Equibles

8-K

ESSEX PROPERTY TRUST, INC. (ESS)

8-K 2022-07-26 For: 2022-07-26
View Original
Added on April 06, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 26, 2022

ESSEX PROPERTY TRUST, INC.

ESSEX PORTFOLIO, L.P.

(Exact Name of Registrant as Specified in Its Charter)

001-13106 (Essex Property Trust, Inc.)

333-44467-01 (Essex Portfolio, L.P.)

(Commission File Number)

Maryland<br> (Essex Property Trust, Inc.) 77-0369576<br> (Essex Property Trust, Inc.)
California<br> (Essex Portfolio, L.P.) 77-0369575<br> (Essex Portfolio, L.P.)
(State or Other Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)

1100 Park Place, Suite 200

San Mateo, CA 94403

(Address of principal executive offices, including zip code)

(650) 655-7800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading<br><br> <br>Symbol(s) Name of each exchange on which registered
Common Stock, $.0001 par value (Essex Property Trust, Inc.) ESS New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):

Essex Property Trust, Inc. Emerging growth company ☐
Essex Portfolio, L.P. Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On July 26, 2022, Essex Property Trust, Inc. (the “Company”) issued a press release and supplemental information announcing the Company’s financial results for the three and six months ended June 30, 2022. The Company has posted a copy of the press release and supplemental information on the Company’s website at www.essex.com. A copy of the press release and supplemental information is attached hereto as Exhibit 99.1 and incorporated by reference herein.

The information in this report (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No. Description
99.1 Press Release and Supplemental Information for the three and six months ended June 30, 2022.
104 Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrants have duly caused this report to be signed on their behalf by the undersigned, hereunto duly authorized.

Date: July 26, 2022 ESSEX PROPERTY TRUST, INC.
/s/ Barbara Pak
Name: Barbara Pak
Title: Executive Vice President and Chief Financial Officer
ESSEX PORTFOLIO, L.P.
By: Essex Property Trust, Inc.
Its: General Partner
/s/ Barbara Pak
Name: Barbara Pak
Title: Executive Vice President and Chief Financial Officer

Exhibit 99.1

SECOND QUARTER 2022 Earnings Release & Supplemental Financial Information TOWNSHIP 32 Apartment Homes Redwood City, CA ESSEX PROPERTY TRUST, INC. 1100 Park Place, Suite 200 San Mateo, CA 94403 INVESTOR RELATIONS Rylan Burns, GVP of Private Equity & Finance (650) 655-780

Essex Announces Second Quarter 2022 Results and Increases Full-Year 2022 Guidance

San Mateo, California—July 26, 2022—Essex Property Trust, Inc. (NYSE: ESS) (the “Company”) announced today its second quarter 2022 earnings results and related business activities. Net Income, Funds from Operations (“FFO”), and Core FFO per diluted share for the three and six months ended June 30, 2022 are detailed below.

Three Months Ended<br><br> <br>June 30, Six Months Ended<br><br> <br>June 30,
2022 2022
Per Diluted Share
Net Income 0.87 1.00 -13.0% 2.00 3.59 -44.3%
Total FFO 3.13 3.09 1.3% 6.49 6.33 2.5%
Core FFO 3.68 3.04 21.1% 7.06 6.12 15.4%

All values are in US Dollars.

Second Quarter 2022 Highlights:

• Reported Net Income per diluted share for the second quarter of 2022 of $0.87, compared to $1.00 in the second quarter of 2021. The decrease is largely attributable to an<br> unrealized loss on marketable securities and unrealized losses incurred by the Company’s non-core co-investments.
• Reported Core FFO per diluted share of $3.68, a 21.1% increase compared to the second quarter of 2021, exceeding the high-end of the Company’s guidance range due to<br> better-than-expected operating results and lower property taxes in Washington.
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• Same-property revenues and net operating income (“NOI”) increased by 12.7% and<br> 16.7%, respectively, compared to the second quarter of 2021. On a sequential basis, same-property revenues and NOI improved 4.8% and 8.0%, respectively.
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• Repurchased 218,960 shares of common stock totaling $60.8 million, including commissions, at an average price per share of $277.81 under the stock repurchase program.
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• Revised full-year 2022 earnings guidance:
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o Decreased full-year Net Income per diluted share guidance by $0.31 as a result of unrealized losses on marketable securities and non-core investments in the second quarter.
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o Increased full-year Core FFO per diluted share guidance by $0.29 at the midpoint to $14.45, representing 15.7% year-over-year growth.
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o Raised the midpoint of full-year same-property revenues and NOI by 0.7% and 1.4%, respectively. Full-year same-property operating expense guidance was lowered by 0.8% at<br> the midpoint as a result of favorable property tax assessments in Washington.
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• As of July 22, 2022, the Company’s immediately available liquidity is approximately $1.3 billion.
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1100 Park Place Suite 200 San Mateo California 94403 telephone 650 655 7800 facsimile 650 655 7810

www.essex.com

“Return to office mandates at many of the large technology companies became a catalyst for strong housing demand in our Northern California and Seattle markets, which now lead the Essex portfolio with year-to-date net effective rent growth of 18.1% and 19.9%, respectively. This positive momentum drove our quarterly results to the second-largest year-over-year Core FFO growth in the Company’s history, along with our third guidance raise of the year,” commented Michael 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 revenues for the quarter ended June 30, 2022 compared to the quarter ended June 30, 2021, and the sequential percentage change for the quarter ended June 30, 2022 compared to the quarter ended March 31, 2022, by submarket for the Company:

Q2 2022 vs.<br><br> <br>Q2 2021 Q2 2022 vs.<br><br> Q1 2022 % of Total
Revenue<br><br> <br>Change Revenue<br><br> <br>Change Q2 2022<br><br> <br>Revenues
Southern California
Los Angeles County 18.8% 6.5% 19.0%
Orange County 10.7% 3.9% 10.9%
San Diego County 12.3% 2.5% 8.5%
Ventura County 10.1% 6.2% 4.0%
Total Southern California 14.5% 5.0% 42.4%
Northern California
Santa Clara County 12.9% 5.0% 18.6%
Alameda County 7.8% 1.6% 8.0%
San Mateo County 11.3% 6.2% 4.7%
Contra Costa County 8.3% 5.9% 5.6%
San Francisco 9.1% 2.2% 2.7%
Total Northern California 10.7% 4.4% 39.6%
Seattle Metro 13.1% 5.3% 18.0%
Same-Property Portfolio 12.7% 4.8% 100%
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The table below illustrates the components that drove the change in same-property revenues on a year-over-year and sequential basis for the second quarter of 2022.

Same-Property Revenue Components Q2 2022<br><br> <br>vs. Q2 2021 YTD 2022<br><br> <br>vs. YTD 2021 Q2 2022<br><br> <br>vs. Q1 2022
Scheduled Rents 7.4% 6.0% 2.5%
Delinquencies 2.0% 0.9% 1.6%
Cash Concessions 3.5% 2.8% 0.7%
Vacancy -0.8% -0.7% -0.3%
Other Income 0.7% 0.6% 0.3%
2022 Same-Property Revenue Growth 12.7% 9.6% 4.8%
Year-Over-Year Change Year-Over-Year Change
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Q2 2022 compared to Q2 2021 YTD 2022 compared to YTD 2021
Revenues Operating<br><br> <br>Expenses NOI Revenues Operating<br><br> <br>Expenses NOI
Southern California 14.5% 5.5% 18.4% 11.7% 5.4% 14.4%
Northern California 10.7% 5.5% 13.0% 7.0% 5.0% 7.9%
Seattle Metro 13.1% -3.5% 20.8% 10.8% 0.4% 15.9%
Same-Property Portfolio 12.7% 3.8% 16.7% 9.6% 4.3% 12.0%
Sequential Change
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Q2 2022 compared to Q1 2022
Revenues Operating<br><br> <br>Expenses NOI
Southern California 5.0% 0.0% 7.0%
Northern California 4.4% -0.9% 6.7%
Seattle Metro 5.3% -11.9% 13.6%
Same-Property Portfolio 4.8% -2.6% 8.0%
Financial Occupancies
Quarter Ended
6/30/2022 3/31/2022 6/30/2021
Southern California 95.7% 96.3% 97.0%
Northern California 96.4% 96.5% 96.3%
Seattle Metro 96.3% 95.9% 96.7%
Same-Property Portfolio 96.1% 96.3% 96.6%
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Development Activity

During the second quarter of 2022, the final phase (Phase IV) of the Company’s Station Park Green development, a 107-unit apartment home community located in San Mateo, CA, reached stabilization.

liquidity and balance sheet

Common Stock

In the second quarter of 2022, the Company repurchased 218,960 shares of its common stock totaling $60.8 million, including commissions, at an average price of $277.81 per share. As of June 30, 2022, the Company had $153.6 million of purchase authority remaining under the stock repurchase plan.

Balance Sheet

In April 2022, Wesco IV, LLC, a joint venture in which the Company owns a 65.1% interest, refinanced five properties with a new $298.3 million secured term loan that has been swapped to a fixed interest rate of 2.8% and matures in 2027.

