 31, 2016, and the sequential percentage change for the quarter ended December 31, 2017 compared to the quarter ended September 30, 2017, by submarket for the Company:
 
   
Q4 2017 vs. Q4 2016
   
Q4 2017 vs. Q3 2017
   
% of Total
 
   
Gross Revenues
   
Gross Revenues
   
Q4 2017 Revenues
 
Southern California
     
   Los Angeles County
   
1.8
%
   
-0.1
%
   
19.9
%
   Orange County
   
3.8
%
   
0.5
%
   
11.6
%
   San Diego County
   
3.7
%
   
0.3
%
   
9.2
%
   Ventura County
   
4.4
%
   
0.4
%
   
4.5
%
   Other Southern California
   
2.3
%
   
0.7
%
   
0.5
%
       Total Southern California
   
2.9
%
   
0.2
%
   
45.7
%
Northern California
     
   Santa Clara County
   
2.0
%
   
0.1
%
   
15.7
%
   Alameda County
   
4.8
%
   
0.1
%
   
7.3
%
   San Mateo County
   
0.7
%
   
-0.3
%
   
5.1
%
   Contra Costa County
   
2.4
%
   
0.9
%
   
5.1
%
   San Francisco
   
2.1
%
   
-0.5
%
   
2.0
%
   Other Northern California
   
6.7
%
   
6.6
%
   
0.3
%
       Total Northern California
   
2.5
%
   
0.2
%
   
35.5
%
Seattle Metro
   
4.0
%
   
0.0
%
   
18.8
%
Same-Property Portfolio
   
3.0
%
   
0.1
%
   
100.0
%
                         
 
   
Year-Over-Year Growth
   
Year-Over-Year Growth
 
   
Q4 2017 compared to Q4 2016
   
YTD 2017 compared to YTD 2016
 
   
Gross
Revenues
   
Operating
Expenses
   
NOI
   
Gross
Revenues
   
Operating
Expenses
   
NOI
 
Southern California
   
2.9
%
   
1.4
%
   
3.7
%
   
3.8
%
   
1.9
%
   
4.6
%
Northern California
   
2.5
%
   
-0.8
%
   
3.8
%
   
2.6
%
   
1.5
%
   
3.0
%
Seattle Metro
   
4.0
%
   
8.7
%
   
1.9
%
   
5.8
%
   
6.5
%
   
5.5
%
Same-Property Portfolio
   
3.0
%
   
2.0
%
   
3.4
%
   
3.7
%
   
2.7
%
   
4.2
%
 
   
Sequential Growth
 
   
Q4 2017 compared to Q3 2017
 
   
Gross
Revenues
   
Operating
Expenses
   
NOI
 
Southern California
   
0.2
%
   
0.1
%
   
0.2
%
Northern California
   
0.2
%
   
-2.3
%
   
1.1
%
Seattle Metro
   
0.0
%
   
0.1
%
   
0.0
%
Same-Property Portfolio
   
0.1
%
   
-0.7
%
   
0.5
%
   
Financial Occupancies
 
   
Quarter Ended
 
   
12/31/2017
   
9/30/2017
   
12/31/2016
 
Southern California
   
96.9
%
   
96.8
%
   
96.7
%
Northern California
   
96.9
%
   
96.9
%
   
96.5
%
Seattle Metro
   
96.4
%
   
96.2
%
   
96.7
%
Same-Property Portfolio
   
96.8
%
   
96.7
%
   
96.6
%
 
2

Investment Activity

In October 2017, the Wesco I, LLC (“Wesco I”) joint venture operating agreement was amended to extend the venture. As part of the amendment, the Company and joint venture partner agreed that the Company earned a promote interest of $38.0 million. The Company agreed to contribute the earned promote interest to the joint venture, resulting in an increase in the Company’s ownership interest in Wesco I to approximately 58%. The promote income has been excluded from Net Income, Total FFO and Core FFO

During the fourth quarter of 2017, the Company formed a new joint venture entity, BEX III, LLC (“BEX III”), in which the Company has a 50% ownership interest. In November 2017, BEX III acquired The Village at Toluca Lake for a total contract price of $59.0 million. The community contains 145 apartment homes in Burbank, CA. The Village at Toluca Lake offers convenient access to employment opportunities in Burbank, Studio City, Glendale, and Hollywood.

Dispositions

In December 2017, the Company sold two communities, which were owned by BEXAEW, LLC, in which the Company has a 50% interest. The communities contained 587 apartment homes in Seattle, WA. The total contract price of the sales was $160.3 million. The Company’s share of the total gain on the sale was $34.8 million, which has been excluded from the calculation of Total FFO and Core FFO.
 
Other Investments

During the fourth quarter of 2017, the Company originated $64.5 million in three preferred equity investments in multifamily developments located in Los Angeles, CA, San Diego, CA, and Bellevue, WA. The total investment has an average preferred return of 11.1% and all of the investments mature in 2021.
 
Development Activity

During the fourth quarter of 2017, the Company began construction on a new development in Hollywood, CA. The project is estimated to have 200 apartment homes and up to 4,700 square feet of ground-floor retail space. The community is centrally located in the heart of Hollywood and less than a quarter mile from the Hollywood/Vine Metro Station, which provides convenient access to Downtown Los Angeles. The development is expected to cost approximately $105.0 million and open in the first quarter of 2020.

The following table represents the development community in lease-up and the current leasing status as of February 2, 2018.
 
