Essex Property Trust, Inc 10-Q for FY2026 Q1
Essex Property Trust, Inc. (ESS)
10-Q
2026-04-29
For: 2026-03-31
View Original
Added on
April 29, 2026
About this 10-Q
Essex Property Trust, Inc filed this 10-Q on April 29, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $484.76M
- up 4.3% from $464.58M a year earlier
- Net income
- $112.21M
- down 47.3% from net income of $212.78M a year earlier
- Diluted EPS
- $1.65
- down 47.8% from $3.16 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
For the quarterly period ended March 31, 2026
OR
For the transition period from ________to _________
(Commission File Number)
(Exact name of Registrant as Specified in its Charter)
| (Essex Property Trust, Inc.) | (Essex Property Trust, Inc.) | |||||||
| (Essex Portfolio, L.P.) | (Essex Portfolio, L.P.) | |||||||
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification Number) | |||||||
(Address of Principal Executive Offices, Including Zip Code)
(650 ) 655-7800
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
| Essex Property Trust, Inc. | ☒ | No | ☐ | Essex Portfolio, L.P. | ☒ | No | ☐ | ||||||||||||||||||||||
i
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
| Essex Property Trust, Inc. | ☒ | No | ☐ | Essex Portfolio, L.P. | ☒ | No | ☐ | ||||||||||||||||||||||
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Essex Property Trust, Inc.:
| ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | |||||||||||||||||||||||
Essex Portfolio, L.P.:
| Large accelerated filer | ☐ | Accelerated filer | ☐ | ☒ | Smaller reporting company | ||||||||||||||||||
| 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.
| Essex Property Trust, Inc. | ☐ | Essex Portfolio, L.P. | ☐ | ||||||||
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
| Essex Property Trust, Inc. | Yes | ☐ | No | Essex Portfolio, L.P. | Yes | ☐ | No | ||||||||||||||||||||||
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 64,262,866 shares of Common Stock ($.0001 par value) of Essex Property Trust, Inc. were outstanding as of April 22, 2026.
ii
EXPLANATORY NOTE
This report combines the reports on Form 10-Q for the three month period ended March 31, 2026 of Essex Property Trust, Inc., a Maryland corporation, and Essex Portfolio, L.P., a California limited partnership of which Essex Property Trust, Inc. is the sole general partner.
Unless stated otherwise or the context otherwise requires, references to the “Company,” “we,” “us” or “our” mean collectively Essex Property Trust, Inc. and those entities/subsidiaries owned or controlled by Essex Property Trust, Inc., including Essex Portfolio, L.P., and references to the “Operating Partnership” or “EPLP” mean Essex Portfolio, L.P. and those entities/subsidiaries owned or controlled by Essex Portfolio, L.P. Unless stated otherwise or the context otherwise requires, references to “Essex” mean Essex Property Trust, Inc., not including any of its subsidiaries.
Essex operates as a self-administered and self-managed real estate investment trust (“REIT”), and is the sole general partner of the Operating Partnership. As of March 31, 2026, Essex owned approximately 96.7% of the ownership interest in the Operating Partnership with the remaining 3.3% interest owned by limited partners. As the sole general partner of the Operating Partnership, Essex has exclusive control of the Operating Partnership’s day-to-day management.
The Company is structured as an umbrella partnership REIT (“UPREIT”) and Essex contributes all net proceeds from its various equity offerings to the Operating Partnership. In return for those contributions, Essex receives a number of Operating Partnership limited partnership units (“OP Units,” and the holders of such OP Units, “Unitholders”) equal to the number of shares of common stock it has issued in the equity offerings. Contributions of properties to the Operating Partnership can be structured as tax-deferred transactions through the issuance of OP Units, which is one of the reasons why the Company is structured in the manner outlined above. Based on the terms of the Operating Partnership’s partnership agreement, OP Units can be exchanged into Essex common stock on a one-for-one basis. The Company maintains a one-for-one relationship between the OP Units issued to Essex and shares of common stock.
The Company believes that combining the reports on Form 10-Q of Essex and the Operating Partnership into this single report provides the following benefits:
•enhances investors’ understanding of Essex and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
•eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both Essex and the Operating Partnership; and
•creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.
Management operates Essex and the Operating Partnership as one business. The management of Essex consists of the same members as the management of the Operating Partnership.
All of the Company’s property ownership, development, and related business operations are conducted through the Operating Partnership and Essex has no material assets, other than its investment in the Operating Partnership. Essex’s primary function is acting as the general partner of the Operating Partnership. As general partner with control of the Operating Partnership, Essex consolidates the Operating Partnership for financial reporting purposes. Therefore, the assets and liabilities of Essex and the Operating Partnership are the same on their respective financial statements. Essex also issues equity from time to time and guarantees certain debt of the Operating Partnership, as disclosed in this report. The Operating Partnership holds substantially all of the assets of the Company, including the Company’s ownership interests in its co-investments. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by the Company, which are contributed to the capital of the Operating Partnership in exchange for OP Units (on a one-for-one share of common stock per OP Unit basis), the Operating Partnership generates all remaining capital required by the Company’s business. These sources of capital include the Operating Partnership’s working capital, net cash provided by operating activities, borrowings under its revolving credit facilities, the issuance of secured and unsecured debt and equity securities and proceeds received from disposition of certain properties and co-investments.
iii
The Company believes it is important to understand the few differences between Essex and the Operating Partnership in the context of how Essex and the Operating Partnership operate as a consolidated company. Stockholders’ equity, partners’ capital and noncontrolling interest are the main areas of difference between the condensed consolidated financial statements of Essex and those of the Operating Partnership. The limited partners of the Operating Partnership are accounted for as partners’ capital in the Operating Partnership’s condensed consolidated financial statements and as noncontrolling interest in Essex’s condensed consolidated financial statements. The noncontrolling interest in the Operating Partnership’s condensed consolidated financial statements includes the interest of unaffiliated partners in various consolidated partnerships and co-investment partners. The noncontrolling interest in Essex’s condensed consolidated financial statements includes (i) the same noncontrolling interest as presented in the Operating Partnership’s condensed consolidated financial statements and (ii) OP Unitholders. The differences between stockholders’ equity and partners’ capital result from differences in the equity issued at Essex and Operating Partnership levels.
To help investors understand the significant differences between Essex and the Operating Partnership, this report on Form 10-Q provides separate condensed consolidated financial statements for Essex and the Operating Partnership; a single set of consolidated notes to such financial statements that includes separate discussions of stockholders’ equity or partners’ capital, and earnings per share/unit, as applicable; and a combined Management’s Discussion and Analysis of Financial Condition and Results of Operations.
This report on Form 10-Q also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of Essex and the Operating Partnership in order to establish that the requisite certifications have been made and that Essex and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and 18 U.S.C. §1350.
In order to highlight the differences between Essex and the Operating Partnership, the separate sections in this report on Form 10-Q for Essex and the Operating Partnership specifically refer to Essex and the Operating Partnership. In the sections that combine disclosure of Essex and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and co-investments and holds assets and debt, reference to the Company is appropriate because the Company is one business and the Company operates that business through the Operating Partnership. The separate discussions of Essex and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.
The information furnished in the accompanying unaudited condensed consolidated balance sheets, statements of income and comprehensive income, equity, capital, and cash flows of the Company and the Operating Partnership reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the aforementioned condensed consolidated financial statements for the interim periods and are normal and recurring in nature, except as otherwise noted.
The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the notes to such unaudited condensed consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations herein. Additionally, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2025.
iv
ESSEX PROPERTY TRUST, INC.
ESSEX PORTFOLIO, L.P.
FORM 10-Q
TABLE OF CONTENTS
| PART I. FINANCIAL INFORMATION | Page No. | |||||||
| Item 1. | Condensed Consolidated Financial Statements of Essex Property Trust, Inc. (Unaudited) | |||||||
| Condensed Consolidated Financial Statements of Essex Portfolio, L.P. (Unaudited) | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| PART II. OTHER INFORMATION | ||||||||
| Item 1. | ||||||||
| Item 1A. | ||||||||
| Item 2. | ||||||||
| Item 3. | ||||||||
| Item 4. | ||||||||
| Item 5. | ||||||||
| Item 6. | ||||||||
1
Part I – Financial Information
Item 1. Condensed Consolidated Financial Statements
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except share amounts)
| March 31, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Real estate investments: | |||||||||||
| Rental properties: | |||||||||||
| Land and land improvements | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Less: accumulated depreciation | ( | ( | |||||||||
| Real estate under development | |||||||||||
| Co-investments | |||||||||||
| Cash and cash equivalents-unrestricted | |||||||||||
| Cash and cash equivalents-restricted | |||||||||||
| Marketable securities | |||||||||||
Notes and other receivables, net of allowance for credit losses of $ | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Prepaid expenses and other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Unsecured debt, net | $ | $ | |||||||||
| Mortgage notes payable, net | |||||||||||
| Lines of credit and commercial paper | |||||||||||
| Accounts payable and accrued liabilities | |||||||||||
| Construction payable | |||||||||||
| Dividends payable | |||||||||||
| Distributions in excess of investments in co-investments | |||||||||||
| Operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 11) | |||||||||||
| Redeemable noncontrolling interest | |||||||||||
| Equity: | |||||||||||
Common stock; $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Distributions in excess of accumulated earnings | ( | ( | |||||||||
| Accumulated other comprehensive income, net | |||||||||||
| Total stockholders’ equity | |||||||||||
| Noncontrolling interest | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
2
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income and Comprehensive Income
(Unaudited)
(In thousands, except share and per share amounts)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Rental and other property | $ | $ | |||||||||||||||||||||
| Management and other fees from affiliates | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Property operating, excluding real estate taxes | |||||||||||||||||||||||
| Real estate taxes | |||||||||||||||||||||||
| Corporate-level property management expenses | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Gain on sale of real estate and land | |||||||||||||||||||||||
| Earnings from operations | |||||||||||||||||||||||
| Interest expense | ( | ( | |||||||||||||||||||||
| Total return swap income | |||||||||||||||||||||||
| Interest and other income | |||||||||||||||||||||||
| Equity income from co-investments | |||||||||||||||||||||||
| Tax (expense) benefit on unconsolidated technology co-investments | ( | ||||||||||||||||||||||
| Loss on early retirement of debt | ( | ||||||||||||||||||||||
| Gain on remeasurement of co-investment | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Net income attributable to noncontrolling interest | ( | ( | |||||||||||||||||||||
| Net income available to common stockholders | $ | $ | |||||||||||||||||||||
| Comprehensive income | $ | $ | |||||||||||||||||||||
| Comprehensive income attributable to noncontrolling interest | ( | ( | |||||||||||||||||||||
| Comprehensive income attributable to controlling interest | $ | $ | |||||||||||||||||||||
| Per share data: | |||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||
| Net income available to common stockholders | $ | $ | |||||||||||||||||||||
| Weighted average number of shares outstanding during the period | |||||||||||||||||||||||
| Diluted: | |||||||||||||||||||||||
| Net income available to common stockholders | $ | $ | |||||||||||||||||||||
| Weighted average number of shares outstanding during the period | |||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
3
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Equity for the three months ended March 31, 2026 and 2025
(Unaudited)
(In thousands, except per share amounts)
| Common stock | Additional paid-in capital | Distributions in excess of accumulated earnings | Accumulated other comprehensive income, net | Noncontrolling interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2026 | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2025 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Reversal of unrealized gains upon the sale of marketable debt securities, net | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of derivatives and amortization of swap settlements | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of marketable debt securities, net | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock option and restricted stock plans, net | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
| Equity based compensation costs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Retirement of common stock, net | ( | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Changes in the redemption value and redemptions of redeemable noncontrolling interest | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in noncontrolling interest from acquisition | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Balances at March 31, 2026 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
4
| Common stock | Additional paid-in capital | Distributions in excess of accumulated earnings | Accumulated other comprehensive income, net | Noncontrolling Interest | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2024 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of derivatives and amortization of swap settlements | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of marketable debt securities, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock under: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock option and restricted stock plans, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Equity based compensation costs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in the redemption value of redeemable noncontrolling interest | — | — | ( | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Redemptions of noncontrolling interest | — | ( | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends ($ | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Balances at March 31, 2025 | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
5
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Straight-lined rents | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of discount and debt financing costs, net | |||||||||||
| Realized and unrealized gains on marketable securities, net | |||||||||||
| Provision for credit losses | ( | ||||||||||
| Equity income from co-investments | ( | ( | |||||||||
| Operating distributions from co-investments | |||||||||||
| Accrued interest from notes and other receivables | ( | ( | |||||||||
| Gain on the sale of real estate and land | ( | ||||||||||
| Equity-based compensation | |||||||||||
| Loss on early retirement of debt | |||||||||||
| Gain on remeasurement of co-investment | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Prepaid expenses, receivables, operating lease right-of-use assets and other assets | |||||||||||
| Accounts payable, accrued liabilities and operating lease liabilities | |||||||||||
| Other liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Additions to real estate: | |||||||||||
| Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired | ( | ( | |||||||||
| Redevelopment | ( | ( | |||||||||
| Development acquisitions of and additions to real estate under development | ( | ( | |||||||||
| Capital expenditures on rental properties | ( | ( | |||||||||
| Investments in notes receivable | ( | ||||||||||
| Collections of notes and other receivables | |||||||||||
| Proceeds from insurance for property losses | |||||||||||
| Proceeds from dispositions of real estate | |||||||||||