In April 2022, BEX II, LLC, a joint venture in which the Company owns a 50.1% interest, refinanced three apartment communities with a new $95.0 million secured term loan. The loan priced at SOFR plus 1.15% and matures in 2026 with a 1-year extension option. 50% of the loan was swapped to a fixed interest rate priced at 2.8%.

As of July 22, 2022, the Company has approximately $1.3 billion in liquidity via undrawn capacity on its unsecured credit facilities, cash, and marketable securities.

Guidance

For the second quarter of 2022, the Company exceeded the midpoint of the guidance range provided in its June 2022 Investor Presentation for Core FFO by $0.10 per diluted share.

The following table provides a reconciliation of second quarter 2022 Core FFO per diluted share to the midpoint of the guidance provided in the Company’s June 2022 Investor Presentation.

Per Diluted<br><br> <br>Share
Projected midpoint of Core FFO per diluted share for Q2 2022 $ 3.58
Real Estate Taxes (including co-investments at pro rata) 0.06
NOI from consolidated communities (excluding impact from taxes) 0.02
FFO from Co-Investments (excluding impact from taxes) 0.01
G&A and other income 0.01
Core FFO per diluted share for Q2 2022 reported $ 3.68
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The table below provides key changes to the Company’s 2022 full-year assumptions for Net Income, Total FFO, Core FFO per diluted share, and same-property growth. For additional details regarding the Company’s 2022 assumptions, please see page S-14 of the accompanying supplemental financial information. For the third quarter of 2022, the Company has established a range for Core FFO per diluted share of $3.60 to $3.70.

2022 Full-Year Guidance

Previous<br><br> <br>Range Previous<br><br> <br>Midpoint Revised<br><br> <br>Range Revised<br><br> <br>Midpoint Change at<br><br> <br>the Midpoint
Per Diluted Share
Net Income $5.01 - $5.33 $5.17 $4.76 - $4.96 $4.86 $(0.31)
Total FFO $13.99 - $14.31 $14.15 $13.78 - $13.98 $13.88 $(0.27)
Core FFO $14.00 - $14.32 $14.16 $14.35 - $14.55 $14.45 $0.29
Same-Property Growth on a Cash-Basis^(1)^
Revenues 9.1% - 10.1% 9.6% 10.0% - 10.6% 10.3% 0.7%
Operating Expenses 3.5% - 4.5% 4.0% 3.0% - 3.5% 3.3% (0.8%)
NOI 11.1% - 13.1% 12.1% 13.0% - 14.0% 13.5% 1.4%
^(1)^ The revised midpoint of the Company’s same property revenues and NOI on a GAAP basis are 10.7% and 14.1%, respectively, representing a 2.4% and 3.9% increase to the<br> Company’s original guidance midpoints.
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2022 External Guidance Assumptions

Previous<br><br> <br>Range
Acquisitions 500M - 700M 600M 250M - 400M 325M
Dispositions 100M - 300M 200M 100M - 200M 150M
Preferred Equity Commitments 50M - 150M 100M 50M - 150M 100M
Preferred Equity Redemptions - 250M 200M - 250M 225M

All values are in US Dollars.

Conference Call with Management

The Company will host an earnings conference call with management to discuss its quarterly results on Wednesday, July 27, 2022 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.

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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 second quarter 2022 earnings link. To access the replay, dial (844) 512-2921 using the replay pin number 13731320. 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 253 apartment communities comprising approximately 62,000 apartment homes with an additional property in 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 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.

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The following table sets forth the Company’s calculation of diluted FFO and Core FFO for the three and six months ended June 30, 2022 and 2021 (in thousands, except for share and per share amounts):

Three Months Ended<br><br> <br>June 30, Six Months Ended<br><br> <br>June 30,
Funds from Operations attributable to common stockholders and unitholders 2022 2021 2022 2021
Net income available to common stockholders $ 57,054 $ 64,846 $ 130,308 $ 233,290
Adjustments:
Depreciation and amortization 134,517 128,736 268,050 257,323
Gains not included in FFO - (2,260 ) - (102,356 )
Depreciation and amortization from unconsolidated co-investments 18,129 14,819 36,244 29,548
Noncontrolling interest related to Operating Partnership units 1,990 2,288 4,553 8,235
Depreciation attributable to third party ownership and other (354 ) (138 ) (707 ) (267 )
Funds from Operations attributable to common stockholders and unitholders $ 211,336 $ 208,291 $ 438,448 $ 425,773
FFO per share – diluted $ 3.13 $ 3.09 $ 6.49 $ 6.33
Expensed acquisition and investment related costs $ 10 $ 41 $ 18 $ 56
Deferred tax (benefit) expense on unconsolidated co-investments ^(1)^ (6,864 ) 1,842 (9,618 ) 2,350
(Gain) loss on sale of marketable securities (259 ) 112 (12,430 ) (2,499 )
Change in unrealized losses (gains) on marketable securities, net 21,856 (10,405 ) 46,441 (16,681 )
Provision for credit losses (1 ) (145 ) (63 ) (107 )
Equity loss (income) from non-core co-investments ^(2)^ 20,710 (6,771 ) 29,554 (8,398 )
Loss on early retirement of debt, net - 16,465 - 18,982
Loss on early retirement of debt from unconsolidated co-investment 901 - 987 3
Co-investment promote income - - (17,076 ) -
Income from early redemption of preferred equity investments and notes receivable - (4,747 ) (858 ) (8,260 )
General and administrative and other, net 997 256 1,445 513
Insurance reimbursements, legal settlements, and other, net (8 ) (4 ) (8 ) (186 )
Core Funds from Operations attributable to common stockholders and unitholders $ 248,678 $ 204,935 $ 476,840 $ 411,546
Core FFO per share – diluted $ 3.68 $ 3.04 $ 7.06 $ 6.12
Weighted average number of shares outstanding diluted ^(3)^ 67,566,748 67,331,877 67,587,362 67,299,655
(1) Represents deferred tax (benefit) expense related to net unrealized gains or losses on technology co-investments.
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(2) Represents the Company's share of co-investment loss (income) from technology co-investments.
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(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<br> excludes DownREIT limited partnership units.
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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<br><br> <br>June 30, Six Months Ended<br><br> <br>June 30,
2022 2021 2022 2021
Earnings from operations $ 128,628 $ 93,381 $ 238,478 $ 290,762
Adjustments:
Corporate-level property management expenses 10,176 9,062 20,348 18,075
Depreciation and amortization 134,517 128,736 268,050 257,323
Management and other fees from affiliates (2,738 ) (2,221 ) (5,427 ) (4,470 )
General and administrative 13,127 12,222 25,369 22,034
Expensed acquisition and investment related costs 10 41 18 56
Gain on sale of real estate and land - - - (100,096 )
NOI 283,720 241,221 546,836 483,684
Less: Non-same property NOI (16,045 ) (11,771 ) (31,400 ) (23,351 )
Same-Property NOI $ 267,675 $ 229,450 $ 515,436 $ 460,333

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 and related variants 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

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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 the COVID-19 pandemic and related variants, and governmental measures intended to prevent its spread, inflation, supply chain impacts and ongoing hostilities between Russia and Ukraine, 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 and related variants, 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, which 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 markets; 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 and related variants and uncertainties regarding ongoing hostilities between Russia and the Ukraine and the related impacts on macroeconomic conditions, including, among other things, interest rates. 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

