Exhibit 99.1





Essex Announces First Quarter 2021 Results

San Mateo, California—April 27, 2021—Essex Property Trust, Inc. (NYSE: ESS) (the “Company”) announced today its first quarter 2021 earnings results and related business activities.

Net Income, Funds from Operations (“FFO”), and Core FFO per diluted share for the quarter ended March 31, 2021 are detailed below.

   
Three Months Ended
March 31,
   
%
 
   
2021
   
2020
   
Change
 
Per Diluted Share
                 
Net Income
 

$2.59
   
$4.76
     
-45.6%

Total FFO
 

$3.23
   
$3.44
     
-6.1%

Core FFO
 

$3.07
   
$3.48
     
-11.8%


First Quarter 2021 Highlights:


Reported Net Income per diluted share for the first quarter of 2021 of $2.59, compared to $4.76 in the first quarter of 2020. The decrease is largely attributable to a gain on remeasurement of co-investments recorded in the first quarter of 2020.


Core FFO per diluted share declined by 11.8% compared to the first quarter of 2020.


Same-property gross revenues and net operating income (“NOI”) declined by 8.1% and 12.3%, respectively, compared to the first quarter of 2020. The decline in same-property gross revenues and NOI is primarily attributed to lower scheduled rents and higher cash concessions compared to the prior-year period.


On a sequential basis, both same-property gross revenues and NOI improved by 0.1% compared to the fourth quarter of 2020. The improvement is largely attributed to lower cash concessions and delinquency compared to the fourth quarter of 2020.


Increased the annual dividend by $0.05 to an annual distribution of $8.36 per common share, the Company’s 27th consecutive annual increase.


Disposed of three apartment communities during the quarter for a total contract price of $275.5 million.


Issued $450.0 million of 7-year senior unsecured notes due in 2028 at an interest rate per annum of 1.70% and an effective yield of 1.79%. The Company has less than $200.0 million of debt maturing through the end of 2022.


Reaffirmed full-year guidance for Core FFO, same-property gross revenues, expenses, and NOI.

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


“We are pleased with our first quarter results which exceeded the midpoint of our initial guidance. Although the West Coast markets are still in the early stages of an economic recovery, we are cautiously optimistic that declining COVID cases and widespread vaccinations will provide a foundation for a long economic expansion. Encouragingly, the large tech employers in our markets have accelerated hiring and are beginning to reopen their offices which should improve apartment demand, consistent with our expectations at the beginning of the year,” commented Michael J. Schall, President and CEO of the Company.

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 March 31, 2021 compared to the quarter ended March 31, 2020, and the sequential percentage change for the quarter ended March 31, 2021 compared to the quarter ended December 31, 2020, by submarket for the Company:

   
Q1 2021 vs.
Q1 2020
 
Q1 2021 vs.
Q4 2020
 
% of
Total
 
   
Gross
Revenues
 
Gross
Revenues
 
Q1 2021
Revenues
 
Southern California
             
Los Angeles County
   
-10.3%
   
2.8%
   
18.4%

Orange County
   
-2.9%
   
0.6%
   
11.3%

San Diego County
   
-2.0%
   
0.1%
   
8.8%

Ventura County
   
-0.1%
   
1.8%
   
4.2%

Total Southern California
   
-5.8%
   
1.5%
   
42.7%

Northern California
                   
Santa Clara County
   
-10.5%
   
-0.4%
   
18.3%

Alameda County
   
-10.5%
   
0.2%
   
6.7%

San Mateo County
   
-14.3%
   
-2.4%
   
5.1%

Contra Costa County
   
-5.0%
   
-0.4%
   
5.8%

San Francisco
   
-18.2%
   
-1.3%
   
3.0%

Total Northern California
   
-10.9%
   
-0.6%
   
38.9%

Seattle Metro
   
-7.0%
   
-1.6%
   
18.4%

Same-Property Portfolio
   
-8.1%
   
0.1%
   
100.0%


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The table below illustrates the components that drove the change in same-property revenue on a year-over-year basis for the first quarter of 2021.

Same-Property Revenue Components
 
$ Amount
(in Millions)
   
% Contribution to
Growth/(Decline)
 