| Contributions to co-investments | ( | ( | |||||||||
| Changes in refundable deposits | ( | ||||||||||
| Purchases of marketable securities | ( | ( | |||||||||
| Sales and maturities of marketable securities | |||||||||||
| Non-operating distributions from co-investments | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from unsecured debt and mortgage notes | |||||||||||
| Payments on unsecured debt and mortgage notes | ( | ( | |||||||||
| Proceeds from lines of credit and commercial paper | |||||||||||
| Repayments of lines of credit and commercial paper | ( | ( | |||||||||
| Retirement of common stock | ( | ||||||||||
6
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Additions to deferred charges | ( | ( | |||||||||
| Payments related to debt prepayment penalties | ( | ||||||||||
| Net proceeds from stock options exercised | |||||||||||
| Payments related to tax withholding for share-based compensation | ( | ( | |||||||||
| Distributions to noncontrolling interest | ( | ( | |||||||||
| Redemption of noncontrolling interest | ( | ||||||||||
| Common stock dividends paid | ( | ( | |||||||||
| Net cash (used in) provided by financing activities | ( | ||||||||||
| Net (decrease) increase in unrestricted and restricted cash and cash equivalents | ( | ||||||||||
| Unrestricted and restricted cash and cash equivalents at beginning of period | |||||||||||
| Unrestricted and restricted cash and cash equivalents at end of period | $ | $ | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest (net of $ | $ | $ | |||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | $ | |||||||||
| Supplemental disclosure of noncash investing and financing activities: | |||||||||||
| Issuance of Operating Partnership units for contributed properties | $ | $ | |||||||||
| Redemption of preferred equity investments upon acquisition of consolidated co-investments | $ | $ | |||||||||
| Reclassifications to redeemable noncontrolling interest from additional paid in capital and noncontrolling interest | $ | $ | |||||||||
| Leased assets obtained in exchange for new operating lease liabilities | $ | $ | |||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
7
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except unit amounts)
| March 31, 2026 | December 31, 2025 | ||||||||||
| ASSETS | |||||||||||
| Real estate investments: | |||||||||||
| Rental properties: | |||||||||||
| Land and land improvements | $ | $ | |||||||||
| Buildings and improvements | |||||||||||
| Less: accumulated depreciation | ( | ( | |||||||||
| Real estate under development | |||||||||||
| Co-investments | |||||||||||
| Cash and cash equivalents-unrestricted | |||||||||||
| Cash and cash equivalents-restricted | |||||||||||
| Marketable securities | |||||||||||
Notes and other receivables, net of allowance for credit losses of $ | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Prepaid expenses and other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND CAPITAL | |||||||||||
| Unsecured debt, net | $ | $ | |||||||||
| Mortgage notes payable, net | |||||||||||
| Lines of credit and commercial paper | |||||||||||
| Accounts payable and accrued liabilities | |||||||||||
| Construction payable | |||||||||||
| Distributions payable | |||||||||||
| Distributions in excess of investments in co-investments | |||||||||||
| Operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies (Note 11) | |||||||||||
| Redeemable noncontrolling interest | |||||||||||
| Capital: | |||||||||||
| General Partner: | |||||||||||
Common equity ( | |||||||||||
| Limited Partners: | |||||||||||
Common equity ( | |||||||||||
| Accumulated other comprehensive income, net | |||||||||||
| Total partners’ capital | |||||||||||
| Noncontrolling interest | |||||||||||
| Total capital | |||||||||||
| Total liabilities and capital | $ | $ | |||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
8
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Income and Comprehensive Income
(Unaudited)
(In thousands, except unit and per unit amounts)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Rental and other property | $ | $ | |||||||||||||||||||||
| Management and other fees from affiliates | |||||||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Property operating, excluding real estate taxes | |||||||||||||||||||||||
| Real estate taxes | |||||||||||||||||||||||
| Corporate-level property management expenses | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Gain on sale of real estate and land | |||||||||||||||||||||||
| Earnings from operations | |||||||||||||||||||||||
| Interest expense | ( | ( | |||||||||||||||||||||
| Total return swap income | |||||||||||||||||||||||
| Interest and other income | |||||||||||||||||||||||
| Equity income from co-investments | |||||||||||||||||||||||
| Tax (expense) benefit on unconsolidated technology co-investments | ( | ||||||||||||||||||||||
| Loss on early retirement of debt | ( | ||||||||||||||||||||||
| Gain on remeasurement of co-investment | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Net income attributable to noncontrolling interest | ( | ( | |||||||||||||||||||||
| Net income available to common unitholders | $ | $ | |||||||||||||||||||||
| Comprehensive income | $ | $ | |||||||||||||||||||||
| Comprehensive income attributable to noncontrolling interest | ( | ( | |||||||||||||||||||||
| Comprehensive income attributable to controlling interest | $ | $ | |||||||||||||||||||||
| Per unit data: | |||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||
| Net income available to common unitholders | $ | $ | |||||||||||||||||||||
| Weighted average number of common units outstanding during the period | |||||||||||||||||||||||
| Diluted: | |||||||||||||||||||||||
| Net income available to common unitholders | $ | $ | |||||||||||||||||||||
| Weighted average number of common units outstanding during the period | |||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
9
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Capital for the three months ended March 31, 2026 and 2025
(Unaudited)
(In thousands, except per unit amounts)
| General Partner | Limited Partners | Accumulated other comprehensive income, net | Noncontrolling interest | Total | |||||||||||||||||||||||||||||||||||||||||||
| Common Equity | Common Equity | ||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2026 | Units | Amount | Units | Amount | |||||||||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Reversal of unrealized gains upon the sale of marketable debt securities, net | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Change in fair value of derivatives and amortization of swap settlements | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of marketable debt securities, net | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Issuance of common units under: | |||||||||||||||||||||||||||||||||||||||||||||||
| General partner’s stock based compensation, net | ( | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||
| Equity based compensation costs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Retirement of common units, net | ( | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Changes in the redemption value and redemptions of redeemable noncontrolling interest | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Changes in noncontrolling interest from acquisition | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Distributions declared ($ | — | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Balances at March 31, 2026 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
10
| General Partner | Limited Partners | Accumulated other comprehensive income, net | Noncontrolling interest | Total | |||||||||||||||||||||||||||||||||||||||||||
| Common Equity | Common Equity | ||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | Units | Amount | Units | Amount | |||||||||||||||||||||||||||||||||||||||||||
| Balances at December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of derivatives and amortization of swap settlements | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Change in fair value of marketable debt securities | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of common units under: | |||||||||||||||||||||||||||||||||||||||||||||||
| General partner's stock based compensation, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Equity based compensation costs | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Changes in the redemption value of redeemable noncontrolling interest | — | ( | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
| Redemptions | ( | ( | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Distributions declared ($ | — | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||
| Balances at March 31, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
11
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
| Straight-lined rents | |||||||||||
| Depreciation and amortization | |||||||||||
| Amortization of discount and debt financing costs, net | |||||||||||
| Realized and unrealized gains on marketable securities, net | |||||||||||
| Provision for credit losses | ( | ||||||||||
| Equity income from co-investments | ( | ( | |||||||||
| Operating distributions from co-investments | |||||||||||
| Accrued interest from notes and other receivables | ( | ( | |||||||||
| Gain on the sale of real estate and land | ( | ||||||||||
| Equity-based compensation | |||||||||||
| Loss on early retirement of debt | |||||||||||
| Gain on remeasurement of co-investment | ( | ||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Prepaid expenses, receivables, operating lease right-of-use assets and other assets | |||||||||||
| Accounts payable, accrued liabilities and operating lease liabilities | |||||||||||
| Other liabilities | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Additions to real estate: | |||||||||||
| Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired | ( | ( | |||||||||
| Redevelopment | ( | ( | |||||||||
| Development acquisitions of and additions to real estate under development | ( | ( | |||||||||
| Capital expenditures on rental properties | ( | ( | |||||||||
| Investments in notes receivable | ( | ||||||||||
| Collections of notes and other receivables | |||||||||||
| Proceeds from insurance for property losses | |||||||||||
| Proceeds from dispositions of real estate | |||||||||||
| Contributions to co-investments | ( | ( | |||||||||
| Changes in refundable deposits | ( | ||||||||||
| Purchases of marketable securities | ( | ( | |||||||||
| Sales and maturities of marketable securities | |||||||||||
| Non-operating distributions from co-investments | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from unsecured debt and mortgage notes | |||||||||||
| Payments on unsecured debt and mortgage notes | ( | ( | |||||||||
| Proceeds from lines of credit and commercial paper | |||||||||||
| Repayments of lines of credit and commercial paper | ( | ( | |||||||||
| Retirement of common units | ( | ||||||||||
| Additions to deferred charges | ( | ( | |||||||||
12
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Payments related to debt prepayment penalties | ( | ||||||||||
| Net proceeds from stock options exercised | |||||||||||
| Payments related to tax withholding for share-based compensation | ( | ( | |||||||||
| Distributions to noncontrolling interest | ( | ( | |||||||||
| Redemption of noncontrolling interests | ( | ||||||||||
| Common units distributions paid | ( | ( | |||||||||
| Net cash (used in) provided by financing activities | ( | ||||||||||
| Net (decrease) increase in unrestricted and restricted cash and cash equivalents | ( | ||||||||||
| Unrestricted and restricted cash and cash equivalents at beginning of period | |||||||||||
| Unrestricted and restricted cash and cash equivalents at end of period | $ | $ | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest (net of $ | $ | $ | |||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | $ | |||||||||
| Supplemental disclosure of noncash investing and financing activities: | |||||||||||
| Issuance of Operating Partnership units for contributed properties | $ | $ | |||||||||
| Redemption of preferred equity investments upon acquisition of co-investments | $ | $ | |||||||||
| Reclassifications to redeemable noncontrolling interest from general and limited partner capital and noncontrolling interest | $ | $ | |||||||||
| Leased assets obtained in exchange for new operating lease liabilities | $ | $ | |||||||||
See accompanying notes to the unaudited condensed consolidated financial statements.
13
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
(1) Organization and Basis of Presentation
The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. (“Essex” or the “Company”), which include the accounts of the Company and Essex Portfolio, L.P. and its subsidiaries (the “Operating Partnership,” which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included and are normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2025. Unless otherwise indicated, the notes to condensed consolidated financial statements apply to both the Company and the Operating Partnership.
All significant intercompany accounts and transactions have been eliminated in the unaudited condensed consolidated financial statements.
The unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 include the accounts of the Company and the Operating Partnership. Essex is the sole general partner of the Operating Partnership, with a 96.7 % and 96.6 % general partnership interest as of March 31, 2026 and December 31, 2025, respectively. Total Operating Partnership limited partnership units (“OP Units,” and the holders of such OP Units, “Unitholders”) outstanding were 2,184,025 and 2,250,339 as of March 31, 2026 and December 31, 2025, respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled approximately $528.5 million and $588.9 million as of March 31, 2026 and December 31, 2025, respectively. The Company has reserved shares of common stock for such conversions.
As of March 31, 2026, the Company owned or had ownership interests in 259 operating apartment home communities, comprising 63,099 apartment homes, excluding the Company’s ownership interests in preferred equity co-investments, loan investments, two operating commercial buildings, and a development pipeline comprised of one consolidated project and various predevelopment projects (collectively, the “Portfolio”). The operating apartment home communities are located in Southern California (primarily Los Angeles, Orange, San Diego, and Ventura counties), Northern California (the San Francisco Bay Area) and the Seattle metropolitan areas.
Recent Accounting Pronouncements
In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” ASU 2025-06 eliminates project stages and requires capitalizing software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. When evaluating if a project is probable to be completed, significant development uncertainty must be assessed. In addition, disclosures for property, plant and equipment will be required for all capitalized software costs. ASU 2025-06 will be effective for the Company beginning January 1, 2028 and early adoption is permitted. Upon adoption, the new standard may be applied prospectively, retrospectively or using a modified transition approach. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated results of operations and financial position.
In November 2024, the FASB issued ASU No. 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, and in January 2025, the FASB issued ASU No. 2025-01 “Income Statement —Reporting Comprehensive Income —Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date.” ASU 2024-03 requires disaggregated information for specified categories of expenses to be presented in the notes to the financial statements. ASU 2024-03, as clarified by ASU 2025-01, will be effective for the Company for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028. Early adoption is permitted. The new standards may be applied either prospectively, to financial statements issued after the effective date, or retrospectively, to all prior periods presented. The Company is currently evaluating the impact of these standards on its consolidated results of operations and financial position.
14
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
Accounting Pronouncements Adopted in the Current Year
In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” ASU 2025-05 provides for a practical expedient that allows an entity to assume that conditions as of the balance sheet date will remain unchanged over the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from revenue transactions from contracts with customers. ASU 2025-05 is effective for the Company beginning January 1, 2026, with early adoption permitted, and is required to be applied prospectively. The Company adopted ASU 2025-05 as of January 1, 2026. This adoption did not have a material impact on its consolidated results of operations or financial position.
Revenues and Gains on Sale of Real Estate and Land
Revenues from tenants renting or leasing apartment homes are recorded when due from tenants and are recognized monthly as they are earned, which generally approximates a straight-line basis, else, adjustments are made to conform to a straight-line basis. Apartment homes are rented under short-term leases (generally, lease terms of 9 to 12 months). Revenues from tenants leasing commercial space are recorded on a straight-line basis over the life of the respective lease. See Note 3, Revenues, for additional information regarding such revenues.
The Company also generates other property-related revenue associated with the leasing of apartment homes, including storage income, pet rent, and other miscellaneous revenue. Similar to rental income, such revenues are recorded when due from tenants and recognized monthly as they are earned.