Group Vice President of Private Equity & Finance

(650) 655-7800

rburns@essex.com

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Q2 2022 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 – June 30, 2022 S-5
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – June 30, 2022 S-6
Portfolio Summary by County – June 30, 2022 S-7
Operating Income by Quarter – June 30, 2022 S-8
Same-Property Revenue Results by County – Quarters ended June 30, 2022 and 2021, and March 31, 2022 S-9
Same-Property Operating Expenses – Quarter ended as of June 30, 2022 and 2021 S-10
Development Pipeline – June 30, 2022 S-11
Capital Expenditures – June 30, 2022 S-12
Co-investments and Preferred Equity Investments – June 30, 2022 S-13
Assumptions for 2022 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
2022 MSA Level Forecast: Supply, Jobs, and Apartment Market Conditions S-17
Year-to-Date Net Effective Rent Growth in Essex Technology-Dominant Markets S-17.1
Top-Technology Companies Open Positions Compared to Technology Startup Layoffs, By Region S-17.2
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<br><br> <br>(Dollars in thousands, except share and per share amounts) Three Months Ended<br><br> <br>June 30, Six Months Ended<br><br> <br>June 30,
2022 2021 2022 2021
Revenues:
Rental and other property $ 397,240 $ 348,757 $ 776,456 $ 701,633
Management and other fees from affiliates 2,738 2,221 5,427 4,470
399,978 350,978 781,883 706,103
Expenses:
Property operating 113,520 107,536 229,620 217,949
Corporate-level property management expenses 10,176 9,062 20,348 18,075
Depreciation and amortization 134,517 128,736 268,050 257,323
General and administrative 13,127 12,222 25,369 22,034
Expensed acquisition and investment related costs 10 41 18 56
271,350 257,597 543,405 515,437
Gain on sale of real estate and land - - - 100,096
Earnings from operations 128,628 93,381 238,478 290,762
Interest expense, net ^(1)^ (48,194 ) (48,338 ) (96,027 ) (97,143 )
Interest and other (loss) income (17,208 ) 22,371 (24,775 ) 36,758
Equity (loss) income from co-investments (8,400 ) 18,248 12,771 35,259
Deferred tax benefit (expense) on unconsolidated co-investments 6,864 (1,842 ) 9,618 (2,350 )
Loss on early retirement of debt, net - (16,465 ) - (18,982 )
Gain on remeasurement of co-investment - 2,260 - 2,260
Net income 61,690 69,615 140,065 246,564
Net income attributable to noncontrolling interest (4,636 ) (4,769 ) (9,757 ) (13,274 )
Net income available to common stockholders $ 57,054 $ 64,846 $ 130,308 $ 233,290
Net income per share - basic $ 0.87 $ 1.00 $ 2.00 $ 3.59
Shares used in income per share - basic 65,262,517 65,001,677 65,269,109 64,995,682
Net income per share - diluted $ 0.87 $ 1.00 $ 2.00 $ 3.59
Shares used in income per share - diluted 65,289,604 65,080,746 65,307,572 65,048,016
^(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<br><br> <br>Selected Line Item Detail Three Months Ended<br><br> <br>June 30, Six Months Ended<br><br> <br>June 30,
(Dollars in thousands) 2022 2021 2022 2021
Rental and other property
Rental income $ 391,778 $ 343,322 $ 765,203 $ 690,627
Other property 5,462 5,435 11,253 11,006
Rental and other property $ 397,240 $ 348,757 $ 776,456 $ 701,633
Property operating expenses
Real estate taxes $ 43,759 $ 44,278 $ 91,001 $ 89,606
Administrative 23,090 21,602 45,179 43,873
Maintenance and repairs 24,472 21,053 47,436 43,066
Utilities 22,199 20,603 46,004 41,404
Property operating expenses $ 113,520 $ 107,536 $ 229,620 $ 217,949
Interest and other (loss) income
Marketable securities and other income $ 4,571 $ 7,182 $ 9,356 $ 12,538
Gain (loss) on sale of marketable securities 259 (112 ) 12,430 2,499
Income from early redemption of notes receivable - 4,747 - 4,747
Provision for credit losses 1 145 63 107
Change in unrealized (losses) gains on marketable securities, net (21,856 ) 10,405 (46,441 ) 16,681
Insurance reimbursements, legal settlements, and other, net (183 ) 4 (183 ) 186
Interest and other (loss) income $ (17,208 ) $ 22,371 $ (24,775 ) $ 36,758
Equity (loss) income from co-investments
Equity loss from co-investments $ (216 ) $ (1,512 ) $ (1,548 ) $ (2,823 )
Income from preferred equity investments 13,236 12,989 26,735 26,174
Equity (loss) income from non-core co-investments (20,710 ) 6,771 (29,554 ) 8,398
Non-core gain from unconsolidated co-investments 191 - 191 -
Loss on early retirement of debt from unconsolidated co-investments (901 ) - (987 ) (3 )
Co-investment promote income - - 17,076 -
Income from early redemption of preferred equity investments - - 858 3,513
Equity (loss) income from co-investments $ (8,400 ) $ 18,248 $ 12,771 $ 35,259
Noncontrolling interest
Limited partners of Essex Portfolio, L.P. $ 1,990 $ 2,288 $ 4,553 $ 8,235
DownREIT limited partners' distributions 2,139 2,085 4,293 4,209
Third-party ownership interest 507 396 911 830
Noncontrolling interest $ 4,636 $ 4,769 $ 9,757 $ 13,274

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 Six Months Ended
(Dollars in thousands, except share and per share amounts and in footnotes) June 30, June 30,
2022 2021 % Change 2022 2021 % Change
Funds from operations attributable to common stockholders and unitholders (FFO)
Net income available to common stockholders $ 57,054 $ 64,846 $ 130,308 $ 233,290
Adjustments:
Depreciation and amortization 134,517 128,736 268,050 257,323
Gains not included in FFO - (2,260 ) - (102,356 )
Depreciation and amortization from unconsolidated co-investments 18,129 14,819 36,244 29,548
Noncontrolling interest related to Operating Partnership units 1,990 2,288 4,553 8,235
Depreciation attributable to third party ownership and other ^(2)^ (354 ) (138 ) (707 ) (267 )
Funds from operations attributable to common stockholders and unitholders $ 211,336 $ 208,291 $ 438,448 $ 425,773
FFO per share-diluted $ 3.13 $ 3.09 1.3% $ 6.49 $ 6.33 2.5%
Components of the change in FFO
Non-core items:
Expensed acquisition and investment related costs $ 10 $ 41 $ 18 $ 56
Deferred tax (benefit) expense on unconsolidated co-investments^(3)^ (6,864 ) 1,842 (9,618 ) 2,350
(Gain) loss on sale of marketable securities (259 ) 112 (12,430 ) (2,499 )
Change in unrealized losses (gains) on marketable securities, net 21,856 (10,405 ) 46,441 (16,681 )
Provision for credit losses (1 ) (145 ) (63 ) (107 )
Equity loss (income) from non-core co-investments^(4)^ 20,710 (6,771 ) 29,554 (8,398 )
Loss on early retirement of debt, net - 16,465 - 18,982
Loss on early retirement of debt from unconsolidated co-investments 901 - 987 3
Co-investment promote income - - (17,076 ) -
Income from early redemption of preferred equity investments and notes receivable - (4,747 ) (858 ) (8,260 )
General and administrative and other, net 997 256 1,445 513
Insurance reimbursements, legal settlements, and other, net (8 ) (4 ) (8 ) (186 )
Core funds from operations attributable to common stockholders and unitholders $ 248,678 $ 204,935 $ 476,840 $ 411,546
Core FFO per share-diluted $ 3.68 $ 3.04 21.1% $ 7.06 $ 6.12 15.4%
Weighted average number of shares outstanding diluted ^(5)^ 67,566,748 67,331,877 67,587,362 67,299,655
^(1)^ Refer to page S-18.2, the section titled "Funds from Operations ("FFO") and Core FFO" for additional information on the Company's definition and use of FFO and Core FFO.
--- ---
^(2)^ The Company consolidates certain co-investments. The noncontrolling interest's share of net operating income in these investments for the three and six months ended June 30, 2022<br> was $0.9 million and $1.6 million, respectively.
--- ---
^(3)^ Represents deferred tax (benefit) expense related to net unrealized gains or losses on technology co-investments.
--- ---
^(4)^ Represents the Company's share of co-investment loss (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 DownREIT limited partnership<br> units.
--- ---

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

        S-3

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

Consolidated Balance Sheets

(Dollars in thousands)

June 30, 2022 December 31, 2021
Real Estate:
Land and land improvements $ 3,045,100 $ 3,032,678
Buildings and improvements 12,797,454 12,597,249
15,842,554 15,629,927
Less: accumulated depreciation (4,913,145 ) (4,646,854 )
10,929,409 10,983,073
Real estate under development 21,950 111,562
Co-investments 1,093,235 1,177,802
12,044,594 12,272,437
Cash and cash equivalents, including restricted cash 48,463 58,638
Marketable securities 154,513 191,829
Notes and other receivables 175,345 341,033
Operating lease right-of-use assets 67,345 68,972
Prepaid expenses and other assets 67,751 64,964
Total assets $ 12,558,011 $ 12,997,873
Unsecured debt, net $ 5,310,486 $ 5,307,196
Mortgage notes payable, net 636,589 638,957
Lines of credit 63,175 341,257
Distributions in excess of investments in co-investments 43,983 35,545
Operating lease liabilities 68,924 70,675
Other liabilities 395,056 393,069
Total liabilities 6,518,213 6,786,699
Redeemable noncontrolling interest 33,213 34,666
Equity:
Common stock 7 7
Additional paid-in capital 6,875,863 6,915,981
Distributions in excess of accumulated earnings (1,073,577 ) (916,833 )
Accumulated other comprehensive income (loss), net 25,554 (5,552 )
Total stockholders' equity 5,827,847 5,993,603
Noncontrolling interest 178,738 182,905
Total equity 6,006,585 6,176,508
Total liabilities and equity $ 12,558,011 $ 12,997,873

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 - June 30, 2022

(Dollars in thousands, except in footnotes)