Project Name
Location
Total Apartment Homes
ESS Ownership
% Pre-Leased as of 2/2/18
Status
Station Park Green – Phase I
San Mateo, CA
121
100%
4.2%
Pre-Leasing
3

Liquidity and Balance Sheet

Common Stock

During the fourth quarter of 2017, the Company issued 33,571 shares of common stock through its equity distribution program at an average price per share of $261.19 for net proceeds of $8.7 million. For the full-year 2017, the Company issued 345,444 shares of common stock at an average price per share of $260.38 for net proceeds of $89.1 million. Subsequent to year-end through February 2, 2018, the Company did not issue any common stock through its equity distribution program.
 
Balance Sheet

During the fourth quarter of 2017, the Company prepaid $91.9 million of secured mortgages with an effective interest rate of 5.7%. The Company incurred approximately $1.8 million of prepayment penalties and related costs, which are excluded from the calculation of Core FFO.

In January 2018, the Company amended its unsecured line of credit facility, increasing the maximum amount available for borrowing from $1.0 billion to $1.2 billion and extending the maturity to December 2021.

As of February 2, 2018, the Company had approximately $891.0 million in undrawn capacity on its unsecured credit facilities.

2018 Full-Year Guidance and Assumptions

Per Diluted Share
 
Range
   Net Income
 
$4.42 - $4.81
   Total FFO
 
$12.23 - $12.62
   Core FFO
 
$12.24 - $12.64
     
U.S. Economic Assumptions
   
   GDP Growth
 
2.7%
   Job Growth
 
1.4%
     
ESS Markets Economic Assumptions
   
   Job Growth
 
1.6%
   Market Rent Growth
 
3.0%
 
Estimated Same-Property Portfolio Growth based on 47,242 Apartment Homes
   
   Southern California
 
1.9% to 2.9%
   Northern California
 
2.0% to 3.0%
   Seattle
 
2.4% to 3.4%
     
   Gross Revenue
 
2.0% to 3.0%
   Operating Expense
 
2.1% to 3.1%
   Net Operating Income
 
1.6% to 3.4%
4

Other Key Assumptions

·
Acquisitions of $400-$525 million to be financed with proceeds from a combination of dispositions, joint venture capital, or common stock, depending on cost of capital.
 
·
Dispositions of $550-$750 million, subject to cost of capital.
 
·
Preferred equity investments of $100 million.
 
·
Total development spending in 2018 for existing projects under construction is expected to be $250 million at the Company’s pro rata share. The Company does not currently plan to start any new developments during 2018.
 
·
Revenue generating capital expenditures are expected to be $83 million at the Company’s pro rata share.

For additional details regarding the 2018 assumptions, please see page S-14 of the accompanying supplemental financial information. For the first quarter of 2018, the Company has established a range of Core FFO per diluted share of $2.99 to $3.09.
 
Conference Call with Management

The Company will host an earnings conference call with management to discuss its quarterly results on Thursday, February 8, 2018 at 9 a.m. PT (12 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.

A rebroadcast of the 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 fourth quarter 2017 earnings link. To access the replay digitally, dial (844) 512-2921 using the replay pin number 13675031. If you are unable to access the information via the Company’s website, please contact the Investor Relations Department at investors@essex.com or by calling (650) 655-7800.

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 247 apartment communities with an additional 7 properties in various stages of active development. Additional information about Essex can be found on the Company’s website at www.essex.com.

This press release and accompanying supplemental financial information will be 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.
5

Funds from Operations (“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 merger, integration and acquisition costs and items that are not routine or not related to the Company’s core business activities, which is referred to as “Core FFO”, to be useful financial 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 the ability to pay dividends.

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 an alternative 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 following table sets forth the Company’s calculation of diluted FFO and Core FFO for the three months and year ended December 31, 2017 and 2016 (in thousands, except for share and per share amounts):


   
Three Months Ended
December 31,
   
Year Ended
December 31,
 
Funds from Operations attributable to common stockholders and unitholders
 
2017
   
2016
   
2017
   
2016
 
Net income available to common stockholders
 
$
103,613
   
$
195,569
   
$
433,059
   
$
411,124
 
Adjustments:
                               
Depreciation and amortization
   
117,988
     
111,835
     
468,881
     
441,682
 
Gains not included in FFO
   
(34,779
)
   
(134,303
)
   
(159,901
)
   
(167,607
)
Deferred tax expense on gain on sale of real estate and land – Taxable REIT Subsidiary activity
   
-
     
131
     
-
     
4,410
 
Depreciation and amortization add back from unconsolidated co-investments
   
15,196
     
13,619
     
55,531
     
50,956
 
Noncontrolling interest related to Operating Partnership units
   
3,536
     
6,632
     
14,825
     
14,089
 
Depreciation attributable to third party ownership and other
   
(212
)
   
(6
)
   
(286
)
   
(9
)
Funds from Operations attributable to common stockholders and unitholders
 
$
205,342
   
$
193,477
   
$
812,109
   
$
754,645
 
FFO per share – diluted
 
$
3.01
   
$
2.85
   
$
11.91
   
$
11.12
 
Acquisition and investment related costs
 
$
415
   
$
462
   
$
1,569
   
$
1,841
 
Gain on sale of marketable securities and other investments
   
(259
)
   
(2,843
)
   
(1,909
)
   
(5,719
)
Interest rate hedge ineffectiveness (1)
   
(59
)
   
(250
)
   
(78
)
   
(250
)
Loss on early retirement of debt
   
1,796
     
395
     
1,796
     
606
 
Income from early redemption of preferred equity investments
   
(100
)
   
-
     
(356
)
   