Apart from rental and other property-related revenue, revenues from contracts with customers are recognized as control of the promised services is passed to the customer. For customer contracts related to management and other fees from affiliates (which includes asset management and property management), the transaction price and amount of revenue to be recognized are determined each quarter based on the management fee calculated and earned for that month or quarter. The contract will contain a description of the service and the fee percentage for management services. Payments from such services are one month or one quarter in arrears of the service performed.
The Company recognizes any gains on sales of real estate when it transfers control of a property and when it is probable that the Company will collect substantially all of the related consideration.
Marketable Securities
The Company reports its equity securities and available-for-sale debt securities at fair value, based on quoted market prices (Level 1 for the equity securities and Level 2 for the available for sale debt securities, as defined by the FASB standard for fair value measurements). As of both March 31, 2026 and December 31, 2025, less than $0.1
Any unrealized gain or loss in debt securities classified as available for sale is recorded as other comprehensive income. Any realized and unrealized gain or loss in equity securities, realized gain in debt securities, and interest income are included in interest and other income in the condensed consolidated statements of income and comprehensive income. There were no other-than-temporary impairment charges for the three months ended March 31, 2026 and 2025.
As of March 31, 2026 and December 31, 2025, equity securities and available for sale debt securities consisted primarily of investment funds-debt securities, common stock, preferred stock and stock funds, U.S. Treasury and agency securities, certificates of deposit, corporate debt securities and municipal debt securities.
15
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
As of March 31, 2026 and December 31, 2025, marketable securities consisted of the following ($ in thousands):
| March 31, 2026 | |||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gain (loss) | Carrying Value | |||||||||||||||||||||||||||
| Equity securities: | |||||||||||||||||||||||||||||
| Common stock, preferred stock and stock funds | $ | $ | $ | ||||||||||||||||||||||||||
| Available for sale debt securities: | |||||||||||||||||||||||||||||
| U.S. Treasury and agency securities | ( | ||||||||||||||||||||||||||||
| Certificates of deposit | |||||||||||||||||||||||||||||
| Corporate debt securities | ( | ||||||||||||||||||||||||||||
| Municipal debt securities | |||||||||||||||||||||||||||||
| Total - Marketable securities | $ | $ | $ | ||||||||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||||||||||
| Amortized Cost | Gross Unrealized Gain | Carrying Value | |||||||||||||||||||||||||||
| Equity securities: | |||||||||||||||||||||||||||||
| Investment funds - debt securities | $ | $ | $ | ||||||||||||||||||||||||||
| Common stock, preferred stock and stock funds | |||||||||||||||||||||||||||||
| Available for sale debt securities: | |||||||||||||||||||||||||||||
| U.S. Treasury and agency securities | |||||||||||||||||||||||||||||
| Certificates of deposit | |||||||||||||||||||||||||||||
| Corporate debt securities | |||||||||||||||||||||||||||||
| Municipal debt securities | |||||||||||||||||||||||||||||
| Total - Marketable securities | $ | $ | $ | ||||||||||||||||||||||||||
Variable Interest Entities
In accordance with accounting standards for consolidation of variable interest entities (“VIEs”), the Company consolidated the Operating Partnership, 18 ten four 979.6 million and $243.8 million, respectively, as of March 31, 2026 and $970.6 million and $242.5 million, respectively, as of December 31, 2025. Noncontrolling interests in these entities was $101.2
16
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
Equity-based Compensation
The cost of share- and unit-based compensation awards is measured at the grant date based on the estimated fair value of the awards. The estimated fair value of stock options and restricted stock granted by the Company are being amortized over the vesting period. The estimated grant date fair values of the long term incentive plan units (discussed in Note 14, Equity Based Compensation Plans, in the Company’s annual report on Form 10-K for the year ended December 31, 2025) are being amortized over the expected service periods.
Fair Value of Financial Instruments
Management estimates that the carrying amounts of the outstanding balances under its lines of credit, commercial paper and notes and other receivables approximate fair value as of March 31, 2026 and December 31, 2025, because interest rates, yields, and other terms for these instruments are consistent with interest rates, yields, and other terms currently available for similar instruments. Management has estimated that the fair value of the Company’s fixed rate debt with a carrying value of $5.9 5.7 billion and $5.8 billion, respectively. Management has estimated that the fair value of the Company’s $859.2 million and $854.4 million of variable rate debt at March 31, 2026 and December 31, 2025, respectively, was approximately $857.6 million and $853.2 million, respectively, based on the terms of existing mortgage notes payable, unsecured debt, and lines of credit compared to those available in the marketplace. Management estimates that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities and dividends payable approximate fair value as of March 31, 2026 and December 31, 2025 due to the short-term maturity of these instruments. Marketable securities are carried at fair value as of March 31, 2026 and December 31, 2025.
Capitalization of Costs
Co-investments
The Company owns investments in joint ventures in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with U.S. GAAP. Therefore, the Company accounts for co-investments using the equity method of accounting. Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company’s equity in earnings, less distributions received and the Company’s share of losses. The significant accounting policies of the Company’s co-investment entities are consistent with those of the Company in all material respects.
Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of the co-investment in the condensed consolidated statements of income and comprehensive income equal to the amount by which the fair value of the co-investment interest, using Level 2 inputs, exceeds the Company’s carrying value of the co-investment. A majority of the co-investments, excluding most preferred equity investments, compensate the Company for its asset management services and some of these investments may provide promote income if certain financial return benchmarks are achieved. Management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible. Any promote fees are reflected in equity income from co-investments.
The Company evaluates its co-investments for impairment and records a loss if the carrying value is greater than the fair value of the investment and the impairment is other-than-temporary.
17
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
Changes in Accumulated Other Comprehensive Income, Net by Component
Essex Property Trust, Inc.
($ in thousands):
| Change in fair value of derivatives and amortization of swap settlements | Unrealized gain (loss) on available for sale debt securities | Total | |||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ||||||||||||||
| Other comprehensive loss before reclassification | ( | ( | ( | ||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | ( | ||||||||||||||||
| Other comprehensive income (loss) | ( | ||||||||||||||||
| Balance at March 31, 2026 | $ | $ | ( | $ | |||||||||||||
Essex Portfolio, L.P.
($ in thousands):
| Change in fair value of derivatives and amortization of swap settlements | Unrealized gain (loss) on available for sale debt securities | Total | |||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ||||||||||||||
| Other comprehensive loss before reclassification | ( | ( | ( | ||||||||||||||
| Amounts reclassified from accumulated other comprehensive income | ( | ||||||||||||||||
| Other comprehensive income (loss) | ( | ||||||||||||||||
| Balance at March 31, 2026 | $ | $ | ( | $ | |||||||||||||
Amounts reclassified from accumulated other comprehensive income, net in connection with derivatives are recorded in interest expense in the condensed consolidated statements of income and comprehensive income. Realized gains and losses on available for sale debt securities are included in interest and other income on the condensed consolidated statements of income and comprehensive income.
Redeemable Noncontrolling Interest
The carrying value of redeemable noncontrolling interests in the accompanying condensed consolidated balance sheets was $25.8 million and $28.3 million as of March 31, 2026 and December 31, 2025, respectively. The limited partners may redeem their noncontrolling interests for cash in certain circumstances.
The changes in the redemption value of redeemable noncontrolling interests for the three months ended March 31, 2026 was as follows ($ in thousands):
| Balance at December 31, 2025 | $ | ||||
| Reclassification due to change in redemption value and other | |||||
| Redemptions | ( | ||||
| Balance at March 31, 2026 | $ | ||||
18
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
Cash, Cash Equivalents and Restricted Cash
Highly liquid investments generally with original maturities of three months or less when purchased are classified as cash equivalents. Restricted cash balances relate primarily to reserve requirements for capital replacement at certain communities in connection with the Company’s mortgage debt.
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands):
| March 31, 2026 | December 31, 2025 | March 31, 2025 | December 31, 2024 | ||||||||||||||||||||
| Cash and cash equivalents - unrestricted | $ | $ | $ | $ | |||||||||||||||||||
| Cash and cash equivalents - restricted | |||||||||||||||||||||||
| Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statements of cash flows | $ | $ | $ | $ | |||||||||||||||||||
Accounting Estimates
The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its Portfolio, its investments in and advances to joint ventures and affiliates, its notes receivable, and its qualification as a real estate investment trust (“REIT”). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions.
(2) Significant Transactions During the Three Months Ended March 31, 2026 and Subsequent Events
Significant Transactions
Notes Receivable
In February 2026, the Company funded a $59.5 million related party bridge loan to Wesco V, a co-investment, in connection with the payoff of a mortgage associated with one of Wesco V’s properties located in Northern California. The note receivable accrues interest at 5.00 % and is scheduled to mature in September 2026.
Common Stock
During the three months ended March 31, 2026, the Company repurchased and retired 205,740 shares of the Company's common stock through the Company's stock repurchase plan, totaling $50.2 million, including commissions, at an average price per share of $244.06 . As a result, as of March 31, 2026, the Company had $252.5 million of purchase authority remaining under the Company's $500.0 million stock repurchase plan.
Subsequent Events
In April 2026, the Company repaid $450.0 million of senior unsecured notes due on April 15, 2026, at maturity.
19
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
(3) Revenues
Disaggregated Revenue
The following table presents the Company’s revenues disaggregated by revenue source for the periods presented ($ in thousands):
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Rental income | $ | $ | |||||||||||||||||||||
| Other property | |||||||||||||||||||||||
| Management and other fees from affiliates | |||||||||||||||||||||||
| Total revenues | $ | $ | |||||||||||||||||||||
The following table presents the Company’s rental and other property revenues disaggregated by geographic operating segment for the periods presented ($ in thousands):
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Southern California | $ | $ | |||||||||||||||||||||
| Northern California | |||||||||||||||||||||||
| Seattle Metro | |||||||||||||||||||||||
Other real estate assets (1) | |||||||||||||||||||||||
| Total rental and other property revenues | $ | $ | |||||||||||||||||||||
(1) Other real estate assets consist of revenues generated from retail space, commercial properties, held for sale properties, disposition properties and straight-line rent adjustments for concessions. Executive management does not evaluate such operating performance geographically.
The following table presents the Company’s rental and other property revenues disaggregated by current property category status for the periods presented ($ in thousands):
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
Same-property (1) | $ | $ | |||||||||||||||||||||
Acquisitions (2) | |||||||||||||||||||||||
Non-residential/other, net (3) | |||||||||||||||||||||||
Straight-line rent concessions (4) | ( | ( | |||||||||||||||||||||
| Total rental and other property revenues | $ | $ | |||||||||||||||||||||
(1)Same-property includes properties that have comparable stabilized results as of January 1, 2025 and are consolidated by the Company for the three months ended March 31, 2026 and 2025. A community is considered to have reached stabilized operations once it achieves an initial occupancy of 90 %.
20
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
(2)Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2025.
(3)Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, student housing, properties undergoing significant construction activities that do not meet our redevelopment criteria, properties subject to upcoming ground lease expirations, two communities located in the California counties of Santa Barbara and Santa Cruz, which the Company does not consider its core markets, and properties without comparable operating results in the reported periods.
(4)Represents straight-line concessions for residential operating communities. Same-property revenues reflect concessions on a cash basis. Total rental and other property revenues reflect concessions on a straight-line basis in accordance with U.S. GAAP.
Deferred Revenues and Remaining Performance Obligations
When cash payments are received or due in advance of the Company’s performance of contracts with customers, deferred revenue is recorded. The total deferred revenue balance related to such contracts was $0.2 0.1 million, which was included in rental and other property revenue within the condensed consolidated statements of income and comprehensive income.
A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the revenue recognition accounting standard. As of March 31, 2026, the Company had $0.2 million of remaining performance obligations. The Company expects to recognize approximately 69 % of these remaining performance obligations in 2026 and the remaining 31 % through 2027.
(4) Co-investments
The Company has joint ventures which are accounted for under the equity method. The co-investments’ accounting policies are similar to the Company’s accounting policies. The co-investments typically own, operate, and develop apartment home communities. The Company also invests in five unconsolidated technology co-investments with an aggregate commitment of $86.0 92.5 million, and $74.7 million as of March 31, 2026 and December 31, 2025, respectively.
The carrying values of the Company’s co-investments as of March 31, 2026 and December 31, 2025 were as follows ($ in thousands, except in parenthetical):
Weighted Average Company Ownership Percentage (1) | March 31, 2026 | December 31, 2025 | |||||||||||||||
| Ownership interest in: | |||||||||||||||||
Wesco I, Wesco III, Wesco IV, Wesco V and Wesco VI (2) | $ | $ | |||||||||||||||
| BEX IV and 500 Folsom | |||||||||||||||||
Other (2) | |||||||||||||||||
| Total operating and other co-investments, net | |||||||||||||||||
Total preferred equity co-investments (3) (includes related party investments of $ | |||||||||||||||||
| Total co-investments, net | $ | $ | |||||||||||||||
21
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
(1)Weighted average company ownership percentages are as of March 31, 2026.
(2)As of March 31, 2026 and December 31, 2025, the Company’s investments in Wesco I, Wesco III, Wesco IV, and Expo were classified as a liability of $99.3 million and $98.8 million, respectively, due to distributions received in excess of the Company’s investment. The weighted average company ownership percentage excludes the Company’s investments in unconsolidated technology co-investments.
(3)Includes one preferred equity investment held with Wesco VII, LLC.