Q1 2020 Same-Property Revenues
 
$
345.7
       
Scheduled Rents
   
-11.1
     
-3.2%

Delinquencies
   
-5.5
     
-1.6%

Cash Concessions
   
-10.4
     
-3.0%

Vacancy
   
0.1
     
0.0%

Other Income
   
-1.0
     
-0.3%

Q1 2021 Same-Property Revenues/Change
 
$
317.8
     
-8.1%


   
Year-Over-Year Change
 
   
Q1 2021 compared to Q1 2020
 
    
Gross
Revenues
     
Operating
Expenses
    
NOI
 
Southern California
   
-5.8%

   
0.3%

   
-8.2%

Northern California
   
-10.9%

   
4.5%

   
-16.2%

Seattle Metro
   
-7.0%

   
6.6%

   
-12.7%

Same-Property Portfolio
   
-8.1%

   
3.1%

   
-12.3%


   
Sequential Change
 
   
Q1 2021 compared to Q4 2020
 
   
Gross
Revenues
   
Operating
Expenses
   
NOI
 
Southern California
   
1.5%

   
-0.7%

   
2.5%

Northern California
   
-0.6%

   
-0.5%

   
-0.7%

Seattle Metro
   
-1.6%

   
3.6%

   
-4.1%

Same-Property Portfolio
   
0.1%

   
0.2%

   
0.1%


   
Financial Occupancies
 
   
Quarter Ended
 
   
3/31/2021
   
12/31/2020
   
3/31/2020
 
Southern California
   
96.7%

   
96.8%

   
96.6%

Northern California
   
96.6%

   
96.5%

   
96.9%

Seattle Metro
   
96.6%

   
95.8%

   
96.8%

Same-Property Portfolio
   
96.7%

   
96.5%

   
96.7%


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Investment Activity

Dispositions

In the first quarter of 2021, the Company sold three apartment communities containing 636 apartment homes, two located in Southern California and one in Northern California, for a total contract price of $275.5 million. In total, the Company recognized a $100.1 million gain on sale in the first quarter, which has been excluded from Total and Core FFO.

Other Investments

In the first quarter of 2021, the Company originated a preferred equity investment totaling $20.0 million for the development of a multifamily project located in Washington. The investment has an initial preferred return of 10.0% and matures in 2026.

In the first quarter of 2021, the Company received cash proceeds of $120.2 million from the full redemption of two preferred equity investments. The Company recorded $3.5 million of income from prepayment penalties as a result of an early redemption, which has been excluded from Core FFO.

Development Activity

During the first quarter of 2021 the Company’s development located in San Francisco, 500 Folsom, reached stabilization.

The table below represents the development communities in lease-up and the current leasing status as of April 23, 2021.

Project Name
Location
 
Total Apartment Homes
   
ESS Ownership
   
% Leased as of 04/23/21
 
Status
Mylo
Santa Clara, CA
   
476
     
100%

   
88.2%

In Lease-Up
Patina at Midtown
San Jose, CA
   
269
     
50%

   
72.1%

In Lease-Up
Wallace on Sunset
Hollywood, CA
   
200
     
100%

   
17.0%

In Lease-Up
Total/Average % Leased
   
945
             
68.5%

 

Liquidity and Balance Sheet

Common Stock

In the first quarter of 2021, the Company repurchased 40,000 shares of its common stock totaling $9.2 million, including commissions, at an average price of $229.30 per share. As of April 23, 2021, the Company has $214.5 million of purchase authority remaining under the stock repurchase plan.

The Company did not issue any shares of common stock through its equity distribution program in the first quarter of 2021.

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Balance Sheet

In February 2021, the Company issued $450.0 million of 7-year senior unsecured notes due in 2028 at an interest rate per annum of 1.70% and an effective yield of 1.79%. The proceeds were used to repay the Company’s $200.0 million unsecured term loan due in 2021 and the majority of its $350.0 million unsecured term loan due in 2022.
 
As of April 23, 2021, the Company has approximately $1.4 billion in liquidity via undrawn capacity on its unsecured credit facilities, cash, and marketable securities.

Guidance

For the first quarter of 2021, the Company exceeded the midpoint of the guidance range provided in its fourth quarter 2020 earnings release for Core FFO by $0.04 per diluted share.

The following table provides a reconciliation of first quarter 2021 Core FFO per diluted share to the midpoint of the guidance provided in the Company’s fourth quarter 2020 earnings release.

   
Per Diluted
Share
 
Projected midpoint of Core FFO per diluted share for Q1 2021
 
$
3.03
 
NOI from consolidated communities
   
0.02
 
FFO from Co-Investments
   
0.01
 
Interest expense and other
   
0.01
 
Core FFO per diluted share for Q1 2021 reported
 
$
3.07
 

For the second quarter of 2021, the Company has established a Core FFO guidance range per diluted share of $2.84 to $3.00. The midpoint of the Company’s second quarter Core FFO guidance range represents a $0.15 sequential decline, which is primarily attributable to the first quarter dispositions ($0.03), the early redemption of a $110 million preferred equity investment ($0.04), lower commercial income ($0.02), lower same-property NOI ($0.03) and higher G&A partially offset by other income ($0.03). The Company is reaffirming its full-year guidance ranges for same-property gross revenues, expenses, NOI, and Core FFO per diluted share as originally provided in its fourth quarter 2020 earnings release. Additional details regarding the Company’s 2021 Core FFO guidance range can be found on page S-14 of the Supplemental Financial Information.