Scheduled principal payments, unamortized premiums (discounts) and (debt issuance costs) are as follows - excludes lines of credit:
Weighted<br><br> <br>Average<br><br> <br>Interest Rate Percentage<br><br> <br>of Total Debt
Weighted Average
Balance Outstanding Interest<br><br> <br>Rate Maturity<br><br> <br>in Years Unsecured Secured Total
Unsecured Debt, net
Bonds public - fixed rate $ 5,350,000 3.3 % 8.2 2022 $ - $ 41,369 $ 41,369 3.6 % 0.7 %
Unamortized net discounts and debt issuance costs (39,514 ) - - 2023 300,000 2,945 302,945 3.4 % 5.1 %
5,310,486 3.3 % 8.2 2024 400,000 3,109 403,109 4.0 % 6.7 %
Mortgage Notes Payable, net 2025 500,000 133,054 633,054 3.5 % 10.6 %
Fixed rate - secured 412,123 3.5 % 3.8 2026 450,000 99,405 549,405 3.5 % 9.2 %
Variable rate - secured ^(1)^ 223,983 1.6 % 15.6 2027 350,000 153,955 503,955 3.4 % 8.4 %
Unamortized premiums and debt issuance costs, net 483 - - 2028 450,000 68,332 518,332 2.2 % 8.7 %
Total mortgage notes payable 636,589 2.9 % 8.0 2029 500,000 1,456 501,456 4.1 % 8.4 %
2030 550,000 1,592 551,592 3.1 % 9.2 %
Unsecured Lines of Credit 2031 600,000 1,740 601,740 2.3 % 10.0 %
Line of credit ^(2)^ 45,000 1.4 % N/A 2032 650,000 1,903 651,903 2.6 % 10.9 %
Line of credit ^(3)^ 18,175 1.4 % N/A Thereafter 600,000 127,246 727,246 3.3 % 12.1 %
Total lines of credit 63,175 1.4 % N/A Subtotal 5,350,000 636,106 5,986,106 3.2 % 100.0 %
Debt Issuance Costs (30,610 ) (1,321 ) (31,931 ) NA NA
Total debt, net $ 6,010,250 3.2 % 8.1 (Discounts)/Premiums (8,904 ) 1,804 (7,100 ) NA NA
Total $ 5,310,486 $ 636,589 $ 5,947,075 3.2 % 100.0 %

Capitalized interest for the three and six months ended June 30, 2022 was approximately $0.7 million and $1.6 million, respectively.

^(1)^ $224.0 million of variable rate debt is tax exempt to the note holders.
^(2)^ In July 2022, this credit facility was extended and transitioned to SOFR. This unsecured line of credit facility has a capacity of $1.2 billion with a scheduled maturity date in<br> January 2027, with two 6-month extension options. The underlying interest rate on this line is Adjusted SOFR plus 0.75%, which is based on a tiered rate structure tied to the Company's corporate ratings, adjusted for the Company's<br> sustainability metric grid.
--- ---
^(3)^ In July 2022, this credit facility was extended and transitioned to SOFR. This unsecured line of credit facility has a capacity of $35.0 million with a scheduled maturity date in<br> July 2024. The underlying interest rate on this line is Adjusted SOFR plus 0.75%, which is based on a tiered rate structure tied to the Company's corporate ratings, adjusted for the Company's sustainability metric grid.
--- ---

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 - June 30, 2022

(Dollars and shares in thousands, except per share amounts)

Capitalization Data Public Bond Covenants ^(1)^ Actual Requirement
Total debt, net $ 6,010,250
Debt to Total Assets: 34% < 65%
Common stock and potentially dilutive securities
Common stock outstanding 65,124
Limited partnership units ^(1)^ 2,273
Options-treasury method 4 Secured Debt to Total Assets: 4% < 40%
Total shares of common stock and potentially dilutive securities 67,401
Common stock price per share as of June 30, 2022 $ 261.51
Interest Coverage: 553% > 150%
Total equity capitalization $ 17,626,036
Total market capitalization $ 23,636,286 Unsecured Debt Ratio ^(2)^: 284% > 150%
Ratio of debt to total market capitalization 25.4 %
Selected Credit Ratios ^(3)^ Actual
Credit Ratings
Rating Agency Rating Outlook Net Indebtedness^^Divided by Adjusted EBITDAre, normalized and annualized: 5.8
Moody's Baa1 Stable
Standard & Poor's BBB+ Stable Unencumbered NOI to Adjusted Total NOI: 94%
^(1)^    Assumes conversion of all<br> 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<br> information on the Company's Public Bond Covenants.
^(2)^   Unsecured Debt Ratio is unsecured<br> assets (excluding investments in co-investments) divided by unsecured indebtedness.
^(3)^   Refer to pages S-18.1 to S-18.4,<br> 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 June 30, 2022

Apartment Homes Average Monthly Rental Rate ^(1)^ Percent of NOI ^(2)^
Region - County Consolidated Unconsolidated<br><br> Co-investments Apartment<br><br> <br>Homes in<br><br> <br>Development ^(3)^ Total Consolidated Unconsolidated<br><br> Co-investments^(4)^ Total ^(5)^ Consolidated Unconsolidated<br><br> Co-investments ^(4)^ Total ^(5)^
Southern California
Los Angeles County 9,327 1,797 - 11,124 $ 2,558 $ 2,374 $ 2,541 18.3 % 14.9 % 18.0 %
Orange County 5,439 1,149 - 6,588 2,521 2,217 2,492 10.5 % 9.9 % 10.5 %
San Diego County 4,824 795 264 5,883 2,300 2,277 2,298 8.6 % 6.9 % 8.5 %
Ventura County and Other 2,600 693 - 3,293 2,136 2,484 2,180 4.6 % 7.1 % 4.8 %
Total Southern California 22,190 4,434 264 26,888 2,443 2,336 2,433 42.0 % 38.8 % 41.8 %
Northern California
Santa Clara County^(6)^ 8,749 1,774 - 10,523 2,804 2,786 2,802 19.5 % 18.9 % 19.4 %
Alameda County 3,959 1,512 - 5,471 2,537 2,510 2,533 7.4 % 13.6 % 7.9 %
San Mateo County 2,561 195 - 2,756 2,968 3,613 2,992 5.6 % 2.4 % 5.3 %
Contra Costa County 2,619 - - 2,619 2,570 - 2,570 5.3 % 0.0 % 4.8 %
San Francisco 1,342 537 - 1,879 2,829 3,264 2,902 2.6 % 6.6 % 3.0 %
Total Northern California 19,230 4,018 - 23,248 2,741 2,783 2,745 40.4 % 41.5 % 40.4 %
Seattle Metro 10,341 2,184 - 12,525 2,072 2,012 2,066 17.6 % 19.7 % 17.8 %
Total 51,761 10,636 264 62,661 $ 2,480 $ 2,436 $ 2,476 100.0 % 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<br> quarter ended June 30, 2022, divided by the number of apartment homes as of June 30, 2022.
--- ---
^(2)^ Represents the percentage of actual NOI for the quarter ended June 30, 2022. See the section titled "Net Operating Income ("NOI") and Same-Property NOI Reconciliations" on page<br> S-18.3.
--- ---
^(3)^ Includes development communities with no rental income.
--- ---
^(4)^ Co-investment amounts weighted for Company's pro rata share.
--- ---
^(5)^ At Company's pro rata share.
--- ---
^(6)^ Includes all communities in Santa Clara County and one community in Santa Cruz County.
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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 Q2 '22 Q1 '22 Q4 '21 Q3 '21 Q2 '21
Rental and other property revenues:
Same-property 49,369 $ 373,331 $ 356,273 $ 347,353 $ 341,744 $ 331,221
Acquisitions^(2)^ 268 1,753 1,747 916 1,004 319
Development ^(3)^ 1,275 11,184 9,427 8,785 8,055 7,500
Redevelopment 164 1,491 1,435 1,498 1,533 1,506
Non-residential/other, net^(4)^ 685 12,748 12,918 12,074 11,320 11,156
Straight-line rent concessions ^(5)^ - (3,267 ) (2,584 ) (1,461 ) (3,036 ) (2,945 )
Total rental and other property revenues 51,761 397,240 379,216 369,165 360,620 348,757
Property operating expenses:
Same-property 105,656 108,512 105,503 108,405 101,771
Acquisitions^(2)^ 540 556 324 373 121
Development ^(3)^ 4,313 3,922 3,571 3,411 2,984
Redevelopment 600 687 590 619 600
Non-residential/other, net^(4) (6)^ 2,411 2,423 1,960 2,531 2,060
Total property operating expenses 113,520 116,100 111,948 115,339 107,536
Net operating income (NOI):
Same-property 267,675 247,761 241,850 233,339 229,450
Acquisitions^(2)^ 1,213 1,191 592 631 198
Development ^(3)^ 6,871 5,505 5,214 4,644 4,516
Redevelopment 891 748 908 914 906
Non-residential/other, net^(4)^ 10,337 10,495 10,114 8,789 9,096
Straight-line rent concessions ^(5)^ (3,267 ) (2,584 ) (1,461 ) (3,036 ) (2,945 )
Total NOI $ 283,720 $ 263,116 $ 257,217 $ 245,281 $ 241,221
Same-property metrics
Operating margin 72 % 70 % 70 % 68 % 69 %
Annualized turnover ^(7)^ 42 % 35 % 36 % 47 % 46 %
Financial occupancy ^(8)^ 96.1 % 96.3 % 96.1 % 96.4 % 96.6 %
^(1)^ Includes consolidated communities only.
--- ---
^(2)^ Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2021.
--- ---
^(3)^ Development includes properties developed which did not have comparable stabilized results as of January 1, 2021.
--- ---
^(4)^ Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, student housing, properties<br> undergoing significant construction activities that do not meet our redevelopment criteria and two communities located in the California counties of Santa Barbara and Santa Cruz, which the Company does not consider its core markets.
--- ---
^(5)^ Same-property revenues reflect concessions on a cash basis. Total Rental and Other Property Revenues reflect concessions on a straight-line basis in accordance with U.S. GAAP.
--- ---
^(6)^ Includes other expenses and intercompany eliminations pertaining to self-insurance.
--- ---
^(7)^ Annualized turnover is defined as the number of apartment homes turned over during the quarter, annualized, divided by the total number of apartment homes.
--- ---
^(8)^ Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income (actual rent for occupied apartment homes plus<br> market rent for vacant apartment homes).
--- ---