-
 
Excess of redemption value of preferred stock over the carrying value
   
-
     
-
     
-
     
2,541
 
Insurance reimbursements, legal settlements and other, net
   
(1,418
)
   
(429
)
   
(1,108
)
   
(4,470
)
Core Funds from Operations attributable to common stockholders and unitholders
 
$
205,717
   
$
190,812
   
$
812,023
   
$
749,194
 
Core FFO per share – diluted
 
$
3.01
   
$
2.81
   
$
11.91
   
$
11.04
 
Weighted average number of shares outstanding diluted (2)
   
68,321,214
     
67,915,332
     
68,194,472
     
67,889,505
 
 
(1) Interest rate swaps are generally adjusted to fair value through other comprehensive income (loss). However, because certain of our interest rate swaps do not have a 0% LIBOR floor, while related hedged debt in these cases is subject to a 0% LIBOR floor, the portion of the change in fair value of these interest rate swaps attributable to this mismatch is recorded as noncash interest rate hedge ineffectiveness through interest expense.
 
(2) Assumes conversion of all outstanding limited partnership units in Essex Portfolio, L.P. (the “Operating Partnership”) into shares of the Company’s common stock and excludes all DownREIT limited partnership units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.
 
6

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

Net Operating Income (“NOI”) and Same-Property NOI are considered by management to be important supplemental performance measures to earnings from operations included in the Company’s condensed 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 revenue 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
December 31,
   
Year Ended
December 31,
 
   
2017
   
2016
   
2017
   
2016
 
Earnings from operations
 
$
112,375
   
$
105,520
   
$
446,522
   
$
420,800
 
Adjustments:
                               
     Depreciation and amortization
   
117,988
     
111,835
     
468,881
     
441,682
 
     Management and other fees from affiliates     
   
(2,647
)
   
(2,133
)
   
(9,574
)
   
(8,278
)
     General and administrative
   
10,659
     
12,224
     
41,385
     
40,751
 
     Acquisition and investment related costs
   
415
     
462
     
1,569
     
1,841
 
        NOI
   
238,790
     
227,908
     
948,783
     
896,796
 
     Less: Non-same property NOI
   
(22,414
)
   
(18,622
)
   
(91,096
)
   
(73,549
)
Same-Property NOI
 
$
216,376
   
$
209,286
   
$
857,687
   
$
823,247
 
 
7

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,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. In this press release and related materials, forward-looking statements include, among other things, statements relating to the Company’s financial guidance for the first quarter and full-year 2018, including guidance relating to same-property portfolio growth, funds from operations, gross revenues, operating expenses, and net operating income; estimated costs of property development and redevelopment, the anticipated timing of completion of current development and redevelopment projects and the stabilization of such projects; financial projections and assumptions; financing and investment activities; forecasts of residential supply, jobs, and rent growth in various areas; and other information that is not historical information. The Company’s actual results may differ materially from those projected in such forward-looking statements. Factors that might cause such a difference include, but are not limited to, the failure of the Company to achieve its business objectives, changes in market demand for rental units and the impact of competition and competitive pricing, unforeseen consequences from cyber-intrusion, changes in economic conditions, unexpected delays or cost increases in the development and stabilization of development projects, unexpected difficulties in leasing of development projects, total costs of development investments exceeding the Company’s projections, and other risks detailed in the Company’s filings with the Securities and Exchange Commission (SEC). All forward-looking statements are made as of the date hereof, and the Company assumes no obligation to update or supplement this information for any reason. For more details relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, and risks relating to our business in general, please refer to our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other filings with the SEC.

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
Barb Pak
Group Vice President of Finance & Investor Relations
(650) 655-7800
bpak@essex.com
8

 
Q4 2017 Supplemental
Table of Contents

 
Page(s)
Consolidated Operating Results
S-1 – S-2
Consolidated Funds From Operations
S-3
Consolidated Balance Sheets
S-4
Debt Summary – December 31, 2017
S-5
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – December 31, 2017
S-6
Portfolio Summary by County – December 31, 2017
S-7
Operating Income by Quarter – December 31, 2017
S-8
Same-Property Revenue Results by County – Quarters ended December 31, 2017 and 2016, and September 30, 2017
S-9
Same-Property Revenue Results by County – Years ended December 31, 2017 and 2016
S-9.1
Same-Property Operating Expenses
S-10
Development Pipeline – December 31, 2017
S-11
Redevelopment Pipeline – December 31, 2017
S-12
Capital Expenditures – December 31, 2017
S-12.1
Co-Investments – December 31, 2017
S-13
Assumptions for 2018 FFO Guidance Range
S-14
Reconciliation of Projected EPS, FFO and Core FFO per diluted share
S-14.1
Summary of Apartment Community Acquisitions and Dispositions Activity
S-15
2018 MSA Level Forecast: Supply, Jobs and Apartment Market Conditions
S-16
Relative Job Growth Rankings – Essex West Coast Metro Performance vs. U.S. Median  S-16.1
Reconciliations of Non-GAAP Financial Measures and Other Terms
S-17.1 – S-17.4



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
   
Twelve Months Ended
 
 
December 31,
   
December 31,
 
   
2017
   
2016
   
2017
   
2016
 
Revenues:
                       
Rental and other property
 
$
342,417
   
$
326,905
   
$
1,354,325
   
$
1,285,723
 
Management and other fees from affiliates
   
2,647
     
2,133
     
9,574
     
8,278
 
     
345,064
     
329,038
     
1,363,899
     
1,294,001
 
                                 
Expenses:
                               