The combined summarized financial information of co-investments was as follows ($ in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
Combined balance sheets: (1) | |||||||||||
| Rental properties and real estate under development | $ | $ | |||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Debt | $ | $ | |||||||||
| Other liabilities | |||||||||||
| Equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
Combined statements of income: (1) | |||||||||||||||||||||||
| Property revenues | $ | $ | |||||||||||||||||||||
| Property operating expenses | ( | ( | |||||||||||||||||||||
| Net operating income | |||||||||||||||||||||||
| Interest expense | ( | ( | |||||||||||||||||||||
| General and administrative | ( | ( | |||||||||||||||||||||
| Depreciation and amortization | ( | ( | |||||||||||||||||||||
| Net loss | $ | ( | $ | ( | |||||||||||||||||||
Company’s share of net income (2) | $ | $ | |||||||||||||||||||||
(1)Includes preferred equity investments held by the Company and excludes investments in technology co-investments.
(2)Includes the Company’s share of equity income from joint ventures and preferred equity investments, gain on sales of co-investments, co-investment promote income, and income from early redemption of preferred equity investments. Includes related party income of $1.3 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively.
22
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
(5) Notes and Other Receivables
Notes and other receivables consisted of the following as of March 31, 2026 and December 31, 2025 ($ in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
Note receivable, secured, bearing interest at | $ | $ | |||||||||
Note receivable, secured, bearing interest at | |||||||||||
Related party note receivable, secured, bearing interest at | |||||||||||
Other receivables from affiliates (1) (2) | |||||||||||
Straight-line rent receivables (3) | |||||||||||
| Other receivables | |||||||||||
| Allowance for credit losses | ( | ( | |||||||||
| Total notes and other receivables | $ | $ | |||||||||
(1)See Note 6, Related Party Transactions, for additional details.
(2)These amounts consist of short-term loans outstanding and due from various joint ventures as of March 31, 2026 and December 31, 2025, respectively.
(3)These amounts are receivables from lease concessions recorded on a straight-line basis for the Company’s operating properties.
The following table presents the activity in the allowance for credit losses for notes receivable, secured, for the periods presented ($ in thousands):
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Mezzanine Loans | Bridge Loans | Total | Mezzanine Loans | Bridge Loans | Total | ||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Provision for credit losses | ( | ( | |||||||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
(6) Related Party Transactions
The Company charges certain fees relating to its co-investments for asset management, property management, development and redevelopment services. These fees from affiliates totaled $2.3 million and $2.5 million during the three months ended March 31, 2026 and 2025, respectively. All of these fees are net of intercompany amounts eliminated by the Company. The Company netted development and redevelopment fees of less than $0.1
The Company’s Chairman and founder, Mr. George M. Marcus, is the Chairman of the Marcus & Millichap Company (“MMC”), which is a parent company of a diversified group of real estate service, investment, and development firms. Mr. Marcus is also the Chairman of and owns a controlling interest in Marcus & Millichap, Inc. (“MMI”), a national brokerage firm listed on the New York Stock Exchange. For the three months ended March 31, 2026 and 2025, the Company did no
23
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
As described in Note 5, Notes and Other Receivables, the Company has provided short-term loans to affiliates. As of March 31, 2026 and December 31, 2025, $65.0 million and $5.2 million, respectively, of short-term loans remained outstanding due from joint venture affiliates, inclusive of the Wesco V bridge loan noted below, and are classified within notes and other receivables in the accompanying condensed consolidated balance sheets.
In February 2026, the Company funded a $59.5 million related party bridge loan to Wesco V, a co-investment, in connection with the payoff of a mortgage associated with one of Wesco V’s properties located in Northern California. The note receivable accrues interest at 5.00 % and is scheduled to mature in September 2026.
In August 2025, the Company funded an $81.2 million related party bridge loan to Wesco I in connection with the payoff of a mortgage related to one of Wesco I’s properties located in Southern California. The note receivable accrued interest at 5.50 % and was paid off at maturity in December 2025.
In August 2022, the Company funded an $11.2 million preferred equity investment in an entity whose sponsor includes an affiliate of MMC. The entity owns three multifamily communities located in Azusa, CA. The investment accrues interest based on a 9.5 % preferred return and is scheduled to mature in August 2027.
In October 2018, the Company funded an $18.6 million preferred equity investment in an entity whose sponsor is an affiliate of MMC. The entity wholly owns a 268 -unit apartment home community development located in Burlingame, CA. The investment initially accrued interest based on a 12.0 % preferred return which was reduced to 9.0 % upon completion and lease-up of the project. In April 2023, the investment’s maturity date was extended from April 2024 to May 2026 with the investment accruing interest based on an 11.0 % preferred return. In April 2023, the Company received cash of $11.2 million for the partial redemption of this preferred equity investment.
In May 2018, the Company made a commitment to fund a $26.5 million preferred equity investment in an entity whose sponsors include an affiliate of MMC. The entity wholly owns a 400 -unit apartment home community located in Ventura, CA. The investment accrued interest based on a 10.25 % initial preferred return. The investment was scheduled to mature in May 2023. In November 2021, the Company received cash of $18.3 million for the partial redemption of this preferred equity investment resulting in a remaining total commitment of $13.0 million, and the maturity was extended to December 2028. As of March 31, 2026, $11.0 million of this commitment was funded and the Company accrues interest based on a 9.0 % preferred return. The remaining unfunded commitment of $2.0 million expired in November 2024.
24
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
(7) Debt
Essex does not have indebtedness as debt is incurred by the Operating Partnership. Essex guarantees the Operating Partnership’s unsecured debt including the revolving credit facilities for the full term of the facilities.
Debt consisted of the following for the periods presented ($ in thousands):
| March 31, 2026 | December 31, 2025 | Weighted Average Maturity In Years as of March 31, 2026 | |||||||||||||||
Term loan - variable rate, net (1) | $ | $ | |||||||||||||||
| Bonds public offering - fixed rate, net | |||||||||||||||||
Unsecured debt, net (2) | |||||||||||||||||
Lines of credit (3) | |||||||||||||||||
Commercial paper (4) | |||||||||||||||||
Mortgage notes payable, net (5) | |||||||||||||||||
| Total debt, net | $ | $ | |||||||||||||||
| Weighted average interest rate on fixed rate unsecured bonds public offering | % | % | |||||||||||||||
| Weighted average interest rate on variable rate term loan | % | % | |||||||||||||||
| Weighted average interest rate on lines of credit | % | % | |||||||||||||||
| Weighted average interest rate on commercial paper | % | % | |||||||||||||||
| Weighted average interest rate on mortgage notes payable | % | % | |||||||||||||||
(1)The $300.0 million unsecured term loan entered in May 2025 is priced at SOFR plus 0.850 % which is based on a tiered rate structure tied to the Company’s long-term unsecured credit rating and is swapped to an all-in rate of 4.0 %. The Company may elect to increase this facility by up to an additional $300.0 million, to an aggregate size of $600.0 million, if the lenders permit. This term loan is scheduled to mature in May 2028, with two one-year extension options, exercisable at the option of the Company. The $300.0 million unsecured term loan entered in October 2022 is priced at SOFR plus 0.85 % with a maturity date of January 2031, inclusive of extension options exercisable at the Company’s option. The interest rate is swapped to an all-in fixed rate of 4.0 % through October 2026.
(2)Unsecured debt, net, consists of fixed rate public bond offerings and a variable rate term loan which includes unamortized discounts, net of premiums of $3.3 million and $3.6 million, and unamortized debt issuance costs of $29.1 million and $30.4 million, as of March 31, 2026 and December 31, 2025, respectively.
(3)Lines of credit, related to the Company’s two 1.58 7.0 million and $7.3 million, respectively. These debt issuance costs are included in prepaid expenses and other assets in the condensed consolidated balance sheets. As of March 31, 2026, the Company’s $1.5 billion credit facility had an interest rate at plus 0.775 %, which is based on a tiered rate structure tied to the Company’s long-term unsecured credit ratings. As of March 31, 2026, the Company’s $75.0 million working capital unsecured line of credit had an interest rate of SOFR plus 0.775 %, which is based on a tiered rate structure tied to the Company’s long-term unsecured credit ratings. In February 2026, the Company extended the scheduled maturity date from July 2026 to July 2028.
(4)The Company has a commercial paper program under which it can issue unsecured short-term notes, which are backstopped by, and reduce the borrowing capacity of, the Company’s $1.5 billion unsecured line of credit facility. The Company can issue up to $750.0 million of commercial paper for up to 397 days from the date of issue. The commercial paper balance excludes unamortized debt issuance of $0.4 million as of March 31, 2026 and December 31, 2025, respectively, and are included in prepaid expenses and other assets in the condensed consolidated balance sheets.
25
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
The aggregate scheduled principal payments of the Company’s outstanding debt, excluding lines of credit and commercial paper, as of March 31, 2026 were as follows ($ in thousands):
| 2026 | $ | ||||
| 2027 | |||||
| 2028 | |||||
| 2029 | |||||
| 2030 | |||||
| Thereafter | |||||
| Total | $ | ||||
(8) Segment Information
The Company’s segment disclosures present the measure used by the chief operating decision maker (“CODM”) for purposes of assessing each segment’s performance. The Company’s CODM is a group comprised of its Chief Executive Officer, Chief Financial Officer, Chief Administrative Officer, and Chief Investment Officer, who use net operating income (“NOI”) to assess the performance of the business for the Company’s reportable operating segments. NOI represents total property revenues less direct property operating expenses.
The CODM evaluates the Company’s operating performance geographically. The Company defines its reportable operating segments as the three
Excluded from segment revenues and NOI are management and other fees from affiliates and interest and other income. Other real estate assets revenues, property operating expenses, including real estate taxes, and NOI included in the following schedule consist of revenues generated from retail space, commercial properties, held for sale properties, disposition properties and straight-line adjustments for concessions. Executive management does not evaluate such operating performance geographically. Other non-segment assets include items such as real estate under development, co-investments, real estate held for sale, cash and cash equivalents, marketable securities, notes and other receivables, and prepaid expenses and other assets.
26
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
The revenues and NOI for each of the reportable operating segments are summarized as follows for the three months ended March 31, 2026 and 2025 ($ in thousands):
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
Rental and other property revenue | Property operating expenses, including real estate taxes | Net operating income | Rental and other property revenue | Property operating expenses, including real estate taxes | Net operating income | ||||||||||||||||||||||||||||||
| Southern California | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Northern California | |||||||||||||||||||||||||||||||||||
| Seattle Metro | |||||||||||||||||||||||||||||||||||
| Other real estate assets | |||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Total net operating income | |||||||||||||||||||||||||||||||||||
| Management and other fees from affiliates | |||||||||||||||||||||||||||||||||||
| Corporate-level property management expenses | ( | ( | |||||||||||||||||||||||||||||||||
| Depreciation and amortization | ( | ( | |||||||||||||||||||||||||||||||||
| General and administrative | ( | ( | |||||||||||||||||||||||||||||||||
| Gain on sale of real estate and land | |||||||||||||||||||||||||||||||||||
| Interest expense | ( | ( | |||||||||||||||||||||||||||||||||
| Total return swap income | |||||||||||||||||||||||||||||||||||
| Interest and other income | |||||||||||||||||||||||||||||||||||
| Equity income from co-investments | |||||||||||||||||||||||||||||||||||
| Tax (expense) benefit on unconsolidated technology co-investments | ( | ||||||||||||||||||||||||||||||||||
| Loss on early retirement of debt | ( | ||||||||||||||||||||||||||||||||||
| Gain on remeasurement of co-investment | |||||||||||||||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||||||||||||||
27
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2026 and December 31, 2025 ($ in thousands):
| March 31, 2026 | December 31, 2025 | ||||||||||
| Assets: | |||||||||||
| Southern California | $ | $ | |||||||||
| Northern California | |||||||||||
| Seattle Metro | |||||||||||
Other real estate assets (1) | |||||||||||
| Net reportable operating segments - real estate assets | |||||||||||
| Real estate under development | |||||||||||
| Co-investments | |||||||||||
| Cash and cash equivalents, including restricted cash | |||||||||||
| Marketable securities | |||||||||||
| Notes and other receivables | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Prepaid expenses and other assets | |||||||||||
| Total assets | $ | $ | |||||||||
(1)Includes retail space, commercial properties, held for sale properties and disposition properties.
(9) Net Income Per Common Share and Net Income Per Common Unit
Essex Property Trust, Inc.
Basic and diluted income per share was calculated as follows ($ in thousands, except per share amounts):
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Income | Weighted- average Common Shares | Per Common Share Amount | Income | Weighted- average Common Shares | Per Common Share Amount | ||||||||||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||||||||||||||
| Net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Effect of Dilutive Securities: | |||||||||||||||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||||||||||||||
| Diluted: | |||||||||||||||||||||||||||||||||||
| Net income available to common stockholders | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,226,996 and 2,306,953 , which include vested 2014 Long-Term Incentive Plan Units and 2015 Long-Term Incentive Plan Units, for the three months ended March 31, 2026 and 2025, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $3.7 million and $7.3 million for the three months ended March 31, 2026 and 2025, respectively.
28
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
Stock options of 321,707 and 177,196 for the three months ended March 31, 2026 and 2025, respectively were excluded from the calculation of diluted earnings per share because the assumed proceeds per share of such options plus the average unearned compensation were greater than the average market price of the common stock for the periods ended and, therefore, were anti-dilutive.
Essex Portfolio, L.P.
Basic and diluted income per unit was calculated as follows ($ in thousands, except per unit amounts):
| Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||||||||||||||
| Income | Weighted- average Common Units | Per Common Unit Amount | Income | Weighted- average Common Units | Per Common Unit Amount | ||||||||||||||||||||||||||||||
| Basic: | |||||||||||||||||||||||||||||||||||
| Net income available to common unitholders | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Effect of Dilutive Securities: | |||||||||||||||||||||||||||||||||||
| Stock options | |||||||||||||||||||||||||||||||||||
| Diluted: | |||||||||||||||||||||||||||||||||||
| Net income available to common unitholders | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
Stock options of 321,707 and 177,196 for the three months ended March 31, 2026 and 2025, respectively, were excluded from the calculation of diluted earnings per unit because the assumed proceeds per unit of these options plus the average unearned compensation were greater than the average market price of the common unit for the periods ended and, therefore, were anti-dilutive.