Conference Call with Management

The Company will host an earnings conference call with management to discuss its quarterly results on Wednesday, April 28, 2021 at 11 a.m. PT (2 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 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 first quarter 2021 earnings link. To access the replay, dial (844) 512-2921 using the replay pin number 13717988. 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.

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Upcoming Events

The Company is scheduled to participate in the National Association of Real Estate Investment Trusts (“NAREIT”) Institutional Investor Forum held virtually from June 8 – 10, 2021. The Company’s President and Chief Executive Officer, Michael J. Schall, will present at the conference on June 8, 2021 at 2:15 p.m. ET. To attend the presentation, registration to NAREIT REITWeek is required. The link to register can be accessed on the Investors section of the Company’s website at www.essex.com. A copy of any materials provided by the Company at the conference will also be made available on the Investors section of the Company’s website.

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 244 apartment communities comprising approximately 60,000 apartment homes with an additional 5 properties in various stages of active development. 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 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

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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 ended March 31, 2021 and 2020 (dollars in thousands, except for share and per share amounts):

   
Three Months Ended
March 31,
 
Funds from Operations attributable to common stockholders and unitholders
 
2021
   
2020
 
Net income available to common stockholders
 
$
168,444
   
$
315,006
 
Adjustments:
               
Depreciation and amortization
   
128,587
     
131,559
 
Gains not included in FFO
   
(100,096
)
   
(234,694
)
Depreciation and amortization from unconsolidated co-investments
   
14,729
     
12,544
 
Noncontrolling interest related to Operating Partnership units
   
5,947
     
10,986
 
Depreciation attributable to third party ownership and other
   
(129
)
   
(134
)
Funds from Operations attributable to common stockholders and unitholders
 
$
217,482
   
$
235,267
 
FFO per share – diluted
 
$
3.23
   
$
3.44
 
Expensed acquisition and investment related costs
 
$
15
   
$
87
 
Deferred tax expense on unrealized gain on unconsolidated co-investment(1)
   
508
     
-
 
(Gain) loss on sale of marketable securities
   
(2,611
)
   
13
 
Unrealized (gains) losses on marketable securities
   
(6,276
)
   
8,696
 
Provision for credit losses
   
38
     
(50
)
Equity (income) loss from non-core co-investment(2)
   
(1,627
)
   
110
 
Loss (gain) on early retirement of debt, net
   
2,517
     
(321
)
Loss on early retirement of debt from unconsolidated co-investment
   
3
     
-
 
Co-investment promote income
   
-
     
(6,455
)
Income from early redemption of preferred equity investments
   
(3,513
)
   
(210
)
General and administrative and other, net
   
257
     
820
 
Insurance reimbursements, legal settlements, and other, net
   
(182
)
   
43
 
Core Funds from Operations attributable to common stockholders and unitholders
 
$
206,611
   
$
238,000
 
Core FFO per share – diluted
 
$
3.07
   
$
3.48
 
Weighted average number of shares outstanding diluted (3)
   
67,272,839
     
68,359,698
 

(1)
Represents deferred tax expense related to net unrealized gains on technology co-investments.
(2)
Represents the Company’s share of co-investment income from technology co-investments.
(3)
Assumes conversion of all outstanding limited partnership units in Essex Portfolio, L.P. (the “Operating Partnership”) into shares of the Company’s common stock and excludes 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.

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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
March 31,
 
   
2021
   
2020
 
Earnings from operations
 
$
197,381
   
$
130,837
 
Adjustments:
               
Corporate-level property management expenses
   
8,947
     
8,759
 
Depreciation and amortization
   
128,587
     
131,559
 
Management and other fees from affiliates
   
(2,249
)
   
(2,617
)
General and administrative
   
9,812
     
13,982
 
Expensed acquisition and investment related costs
   
15
     
87
 
Gain on sale of real estate and land
   
(100,096
)
   
-
 
NOI
   
242,397
     
282,607
 
Less: Non-same property NOI
   
(22,416
)
   
(31,834
)
Same-Property NOI
 
$
219,981
   
$
250,773
 

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 expectations related to the continued impact of the COVID-19 pandemic on the Company’s business, financial condition and results of operations and the impact of any additional measures taken to mitigate the impact of the pandemic, the Company’s intent, beliefs or expectations with respect to the timing of completion of current development and redevelopment projects and the stabilization of such projects, the timing of lease-up and occupancy of its apartment communities, the anticipated operating performance of its apartment communities, the total projected costs of development and redevelopment projects, co-investment activities, qualification as a REIT under the Internal Revenue Code of 1986, as amended, the real estate markets in the geographies in which the Company’s properties are located and in the United States in general, the adequacy of future cash flows to meet anticipated cash needs, its financing activities and the use of proceeds from such activities, the availability of debt and equity financing, general economic conditions including the potential impacts from such economic conditions, including as a result of

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the COVID-19 pandemic and governmental measures intended to prevent its spread, trends affecting the Company’s financial condition or results of operations, changes to U.S. tax laws and regulations in general or specifically related to REITs or real estate, changes to laws and regulations in jurisdictions in which communities the Company owns are located, and other information that is not historical information.