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

        S-8

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

Same-Property Revenue Results by County - Second Quarter 2022 vs. Second Quarter 2021 and First Quarter 2022

(Dollars in thousands, except average monthly rental rates)

Average Monthly Rental Rate Financial Occupancy Gross Revenues Sequential Gross<br><br> <br>Revenues
Region - County Apartment<br><br> <br>Homes Q2 '22 % of<br><br> <br>Actual NOI Q2 '22 Q2 '21 % Change Q2 '22 Q2 '21 % Change Q2 '22 Q2 '21 % Change Q1 '22 % Change
Southern California
Los Angeles County 8,982 18.6 % $ 2,553 $ 2,413 5.8 % 95.8 % 96.0 % -0.2 % $ 70,813 $ 59,604 18.8 % $ 66,513 6.5 %
Orange County 5,439 11.0 % 2,521 2,267 11.2 % 95.2 % 97.5 % -2.4 % 40,692 36,758 10.7 % 39,180 3.9 %
San Diego County 4,582 8.6 % 2,294 2,030 13.0 % 96.0 % 98.0 % -2.0 % 31,782 28,289 12.3 % 30,998 2.5 %
Ventura County 2,253 4.3 % 2,116 1,935 9.4 % 96.1 % 97.9 % -1.8 % 14,827 13,469 10.1 % 13,962 6.2 %
Total Southern California 21,256 42.5 % 2,443 2,242 9.0 % 95.7 % 97.0 % -1.3 % 158,114 138,120 14.5 % 150,653 5.0 %
Northern California
Santa Clara County 8,177 19.0 % 2,776 2,658 4.4 % 96.8 % 96.4 % 0.4 % 69,532 61,580 12.9 % 66,210 5.0 %
Alameda County 3,959 7.7 % 2,537 2,437 4.1 % 95.4 % 96.2 % -0.8 % 30,033 27,860 7.8 % 29,570 1.6 %
San Mateo County 1,962 4.6 % 2,898 2,808 3.2 % 96.5 % 95.3 % 1.3 % 17,603 15,813 11.3 % 16,575 6.2 %
Contra Costa County 2,619 5.6 % 2,570 2,458 4.6 % 96.3 % 96.5 % -0.2 % 20,902 19,295 8.3 % 19,735 5.9 %
San Francisco 1,178 2.4 % 2,739 2,652 3.3 % 96.1 % 96.6 % -0.5 % 10,128 9,286 9.1 % 9,912 2.2 %
Total Northern California 17,895 39.3 % 2,704 2,596 4.2 % 96.4 % 96.3 % 0.1 % 148,198 133,834 10.7 % 142,002 4.4 %
Seattle Metro 10,218 18.2 % 2,075 1,883 10.2 % 96.3 % 96.7 % -0.4 % 67,019 59,267 13.1 % 63,618 5.3 %
Total Same-Property 49,369 100.0 % $ 2,461 $ 2,296 7.2 % 96.1 % 96.6 % -0.5 % $ 373,331 $ 331,221 12.7 % $ 356,273 4.8 %

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

        S-9

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

Same-Property Revenue Results by County - Six months ended June 30, 2022 vs. Six months ended June 30, 2021

(Dollars in thousands, except average monthly rental rates)

Average Monthly Rental Rate Financial Occupancy Gross Revenues
Region - County Apartment<br><br> <br>Homes YTD 2022<br><br> <br>% of<br><br> <br>Actual NOI YTD 2022 YTD 2021 % Change YTD 2022 YTD 2021 % Change YTD 2022 YTD 2021 % Change
Southern California
Los Angeles County 8,982 18.4 % $ 2,529 $ 2,414 4.8 % 96.0 % 96.0 % 0.0 % $ 137,326 $ 120,886 13.6 %
Orange County 5,439 11.2 % 2,484 2,253 10.3 % 95.7 % 97.3 % -1.6 % 79,872 72,782 9.7 %
San Diego County 4,582 8.9 % 2,252 2,019 11.5 % 96.4 % 97.5 % -1.1 % 62,780 56,107 11.9 %
Ventura County 2,253 4.2 % 2,084 1,921 8.5 % 96.0 % 98.0 % -2.0 % 28,789 26,763 7.6 %
Total Southern California 21,256 42.7 % 2,411 2,235 7.9 % 96.0 % 96.8 % -0.8 % 308,767 276,538 11.7 %
Northern California
Santa Clara County 8,177 19.1 % 2,748 2,672 2.8 % 96.7 % 96.7 % 0.0 % 135,742 125,769 7.9 %
Alameda County 3,959 7.9 % 2,519 2,446 3.0 % 95.8 % 96.4 % -0.6 % 59,603 56,269 5.9 %
San Mateo County 1,962 4.5 % 2,879 2,831 1.7 % 96.3 % 95.4 % 0.9 % 34,178 32,096 6.5 %
Contra Costa County 2,619 5.5 % 2,545 2,452 3.8 % 96.4 % 96.9 % -0.5 % 40,637 38,419 5.8 %
San Francisco 1,178 2.5 % 2,724 2,671 2.0 % 96.4 % 96.0 % 0.4 % 20,040 18,667 7.4 %
Total Northern California 17,895 39.5 % 2,680 2,608 2.8 % 96.4 % 96.5 % -0.1 % 290,200 271,220 7.0 %
Seattle Metro 10,218 17.8 % 2,040 1,884 8.3 % 96.1 % 96.6 % -0.5 % 130,637 117,900 10.8 %
Total Same-Property 49,369 100.0 % $ 2,432 $ 2,298 5.8 % 96.2 % 96.6 % -0.4 % $ 729,604 $ 665,658 9.6 %

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

        S-9.1

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

Same-Property Operating Expenses - Quarter to Date and Year to Date as of June 30, 2022 and 2021

(Dollars in thousands)

Based on 49,369 apartment homes
Q2 '22 Q2 '21 % Change % of Op. Ex. YTD 2022 YTD 2021 % Change % of Op. Ex.
Same-property operating expenses:
Real estate taxes $ 39,017 $ 40,460 -3.6 % 36.9 % $ 81,798 $ 81,901 -0.1 % 38.2 %
Maintenance and repairs 23,032 19,973 15.3 % 21.8 % 44,695 40,767 9.6 % 20.9 %
Administrative 16,953 16,531 2.6 % 16.0 % 33,700 32,901 2.4 % 15.7 %
Utilities 20,788 19,456 6.8 % 19.7 % 42,942 38,938 10.3 % 20.1 %
Insurance and other 5,866 5,351 9.6 % 5.6 % 11,033 10,818 2.0 % 5.1 %
Total same-property operating expenses $ 105,656 $ 101,771 3.8 % 100.0 % $ 214,168 $ 205,325 4.3 % 100.0 %

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

        S-10

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

Development Pipeline - June 30, 2022

(Dollars in millions, except per apartment home amounts in thousands and except in footnotes)

Project Name Location Ownership<br><br> <br>% Estimated <br><br> Apartment <br><br> Homes Estimated<br><br> <br>Commercial <br><br> sq. feet Incurred to<br><br> <br>Date Remaining<br><br> <br>Costs Estimated<br><br> <br>Total Cost Essex Est.<br><br> <br>Total Cost ^(1)^ Cost per Apartment Home ^(2)^ Average % Occupied %<br><br> <br>Leased as of<br><br> <br>6/30/22 ^(3)^ %<br><br> <br>Leased as of<br><br> <br>7/22/22 ^(3)^ Construction Start Initial Occupancy Stabilized Operations
Land Held for Future Development - Consolidated
Other Projects Various 100% - - $ 22 $ - $ 22 $ 22
Total Development Pipeline - Consolidated - - 22 - 22 22
Development Projects - Joint Venture ^(4)^
Scripps Mesa Apartments ^(5)^ San Diego, CA 51% 264 2,000 67 35 102 52 383 0% 0% 0% Q3 2020 Q4 2022 Q3 2023
Total Development Projects - Joint Venture 264 2,000 67 35 102 52 $ 383
Grand Total - Development Pipeline 264 2,000 $ 89 $ 35 $ 124 74
Essex Cost Incurred to Date - Pro Rata (56 )
Essex Remaining Commitment $ 18
^(1)^ The Company's share of the estimated total cost of the project.
--- ---
^(2)^ Net of the estimated allocation to the retail component of the project, as applicable.
--- ---
^(3)^ Calculations are based on multifamily operations only.
--- ---
^(4)^ For the second quarter of 2022, the Company's cost includes $0.6 million of capitalized interest, $1.0 million of capitalized overhead and $0.4 million of development fees (such<br> development fees reduced G&A expenses).
--- ---
^(5)^ Cost incurred to date and estimated total cost are net of a projected value for low income housing tax credit proceeds and the value of the tax exempt bond structure.
--- ---