Property operating
   
103,627
     
98,997
     
405,542
     
388,927
 
Depreciation and amortization
   
117,988
     
111,835
     
468,881
     
441,682
 
General and administrative
   
10,659
     
12,224
     
41,385
     
40,751
 
Acquisition and investment related costs
   
415
     
462
     
1,569
     
1,841
 
     
232,689
     
223,518
     
917,377
     
873,201
 
Earnings from operations
   
112,375
     
105,520
     
446,522
     
420,800
 
                                 
Interest expense, net (1)
   
(53,116
)
   
(52,291
)
   
(212,796
)
   
(207,938
)
Interest and other income
   
6,688
     
7,745
     
24,604
     
27,305
 
Equity income from co-investments
   
45,511
     
9,766
     
86,445
     
48,698
 
Loss on early retirement of debt
   
(1,796
)
   
(395
)
   
(1,796
)
   
(606
)
Gain on sale of real estate and land
   
-
     
134,303
     
26,423
     
154,561
 
Deferred tax expense on gain on sale of real estate and land
   
-
     
(131
)
   
-
     
(4,410
)
Gain on remeasurement of co-investment
   
-
     
-
     
88,641
     
-
 
Net income
   
109,662
     
204,517
     
458,043
     
438,410
 
Net income attributable to noncontrolling interest
   
(6,049
)
   
(8,948
)
   
(24,984
)
   
(23,431
)
Net income attributable to controlling interest
   
103,613
     
195,569
     
433,059
     
414,979
 
Dividends to preferred stockholders
   
-
     
-
     
-
     
(1,314
)
Excess of redemption value of preferred stock over the carrying value  
   
-
     
-
     
-
     
(2,541
)
Net income available to common stockholders
 
$
103,613
   
$
195,569
   
$
433,059
   
$
411,124
 
                                 
Net income per share - basic
 
$
1.57
   
$
2.98
   
$
6.58
   
$
6.28
 
                                 
Shares used in income per share - basic
   
66,035,998
     
65,520,788
     
65,829,155
     
65,471,540
 
                                 
Net income per share - diluted
 
$
1.57
   
$
2.98
   
$
6.57
   
$
6.27
 
                                 
Shares used in income per share - diluted
   
66,103,882
     
65,829,180
     
65,898,255
     
65,587,816
 
 
(1)
Refer to page S-17.2, the section titled “Interest Expense, Net” for additional information. 
See Company’s 10-K and 10-Q for additional disclosures
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
   
Twelve Months Ended
 
 
December 31,
   
December 31,
 
 
2017
   
2016
   
2017
   
2016
 
                         
Rental and other property
                       
Rental
 
$
319,500
   
$
305,220
   
$
1,263,476
   
$
1,201,995
 
Other property
   
22,917
     
21,685
     
90,849
     
83,728
 
Rental and other property
 
$
342,417
   
$
326,905
   
$
1,354,325
   
$
1,285,723
 
                                 
Property operating expenses
                               
Real estate taxes
 
$
38,027
   
$
34,622
   
$
146,310
   
$
139,162
 
Administrative and insurance
   
21,007
     
19,954
     
82,941
     
78,887
 
Maintenance and repairs
   
19,375
     
20,385
     
76,869
     
76,258
 
Utilities
   
17,766
     
16,518
     
69,266
     
64,354
 
Property management
   
7,452
     
7,518
     
30,156
     
30,266
 
Property operating expenses
 
$
103,627
   
$
98,997
   
$
405,542
   
$
388,927
 
                                 
                                 
Interest and other income
                               
Marketable securities and other interest income
 
$
6,175
   
$
4,353
   
$
21,603
   
$
16,996
 
Gain on sale of marketable securities and other investments
   
259
     
2,843
     
1,909
     
5,719
 
Insurance reimbursements, legal settlements, and other
   
254
     
549
     
1,092
     
4,590
 
Interest and other income
 
$
6,688
   
$
7,745
   
$
24,604
   
$
27,305
 
                                 
Equity income from co-investments
                               
Equity income from co-investments
 
$
3,998
   
$
4,458
   
$
17,334
   
$
19,269
 
Income from preferred equity investments
   
6,634
     
5,308
     
23,918
     
16,383
 
Gain on sale of co-investment communities
   
34,779
     
-
     
44,837
     
13,046
 
Income from early redemption of preferred equity investments
   
100
     
-
     
356
     
-
 
Equity income from co-investments
 
$
45,511
   
$
9,766
   
$
86,445
   
$
48,698
 
                                 
Noncontrolling interest
                               
Limited partners of Essex Portfolio, L.P.
 
$
3,536
   
$
6,632
   
$
14,825
   
$
14,089
 
DownREIT limited partners’ distributions
   
1,496
     
1,423
     
6,433
     
5,705
 
Third-party ownership interest
   
1,017
     
893
     
3,726
     
3,637
 
Noncontrolling interest
 
$
6,049
   
$
8,948
   
$
24,984
   
$
23,431
 
 
See Company’s 10-K and 10-Q for additional disclosures
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
         
Twelve Months Ended
       
 
December 31,
         
December 31,
       
    2017     2016    
% Change
   
2017
    2016    
% Change
 
                                     
Funds from operations attributable to common stockholders and unitholders (FFO)
                                   
Net income available to common stockholders
 
$
103,613
   
$
195,569
         
$
433,059
   
$
411,124
       
Adjustments:
                                           
Depreciation and amortization
   
117,988
     
111,835
           
468,881
     
441,682
       
Gains not included in FFO
   
(34,779
)
   
(134,303
)
         
(159,901
)
   
(167,607
)
     