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 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: the continued impact of the COVID-19 pandemic, which remains inherently uncertain as to duration and severity, and any additional governmental measures taken to limit its spread and other potential future outbreaks of infectious diseases or other health concerns could continue to adversely affect the Company’s business and its tenants, and cause a significant downturn in general economic conditions, the real estate industry, and the markets in which the Company's communities are located; the Company may fail to achieve its business objectives; the actual completion of development and redevelopment projects may be subject to delays; the stabilization dates of such projects may be delayed; the Company may abandon or defer development or redevelopment projects for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses; the total projected costs of current development and redevelopment projects may exceed expectations; such development and redevelopment projects may not be completed; development and redevelopment projects and acquisitions may fail to meet expectations; estimates of future income from an acquired property may prove to be inaccurate; occupancy rates and rental demand may be adversely affected by competition and local economic and market conditions; there may be increased interest rates and operating costs; the Company may be unsuccessful in the management of its relationships with its co-investment partners; 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; the terms of any refinancing may not be as favorable as the terms of existing indebtedness; unexpected difficulties in leasing of development projects; volatility in financial and securities market; the Company’s failure to successfully operate acquired properties; unforeseen consequences from cyber-intrusion; the Company’s inability to maintain our investment grade credit rating with the rating agencies; 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, quarterly reports on Form 10-Q, and other reports that the Company files with the SEC from time to time. Additionally, the risks, uncertainties and other factors set forth above or otherwise referred to in the reports that the Company has filed with the SEC may be further amplified by the global impact of the COVID-19 pandemic. 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.

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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-18.1 through S-18.4, "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
Rylan Burns
Vice President of Finance & Investor Relations
(650) 655-7800
rburns@essex.com

10

Q1 2021 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 – March 31, 2021
S-5
   
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – March 31, 2021
S-6
   
Portfolio Summary by County – March 31, 2021
S-7
   
Operating Income by Quarter – March 31, 2021
S-8
   
Same-Property Revenue Results by County – Quarters ended March 31, 2021 and 2020, and December 31, 2020
S-9
   
Same-Property Operating Expenses – Quarter ended as of March 31, 2021 and 2020
S-10
   
Development Pipeline –March 31, 2021
S-11
   
Capital Expenditures – March 31, 2021
S-12
   
Co-investments and Preferred Equity Investments – March 31, 2021
S-13
   
Assumptions for 2021 FFO Guidance Range
S-14
   
Reconciliation of Projected EPS, FFO and Core FFO per diluted share
S-14.1
   
Summary of Apartment Community Acquisitions and Dispositions Activity
S-15
   
Delinquencies, Operating Statistics, and Same-Property Revenue Growth with Concessions on a GAAP basis
S-16
   
2021 MSA Level Forecast: Supply, Jobs, and Apartment Market Conditions
S-17
   
Recent Apartment Demand Growth in Essex Markets is Being Fueled by Higher Job Postings and New Back-to-Office Announcements
S-17.1
   
Reconciliations of Non-GAAP Financial Measures and Other Terms
S-18.1 – S-18.4


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

Consolidated Operating Results
 
Three Months Ended
 
(Dollars in thousands, except share and per share amounts)
 
March 31,
 
   
2021
   
2020
 
             
Revenues:
           
Rental and other property
 
$
352,876
   
$
389,750
 
Management and other fees from affiliates
   
2,249
     
2,617
 
     
355,125
     
392,367
 
                 
Expenses:
               
Property operating
   
110,479
     
107,143
 
Corporate-level property management expenses
   
8,947
     
8,759
 
Depreciation and amortization
   
128,587
     
131,559
 
General and administrative
   
9,812
     
13,982
 
Expensed acquisition and investment related costs
   
15
     
87
 
     
257,840
     
261,530
 
Gain on sale of real estate and land
   
100,096
     
-
 
Earnings from operations
   
197,381
     
130,837
 
Interest expense, net (1)
   
(48,805
)
   
(53,163
)
Interest and other income (loss)
   
14,387
     
(5,221
)
Equity income from co-investments
   
17,011
     
21,297
 
Deferred tax expense on unrealized gain on unconsolidated co-investment
   
(508
)
   
-
 
(Loss) gain on early retirement of debt, net
   
(2,517
)
   
321
 
Gain on remeasurement of co-investment
   
-
     
234,694
 
Net income
   
176,949
     
328,765
 
Net income attributable to noncontrolling interest
   
(8,505
)
   