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

        S-11

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

Capital Expenditures - June 30, 2022 ^(1)^

(Dollars in thousands, except in footnotes and per apartment home amounts)

Revenue Generating Capital Expenditures^(2)^ Q2 '22 Trailing 4<br><br> <br>Quarters
Same-property portfolio $ 16,942 $ 51,742
Non-same property portfolio 206 1,093
Total revenue generating capital expenditures $ 17,148 $ 52,835
Number of same-property interior renovations 1,029 3,011
Number of total consolidated interior renovations 1,035 3,045
Non-Revenue Generating Capital Expenditures ^(3)^ Q2 '22 Trailing 4<br><br> <br>Quarters
--- --- --- --- ---
Non-revenue generating capital expenditures $ 32,953 $ 110,702
Average apartment homes in quarter 51,761 51,683
Capital expenditures per apartment homes in the quarter $ 637 $ 2,142
^(1)^ The Company incurred $0.1 million of capitalized interest, $3.9 million of capitalized overhead and $0.3 million of co-investment fees related to redevelopment in Q2 2022.
--- ---
^(2)^ Represents revenue generating or expense saving expenditures, such as full-scale redevelopments, interior unit turn renovations, enhanced amenities and certain resource<br> management initiatives. Q2 2022 excludes costs related to smart home automation.
--- ---
^(3)^ Represents roof replacements, paving, building and mechanical systems, exterior painting, siding, etc. Non-revenue generating capital expenditures does not include expenditures<br> incurred due to changes in governmental regulations that the Company would not have incurred otherwise, costs related to retail, furniture and fixtures, and expenditures in which the Company expects to be reimbursed.
--- ---

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

        S-12

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

Co-investments and Preferred Equity Investments - June 30, 2022

(Dollars in thousands, except in footnotes)

Weighted<br><br> <br>Average Essex<br><br> <br>Ownership<br><br> Percentage Apartment<br><br> <br>Homes Total<br><br> <br>Undepreciated<br><br> <br>Book Value Debt<br><br> <br>Amount Essex<br><br> <br>Book<br><br> <br>Value Weighted<br><br> <br>Average<br><br> Borrowing Rate Remaining<br><br> <br>Term of<br><br> Debt (in Years) Three Months<br><br> <br>Ended<br><br> June 30, 2022 Six Months Ended<br><br> June 30, 2022
Operating and Other Non-Consolidated Joint Ventures NOI
Wesco I, III, IV, V, VI, Essex JV, LLC ^(1)^ 54% 6,186 $ 2,153,988 $ 1,461,442 $ 178,960 2.7 % 4.3 $ 29,389 $ 55,896
BEXAEW, BEX II, BEX IV, and 500 Folsom 50% 3,083 1,239,386 551,123 248,782 2.6 % 8.8 ^^^(4)^ 15,534 29,399
Other ^(2)^ 52% 1,367 556,564 408,452 88,533 3.1 % 2.7 7,405 13,484
Total Operating and Other Non-Consolidated Joint Ventures 10,636 $ 3,949,938 $ 2,421,017 $ 516,275 2.8 % 5.1 $ 52,328 $ 98,779
Development Non-Consolidated Joint Ventures ^(3)^ 51% 264 66,532 89,250 12,808 1.2 % 37.9 ^(5)^ - -
Total Non-Consolidated Joint Ventures 10,900 $ 4,016,470 $ 2,510,267 $ 529,083 2.7 % 6.2 $ 52,328 $ 98,779
Essex Portion of NOI and Expenses
NOI $ 27,960 $ 52,061
Depreciation (18,131 ) (36,244 )
Interest expense and other (9,854 ) (17,174 )
Equity loss from non-core co-investments (20,710 ) (29,554 )
Loss on early retirement of debt from unconsolidated co-investment (901 ) (987 )
Co-investment promote income - 17,076
Net income from operating and other co-investments $ (21,636 ) $ (14,822 )
Weighted Average Preferred Return Weighted Average Expected<br><br> <br>Term Income from Preferred Equity Investments
Income from preferred equity investments $ 13,236 $ 26,735
Income from early redemption of preferred equity investments - 858
Preferred Equity Investments^(6)^ $ 520,169 10.0 % 2.6 $ 13,236 $ 27,593
Total Co-investments $ 1,049,252 $ (8,400 ) $ 12,771
^(1)^ As of June 30, 2022, the Company’s investments in Wesco I, Wesco III, and Wesco IV were classified as a liability of $43.7 million due to distributions received in excess of the<br> Company's investment.
--- ---
^(2)^ As of June 30, 2022, the Company’s investment in Expo was classified as a liability of $0.3 million due to distributions received in excess of the Company's investment. The<br> weighted average Essex ownership percentage excludes our investments in non-core technology co-investments which are carried at fair value.
--- ---
^(3)^ The Company has ownership interests in development co-investments, which are detailed on page S-11.
--- ---
^(4)^ $132.0 million of the debt related to 500 Folsom, one of the Company's co-investments, is financed by tax exempt bonds with a maturity date of January 2052.
--- ---
^(5)^ Scripps Mesa Apartments has $89.3 million of long-term tax-exempt bond debt that is subject to a total return swap that matures in 2025.
--- ---
^(6)^ As of June 30, 2022, the Company has invested in 23 preferred equity investments.
--- ---

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

        S-13

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

Assumptions for 2022 FFO Guidance Range

The guidance projections below are based on current expectations and are forward-looking. The guidance on this page is given for Net Operating Income ("NOI") and Total and Core FFO. See pages S-18.1 to S-18.4 for the definitions of non-GAAP financial measures and other terms.

Six Months<br><br> <br>Ended June 30, 2022 Full-Year Guidance Range
($'s in thousands, except per share data) 2022 ^(1)^ Low End High End Comments About 2022 Full-Year Guidance
Total NOI from Consolidated Communities - Excluding Straight-Line Rent Concessions $ 552,687 $ 1,131,000 $ 1,142,000 Includes a range of same-property NOI growth of 13.0% to 14.0%, an increase from the prior range of 11.1% to 13.1%
Straight-Line Rent Concessions from Consolidated Communities (5,851 ) (6,700 ) (8,400 ) Reflects the non-cash impact of recording lease concessions on a straight-line basis
Management Fees 5,427 10,700 11,300
Interest Expense
Interest expense, before capitalized interest (97,584 ) (198,600 ) (197,400 )
Interest capitalized 1,557 1,600 2,400
Net interest expense (96,027 ) (197,000 ) (195,000 )
Recurring Income and Expenses
Interest and other income 9,356 18,000 19,300
FFO from co-investments 61,431 119,000 120,600 Reflects updated timing for preferred equity redemptions
General and administrative (23,924 ) (53,500 ) (54,500 )
Corporate-level property management expenses (20,348 ) (40,200 ) (40,800 )
Non-controlling interest (5,911 ) (12,100 ) (11,500 )
Total recurring income and expenses 20,604 31,200 33,100
Non-Core Income and Expenses
Expensed acquisition and investment related costs (18 ) (18 ) (18 )
Deferred tax benefit on unconsolidated co-investments 9,618 9,618 9,618
Gain on sale of marketable securities 12,430 12,430 12,430
Change in unrealized losses on marketable securities, net (46,441 ) (46,441 ) (46,441 )
Provision for credit losses 63 63 63
Equity loss from non-core co-investments (29,554 ) (29,554 ) (29,554 )
Loss on early retirement of debt, net - - -
Loss on early retirement of debt from unconsolidated co-investments (987 ) (987 ) (987 )
Co-investment promote income 17,076 17,076 17,076
Income from early redemption of preferred equity investments 858 858 858
General and administrative and other, net (1,445 ) (1,445 ) (1,445 )
Insurance reimbursements, legal settlements, and other, net 8 8 8
Total non-core income and expenses (38,392 ) (38,392 ) (38,392 )
Funds from Operations ^(2)^ $ 438,448 $ 930,808 $ 944,608
Funds from Operations per diluted Share $ 6.49 $ 13.78 $ 13.98
% Change - Funds from Operations 2.5 % -1.4 % 0.0 %
Core Funds from Operations (excludes non-core items) $ 476,840 $ 969,200 $ 983,000
Core Funds from Operations per diluted Share $ 7.06 $ 14.35 $ 14.55
% Change - Core Funds from Operations 15.4 % 14.9 % 16.5 %
EPS - Diluted $ 2.00 $ 4.76 $ 4.96
Weighted average shares outstanding - FFO calculation 67,587 67,550 67,550
^(1)^ All non-core items are excluded from the 2022 actuals and included in the non-core income and expense section of the FFO reconciliation.
--- ---
^(2)^ 2022 guidance excludes inestimable projected gain on sale of marketable securities, loss on early retirement of debt, political/legislative costs, and promote income until they are realized within the<br> reporting period presented in the report.
--- ---

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

          S-14

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

Reconciliation of Projected EPS, FFO and Core FFO per diluted share

With respect to the Company's guidance regarding its projected FFO and Core FFO, which guidance is set forth in the earnings release and on page S-14 of this supplement, a reconciliation of projected net income per share to projected FFO per share and projected Core FFO per share, as set forth in such guidance, is presented in the table below.