Deferred tax expense on gain on sale of real estate and land - Taxable REIT Subsidiary activity
   
-
     
131
           
-
     
4,410
       
Depreciation and amortization add back from unconsolidated co-investments
   
15,196
     
13,619
           
55,531
     
50,956
       
Noncontrolling interest related to Operating Partnership units
   
3,536
     
6,632
           
14,825
     
14,089
       
Depreciation attributable to third party ownership and other (2)
   
(212
)
   
(6
)
         
(286
)
   
(9
)
     
Funds from operations attributable to common stockholders and unitholders
 
$
205,342
   
$
193,477
         
$
812,109
   
$
754,645
       
FFO per share-diluted
 
$
3.01
   
$
2.85
    5.6%
 
 
$
11.91
   
$
11.12
    7.1%
 
                                                 
Components of the change in FFO
                                               
Non-core items:
                                               
Acquisition and investment related costs
 
$
415
   
$
462
           
$
1,569
   
$
1,841
         
Gain on sale of marketable securities and other investments
   
(259
)
   
(2,843
)
           
(1,909
)
   
(5,719
)
       
Interest rate hedge ineffectiveness (3)
   
(59
)
   
(250
)
           
(78
)
   
(250
)
       
Loss on early retirement of debt
   
1,796
     
395
             
1,796
     
606
         
Income from early redemption of preferred equity investments
   
(100
)
   
-
             
(356
)
   
-
         
Excess of redemption value of preferred stock over the carrying value
   
-
     
-
             
-
     
2,541
         
Insurance reimbursements, legal settlements and other, net
   
(1,418
)
   
(429
)
           
(1,108
)
   
(4,470
)
       
Core funds from operations attributable to common stockholders and unitholders
 
$
205,717
   
$
190,812
           
$
812,023
   
$
749,194
         
Core FFO per share-diluted
 
$
3.01
   
$
2.81
    7.1%
 
 
$
11.91
   
$
11.04
    7.9%
 
                                                 
Changes in core items:
                                               
Same-property NOI
 
$
7,090
                   
$
34,440
                 
Non-same property NOI
   
3,792
                     
17,547
                 
Management and other fees, net
   
514
                     
1,296
                 
FFO from co-investments
   
2,634
                     
10,366
                 
Interest and other income
   
1,956
                     
5,889
                 
Interest expense
   
(1,016
)
                   
(5,030
)
               
General and administrative
   
(44
)
                   
(2,243
)
               
Other items, net
   
(21
)
                   
564
                 
   
$
14,905
                   
$
62,829
                 
                                                 
Weighted average number of shares outstanding diluted (4)
   
68,321,214
     
67,915,332
             
68,194,472
     
67,889,505
         
 
(1)
Refer to page S-17.1, the section titled “Funds from Operations (“FFO”) for additional information on the Company’s definition and use of FFO and Core FFO.         
(2)
The Company consolidates certain co-investments. The noncontrolling interest’s share of net operating income in these investments for the three and twelve months ended December 31, 2017 was $1.1 million and $4.7 million, respectively.    
(3)
Interest rate swaps are generally adjusted to fair value through other comprehensive income (loss). However, because certain of our interest rate swaps do not have a 0% LIBOR floor, while related hedged debt in these cases is subject to a 0% LIBOR floor, the portion of the change in fair value of these interest rate swaps attributable to this mismatch, if any, is recorded as noncash interest rate hedge ineffectiveness through interest expense.
(4)
Assumes conversion of all outstanding limited partnership units in the Operating Partnership into shares of the Company’s common stock and excludes all DownREIT limited partnership units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.

See Company’s 10-K and 10-Q for additional disclosures
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)
 
   
December 31, 2017
   
December 31, 2016
 
             
Real Estate:
           
Land and land improvements
 
$
2,719,064
   
$
2,559,743
 
Buildings and improvements
   
10,629,767
     
10,116,563
 
     
13,348,831
     
12,676,306
 
Less:  accumulated depreciation
   
(2,769,297
)
   
(2,311,546
)
     
10,579,534
     
10,364,760
 
Real estate under development
   
355,735
     
190,505
 
Co-investments
   
1,155,984
     
1,161,275
 
Real estate held for sale, net
   
-
     
101,957
 
     
12,091,253
     
11,818,497
 
Cash and cash equivalents, including restricted cash
   
61,126
     
170,302
 
Marketable securities
   
190,004
     
139,189
 
Notes and other receivables
   
100,926
     
40,970
 
Prepaid expenses and other assets
   
52,397
     
48,450
 
Total assets
 
$
12,495,706
   
$
12,217,408
 
                 
Unsecured debt, net
 
$
3,501,709
   
$
3,246,779
 
Mortgage notes payable, net
   
2,008,417
     
2,191,481
 
Lines of credit
   
179,000
     
125,000
 
Distributions in excess of investments in co-investments
   
36,726
     
-
 
Other liabilities
   
333,823
     
317,227
 
Total liabilities
   
6,059,675
     
5,880,487
 
Redeemable noncontrolling interest
   
39,206
     
44,684
 
Equity:
               
Common stock
   
7
     
6
 
Additional paid-in capital
   
7,129,571
     
7,029,679
 
Distributions in excess of accumulated earnings
   
(833,726
)
   
(805,409
)
Accumulated other comprehensive loss, net
   
(18,446
)
   
(32,098
)
Total stockholders’ equity
   
6,277,406
     
6,192,178
 
Noncontrolling interest
   
119,419
     
100,059
 
Total equity
   
6,396,825
     
6,292,237
 
Total liabilities and equity
 
$
12,495,706
   
$
12,217,408
 
 
See Company’s 10-K and 10-Q for additional disclosures
S-4

E S S E X  P R O P E R T Y  T R U S T, I N C.
 