(13,759
)
Net income available to common stockholders
 
$
168,444
   
$
315,006
 
                 
Net income per share - basic
 
$
2.59
   
$
4.77
 
                 
Shares used in income per share - basic
   
64,989,620
     
66,043,831
 
                 
Net income per share - diluted
 
$
2.59
   
$
4.76
 
                 
Shares used in income per share - diluted
   
65,114,933
     
66,195,415
 

(1)
Refer to page S-18.2, 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
 
Three Months Ended
 
Selected Line Item Detail
 
March 31,
 
(Dollars in thousands)
 
2021
   
2020
 
             
Rental and other property
           
Rental income
 
$
347,305
   
$
383,498
 
Other property
   
5,571
     
6,252
 
Rental and other property
 
$
352,876
   
$
389,750
 
                 
Property operating expenses
               
Real estate taxes
 
$
45,328
   
$
43,012
 
Administrative
   
22,263
     
22,757
 
Maintenance and repairs
   
22,087
     
21,871
 
Utilities
   
20,801
     
19,503
 
Property operating expenses
 
$
110,479
   
$
107,143
 
                 
Interest and other income (loss)
               
Marketable securities and other income
 
$
5,356
   
$
3,481
 
Gain (loss) on sale of marketable securities
   
2,611
     
(13
)
Provision for credit losses
   
(38
)
   
50
 
Unrealized gains (losses) on marketable securities
   
6,276
     
(8,696
)
Insurance reimbursements, legal settlements, and other, net
   
182
     
(43
)
Interest and other income (loss)
 
$
14,387
   
$
(5,221
)
                 
Equity income from co-investments
               
Equity (loss) income from co-investments
 
$
(1,311
)
 
$
3,063
 
Income from preferred equity investments
   
13,185
     
11,679
 
Equity income (loss) from non-core co-investment
   
1,627
     
(110
)
Loss on early retirement of debt from unconsolidated co-investment
   
(3
)
   
-
 
Co-investment promote income
   
-
     
6,455
 
Income from early redemption of preferred equity investments
   
3,513
     
210
 
Equity income from co-investments
 
$
17,011
   
$
21,297
 
                 
Noncontrolling interest
               
Limited partners of Essex Portfolio, L.P.
 
$
5,947
   
$
10,986
 
DownREIT limited partners’ distributions
   
2,124
     
2,136
 
Third-party ownership interest
   
434
     
637
 
Noncontrolling interest
 
$
8,505
   
$
13,759
 

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)
 
Three Months Ended
       
(Dollars in thousands, except share and per share amounts and in footnotes)
 
March 31,
       
   
2021
   
2020
   
% Change
 
                   
Funds from operations attributable to common stockholders and unitholders (FFO)
                 
Net income available to common stockholders
 
$
168,444
   
$
315,006
       
Adjustments:
                     
Depreciation and amortization
   
128,587
     
131,559
       
Gains not included in FFO
   
(100,096
)
   
(234,694
)
     
Depreciation and amortization from unconsolidated co-investments
   
14,729
     
12,544
       
Noncontrolling interest related to Operating Partnership units
   
5,947
     
10,986
       
Depreciation attributable to third party ownership and other  (2)
   
(129
)
   
(134
)
     
Funds from operations attributable to common stockholders and unitholders
 
$
217,482
   
$
235,267
       
FFO per share-diluted
 
$
3.23
   
$
3.44
     
-6.1
%
                         
Components of the change in FFO
                       
Non-core items:
                       
Expensed acquisition and investment related costs
 
$
15
   
$
87
         
Deferred tax expense on unrealized gain on unconsolidated co-investment (3)
   
508
     
-
         
(Gain) loss on sale of marketable securities
   
(2,611
)
   
13
         
Unrealized (gains) losses on marketable securities
   
(6,276
)
   
8,696
         
Provision for credit losses
   
38
     
(50
)
       
Equity (income) loss from non-core co-investment  (4)
   
(1,627
)
   
110
         
Loss (gain) on early retirement of debt, net
   
2,517
     
(321
)
       
Loss on early retirement of debt from unconsolidated co-investment
   
3
     
-
         
Co-investment promote income
   
-
     
(6,455
)
       
Income from early redemption of preferred equity investments
   
(3,513
)
   
(210
)
       
General and administrative and other, net
   
257
     
820
         
Insurance reimbursements, legal settlements, and other, net
   
(182
)
   
43
         
Core funds from operations attributable to common stockholders and unitholders
 
$
206,611
   
$
238,000
         
Core FFO per share-diluted
 
$
3.07
   
$
3.48
     
-11.8
%
                         
Weighted average number of shares outstanding diluted  (5)
   