(10) Derivative Instruments and Hedging Activities
As of March 31, 2026, the Company had five interest rate swap contracts and one forward starting interest rate swap contract with an aggregate notional amount of $600.0 million. The Company has $500.0 million in notional amount that effectively fixed the interest rate on the Company’s $600.0 million unsecured term loan at 4.0 %. In December 2025, the Company entered into a $100.0 million forward starting interest rate swap which will be effective at a future date. These derivatives qualify for hedge accounting.
As of March 31, 2026 and December 31, 2025, the aggregate carrying value of the interest rate swap contracts was an asset of $2.5 million and $1.3 million, respectively, within prepaid expenses and other assets in the condensed consolidated balance sheets.
As of March 31, 2026 and December 31, 2025, the aggregate carrying value of the forward starting interest rate swap contract was $1.2 million and $0.7 million, respectively, within prepaid expenses and other assets in the condensed consolidated balance sheets.
(11) Commitments and Contingencies
The Company is subject to various lawsuits in the normal course of its business operations. Such lawsuits have not had a material adverse effect on the Company’s financial condition, results of operations or cash flows. While no assurances can be given, the Company does not believe there is any pending or threatened litigation against the Company that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Company.
29
ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
March 31, 2026 and 2025
(Unaudited)
A number of purported class actions were filed against RealPage, Inc., a seller of revenue management software, and various lessors of multifamily housing which utilize this software, including the Company. The complaints allege collusion among defendants to artificially increase rents of multifamily residential real estate above competitive levels. The Company is vigorously defending against these lawsuits. The Company is unable to predict the outcome or estimate the amount of loss, if any, that may result from such matters. The Company is also subject to various other legal and/or regulatory proceedings arising in the normal course of its business operations. The Company believes that, with respect to such matters that it is currently a party to, the ultimate disposition of any such matter will not result in a material adverse effect on the Company’s financial condition, results of operations or cash flows. To the extent that such a matter arises or is identified in the future and the Company believes it will have a material impact on the condensed consolidated financial statements, the Company will disclose the estimated range of possible outcomes associated with it, and, if an outcome is probable, accrue an appropriate liability for that matter. The Company will consider whether any such matter results in an impairment of value on the affected property and, if so, impairment will be recognized.
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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with the Company’s 2025 annual report on Form 10-K for the year ended December 31, 2025. Capitalized terms not defined in this section have the meaning ascribed to them elsewhere in this quarterly report on Form 10-Q. The Company makes statements in this section that are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this Form 10-Q entitled “Forward-Looking Statements.”
Essex is a self-administered and self-managed REIT that acquires, develops, redevelops, and manages apartment home communities in selected residential areas located on the West Coast of the United States. Essex owns all of its interests in its real estate investments, directly or indirectly through the Operating Partnership. Essex is the sole general partner of the Operating Partnership and, as of March 31, 2026, had an approximately 96.7% general partner interest in the Operating Partnership.
The Company’s investment strategy has two components: constant monitoring of existing markets, and evaluation of new markets to identify areas with the characteristics that underlie rental growth. The Company’s strong financial condition supports its investment strategy by enhancing its ability to quickly shift acquisition, development, redevelopment, and disposition activities to markets that will optimize the performance of the Company’s Portfolio.
As of March 31, 2026, the Company owned or had ownership interests in 259 operating apartment communities, comprising 63,099 apartment homes, excluding the Company’s ownership in preferred equity co-investments, loan investments, two operating commercial buildings, and a development pipeline comprised of one consolidated project and various predevelopment projects.
The Company’s apartment home communities are predominantly located in the following major regions:
Southern California (primarily Los Angeles, Orange, San Diego, and Ventura counties)
Northern California (the San Francisco Bay Area)
Seattle Metro (the Seattle metropolitan area)
The Company’s consolidated operating communities as of March 31, 2026 and 2025 were as follows:
| March 31, 2026 | March 31, 2025 | ||||||||||||||||||||||
| Apartment Homes | % | Apartment Homes | % | ||||||||||||||||||||
| Southern California | 23,616 | 42 | % | 23,572 | 43 | % | |||||||||||||||||
| Northern California | 21,101 | 38 | % | 20,607 | 37 | % | |||||||||||||||||
| Seattle Metro | 10,899 | 20 | % | 10,899 | 20 | % | |||||||||||||||||
| Total | 55,616 | 100 | % | 55,078 | 100 | % | |||||||||||||||||
Co-investments, including Wesco I, Wesco III, Wesco IV, Wesco V, Wesco VI, BEX IV and other co-investments, developments under construction, and preferred equity interest co-investment communities are not included in the table presented above for both periods.
Market Considerations
Domestic and international policy actions, including tariff and trade policy, as well as continuing geopolitical tensions, war and regional conflicts have the potential to trigger market uncertainty. The long-term impact of these developments on our Company will largely depend on the impact on broader trends in job growth, inflation, the economy, and reactions by consumers, companies, governmental entities and capital market participants.
The foregoing macroeconomic conditions have not negatively impacted the Company’s ability to access traditional funding sources which have been historically available to it. The Company is not at material risk of failing to meet the covenants in its credit agreements and is able to timely service its debt and other obligations.
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Comparison of the Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025
The average financial occupancy for the Company’s 2026 Same-Property portfolio (stabilized properties consolidated by the Company for the quarters ended March 31, 2026 and 2025) was 96.5% and 96.3% for the three months ended March 31, 2026 and 2025, respectively. Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income. Actual rental income represents contractual rental income pursuant to leases without considering delinquency and concessions. Total scheduled rental income represents the value of all apartment homes, with occupied apartment homes valued at contractual rental rates pursuant to leases and vacant apartment homes valued at estimated market rents. The Company believes that financial occupancy is a meaningful measure of occupancy because it considers the value of each vacant apartment home at its estimated market rate.
Market rates are determined using the recently signed effective rates on new leases at the property and are used as the starting point in the determination of the market rates of vacant apartment homes. The Company may increase or decrease these rates based on a variety of factors, including overall supply and demand for housing, concentration of new apartment deliveries within the same submarket which can cause periodic disruption due to greater rental concessions to increase leasing velocity, and rental affordability. Financial occupancy may not completely reflect short-term trends in physical occupancy and financial occupancy rates, and the Company’s calculation of financial occupancy may not be comparable to financial occupancy disclosed by other REITs.
The Company does not take into account delinquency and concessions to calculate actual rent for occupied apartment homes and market rents for vacant apartment homes. The calculation of financial occupancy compares contractual rates for occupied apartment homes to estimated market rents for unoccupied apartment homes, and thus the calculation compares the gross value of all apartment homes excluding delinquency and concessions. For apartment communities that are development properties in lease-up without stabilized occupancy figures, the Company believes the physical occupancy rate is the appropriate performance metric. While an apartment community is in the lease-up phase, the Company’s primary motivation is to stabilize the property, which may entail the use of rent concessions and other incentives, and thus financial occupancy, which is based on contractual income, is not considered the best metric to quantify occupancy.
The regional breakdown of the Company’s 2026 Same-Property portfolio for financial occupancy for the three months ended March 31, 2026 and 2025 was as follows:
| Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Southern California | 96.1 | % | 95.8 | % | |||||||
| Northern California | 96.9 | % | 96.7 | % | |||||||
| Seattle Metro | 96.6 | % | 96.2 | % | |||||||
The following table provides a breakdown of rental and other property revenues, including the revenues attributable to the 2026 Same-Property portfolio ($ in thousands):
| Number of Apartment Homes | Three Months Ended March 31, | Dollar Change | Percentage Change | |||||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||||||||
| 2026 Same-Property: | ||||||||||||||||||||||||||||||||
| Southern California | 22,389 | $ | 185,037 | $ | 181,034 | $ | 4,003 | 2.2 | % | |||||||||||||||||||||||
| Northern California | 18,847 | 178,514 | 171,761 | 6,753 | 3.9 | % | ||||||||||||||||||||||||||
| Seattle Metro | 10,899 | 79,021 | 77,214 | 1,807 | 2.3 | % | ||||||||||||||||||||||||||
| Total 2026 Same-Property | 52,135 | 442,572 | 430,009 | 12,563 | 2.9 | % | ||||||||||||||||||||||||||
| 2026 Non-Same Property | 39,871 | 32,080 | 7,791 | 24.3 | % | |||||||||||||||||||||||||||
| Total rental and other property revenues | $ | 482,443 | $ | 462,089 | $ | 20,354 | 4.4 | % | ||||||||||||||||||||||||
2026 Same-Property Revenues increased by $12.6 million or 2.9% to $442.6 million for the first quarter of 2026 from $430.0 million for the first quarter of 2025. The increase was primarily attributable to an increase of 2.2% in average rental rates from $2,660 per apartment home for the first quarter of 2025 to $2,719 per apartment home for the first quarter of 2026.
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2026 Non-Same Property Revenues increased by $7.8 million or 24.3% to $39.9 million in the first quarter of 2026 from $32.1 million in the first quarter of 2025. The increase was primarily due to the acquisitions of The Plaza, One Hundred Grand, ROEN Menlo Park, Revere Campbell, The Parc at Pruneyard, ViO, 1250 Lakeside, and the consolidation of Artizan and TENTEN Downtown in 2025. The increases were partially offset by the sale of Highridge, Essex Skyline, The Grand, and Fourth & U in 2025.
Property operating expenses, excluding real estate taxes increased by $3.1 million or 3.6% to $89.1 million for the first quarter of 2026 compared to $86.0 million for the first quarter of 2025, primarily due to acquisitions in 2025 identified in the Non-Same Property revenues section above and the increase of Same-Property operating expenses discussed below, partially offset by dispositions in 2025. Same-Property operating expenses, excluding real estate taxes, increased by $1.6 million or 2.0% to $82.3 million in the first quarter of 2026 compared to $80.7 million in the first quarter of 2025, primarily due to increases of $2.2 million in utilities expenses resulting from increases in trash removal, gas, water and sewer costs.
Real estate taxes decreased by $0.5 million or 1.0% to $52.1 million for the first quarter of 2026 compared to $52.6 million for the first quarter of 2025, primarily due to property tax refunds. Same-Property real estate taxes decreased by $1.3 million to $47.2 million for the first quarter of 2026 compared to $48.5 million for the first quarter of 2025 primarily due to property tax refunds.
Depreciation and amortization expense increased by $3.6 million or 2.4% to $154.9 million for the first quarter of 2026 compared to $151.3 million for the first quarter of 2025, primarily due to acquisitions in 2025 identified in the Non-Same Property revenues section above, partially offset by dispositions in 2025.
General and administrative expense increased by $3.7 million or 22.7% to $20.0 million for the first quarter of 2026 compared to $16.3 million for the first quarter of 2025, primarily due to increases of $1.5 million in political advocacy costs and $1.8 million in legal costs related to ongoing litigations.
Gain on sale of real estate and land of $111.0 million for the first quarter of 2025 was attributable to the disposition of Highridge. There were no sales of real estate or land during the first quarter of 2026.
Interest expense increased by $2.9 million or 4.6% to $65.6 million for the first quarter of 2026 compared to $62.7 million for the first quarter of 2025, primarily due to the issuance in February 2025 of $400.0 million senior unsecured notes due April 2035, the issuance in December 2025 of $350.0 million senior unsecured notes due February 2036, and borrowing on the new $300.0 million unsecured term loan in 2025 which resulted in an increase in interest expense of $9.8 million for the first quarter of 2026. These increases to interest expense were partially offset by various debt that was paid off, matured, or regular principal amortization during and after the first quarter of 2025, but primarily due to the payoff of $500.0 million of senior unsecured notes due April 1, 2025, which resulted in a decrease in interest expense of $6.3 million for the first quarter of 2026. Additionally, there was an increase in capitalized interest of $0.6 million in the first quarter of 2026, due to an increase in development activity as compared to the same period in 2025.
Equity income from co-investments increased by $10.4 million or 78.8% to $23.6 million for the first quarter of 2026 compared to $13.2 million for the first quarter of 2025, primarily due to an increase of $15.3 million in unrealized and realized gains from unconsolidated technology co-investments as a result of change in fair value of investments held by the co-investments. The increases were partially offset by a decrease of $6.2 million in income from preferred equity investments due to fewer outstanding investments at March 31, 2026 compared to the same period in 2025.
Loss on early retirement of debt of $0.8 million for the first quarter of 2025 was due to the payoff of debt in conjunction with the disposition of Highridge with no corresponding activity during the first quarter of 2026.
Gain on remeasurement of co-investment of $0.3 million for the first quarter of 2025 resulted from the Company’s consolidation of its investment in Artizan with no corresponding activity during the first quarter of 2026.
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Liquidity and Capital Resources
As of March 31, 2026, the Company had $38.0 million of unrestricted cash and cash equivalents and $96.5 million in marketable securities, all of which were equity securities or available for sale debt securities. The Company believes that cash flows generated by its operations, existing cash and cash equivalents, marketable securities balances and availability under existing lines of credit are sufficient to meet all of its anticipated cash needs during the next twelve months. Additionally, the capital markets continue to be available and the Company is able to generate cash from the disposition of real estate assets to finance additional cash flow needs, including continued development and select acquisitions. In the event that economic disruptions occur, the Company may further utilize other resources such as its cash reserves, lines of credit, commercial paper or decreased investment in redevelopment activities to supplement operating cash flows. The timing, source and amounts of cash flows provided by or used in financing activities and investing activities are sensitive to changes in interest rates and other fluctuations in the capital markets environment, which can affect the Company’s plans for acquisitions, dispositions, development and redevelopment activities.