Deby Summary - December 31, 2017
(Dollars in thousands, except in footnotes)
 
                                                   
                       
Scheduled principal payments, unamortized premiums (discounts) and (debt issuance costs) are as follows - excludes lines of credit:
                                             
 
 
             
Weighted Average
                          Weighted
Average
Interest Rate
  Percentage of Total Debt
       
Balance Outstanding
Interest Rate
Maturity
in Years
   
Unsecured
 
Secured
   
Total
   
Unsecured Debt, net
                                             
 
Bonds private - fixed rate
 
$
275,000
 
4.5%
 
3.1
   
2018
 
$
                -
 
$
        202,131
 
$
        202,131
 
5.3%
 
3.7%
 
Bonds public - fixed rate
   
2,900,000
 
3.7%
 
6.4
   
2019
   
          75,000
   
        560,389
   
        635,389
 
4.1%
 
11.5%
 
Term loan (1)
   
350,000
 
2.5%
 
4.1
   
2020
   
                -
   
        694,921
   
        694,921
 
4.8%
 
12.6%
 
Unamortized net discounts and debt issuance costs
   
       (23,291)
 
          -
 
          -
   
2021
   
        500,000
   
          44,846
   
        544,846
 
4.3%
 
9.9%
         
3,501,709
 
3.6%
 
6.0
   
2022
   
        650,000
   
          42,466
   
        692,466
 
3.1%
 
12.6%
Mortgage Notes Payable, net
                 
2023
   
        600,000
   
           2,188
   
        602,188
 
3.6%
 
10.9%
 
Fixed rate - secured
   
1,710,349
 
4.6%
 
3.3
   
2024
   
        400,000
   
           2,317
   
        402,317
 
4.0%
 
7.3%
 
Variable rate - secured (2)
   
270,212
 
2.0%
 
18.7
   
2025
   
        500,000
   
          16,056
   
        516,056
 
3.5%
 
9.4%
 
Unamortized premiums and debt issuance costs, net
   
27,856
 
          -
 
          -
   
2026
   
        450,000
   
          55,091
   
        505,091
 
3.4%
 
9.2%
   
Total mortgage notes payable
   
2,008,417
 
4.2%
 
5.4
   
2027
   
        350,000
   
        155,500
   
        505,500
 
3.4%
 
9.2%
                       
2028
   
                -
   
           2,934
   
           2,934
 
2.9%
 
0.1%
Unsecured Lines of Credit
                 
Thereafter
   
                -
   
        201,722
   
        201,722
 
2.3%
 
3.6%
 
Line of credit (3)
   
      179,000
 
2.3%
       
Subtotal
   
3,525,000
   
1,980,561
   
5,505,561
 
3.8%
 
100.0%
 
Line of credit (4)
   
                -
 
2.3%
       
Debt Issuance Costs
   
         (18,103)
   
          (5,392)
   
         (23,495)
 
NA
 
NA
   
Total lines of credit
   
      179,000
 
2.3%
       
(Discounts)/Premiums
   
          (5,188)
   
          33,248
   
          28,060
 
NA
 
NA
                       
Total
 
$
3,501,709
 
$
2,008,417
 
$
5,510,126
 
3.8%
 
100.0%
   
Total debt, net
 
$
5,689,126
 
3.8%
                                   
                                                   
 
Capitalized interest for the three and twelve months ended December 31, 2017 was approximately $3.9 million and $13.9 million, respectively.
 
(1)
The unsecured term loan has a variable interest rate of LIBOR plus 0.95%. The Company has interest rate swap contracts with an aggregate notional amount of $175 million, which effectively converts the interest rate on $175 million of the term loan to a fixed rate of 2.3%.
(2)
$270.2 million of variable rate debt is tax exempt to the note holders. $20.7 million is subject to interest rate cap protection agreements.         
(3)
As of December 31, 2017, this unsecured line of credit facility had a capacity of $1.0 billion, with a scheduled maturity date in December 2020 with one 18-month extension, exercisable at the Company’s option.  The underlying interest rate on this line was based on a tiered rate structure tied to the Company’s corporate ratings and was LIBOR plus 0.90% as of December 31, 2017. In January 2018, the line of credit facility was amended such that the line’s capacity was increased to $1.2 billion and the scheduled maturity date was extended to December 2021 with one 18-month extension, exercisable at the Company’s option. The underlying interest rate on the amended line is based on a tiered rate structure tied to the Company’s corporate ratings and is currently at LIBOR plus 0.875%.
(4)
As of December 31, 2017, this unsecured line of credit facility had a capacity of $25 million and was scheduled to mature in January 2018. The underlying interest rate on this line was based on a tiered rate structure tied to the Company’s corporate ratings and was LIBOR plus 0.90% as of December 31, 2017. In January 2018, the line of credit facility was amended such that the line’s capacity was increased to $35 million and the scheduled maturity date was extended to January 2020. The underlying interest rate on the amended line is based on a tiered rate structure tied to the Company’s corporate ratings and is currently at LIBOR plus 0.875%.