67,272,839
     
68,359,698
         

(1)
Refer to page S-18.2, the section titled “Funds from Operations (“FFO”) and Core FFO” for additional information on the Company’s definition and use of FFO and Core FFO.
(2)
The Company consolidates certain co-investments. The noncontrolling interest’s share of net operating income in these investments for the three months ended March 31, 2021 was $0.8 million.
(3)
Represents deferred tax expense related to net unrealized gains on technology co-investments.
(4)
Represents the Company’s share of co-investment income from technology co-investments.
(5)
Assumes conversion of all outstanding limited partnership units in the Operating Partnership into shares of the Company’s common stock and excludes 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 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)
           
   
March 31, 2021
   
December 31, 2020
 
             
Real Estate:
           
Land and land improvements
 
$
2,902,401
   
$
2,929,009
 
Buildings and improvements
   
12,075,518
     
12,132,736
 
     
14,977,919
     
15,061,745
 
Less: accumulated depreciation
   
(4,259,148
)
   
(4,133,959
)
     
10,718,771
     
10,927,786
 
Real estate under development
   
404,496
     
386,047
 
Co-investments
   
962,625
     
1,018,010
 
Real estate held for sale
   
-
     
57,938
 
     
12,085,892
     
12,389,781
 
Cash and cash equivalents, including restricted cash
   
113,360
     
84,041
 
Marketable securities
   
165,265
     
147,768
 
Notes and other receivables
   
266,896
     
195,104
 
Operating lease right-of-use assets
   
71,347
     
72,143
 
Prepaid expenses and other assets
   
87,444
     
47,340
 
Total assets
 
$
12,790,204
   
$
12,936,177
 
                 
Unsecured debt, net
 
$
5,454,290
   
$
5,607,985
 
Mortgage notes payable, net
   
642,419
     
643,550
 
Operating lease liabilities
   
73,201
     
74,037
 
Other liabilities
   
373,041
     
395,174
 
Total liabilities
   
6,542,951
     
6,720,746
 
Redeemable noncontrolling interest
   
36,322
     
32,239
 
Equity:
               
Common stock
   
6
     
6
 
Additional paid-in capital
   
6,864,185
     
6,876,326
 
Distributions in excess of accumulated earnings
   
(828,625
)
   
(861,193
)
Accumulated other comprehensive loss, net
   
(10,390
)
   
(14,729
)
Total stockholders’ equity
   
6,025,176
     
6,000,410
 
Noncontrolling interest
   
185,755
     
182,782
 
Total equity
   
6,210,931
     
6,183,192
 
Total liabilities and equity
 
$
12,790,204
   
$
12,936,177
 

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 - March 31, 2021
(Dollars in thousands, except in footnotes)

                         
                     
Scheduled principal payments, unamortized premiums (discounts) and (debt issuance costs) are as follows - excludes lines of credit:
 
 
 
Balance
Outstanding
     
         
Unsecured
   
Secured
   
Total
   
Weighted
Average
Interest Rate
   
Percentage of
Total Debt
 
     
Weighted Average
                     
Interest
Rate
   
Maturity
in Years
Unsecured Debt, net
                                                     
Bonds private - fixed rate
 
$
50,000
     
4.4
%
   
0.4
     
2021
   
$
50,000
   
$
2,644
   
$
52,644
     
4.4
%
   
0.9
%
Bonds public - fixed rate
   
5,350,000
     
3.3
%
   
9.0
     
2022
     
100,000
     
43,188
     
143,188
     
1.9
%
   
2.3
%
Term loan (1)
   
100,000
     
1.1
%
   
0.9
     
2023
     
600,000
     
2,945
     
602,945
     
3.7
%
   
9.8
%
Unamortized net discounts and debt issuance costs
   
(45,710
)
   
-
     
-
     
2024
     
400,000
     
3,109
     
403,109
     
4.0
%
   
6.6
%
     
5,454,290
     
3.3
%
   
8.7
     
2025
     
500,000
     
133,054
     
633,054
     
3.5
%
   
10.3
%
Mortgage Notes Payable, net
                           
2026
     
450,000
     
99,405
     
549,405
     
3.5
%
   
8.9
%
Fixed rate - secured
   
415,665
     
3.5
%
   
5.1
     
2027
     
350,000
     
153,955
     
503,955
     
3.3
%
   
8.2
%
Variable rate - secured (2)
   
224,904
     
0.9
%
   
16.9
     
2028
     
450,000
     
68,332
     
518,332
     
2.2
%
   
8.4
%
Unamortized premiums and debt issuance costs, net
   
1,850
     
-
     
-
     
2029
     
500,000
     
1,456
     
501,456
     
4.1
%
   
8.2
%
Total mortgage notes payable
   
642,419
     
2.6
%
   
9.2
     
2030
     
550,000
     
1,592
     
551,592
     
3.1
%
   
9.0
%
                             
2031
     
300,000
     
1,740
     
301,740
     
1.8
%
   
4.9
%
Unsecured Lines of Credit
                         
Thereafter
     
1,250,000
     
129,149
     
1,379,149
     
2.9
%
   
22.5
%
Line of credit (3)
   