As of March 31, 2026, Moody’s Investor Service, and Standard and Poor’s credit agencies rated Essex Property Trust, Inc. and Essex Portfolio, L.P. Baa1/Stable, and BBB+/Stable, respectively.
As of March 31, 2026, the Company had two unsecured lines of credit aggregating $1.58 billion, including a $1.5 billion unsecured line of credit and a $75.0 million working capital unsecured line of credit. As of March 31, 2026, there was no amount outstanding on the Company’s $1.5 billion unsecured line of credit. The underlying interest rate is based on a tiered rate structure tied to the Company’s long-term unsecured credit ratings and was at Secured Overnight Financing Rate (“SOFR”) plus 0.775% as of March 31, 2026. This facility is scheduled to mature in January 2030, with two six-month extensions, exercisable at the Company’s option. The Company may elect to increase the facility by up to an additional $1.0 billion, to an aggregate size of $2.5 billion, if the lenders permit. As of March 31, 2026, there was $4.7 million outstanding on the Company’s $75.0 million working capital unsecured line of credit. The underlying interest rate on the $75.0 million line is based on a tiered rate structure tied to the Company’s long-term unsecured credit ratings and was at SOFR plus 0.775% as of March 31, 2026. In February 2026, the Company extended the scheduled maturity to July 2028.
As of March 31, 2026, the Company had an unsecured commercial paper program (the “Commercial Paper Program”) to issue unsecured commercial paper notes with varying maturities up to 397 days from the date of issue (the “Notes”). As of March 31, 2026, there were no Notes outstanding under the Commercial Paper Program. Amounts available under the Commercial Paper Program may be borrowed, repaid and re-borrowed from time to time, with the maximum aggregate face or principal amount outstanding at any one time not exceeding $750.0 million. The Company’s $1.5 billion unsecured line of credit facility serves as a liquidity backstop and any issuances under the Commercial Paper Program reduce the available borrowing capacity. The Notes rank equally in right of payment with all other senior unsecured senior obligations of the Operating Partnership and are unconditionally guaranteed by the Company. The Company has used and expects to continue to use the proceeds from the Notes for general corporate purposes and working capital purposes.
In August 2024, the Company entered into an equity distribution agreement pursuant to which the Company may offer and sell shares of its common stock having an aggregate gross sales price of up to $900.0 million (the “2024 ATM Program”). In connection with the 2024 ATM Program, the Company may also enter into related forward sale agreements whereby, at the Company’s discretion, it may sell shares of its common stock under the 2024 ATM Program under forward sale agreements. The use of a forward sale agreement would allow the Company to lock in a share price on the sale of shares of its common stock at the time the agreement is executed, but defer receipt of the proceeds from the sale of shares until a later date. Furthermore, it would permit the Company, at its election, to settle the agreements by issuing common stock in exchange for net proceeds at the then-applicable forward sale price specified by the agreement or, alternatively, to settle the agreements in whole or in part through the delivery or receipt of common stock or cash. Issuances of shares under these forward sale agreements are classified as equity transactions. Accordingly, no amounts relating to the forward sale agreements are recorded in the condensed consolidated financial statements until settlement occurs. Prior to any settlements, the only impact to the condensed consolidated financial statements is the inclusion of incremental shares, if any, within the calculation of diluted earnings per share and diluted earnings per unit using the treasury stock method. The actual forward price per share to be received by the Company upon settlement will be determined on the applicable settlement date based on adjustments made to the initial forward price to reflect the then-current overnight federal funds rate and the amount of dividends paid to holders of the Company’s common stock over the term of the forward sale agreement.
During the three months ended March 31, 2026, the Company did not issue any shares of its common stock through the 2024 ATM Program.
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During the three months ended March 31, 2025, the Company entered into forward sale agreements with certain financial institutions acting as forward purchasers under the 2024 ATM program with respect to 52,600 shares of common stock at an initial gross weighted average forward price of $314.06 per share, which is to be settled by September 2026.
As of March 31, 2026, $900.0 million of shares of common stock remained available to be sold under the 2024 ATM Program, pending the settlement of outstanding forward sale agreements.
In September 2022, the Company announced that its Board of Directors approved a stock repurchase plan, without an expiration date, to allow the Company to acquire shares of common stock up to an aggregate value of $500.0 million. During the three months ended March 31, 2026, the Company repurchased and retired 205,740 shares totaling $50.2 million, including commissions, at an average price per share of $244.06. As of March 31, 2026, the Company had $252.5 million of purchase authority remaining under the stock repurchase plan.
Essex pays quarterly dividends from cash available for distribution. Until it is distributed, cash available for distribution is invested by the Company primarily in investment grade securities held available for sale or is used by the Company to reduce balances outstanding under its lines of credit or commercial paper.
Development Pipeline
The Company defines development projects as new communities that are being constructed, or are newly constructed and are in a phase of lease-up and have not yet reached stabilized operations. The Company defines predevelopment projects as proposed communities in negotiation or in the entitlement process with an expected high likelihood of becoming entitled development projects. The Company may also acquire land for future development purposes.
As of March 31, 2026, the Company’s development pipeline was comprised of one consolidated development project of 543 apartment homes and various predevelopment projects, with total incurred costs of $159.5 million, and estimated remaining project costs of approximately $182.4 million, for total estimated project costs of $341.9 million.
The Company expects to fund the development and predevelopment communities by using a combination of some or all of the following sources: its working capital, amounts available on its lines of credit, commercial paper, construction loans, net proceeds from public and private equity and debt issuances, and proceeds from the disposition of assets, if any.
Derivative Activity
The Company uses interest rate swaps, interest rate caps, and total return swap contracts to manage certain interest rate risks. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps and total return swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.
Alternative Capital Sources
The Company utilizes co-investments as an alternative source of capital for acquisitions of both operating and development communities. The Company had an interest in 7,483 apartment homes in operating communities with joint ventures and technology co-investments for a total book value of $317.9 million as of March 31, 2026.
Off-Balance Sheet Arrangements
The Company has various unconsolidated interests in certain joint ventures. The Company does not believe that these unconsolidated investments have a materially different impact on its liquidity, cash flows, capital resources, credit or market risk than its consolidated operations. See Note 4, Co-investments, in the Notes to Condensed Consolidated Financial Statements, for carrying values and combined summarized financial information of these unconsolidated investments.
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Critical Accounting Estimates
The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. The Company defines critical accounting estimates as those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the Company. The Company’s critical accounting estimates relate principally to the following key areas: (i) accounting for the acquisition of investments in real estate; and (ii) evaluation of events and changes in circumstances indicating that the carrying value of any of the Company’s rental properties may not be recoverable.
The Company’s critical accounting policies and estimates have not changed materially from the information reported in Note 2, Summary of Critical and Significant Accounting Policies, in the Company’s annual report on Form 10-K for the year ended December 31, 2025.
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Forward-Looking Statements
Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this quarterly report on Form 10-Q which are not historical facts may be considered 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, 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 expected operating performance and results (including projected Same-Property revenues and expenses), qualification as a REIT under the Internal Revenue Code of 1986, as amended, property stabilizations, property acquisition and disposition activity, joint venture and co-investment activity, development and redevelopment activity and other capital expenditures, capital raising and financing activity, revenue and expense growth, financial occupancy, interest rate and other economic expectations, including estimated remaining and total project costs related to the Company’s development pipeline and projected new housing supply.
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: occupancy rates and rental demand may be adversely affected by competition and local economic and market conditions; there may be increased interest rates, inflation, escalated operating costs and possible recessionary impacts, including from tariffs imposed by the current presidential administration and the threat of such tariffs; geopolitical tensions and regional conflicts, and the related impacts on macroeconomic conditions, including, among other things, interest rates and inflation; the terms of any refinancing may not be as favorable as the terms of existing indebtedness; the Company’s inability to maintain its investment grade credit rating with the rating agencies; the Company may be unsuccessful in the management of its relationships with its co-investment partners; the Company may fail to achieve its business objectives; time of actual completion and/or stabilization of development and redevelopment projects, including potential delays due to supply shortages related to tariffs and/or labor shortages related to deportations or threat of deportations; estimates of future income from an acquired property may prove to be inaccurate; future cash flows may be inadequate to meet operating requirements and/or may be insufficient to provide for dividend payments in accordance with REIT requirements; changes in laws or regulations and the anticipated or actual impact of future changes in laws or regulations, including eviction moratoria; unexpected difficulties in leasing of future development projects; volatility in financial and securities markets; the Company’s failure to successfully operate acquired properties; unforeseen consequences from cyber-intrusion; government approvals, actions and initiatives, including the need for compliance with environmental requirements; and those further risks, special considerations, and other factors referred to in this quarterly report on Form 10-Q, in the Company’s annual report on Form 10-K for the year ended December 31, 2025, and those risk factors and special considerations set forth in the Company’s other filings with the SEC which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements are made as of the date hereof, the Company assumes no obligation to update or supplement this information for any reason, and therefore, they may not represent the Company’s estimates and assumptions after the date of this report.
Funds from Operations Attributable to Common Stockholders and Unitholders
Funds from Operations Attributable to Common Stockholders and Unitholders (“FFO”) is a financial measure that is commonly used in the REIT industry. The Company presents FFO and FFO excluding non-core items (referred to as “Core FFO”) as supplemental operating performance measures. FFO and Core FFO are not used by the Company as, nor should they be considered to be, alternatives to net income computed under U.S. GAAP as an indicator of the Company’s operating performance or as alternatives to cash from operating activities computed under U.S. GAAP as an indicator of the Company’s ability to fund its cash needs.
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FFO and Core FFO are not meant to represent a comprehensive system of financial reporting and do not present, nor do they intend to present, a complete picture of the Company’s financial condition and operating performance. The Company believes that net income computed under U.S. GAAP is the primary measure of performance and that FFO and Core FFO are only meaningful when they are used in conjunction with net income.
The Company considers FFO and Core FFO to be useful financial performance measurements of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and to pay dividends. By excluding gains or losses related to sales of depreciated operating properties and land, excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates) and excluding impairment write-downs from operating real estate and unconsolidated co-investments driven by a measurable decrease in the fair value of real estate held by the co-investment, 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. The Company believes that its condensed consolidated financial statements, prepared in accordance with U.S. GAAP, provide the most meaningful picture of its financial condition and its operating performance.
In calculating FFO, the Company follows the definition for this measure published by NAREIT, which is the leading REIT industry association. The Company believes that, under the NAREIT FFO definition, the two most significant adjustments made to net income are (i) the exclusion of historical cost depreciation and (ii) the exclusion of gains and losses from the sale of previously depreciated properties. The Company agrees that these two NAREIT adjustments are useful to investors for the following reasons:
(a)Historical cost accounting for real estate assets in accordance with U.S. GAAP assumes, through depreciation charges, that the value of real estate assets diminishes predictably over time. NAREIT stated in its White Paper on Funds from Operations “since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves.” Consequently, NAREIT’s definition of FFO reflects the fact that real estate, as an asset class, generally appreciates over time and depreciation charges required by U.S. GAAP do not reflect the underlying economic realities.
(b)REITs were created as a legal form of organization in order to encourage public ownership of real estate as an asset class through investment in firms that were in the business of long-term ownership and management of real estate. The exclusion, in NAREIT’s definition of FFO, of gains and losses from the sales of previously depreciated operating real estate assets allows investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT’s activity and assists in comparing those operating results between periods.
Management believes that it 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 disclosure of FFO may not be comparable to the Company’s calculation.
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The table below is a reconciliation of net income available to common stockholders to FFO and Core FFO for the periods presented ($ in thousands, except per share amounts):
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net income available to common stockholders | $ | 106,186 | $ | 203,110 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Depreciation and amortization | 154,895 | 151,287 | |||||||||||||||||||||
| Gains not included in FFO | — | (111,360) | |||||||||||||||||||||
| Depreciation and amortization from unconsolidated co-investments | 13,316 | 14,378 | |||||||||||||||||||||
| Noncontrolling interest related to Operating Partnership units | 3,669 | 7,279 | |||||||||||||||||||||
| Depreciation attributable to third party ownership and other | (38) | (46) | |||||||||||||||||||||
| Funds from operations attributable to common stockholders and unitholders | $ | 278,028 | $ | 264,648 | |||||||||||||||||||
| FFO per share-diluted | $ | 4.17 | $ | 3.97 | |||||||||||||||||||
| Non-core items: | |||||||||||||||||||||||
| Tax expense (benefit) on unconsolidated technology co-investments | 3,614 | (163) | |||||||||||||||||||||
| Realized and unrealized losses on marketable securities, net | 1,726 | 91 | |||||||||||||||||||||
| Provision for credit losses | 34 | (3) | |||||||||||||||||||||
| Equity income from unconsolidated technology co-investments | (17,036) | (1,716) | |||||||||||||||||||||
| Loss on early retirement of debt | — | 762 | |||||||||||||||||||||
General and administrative and other, net (1) | 4,546 | 1,276 | |||||||||||||||||||||
| Insurance reimbursements, legal settlements, and other, net | (51) | (361) | |||||||||||||||||||||
| Core funds from operations attributable to common stockholders and unitholders | $ | 270,861 | $ | 264,534 | |||||||||||||||||||
| Core FFO per share-diluted | $ | 4.06 | $ | 3.97 | |||||||||||||||||||
Weighted average number of shares outstanding, diluted (2) | 66,688,617 | 66,656,852 | |||||||||||||||||||||
(1)Includes political advocacy costs of $1.6 million and $0.1 million for the three months ended March 31, 2026 and 2025, respectively.