See Company’s 10-K and 10-Q for additional disclosures
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 - December 31, 2017
(Dollars and shares in thousands, except per share amounts)
 
                           
Capitalization Data
           
Public Bond Covenants (1)
 
Actual
 
Requirement
   
Total debt, net
     
$
5,689,126
                   
                 
Adjusted Debt to Adjusted Total Assets:
 
37%
 
< 65%
   
Common stock and potentially dilutive securities
                       
 
Common stock outstanding
   
66,054
                   
 
Limited partnership units (1)
   
2,230
                   
 
Options-treasury method
   
54
   
Secured Debt to Adjusted Total Assets:
 
13%
 
< 40%
   
Total shares of common stock and potentially dilutive securities
68,338
                   
                                 
Common stock price per share as of December 31, 2017
$
241.37
                   
                 
Interest Coverage:
 
421%
 
> 150%
   
Total equity capitalization
 
$
16,494,743
                   
                                 
Total market capitalization
 
$
22,183,869
   
Unsecured Debt Ratio (2):
 
283%
 
> 150%
   
                                 
Ratio of debt to total market capitalization
   
25.6%
                   
                 
Selected Credit Ratios (3)
 
Actual
       
Credit Ratings
                             
Rating Agency
 
Rating
Outlook
       
Net Indebtedness Divided by Adjusted EBITDA, normalized and annualized:
 
5.6
       
Fitch
 
BBB+
Stable
                       
Moody’s
 
Baa1
Stable
       
Unencumbered NOI to Adjusted Total NOI:
 
71%
       
Standard & Poor’s
BBB+
Stable
                       
                 
(1)
Refer to page S-17.3 for additional information on the Company’s Public Bond Covenants.
       
(1)
Assumes conversion of all outstanding limited partnership units in the Operating Partnership into shares of the Company’s common stock.
 
(2)
Unsecured Debt Ratio is unsecured assets (excluding investments in co-investments) divided by unsecured indebtedness.
                 
(3)
Refer to pages S-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 10-K and 10-Q for additional disclosures
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 December 31, 2017
 
       
Apartment Homes
 
Average Monthly Rental Rate (1)
 
Percent of NOI (2)
Region - County
 
Consolidated (3)
 
Unconsolidated
Co-investments (3)
 
Apartment
Homes in
Development (4)
 
Total
 
Consolidated
 
Unconsolidated
Co-investments (5)
 
Total (6)
 
Consolidated
 
Unconsolidated
Co-investments (5)
 
Total (6)
                                             
Southern California
                                       
 
Los Angeles County
 
9,387
 
1,563
 
                  200
 
11,150
 
 $         2,380
 
 $                  2,051
 
 $  2,354
 
19.3%
 
12.1%
 
18.7%
 
Orange County
 
5,553
 
1,149
 
                       -
 
6,702
 
            2,125
 
                    1,839
 
     2,099
 
10.7%
 
9.0%
 
10.6%
 
San Diego County
 
5,203
 
616
 
                       -
 
5,819
 
            1,877
 
                    1,723
 
     1,869
 
8.7%
 
4.4%
 
8.3%
 
Ventura County
 
2,577
 
693
 
                       -
 
3,270
 
            1,750
 
                    2,072
 
     1,791
 
4.3%
 
6.1%
 
4.4%
 
Other Southern CA
 
623
 
249
 
                       -
 
872
 
            1,595
 
                    1,589
 
     1,594
 
0.9%
 
1.6%
 
0.9%
Total Southern California
 
23,343
 
4,270
 
                  200
 
27,813
 
            2,117
 
                    1,927
 
     2,101
 
43.9%
 
33.2%
 
42.9%
                                             
Northern California
                                       
 
Santa Clara County
 
7,356
 
2,266
 
745
 
10,367
 
            2,659
 
                    2,797
 
     2,678
 
18.7%
 
25.2%
 
19.3%
 
Alameda County
 
2,954
 
1,983
 
                       -
 
4,937
 
            2,488
 
                    2,327
 
     2,445
 
6.8%
 
19.7%
 
8.1%
 
San Mateo County
 
1,830
 
197
 
492
 
2,519
 
            2,828
 
                    2,870
 
     2,830
 
4.9%
 
2.4%
 
4.6%
 
Contra Costa County
 
2,270
 
49
 
                       -
 
2,319
 
            2,275
 
                    4,549
 
     2,300
 
4.8%
 
0.7%
 
4.4%
 
San Francisco
 
1,342
 
463
 
545
 
2,350
 
            3,063
 
                    3,261
 
     3,095
 
3.7%
 
6.3%
 
3.9%
 
Other Northern CA
 
96
 
                           -
 
                       -
 
96
 
            2,895
 
                           -
 
     2,895
 
0.3%
 
                           -
 
0.3%
Total Northern California
 
15,848
 
4,958
 
1,782
 
22,588
 
            2,627
 
                    2,673
 
     2,634
 
39.2%
 
54.3%
 
40.6%
                                             
Seattle Metro
 
10,238
 
1,582
 
                       -
 
11,820
 
            1,799
 
                    1,803
 
     1,799
 
16.9%
 
12.5%
 
16.5%
                                             
Total
   
49,429
 
10,810
 
1,982
 
62,221
 
 $         2,215
 
 $                  2,256
 
 $  2,219
 
100.0%
 
100.0%
 
100.0%
 
(1)
Average monthly rental rate is defined as the total potential monthly rental revenue (actual rent for occupied apartment homes plus market rent for vacant apartment homes) divided by the number of apartment homes.
(2)
Actual NOI for the quarter ended December 31, 2017. See the section titled “Net Operating Income (“NOI”) and Same-Property NOI Reconciliations” on page S-17.3.
(3)
Includes all apartment communities with rents.        
(4)
Includes development communities with no rental income.
(5)
Co-investment amounts weighted for Company’s pro rata share.              
(6)
At Company’s pro rata share.                
See Company’s 10-K and 10-Q for additional disclosures
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
   