2022 Guidance Range ^(1)^
Six Months 3rd Quarter 2022 Full-Year 2022
Ended June 30,
2022 Low High Low High
EPS - diluted $ 2.00 $ 1.34 $ 1.44 $ 4.76 $ 4.96
Conversion from GAAP share count (0.07 ) (0.05 ) (0.05 ) (0.16 ) (0.16 )
Depreciation and amortization 4.50 2.26 2.26 9.03 9.03
Noncontrolling interest related to Operating Partnership units 0.06 0.05 0.05 0.15 0.15
Gain on sale of real estate - - - - -
Gain on remeasurement of co-investment - - - - -
FFO per share - diluted $ 6.49 $ 3.60 $ 3.70 $ 13.78 $ 13.98
Expensed acquisition and investment related costs - - - - -
Deferred tax benefit on unconsolidated co-investments (0.14 ) - - (0.14 ) (0.14 )
Gain on sale of marketable securities (0.18 ) - - (0.18 ) (0.18 )
Change in unrealized losses on marketable securities, net 0.69 - - 0.69 0.69
Provision for credit losses - - - - -
Equity loss from non-core co-investments 0.44 - - 0.44 0.44
Loss on early retirement of debt, net - - - - -
Loss on early retirement of debt from unconsolidated co-investments 0.01 - - 0.01 0.01
Co-investment promote income (0.26 ) - - (0.26 ) (0.26 )
Income from early redemption of preferred equity investments (0.01 ) - - (0.01 ) (0.01 )
General and administrative and other, net 0.02 - - 0.02 0.02
Insurance reimbursements, legal settlements, and other, net - - - - -
Core FFO per share - diluted $ 7.06 $ 3.60 $ 3.70 $ 14.35 $ 14.55
^(1)^ 2022 guidance excludes inestimable projected gain on sale of real estate and land, gain on sale of marketable securities, loss on early retirement of debt,<br> political/legislative costs, and promote income until they are realized within the reporting period presented in the report.
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See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

            S-14.1

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

Summary of Apartment Community Acquisitions and Dispositions Activity

Year to date as of June 30, 2022

(Dollars in thousands)

Acquisitions
Property Name Location Apartment<br><br> <br>Homes Essex<br><br> <br>Ownership<br><br> Percentage Entity Date Total<br><br> <br>Contract<br><br> Price ^(1)^ Price per<br><br> Apartment Home Average<br><br> <br>Rent
Vela Woodland Hills, CA 379 50% JV Jan-22 $ 183,000 $ 483 $ 2,729
Q1 2022 379 $ 183,000 $ 483
2022 Total 379 $ 183,000 $ 483
(1) Represents the contract price for the entire property, not the Company’s share.
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See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

            S-15

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

Delinquencies, Operating Statistics, and Same-Property Revenue Growth with Concessions on a GAAP basis

(Dollars in millions, except in footnotes and per share amounts)

Delinquencies for Second Quarter 2022 Same-Property Non-Same <br><br> Property and<br><br> Co-investments Total Operating Communities Commercial Total
Operating apartment community units 49,369 11,484 60,853 N/A N/A
Cash delinquencies as % of scheduled rent 0.3 % 1.4 % 0.4 % N/A N/A
Reported delinquencies as % of scheduled rent ^(1)^ 0.6 % 2.1 % 0.8 % N/A N/A
Reported delinquencies in 2Q 2022 ^(2) (3)^ $ (2.1 ) $ (1.0 ) $ (3.1 ) $ 0.6 $ (2.5 )
Reported delinquencies in 2Q 2021 ^(2)^ $ (8.8 ) $ (0.9 ) $ (9.7 ) $ (0.1 ) $ (9.8 )
YoY impact to 2Q 2022 Core FFO per share $ 0.10 $ (0.00 ) $ 0.10 $ 0.01 $ 0.11
YoY impact to Core FFO per share growth 3.3 % 0.0 % 3.2 % 0.3 % 3.6 %
Total cumulative cash delinquencies ^(4)^ ^(5)^ $ (69.4 ) $ (9.0 ) $ (78.4 ) N/A N/A
Net accounts receivable balance $ 3.4 $ - $ 3.4 N/A N/A
(1) Represents total residential portfolio delinquencies as a percentage of scheduled rent reflected in the financial statements for the three months ended<br> June 30, 2022.
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(2) Co-investment delinquencies reported at the Company's pro rata share.
--- ---
(3) Commercial delinquencies in 2Q 2022 includes a reduction of the straight-line rent reserve of $0.5 million and includes co-investment amounts at the<br> Company's pro rata share.
--- ---
(4) Represents cash delinquencies from the period of April 1, 2020 to June 30, 2022. This includes $3.4 million of the net accounts receivable balance.
--- ---
(5) The Company, including its co-investments, has received Emergency Rental Assistance payments of $15.5 million and $51.6 million for the three months<br> ended June 30, 2022 and the period from April 1, 2020 to June 30, 2022, respectively.
--- ---
Operating Statistics Same-Property Revenue Growth with Concessions on a GAAP basis
Same-Property Portfolio Preliminary Estimate<br><br> <br>July 2022 2Q 2022 2Q 2022 2Q 2021 YTD 2022 YTD 2021
Cash delinquencies as % of scheduled rent ^(1)^ 1.0% 0.3% Reported rental revenue (cash basis concessions) $ 373.3 $ 331.2 $ 729.6 $ 665.7
Straight-line rent impact to rental revenue (2.8 ) (2.8 ) (5.4 ) (5.9 )
New lease rates ^(2)^ 14.0% 20.6% GAAP rental revenue $ 370.5 $ 328.4 $ 724.2 $ 659.8
Renewal rates ^(3)^ 8.7% 9.9%
Blended rates 11.8% 15.4% % change - reported rental revenue 12.7 % 9.6 %
% change - GAAP rental revenue 12.8 % 9.8 %
Financial occupancy 96.1% 96.1%
^(1)^ The Company's same-property portfolio has received Emergency Rental Assistance payments of $2.8 million and $13.0 million in July 2022, and for the three months ended<br> June 30, 2022, respectively.
--- ---
^(2)^ Represents % change on a net-effective basis, including the impact of leasing incentives.
--- ---
^(3)^ Represents % change in similar term lease tradeouts, including the impact of leasing incentives.
--- ---

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

            S-16

See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information  S-17  E S S E X P R O P E R T Y T R U S T, I N C                                2022 MSA Level Forecast: Supply, Jobs, and Apartment Market Conditions                                                     Forecast Summary:           Forecast Assumptions:            2022 GDP Growth = +1.6%   Hybrid return-to-office continues gradually through year-end   2022 U.S. job growth = +3.0%; Dec-22 unemployment rate = 3.6%   Economic growth moderates but base case does not include 2022 recession   2022 Multifamily supply in ESS markets remains below 1% growth      Rent growth leadership transitions from SoCal to NorCal/Seattle in 2H22   Residential Supply (1)        Job Forecast (2)     Rent Forecast (3)  Market     New MF Supply  New SF Supply  Total   Supply  MF Supply as % of MF Stock  % of Total Supply to Total Stock        Est. New Jobs  % Growth     Economic   Rent Growth                                         Los Angeles     8,100  7,050  15,150  0.5%  0.4%        205,000  4.7%     10.0%  Orange     3,400  3,300  6,700  0.8%  0.6%        53,000  3.3%     13.2%  San Diego     4,800  3,050  7,850  1.0%  0.6%        58,000  4.0%  12.9%  Ventura     800  150  950  1.2%  0.3%        7,000  2.3%     10.1%  So. Cal.     17,100  13,550  30,650  0.7%  0.5%        323,000  4.2%     11.4%                                         San Francisco     3,100  600  3,700  0.8%  0.5%        74,000  6.7%     10.6%  Oakland     4,300  3,200  7,500  1.3%  0.7%        44,000  3.9%  7.9%  San Jose     3,600  2,100  5,700  1.4%  0.8%        51,000  4.5%     12.1%  No. Cal.     11,000  5,900  16,900  1.1%  0.7%        169,000  5.0%     10.5%                                         Seattle     8,200  5,750  13,950  1.6%  1.1%        76,000  4.4%     11.6%                                         Total/Weighted Avg. (4)     36,300  25,200  61,500  0.9%  0.6%        568,000  4.4%     11.1%                          All data are based on Essex Property Trust, Inc. forecasts.                                                                 (1) Residential Supply: Total supply includes the Company's estimate of multifamily deliveries of properties with 50+ units and excludes student, senior and 100% affordable housing communities. Single-family estimates are based on trailing single-family permits. Multifamily estimates incorporate a methodological assumption ("delay-adjusted supply") to reflect the anticipated impact of continued construction delays in Essex markets.                                      (2) Job Forecast: Refers to the difference between total non-farm industry employment (not seasonally adjusted) projected 4Q22 over 4Q21, expressed as total new jobs and growth rates.                                      (3) Rent Forecast: The estimated rent growth represents the forecasted change in market rents for full year 2022 vs 2021 (T4Q year-over-year average), and excludes submarkets not targeted by Essex.                                      (4) Weighted Average: Rent growth rates are weighted by scheduled rent in the Company's Portfolio.