(2)Assumes conversion of all outstanding limited partnership units in the Operating Partnership into shares of the Company’s common stock and excludes DownREIT limited partnership units.
Net Operating Income
Net operating income (“NOI”) and Same-Property NOI are considered by management to be important supplemental performance measures to earnings from operations included in the Company’s condensed consolidated statements of income and comprehensive income. The presentation of Same-Property NOI assists with the presentation of the Company’s operations prior to the allocation of depreciation and any corporate-level or financing-related costs. NOI reflects the operating performance of a community and allows for an easy comparison of the operating performance of individual communities or groups of communities. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impacts to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets. The Company defines Same-Property NOI as Same-Property revenues less Same-Property operating expenses, including property taxes. Please see the reconciliation of earnings from operations to NOI and Same-Property NOI, which in the table below is the NOI for stabilized properties consolidated by the Company for the periods presented ($ in thousands):
39
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Earnings from operations | $ | 155,193 | $ | 257,081 | |||||||||||||||||||
| Adjustments: | |||||||||||||||||||||||
| Corporate-level property management expenses | 13,398 | 12,332 | |||||||||||||||||||||
| Depreciation and amortization | 154,895 | 151,287 | |||||||||||||||||||||
| Management and other fees from affiliates | (2,313) | (2,494) | |||||||||||||||||||||
| General and administrative | 20,014 | 16,292 | |||||||||||||||||||||
| Gain on sale of real estate and land | — | (111,030) | |||||||||||||||||||||
| NOI | 341,187 | 323,468 | |||||||||||||||||||||
| Less: Non-Same Property NOI | (28,118) | (22,700) | |||||||||||||||||||||
| Same-Property NOI | $ | 313,069 | $ | 300,768 | |||||||||||||||||||
Item 3: Quantitative and Qualitative Disclosures About Market Risks
Interest Rate Hedging Activities
The Company’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements or other identified risks. To accomplish this objective, the Company uses interest rate swaps as part of its cash flow hedging strategy. As of March 31, 2026, the Company had five interest rate swap contracts and one forward starting interest rate swap contracts to mitigate the risk of changes in the interest-related cash outflows on the Company’s $600.0 million unsecured term loan. The Company’s interest rate swap was designated as a cash flow hedge as of March 31, 2026. The following table summarizes the notional amount, carrying value, and estimated fair value of the Company’s cash flow hedge derivative instruments used to hedge interest rates as of March 31, 2026. The notional amount represents the aggregate amount of a particular security that is currently hedged at one time, but does not represent exposure to credit, interest rates or market risks. The table also includes a sensitivity analysis to demonstrate the impact on the Company’s derivative instruments from an increase or decrease in 10-year Treasury bill interest rates by 50 basis points, as of March 31, 2026 ($ in thousands):
| Notional Amount | Maturity Date | Carrying and Estimated Fair Value | Estimated Carrying Value | ||||||||||||||||||||||||||
| +50 | -50 | ||||||||||||||||||||||||||||
| Basis Points | Basis Points | ||||||||||||||||||||||||||||
| Cash flow hedges: | |||||||||||||||||||||||||||||
| Interest rate swaps | $ | 500,000 | 2026-2030 | $ | 2,495 | $ | 6,837 | $ | (1,925) | ||||||||||||||||||||
| Forward starting interest rate swap | 100,000 | 2030 | 1,241 | 3,082 | (619) | ||||||||||||||||||||||||
| Total cash flow hedges | $ | 600,000 | 2026-2030 | $ | 3,736 | $ | 9,919 | $ | (2,544) | ||||||||||||||||||||
Additionally, the Company has entered into total return swap contracts, with an aggregate notional amount of $258.5 million that effectively convert $258.5 million of fixed mortgage notes payable to a floating interest rate based on the Securities Industry and Financial Markets Association Municipal Swap Index plus a spread and had a carrying value of zero as of March 31, 2026. The Company is exposed to insignificant interest rate risk on these total return swaps as the related mortgages are callable, at par, by the Company, co-terminus with the termination of any related swap. These derivatives do not qualify for hedge accounting.
Interest Rate Sensitive Liabilities
The Company is exposed to interest rate changes primarily as a result of its lines of credit, commercial paper, and long-term debt used to maintain liquidity and fund capital expenditures and expansion of the Company’s Portfolio and operations. The Company’s interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. To achieve its objectives, the Company borrows primarily at fixed rates and may enter into derivative financial instruments such as interest rate swaps, caps and treasury locks in order to mitigate its interest rate risk on a related financial instrument. The Company does not enter into derivative or interest rate transactions for speculative purposes.
The Company’s interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts and weighted average interest rates by year of expected maturity to evaluate the expected cash flows ($ in thousands):
40
| Year Ended December 31, | |||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2027 | 2028 | 2029 | 2030 | Thereafter | Total | Fair value | ||||||||||||||||||||||||||||||||||||||||
| Fixed rate debt | $ | 548,292 | 350,000 | 517,000 | 500,000 | 615,000 | 3,448,000 | $ | 5,978,292 | $ | 5,705,573 | ||||||||||||||||||||||||||||||||||||
| Average interest rate | 3.5 | % | 3.8 | % | 2.2 | % | 4.1 | % | 3.4 | % | 4.0 | % | 3.7 | % | |||||||||||||||||||||||||||||||||
Variable rate debt (1) | $ | 844 | 84,397 | 5,992 | 1,456 | 301,592 | 468,889 | $ | 863,170 | $ | 857,562 | ||||||||||||||||||||||||||||||||||||
| Average interest rate | 2.9 | % | 2.8 | % | 4.2 | % | 2.9 | % | 3.9 | % | 3.6 | % | 3.7 | % | |||||||||||||||||||||||||||||||||
(1)$258.5 million of variable rate debt is tax exempt to the note holders.
The table incorporates only those exposures that exist as of March 31, 2026. It does not consider those exposures or positions that could arise after that date. As a result, the Company’s ultimate realized gain or loss, with respect to interest rate fluctuations and hedging strategies would depend on the exposures that arise prior to settlement.
Item 4: Controls and Procedures
Essex Property Trust, Inc.
As of March 31, 2026, Essex carried out an evaluation, under the supervision and with the participation of management, including Essex’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Essex’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, Essex’s Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2026, Essex’s disclosure controls and procedures were effective at a reasonable assurance level to ensure that the information required to be disclosed by Essex in the reports that Essex files or submits under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such disclosure controls and procedures were also effective to ensure that information required to be disclosed in the reports that Essex files or submits under the Exchange Act is accumulated and communicated to Essex’s management, including Essex’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
There were no changes in Essex’s internal control over financial reporting, that occurred during the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, Essex’s internal control over financial reporting.
Limitations on Effectiveness of Controls
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, Essex’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Essex Portfolio, L.P.
As of March 31, 2026, the Operating Partnership carried out an evaluation, under the supervision and with the participation of management, including Essex’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Operating Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2026, the Operating Partnership’s disclosure controls and procedures were effective at a reasonable assurance level to ensure that the information required to be disclosed by the Operating Partnership in the reports that the Operating Partnership files or submits under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such disclosure controls and procedures were also effective to ensure that information required to be disclosed in the reports that the Operating Partnership files or submits under the Exchange Act is accumulated and communicated to the Operating Partnership’s management, including Essex’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.
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There were no changes in the Operating Partnership’s internal control over financial reporting, that occurred during the quarter ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.
Limitations on Effectiveness of Controls
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, the Operating Partnership’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Part II -- Other Information
Item 1: Legal Proceedings
The information regarding lawsuits, other proceedings and claims, set forth in Note 11, Commitments and Contingencies, in the Notes to Condensed Consolidated Financial Statements, is incorporated by reference into this Item 1. In addition to such matters referred to in Note 11, the Company is subject to various other legal and/or regulatory proceedings arising in the normal course of its business operations. We believe that, with respect to such matters that we are currently a party to, the ultimate disposition of any such matter will not result in a material adverse effect on the Company’s financial condition, results of operations or cash flows, nor is any legal proceeding currently threatened against the Company that the Company believes, individually or in the aggregate, would have a material adverse effect on the Company’s financial condition, results of operations or cash flows.
Item 1A: Risk Factors
In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the factors discussed in “Part I. Item 1A. Risk Factors” in the Company’s annual report on Form 10-K for the year ended December 31, 2025, which could materially affect the Company’s financial condition, results of operations or cash flows. There have been no material changes to the Risk Factors disclosed in Item 1A of the Company’s annual report on Form 10-K for the year ended December 31, 2025, as filed with the SEC and available at www.sec.gov. The risks described in the Company’s annual report on Form 10-K and subsequent quarterly reports on Form 10-Q are not the only risks facing the Company. Additional risks and uncertainties not currently known or that the Company currently deems to be immaterial may also materially adversely affect the Company’s financial condition, results of operations or cash flows.
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities; Essex Portfolio, L.P.
During the three months ended March 31, 2026, the Operating Partnership issued OP Units in private placements in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, in the amounts and for the consideration set forth below:
During the three months ended March 31, 2026, Essex issued an aggregate of 73,127 shares of its common stock upon the exercise of stock options, the vesting of restricted stock awards, and the exchange of OP units by limited partners or members into shares of common stock. Essex contributed the net proceeds of $0.6 million from the option exercises during the three months ended March 31, 2026 to the Operating Partnership in exchange for an aggregate of 2,609 OP Units, as required by the Operating Partnership’s partnership agreement. Furthermore, for each share of common stock issued by Essex in connection with vesting of restricted stock awards and the exchange of OP Units, the Operating Partnership issued OP Units to Essex, as required by the partnership agreement. During the three months ended March 31, 2026, 70,518 OP Units were issued to Essex pursuant to this mechanism.
42
Stock Repurchases
The following table summarizes the Company's purchases of its common stock during the three months ended March 31, 2026:
| Total Number of Shares Purchased | Average Price Paid Per Share (1) | Total Number of Shares Purchased as Part of a Publicly Announced Program (2) | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (in millions) (2) | |||||||||||||||||||||||
| March 1, 2026 - March 31, 2026 | 205,740 | $ | 244.06 | 205,740 | $ | 252.5 | ||||||||||||||||||||
| Total | 205,740 | $ | 244.06 | 205,740 | $ | 252.5 | ||||||||||||||||||||
(1)Includes commissions for the shares repurchased under the stock repurchase plan.
(2)In September 2022, the Board of Directors approved a new stock repurchase plan to allow the Company to acquire shares of common stock up to an aggregate of $500.0 million. The plan supersedes the Company's previous common stock repurchase plan announced in December 2015.
Item 3: Defaults Upon Senior Securities
None.
Item 4: Mine Safety Disclosures
Not applicable.
Item 5: Other Information
Securities Trading Plans of Directors and Executive Officers
Except as described below, during the three months ended March 31, 2026, none of our officers or directors adopted , modified or terminated
On February 24, 2026 , Rylan Burns , Executive Vice President, Chief Investment Officer , modified a previously adopted “Rule 10b5-1 trading arrangement ”, as such item is defined in Item 408(a) of Regulation S-K, to extend its duration. The plan, which had an initial adoption date of May 22, 2025, provides for the potential exercise of stock options and associated sale of up to 1,289 shares of common stock and will expire on December 31, 2027 , subject to early termination for certain specified events as set forth in the plan.
43
Item 6: Exhibits
| A. Exhibits | |||||
10.1* | |||||
31.1* | |||||
31.2* | |||||
31.3* | |||||
31.4* | |||||
32.1* | |||||
32.2* | |||||
32.3* | |||||
32.4* | |||||
| 101.INS | XBRL Instance Document - the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | ||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||||
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | ||||
* Filed or furnished herewith.
** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
# Management contract or compensatory plan or arrangement.
44
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.
| ESSEX PROPERTY TRUST, INC. | |||||
| (Registrant) | |||||
| Date: April 29, 2026 | |||||
By: /s/ BARBARA PAK | |||||
| Barbara Pak | |||||
| Executive Vice President and Chief Financial Officer (Authorized Officer, Principal Financial Officer) | |||||
| Date: April 29, 2026 | |||||
By: /s/ BRENNAN MCGREEVY | |||||
| Brennan McGreevy | |||||
| Group Vice President and Chief Accounting Officer | |||||
ESSEX PORTFOLIO, L.P. By Essex Property Trust, Inc., its general partner | |||||
| (Registrant) | |||||
| Date: April 29, 2026 | |||||
By: /s/ BARBARA PAK | |||||
| Barbara Pak | |||||
| Executive Vice President and Chief Financial Officer (Authorized Officer, Principal Financial Officer) | |||||
| Date: April 29, 2026 | |||||
By: /s/ BRENNAN MCGREEVY | |||||
| Brennan McGreevy | |||||
| Group Vice President and Chief Accounting Officer | |||||
45
Exhibit 10.1
3 Year Time Vest (Executive)
ESSEX PROPERTY TRUST, INC.
2026 LONG-TERM INCENTIVE AWARD
AWARD AGREEMENT
Name of Grantee: [________] (“the Grantee”)
No. of Restricted Stock Units: [_________] (the “Stock Units”)
Grant Date: February 18, 2026 (the “Grant Date”)
RECITALS
A.The Grantee is an employee of Essex Property Trust, Inc., a Maryland corporation (the “Company”) or a Company Affiliate.