Q4 ‘17
   
Q3 ‘17
   
Q2 ‘17
   
Q1 ‘17
   
Q4 ‘16
 
                                     
Rental and other property revenues:
                                   
Same-property
   
46,128
   
$
309,765
   
$
309,308
   
$
304,662
   
$
302,125
   
$
300,808
 
Acquisitions (2)
   
2,081
     
16,145
     
16,225
     
15,859
     
13,751
     
3,018
 
Development (3)
   
360
     
4,529
     
4,530
     
4,462
     
4,334
     
4,270
 
Redevelopment
   
621
     
5,005
     
4,913
     
4,909
     
4,814
     
4,757
 
Non-residential/other, net (4)
   
239
     
6,973
     
6,998
     
6,874
     
8,144
     
14,052
 
Total rental and other property revenues
   
49,429
     
342,417
     
341,974
     
336,766
     
333,168
     
326,905
 
                                                 
Property operating expenses:
                                               
Same-property
           
93,389
     
94,021
     
90,308
     
90,455
     
91,522
 
Acquisitions (2)
           
5,185
     
5,288
     
5,273
     
4,552
     
906
 
Development (3)
           
1,421
     
1,508
     
1,448
     
1,576
     
1,528
 
Redevelopment
           
1,602
     
1,604
     
1,468
     
1,526
     
1,558
 
Non-residential/other, net (4) (5)
           
2,030
     
1,716
     
(232
)
   
1,404
     
3,483
 
Total property operating expenses
           
103,627
     
104,137
     
98,265
     
99,513
     
98,997
 
                                                 
Net operating income (NOI):
                                               
Same-property
           
216,376
     
215,287
     
214,354
     
211,670
     
209,286
 
Acquisitions (2)
           
10,960
     
10,937
     
10,586
     
9,199
     
2,112
 
Development (3)
           
3,108
     
3,022
     
3,014
     
2,758
     
2,742
 
Redevelopment
           
3,403
     
3,309
     
3,441
     
3,288
     
3,199
 
Non-residential/other, net (4)
           
4,943
     
5,282
     
7,106
     
6,740
     
10,569
 
Total NOI
         
$
238,790
   
$
237,837
   
$
238,501
   
$
233,655
   
$
227,908
 
                                                 
Same-property metrics
                                               
Operating margin
           
70
%
   
70
%
   
70
%
   
70
%
   
70
%
Annualized turnover (6)
           
46
%
   
62
%
   
54
%
   
46
%
   
47
%
Financial occupancy (7)
           
96.8
%
   
96.7
%
   
96.4
%
   
96.5
%
   
96.6
%
 
(1)
Includes consolidated communities only.           
(2)
Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2016. 
(3)
Development includes properties developed which did not have comparable stabilized results as of January 1, 2016.  
(4)
Other real estate assets consists mainly of retail space, commercial properties, boat slips, held for sale properties, disposition properties, and student housing.
(5)
Includes other expenses and intercompany eliminations pertaining to self-insurance. In Q2 ‘17, there were $2.0 million in reductions to operating expenses related to changes in prior period property tax estimates.
(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 revenue by total potential rental revenue (actual rent for occupied apartment homes plus market rent for vacant apartment homes).
See Company’s 10-K and 10-Q for additional disclosures
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 Results by County - Fourth Quarter 2017 vs. Fourth Quarter 2016 and Third Quarter 2017
(Dollars in thousands, except average monthly rental rates)

 
                                                                               
               
Average Monthly Rental Rate
   
Financial Occupancy 
   
Gross Revenues
   
Sequential Gross Revenues
 
Region - County
 
Apartment
Homes
   
Q4 ‘17 %
of Actual
NOI
   
Q4 ‘17
   
Q4 ‘16
   
% Change
   
Q4 ‘17
   
Q4 ‘16
   
% Change
   
Q4 ‘17
   
Q4 ‘16
   
% Change
   
Q3 ‘17
   
% Change
 
                                                                               
Southern California
                                                                             
Los Angeles County
   
8,523
     
19.2
%
 
$
2,377
   
$
2,332
     
1.9
%
   
96.6
%
   
96.3
%
   
0.3
%
 
$
61,503
   
$
60,418
     
1.8
%
 
$
61,573
     
-0.1
%
Orange County
   
5,553
     
11.6
%
   
2,125
     
2,052
     
3.6
%
   
96.9
%
   
96.8
%
   
0.1
%
   
35,945
     
34,631
     
3.8
%
   
35,761
     
0.5
%
San Diego County
   
4,961
     
9.0
%
   
1,866
     
1,798
     
3.8
%
   
96.9
%
   
96.9
%
   
0.0
%
   
28,443
     
27,418
     
3.7
%
   
28,371
     
0.3
%
Ventura County
   
2,577
     
4.6
%
   
1,750
     
1,675
     
4.5
%
   
97.5
%
   
97.2
%
   
0.3
%
   
14,069
     
13,482
     
4.4
%
   
14,006
     
0.4
%
Other Southern CA
   
384
     
0.4
%
   
1,265
     
1,223
     
3.4
%
   
97.4
%
   
97.3
%
   
0.1
%
   
1,502
     
1,468
     
2.3
%
   
1,492
     
0.7
%
Total Southern California
   
21,998
     
44.8
%
   
2,105
     
2,045
     
2.9
%
   
96.9
%
   
96.7
%
   
0.2
%
   
141,462
     
137,417
     
2.9
%
   
141,203
     
0.2
%