-
     
1.0
%
         
Subtotal
     
5,500,000
     
640,569
     
6,140,569
     
3.2
%
   
100.0
%
Line of credit (4)
   
-
     
1.0
%
         
Debt Issuance Costs
     
(33,743
)
   
(1,689
)
   
(35,432
)
 
NA
   
NA
 
Total lines of credit
   
-
     
1.0
%
         
(Discounts)/Premiums
     
(11,967
)
   
3,539
     
(8,428
)
 
NA
   
NA
 
 
                         
Total
   
$
5,454,290
   
$
642,419
   
$
6,096,709
     
3.2
%
   
100.0
%
Total debt, net
 
$
6,096,709
     
3.2
%
   
8.8
                                                 
                                                                         

Capitalized interest for the three months ended March 31, 2021 was approximately $2.1 million.

(1)
$100.0 million of the unsecured term loan has a variable interest rate of LIBOR plus 0.95%.
(2)
$224.9 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, with a scheduled maturity date in December 2023 with one 18-month extension, exercisable at the Company’s option. The underlying interest rate on this line is based on a tiered rate structure tied to the Company’s corporate ratings and is currently at LIBOR plus 0.825%.
(4)
This unsecured line of credit facility has a capacity $35.0 million, with a scheduled maturity date in February 2023. The underlying interest rate on this line is based on a tiered rate structure tied to the Company’s corporate ratings and is currently at LIBOR plus 0.825%.

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 - March 31, 2021
(Dollars and shares in thousands, except per share amounts)

                           
Capitalization Data
       
Public Bond Covenants (1)
 
Actual
 
Requirement
Total debt, net
 
$
6,096,709
               
           
Debt to Total Assets:
   
36
%
< 65%
Common stock and potentially dilutive securities
                         
Common stock outstanding
   
64,999
                 
Limited partnership units (1)
   
2,252
                 
Options-treasury method
   
45
   
Secured Debt to Total Assets:
   
4
%
< 40%
Total shares of common stock and potentially dilutive securities
   
67,296
                 
                               
Common stock price per share as of March 31, 2021
 
$
271.84
                 
           
Interest Coverage:
   
472
%
> 150%
Total equity capitalization
 
$
18,293,745
                 
                               
Total market capitalization
 
$
24,390,454
   
Unsecured Debt Ratio (2):
   
274
%
> 150%
                               
Ratio of debt to total market capitalization
   
25.0
%
               
           
Selected Credit Ratios (3)
 
Actual
   
Credit Ratings
                           
Rating Agency
Rating
Outlook
         
Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized:
   
6.5
   
Moody’s
Baa1
Stable
                         
Standard & Poor’s
BBB+
Stable
         
Unencumbered NOI to Adjusted Total NOI:
   
94
%
 
                                   
(1) Assumes conversion of all outstanding limited partnership units in the Operating Partnership into shares of the Company’s common stock.
   
(1) Refer to page S-18.4 for additional information on the Company’s Public Bond Covenants.
(2) Unsecured Debt Ratio is unsecured assets (excluding investments in co-investments) divided by unsecured indebtedness.
(3) Refer to pages S-18.1 to S-18.4, the section titled “Reconciliations of Non-GAAP Financial Measures and Other Terms” for additional information on the Company’s Selected Credit Ratios.

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 March 31, 2021
   
Apartment Homes
   
Average Monthly Rental Rate (1)
   
Percent of NOI (2)
 
Region - County
 
Consolidated (3)
   
Unconsolidated
Co-investments (4)
   
Apartment
Homes in
Development (5)
   
Total
   
Consolidated
   
Unconsolidated
Co-investments (6)
   
Total (7)
   
Consolidated
   
Unconsolidated
Co-investments (6)
   
Total (7)
 
                                                             
Southern California
                                                           
Los Angeles County
   
8,982
     
1,563
     
200
     
10,745
   
$
2,415
   
$
2,150
   
$
2,393
     
16.9
%
   
14.8
%
   
16.7
%
Orange County
   
5,439
     
1,149
     
-
     
6,588
     
2,239
     
1,987
     
2,215
     
10.7
%
   
11.9
%
   
10.8
%
San Diego County
   
4,824
     
616
     
264
     
5,704
     
2,012
     
1,881
     
2,004
     
8.7
%
   
5.9
%
   
8.5
%
Ventura County and Other
   
2,876
     
693
     
-
     
3,569
     
1,870
     
2,242
     
1,913
     
5.2
%
   
8.8
%
   
5.4
%
Total Southern California
   
22,121
     
4,021
     
464
     
26,606
     
2,213
     
2,081
     
2,202
     
41.5
%
   
41.4
%
   
41.4
%
                                                                                 
Northern California
                                                                               
Santa Clara County (8)
   