See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information  S-17.1  E S S E X P R O P E R T Y T R U S T, I N C                                Year-to-Date Net Effective Rent Growth in Essex Technology-Dominant Markets                                                     Essex technology-dominant markets have the strongest year-to-date net effective rent growth within the same-property portfolio as a result of return-to-office trends and strong job growth  Source: Essex Property Trust, Inc.

See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information  S-17.2  E S S E X P R O P E R T Y T R U S T, I N C                                Top-Technology Companies Open Positions Compared to Technology Layoffs, by Region Source: Essex Property Trust, Inc., Company Disclosures, Layoffs.fyi   While open positions at the largest technology companies in Essex markets has slowed, they remain significantly higher than pre-covid levels and much larger than the number of announced layoffs in Essex markets  Essex markets only account for ~1/3 of announced technology layoffs year-to-date based on headquarter locations, which likely overstates the number of layoffs in Essex markets due to remote work and satellite location layoffs

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

Reconciliations of Non-GAAP Financial Measures and Other Terms

Adjusted EBITDAre Reconciliation

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

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

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

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

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

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

Three Months Ended<br><br> <br>June 30,<br><br> <br>2022
Net income available to common stockholders $ 57,054
Adjustments:
Net income attributable to noncontrolling interest 4,636
Interest expense, net ^(1)^ 48,194
Depreciation and amortization 134,517
Income tax provision 243
Co-investment EBITDAre adjustments 27,589
EBITDAre 272,233
Gain (loss) on sale of marketable securities (259 )
Change in unrealized (losses) gains on marketable securities, net 21,856
Provision for credit losses (1 )
Equity (loss) income from non-core co-investments 20,710
Deferred tax benefit (expense) on unconsolidated co-investments (6,864 )
General and administrative and other, net 997
Insurance reimbursements and legal settlements, net (8 )
Expensed acquisition and investment related costs 10
Loss on early retirement of debt from unconsolidated co-investments 901
Adjusted EBITDAre $ 309,575
^(1)^ Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges.
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See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

              S-18.1

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

Reconciliations of Non-GAAP Financial Measures and Other Terms

Encumbered

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

Funds From Operations ("FFO") and Core FFO

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

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

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

Interest Expense, Net

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

Three Months Ended Six Months Ended
June 30, June 30,
2022 2022
Interest expense $ 50,477 100,854
Adjustments:
Total return swap income (2,283 ) (4,827 )
Interest expense, net $ 48,194 96,027

Immediately Available Liquidity

The Company's immediately available liquidity as of July 22, 2022, consisted of the following (Dollars in millions):

July 22, 2022
Unsecured credit facility - committed $ 1,235
Balance outstanding 145
Undrawn portion of line of credit $ 1,090
Cash, cash equivalents & marketable securities 196
Total liquidity $ 1,286

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

S-18.2

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

Reconciliations of Non-GAAP Financial Measures and Other Terms

Net Indebtedness Divided by Adjusted EBITDAre

This credit ratio is presented on page S-6 in the section titled "Selected Credit Ratios." This credit ratio is calculated by dividing net indebtedness by Adjusted EBITDAre, as annualized based on the most recent quarter, and adjusted for estimated net operating income from properties acquired or disposed of during the quarter. This ratio is presented by the Company because it provides rating agencies and investors an additional means of comparing the Company's ability to service debt obligations to that of other companies. Net indebtedness is total debt, net less unamortized premiums, discounts, debt issuance costs, unrestricted cash and cash equivalents, and marketable securities. The reconciliation of Adjusted EBITDAre is set forth in "Adjusted EBITDAre Reconciliation" on page S-18.1 The calculation of this credit ratio and a reconciliation of net indebtedness to total debt at pro rata share for co-investments, net is presented in the table below (Dollars in thousands):

Total consolidated debt, net $ 6,010,250
Total debt from co-investments at pro rata share 1,340,504
Adjustments:
Consolidated unamortized premiums, discounts, and debt issuance costs 39,031
Pro rata co-investments unamortized premiums, discounts,
and debt issuance costs 7,343
Consolidated cash and cash equivalents-unrestricted (37,756 )
Pro rata co-investment cash and cash equivalents-unrestricted (39,583 )
Marketable securities (179,744 )
Net Indebtedness $ 7,140,045
Adjusted EBITDAre, annualized ^(1)^ $ 1,238,300
Other EBITDAre normalization adjustments, net, annualized ^(2)^ 295
Adjusted EBITDAre, normalized and annualized $ 1,238,595
Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized 5.8
^(1)^ Based on the amount for the most recent quarter, multiplied by four.
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^(2)^ Adjustments made for properties in lease-up, acquired, or disposed during the most recent quarter and other partial quarter activity, multiplied by four.
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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<br><br> <br>June 30,<br><br> <br>2022 Three Months Ended<br><br> <br>June 30,<br><br> <br>2021 Six Months Ended<br><br> <br>June 30,<br><br> <br>2022 Six Months Ended<br><br> <br>June 30,<br><br> <br>2021
Earnings from operations $ 128,628 $ 93,381 $ 238,478 $ 290,762
Adjustments:
Corporate-level property management expenses 10,176 9,062 20,348 18,075
Depreciation and amortization 134,517 128,736 268,050 257,323
Management and other fees from affiliates (2,738 ) (2,221 ) (5,427 ) (4,470 )
General and administrative 13,127 12,222 25,369 22,034
Expensed acquisition and investment related costs 10 41 18 56
Gain on sale of real estate and land - - - (100,096 )
NOI 283,720 241,221 546,836 483,684
Less: Non-same property NOI (16,045 ) (11,771 ) (31,400 ) (23,351 )
Same-Property NOI $ 267,675 $ 229,450 $ 515,436 $ 460,333

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

S-18.3

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

Reconciliations of Non-GAAP Financial Measures and Other Terms

              Public Bond Covenants

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

The ratios set forth on page S-6 in the section titled "Public Bond Covenants" are provided only to show the Company's compliance with certain specified covenants that are contained in indentures related to the Company's issuance of Senior Notes, which indentures are filed by the Company with the SEC. See, for example, the Indenture dated March 1, 2021, filed by the Company as Exhibit 4.1 to the Company's Form 8-K, filed on March 1, 2021. These ratios should not be used for any other purpose, including without limitation to evaluate the Company's financial condition or results of operations, nor do they indicate the Company's covenant compliance as of any other date or for any other period. The capitalized terms in the disclosure are defined in the indentures filed by the Company with the SEC and may differ materially from similar terms used by other companies that present information about their covenant compliance.

Secured Debt

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

Unencumbered NOI to Adjusted Total NOI

This ratio is presented on page S-6 in the section titled "Selected Credit Ratios". Unencumbered NOI means the sum of NOI for those real estate assets which are not subject to an encumbrance securing debt. The ratio of Unencumbered NOI to Adjusted Total NOI for the three months ended June 30, 2022, annualized, is calculated by dividing Unencumbered NOI, annualized for the three months ended June 30, 2022 and as further adjusted for pro forma NOI for properties acquired or sold during the recent quarter, by Adjusted Total NOI as annualized. The calculation and reconciliation of NOI is set forth in "Net Operating Income ("NOI") and Same-Property NOI Reconciliations" above. This ratio is presented by the Company because it provides rating agencies and investors an additional means of comparing the Company's ability to service debt obligations to that of other companies. The calculation of this ratio is presented in the table below (Dollars in thousands):

Annualized
Q2'22 ^(1)^
NOI $ 1,134,880
Adjustments:
NOI from real estate assets sold or held for sale -
Other, net^(2)^ 9,031
Adjusted Total NOI 1,143,911
Less: Encumbered NOI (64,315 )
Unencumbered NOI $ 1,079,596
Encumbered NOI $ 64,315
Unencumbered NOI 1,079,596
Adjusted Total NOI $ 1,143,911
Unencumbered NOI to Adjusted Total NOI 94 %
^(1)^ This table is based on the amounts for the most recent quarter, multiplied by four.
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^(2)^ Includes intercompany eliminations pertaining to self-insurance and other expenses.
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See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information

S-18.4

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