8,749
     
1,506
     
-
     
10,255
     
2,703
     
2,710
     
2,704
     
20.3
%
   
16.4
%
   
20.0
%
Alameda County
   
3,959
     
1,309
     
-
     
5,268
     
2,455
     
2,391
     
2,446
     
8.1
%
   
15.8
%
   
8.7
%
San Mateo County
   
2,454
     
195
     
107
     
2,756
     
2,882
     
3,456
     
2,904
     
5.7
%
   
2.7
%
   
5.5
%
Contra Costa County
   
2,619
     
-
     
-
     
2,619
     
2,447
     
-
     
2,447
     
5.5
%
   
0.0
%
   
5.1
%
San Francisco
   
1,342
     
537
     
-
     
1,879
     
2,768
     
3,139
     
2,830
     
2.7
%
   
5.3
%
   
2.9
%
Total Northern California
   
19,123
     
3,547
     
107
     
22,777
     
2,644
     
2,694
     
2,649
     
42.3
%
   
40.2
%
   
42.2
%
                                                                                 
Seattle Metro
   
10,218
     
1,890
     
-
     
12,108
     
1,886
     
1,864
     
1,884
     
16.2
%
   
18.4
%
   
16.4
%
                                                                                 
Total
   
51,462
     
9,458
     
571
     
61,491
   
$
2,308
   
$
2,263
   
$
2,304
     
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 March 31, 2021, divided by the number of apartment homes as of March 31, 2021.
(2)
Represents the percentage of actual NOI for the quarter ended March 31, 2021. See the section titled “Net Operating Income (“NOI”) and Same-Property NOI Reconciliations” on page S-18.3.
(3)
Includes one community consisting of 476 apartment homes that is producing partial income due to lease-up.
(4)
Includes one community consisting of 269 apartment homes that is producing partial income due to lease-up.
(5)
Includes development communities with no rental income.
(6)
Co-investment amounts weighted for Company’s pro rata share.
(7)
At Company’s pro rata share.
(8)
Includes all communities in Santa Clara County and one community in Santa Cruz County.

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
   
Q1 ‘21
   
Q4 ‘20
   
Q3 ‘20
   
Q2 ‘20
   
Q1 ‘20
 
                                     
Rental and other property revenues:
                                   
Same-property
   
47,090
   
$
317,806
   
$
317,472
   
$
316,639
   
$
324,654
   
$
345,652
 
Acquisitions (2)
   
1,823
     
13,673
     
13,924
     
14,237
     
13,696
     
12,558
 
Development (3)
   
968
     
6,930
     
6,094
     
5,461
     
4,420
     
4,075
 
Redevelopment
   
620
     
4,590
     
4,280
     
4,277
     
5,096
     
5,401
 
Non-residential/other, net (4)
   
961
     
13,246
     
13,867
     
13,119
     
17,308
     
22,064
 
Straight-line rent concessions (5)
   
-
     
(3,369
)
   
4,150
     
14,731
     
2,975
     
-
 
Total rental and other property revenues
   
51,462
     
352,876
     
359,787
     
368,464
     
368,149
     
389,750
 
 
                                               
Property operating expenses:
                                               
Same-property
           
97,825
     
97,613
     
98,878
     
96,456
     
94,879
 
Acquisitions (2)
           
4,614
     
4,476
     
4,454
     
4,578
     
3,642
 
Development (3)
           
2,687
     
2,438
     
1,977
     
1,445
     
1,447
 
Redevelopment
           
1,774
     
1,845
     
2,049
     
1,752
     
1,663
 
Non-residential/other, net (4) (6)
           
3,579
     
4,354
     
5,037
     
5,905
     
5,512
 
Total property operating expenses
           
110,479
     
110,726
     
112,395
     
110,136
     
107,143
 
 
                                               
Net operating income (NOI):
                                               
Same-property
           
219,981
     
219,859
     
217,761
     
228,198
     
250,773
 
Acquisitions (2)
           
9,059
     
9,448
     
9,783
     
9,118
     
8,916
 
Development (3)
           
4,243
     
3,656
     
3,484
     
2,975
     
2,628
 
Redevelopment
           
2,816
     
2,435
     
2,228
     
3,344
     
3,738
 
Non-residential/other, net (4)
           
9,667
     
9,513
     
8,082
     
11,403
     
16,552
 
Straight-line rent concessions (5)
           
(3,369
)
   
4,150
     
14,731
     
2,975
     
-
 
Total NOI
         
$
242,397
   
$
249,061
   
$
256,069
   
$
258,013
   
$
282,607
 
 
                                               
Same-property metrics
                                               
Operating margin
           
69
%
   
69
%
   
69
%
   
70
%
   
73
%
Annualized turnover (7)
           
40
%
   
46
%
   
58
%
   
46
%