B.As of February 17, 2026, the Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”) approved the terms of the 2026 Long-Term Incentive Awards to be granted by the Company under the Company’s 2018 Stock Award and Incentive Compensation Plan (the “2018 Plan”) to provide the Company’s employees with incentive compensation. This award agreement (this “Award Agreement”) evidences a 2026 Long-Term Incentive Award to the Grantee under the 2018 Plan (the “Award”), which is subject to the terms and conditions set forth herein and in the 2018 Plan.
C.The Grantee was selected by the Company to receive the Award. The Company, effective as of the Grant Date set forth above, issued to the Grantee the number of Stock Units set forth above.
D.Capitalized terms used herein shall have the respective meanings ascribed to them in Appendix A hereto. Unless the context requires otherwise, capitalized terms used, but not otherwise defined herein or in Appendix A, shall have the respective meanings ascribed to them in the 2018 Plan.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.Grant of Stock Units; Issuance of Stock; Payment of Dividends.
(a)The Company hereby grants the Grantee an award consisting of [________] Stock Units in accordance with the terms and conditions set forth in this Award Agreement. The 2018 Plan is hereby incorporated herein by reference as though set forth herein in its entirety.
(b)On or within thirty (30) days following each Vesting Date (as defined below), the Company will issue to the Grantee a number of shares of Stock equal to the number of such Stock Units that vested on such Vesting Date.
(c)Neither this Award nor the Stock Units may be sold, transferred, pledged assigned or otherwise encumbered or disposed of by the Grantee.
(d)With respect to the shares of Stock issuable pursuant to Section 1(b) above, the Grantee shall be entitled to dividends with a record date on or after the date of issuance of such shares of Stock to the Grantee. Prior to the issuance of shares of Stock to the Grantee following the applicable Vesting Date, the Grantee shall not be entitled to any dividends with respect to the Stock Units or the Stock issuable in settlement thereof.
2.Vesting.
(a)All of the Stock Units granted pursuant to this Award shall be subject to time-based vesting, with one-third (1/3) of the Stock Units granted pursuant to this Award vesting on each of the first three (3) anniversaries of the Grant Date (each, a “Vesting Date”), subject to the Grantee’s Continuous Service with the Company (or a Company Affiliate) through the applicable Vesting Date. Except as provided in Sections 2(b) and 2(c) below, if at any time the Grantee’s Continuous Service terminates for any reason, then the Stock Units granted pursuant to this Award that remain unvested at such time shall automatically and immediately be forfeited by the Grantee without consideration therefor.
(b)If the Grantee’s Continuous Service terminates in circumstances that constitute a Terminating Event, any then unvested Stock Units granted pursuant to this Award will not be forfeited and such Stock Units granted pursuant to this Award will be fully vested as of the date of such Terminating Event and shall be settled in shares of Stock in accordance with Section 1(b) following the date of such Terminating Event (or, in the event such Terminating Event occurs as a result of the Grantee’s Qualifying Termination prior to a Change in Control, on the date of such Change in Control) (which shall be considered a “Vesting Date” for purposes of this Award Agreement).
(c)In the event of the Grantee’s change in status from Employee, Director or Consultant to any other status of Employee, Director or Consultant, then, unless otherwise required by law, the Grantee shall continue to time-vest in any then unvested Stock Units granted pursuant to this Award based on the Grantee’s Continuous Service.
3.Tax Withholding. The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be required by law. The Grantee shall, not later than the date as of which vesting or payment in respect of this Award becomes a taxable event, pay to the Company or make arrangements satisfactory to the Company for payment of any Federal, state and local taxes required by law to be withheld on account of such taxable event; provided that, to the extent such taxable event occurs upon or concurrently with the issuance or vesting of the Stock Units and shares of Stock issuable hereunder, the Company will satisfy any required tax withholding obligation by withholding a number of shares of Stock issued or issuable hereunder with a Fair Market Value on the date of withholding equal to the aggregate amount of such tax withholding obligation based on the maximum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes
that are applicable to this Award, as determined pursuant to the 2018 Plan. For purposes of this Section 3, the Fair Market Value of the shares of Stock to be withheld shall be calculated in the same manner as the shares of Stock are valued for purposes of determining the amount of withholding taxes due.
4.Changes in Capital Structure. If (i) the Company shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or substantially all of the assets or stock of the Company or other transaction similar thereto, (ii) any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, significant repurchases of stock, or other similar change in the capital stock of the Company, (iii) any cash dividend or other distribution to holders of shares of Stock shall be declared and paid other than in the ordinary course, or (iv) any other extraordinary corporate event shall occur that in each case in the good faith judgment of the Committee necessitates action by way of equitable or proportionate adjustment in the terms of this Award Agreement, the Stock Units or the shares of Stock issuable pursuant to this Award to avoid distortion in the value of this Award, then the Committee shall make equitable or proportionate adjustment and take such other action as it deems necessary to maintain the Grantee’s rights hereunder so that they are substantially proportionate to the rights existing under this Award and the terms of the Stock Units and the shares of Stock prior to such event, including, without limitation: (A) interpretations of or modifications to any defined term in this Award Agreement; (B) adjustments in any calculations provided for in this Award Agreement, and (C) substitution of other awards under the 2018 Plan or otherwise. All adjustments made by the Committee shall be final, binding and conclusive.
5.Effectiveness of Award Agreement.
(a)This award shall be binding upon the successors and permitted assigns of the Grantee and shall be binding upon successors and assigns of the Company.
(b)Every provision of this Award Agreement is intended to be severable, and if any term or provision hereof is held to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder hereof.
6.Governing Law.
This Award Agreement shall be construed in accordance with and governed by the internal laws of the State of Maryland without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Maryland to the rights and duties of the parties.
7.Administration.
This Award shall be administered by the Committee, which in the administration of this Award shall have all the powers and authority it has in the administration of the 2018 Plan as set forth in the 2018 Plan.
8.Section 409A.
The Award is intended to comply with or be exempt from (under the “short term deferral” exception) Section 409A of the Internal Revenue Code (“Section 409A”) and, to the extent applicable, this Award Agreement shall be interpreted in accordance with Section 409A, including without limitation any applicable Department of Treasury regulations and other interpretive guidance currently in effect or that may be issued after the effective date of this Award Agreement. In addition, notwithstanding any provision herein to the contrary, in the event that following the Grant Date, the Administrator determines that it may be necessary or appropriate to do so, the Administrator may adopt such amendments to the Plan and/or this Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Plan and/or the Stock Units from the application of Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to this Award, or (b) comply with the requirements of Section 409A; provided, however, that this paragraph shall not create an obligation on the part of the Administrator to adopt any such amendment, policy or procedure or take any such other action. No payment hereunder shall be made during the six (6)-month period following the Grantee’s “separation from service” (within the meaning of Section 409A) to the extent that the Administrator determines that paying such amount at the time set forth herein would be a prohibited distribution under Section 409A(a)(2)(B)(i). If the payment of any such amounts is delayed as a result of the previous sentence, then within thirty (30) days following the end of such six (6)-month period (or, if earlier, the Grantee’s death), the Administrator shall pay to the Grantee (or to the Grantee’s estate) the cumulative amounts that would have otherwise been payable to the Grantee during such period, without interest. Notwithstanding anything herein or in the Plan to the contrary, to the extent required to avoid the imposition of additional taxes under Section 409A, a “Change in Control” shall not be deemed to have occurred for purposes of this Award Agreement unless such transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).
9.Communication.
Any notice, demand, request or other communication which may be required or contemplated herein shall be sufficiently given if (i) given either by electronic mail transmission, by reputable overnight delivery service, postage prepaid, or by registered or certified mail, postage prepaid and return receipt requested, to the address indicated herein or to such other address as my party hereto may specify as provided herein, or (ii) delivered personally at such address.
10. Recovery of Erroneously Awarded Compensation.
If the Grantee is now or hereafter become subject to any policy providing for the recovery of Awards, Shares, Stock Units, proceeds or payments to the Grantee in the event of fraud or other circumstances, then this Award, the Stock Units, and any Shares issuable upon the settlement of this Awards or proceeds therefrom, are subject to potential recovery by the Company under the circumstances provided under such policy as may be in effect from time to time.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Award Agreement as of the Grant Date.
ESSEX PROPERTY TRUST, INC.
By: | |||||
Hereunto duly authorized | |||||
Agreed and Accepted:
_______________________________
Name:
[Signature page to 2026 RSU Award Agreement]
APPENDIX A
DEFINITIONS
“2018 Plan” means the Essex Property Trust, Inc. 2018 Stock Award and Incentive Compensation Plan, as amended, modified or supplemented from time to time.
“Cause” shall mean, and shall be limited to, the occurrence of any one or more of the following events:
(i) a willful act of dishonesty by the Grantee with respect to any matter involving the Company or any Company Affiliates;
(ii) conviction of the Grantee of a crime involving moral turpitude; or
(iii) the deliberate or willful failure by the Grantee (other than by reason of the Grantee’s physical or mental illness, incapacity or disability) to substantially perform the Grantee’s duties with the Company and the Company Affiliates and the continuation of such failure for a period of 30 days after delivery by the Company or a Company Affiliate to the Grantee of written notice specifying the scope and nature of such failure and its intention to terminate the Grantee for Cause.
For purposes of clauses (i) and (iii) above, no act, or failure to act, on the Grantee’s part shall be deemed “willful” unless done, or omitted to be done, by the Grantee without reasonable belief that the Grantee’s act, or failure to act, was in the best interest of the Company and/or the Company Affiliates.
“Company Affiliate” means any parent entity of the Company, if any, that directly or indirectly owns a majority of the common equity of the Company, any direct or indirect subsidiary of any such parent entity and any direct or indirect subsidiary of the Company.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Executive Severance Plan” means the Essex Property Trust, Inc. Executive Severance Plan, as amended, modified or supplemented from time to time.
“Good Reason” means, for purposes of determining whether a Terminating Event occurred in connection with a Change in Control, the occurrence of any of the following events:
(i) a substantial adverse change in the nature or scope of the Grantee’s responsibilities, authorities, title, powers, functions, or duties from the responsibilities, authorities, powers, functions, or duties exercised by the Grantee immediately prior to the Change in Control; or
(ii) a reduction in the Grantee’s annual base salary as in effect immediately prior to the Change in Control or as the same may be increased from time to time; or
(iii) a reduction in the Grantee’s annual bonus opportunity to an annual bonus opportunity that is less than the highest bonus opportunity during the three fiscal years preceding the date of the Change in Control or as the same may be increased from time to time; or
(iv) a reduction of the Grantee’s target annual long-term incentive opportunity from the target annual long-term incentive opportunity as in effect immediately prior to the Change in Control or as the same may be increased from time to time; or
(v) a material reduction of the Grantee’s savings and retirement program opportunities, health and welfare benefits and fringe benefits, in the aggregate, to a level that is less favorable than such benefits and opportunities, in the aggregate, as are in effect immediately prior to the Change in Control or as the same may be increased from time to time; or
(vi) the relocation of the offices of the Company or Company Affiliate at which the Grantee is principally employed immediately prior to the date of the Change in Control to a location more than 30 miles from such offices, or the requirement by the Company or a Company Affiliate for the Grantee to be based anywhere other than the offices of the Company or Company Affiliate at such location, except for required travel on the business of the Company and the Company Affiliates to an extent substantially consistent with the Grantee’s business travel obligations immediately prior to the Change in Control; or
(vii) the failure by the Company or a Company Affiliate to pay to the Grantee any portion of Grantee’s compensation or to pay to the Grantee any portion of an installment of deferred compensation under any deferred compensation program of the Company or a Company Affiliate within 15 days of the date such compensation is due without prior written consent of the Grantee; or
(viii) the failure by the Company and the Company Affiliates to obtain an effective agreement from any successor to assume and agree to perform the obligation of the Company and the Company Affiliates under the Executive Severance Plan; or
(ix) any material breach by the Company or by any successor of the Company of the Executive Severance Plan.
Notwithstanding the foregoing to the contrary, none of the circumstances described above will constitute Good Reason unless the Grantee has provided written notice to the Company that such circumstances exist within ninety (90) days of the Grantee’s learning of such circumstances and the Company has failed to cure such circumstances within thirty (30) days following its receipt of such notice; and provided
further, that the Grantee did not previously consent in writing to the action leading to his or her claim of resignation for Good Reason.
“Stock” means a share of the Company’s common stock, par value $0.001 per share.
“Qualified Termination” of the Grantee means (i) termination by the Company and/or a Company Affiliate of the employment or service of the Grantee with the Company (if the Grantee is then employed or retained by the Company) and all Company Affiliates then employing or retaining the Grantee for any reason other than for Cause or the death or disability (as determined under the then existing long-term disability coverage of the Company or such Company Affiliate) of the Grantee or (ii) termination by the Grantee of the Grantee’s employment or service with the Company (if the Grantee is then employed or retained by the Company) and all other Company Affiliates then employing or retaining the Grantee for Good Reason; provided, for avoidance of doubt, that no such termination shall constitute a Qualified Termination if the Grantee remains or becomes an employee or consultant of the Company or a Company Affiliate immediately following such termination.
“Terminating Event” shall mean:
(i) a Qualified Termination of the Grantee (A) at any time following a Change in Control or (B) during the two-month period prior to the date of a Change in Control, and it is reasonably demonstrated by the Grantee that such termination of employment or service (1) was at the request of a third party that had taken steps reasonably calculated to effect such Change in Control or (2) otherwise arose in connection with or anticipation of a Change in Control; provided that a Terminating Event under this clause (i) shall not be deemed to have occurred solely as a result of the Grantee being an employee or consultant of any direct or indirect successor to the business or assets of the Company, rather than continuing as an employee or consultant of the Company following a Change in Control; or
(ii) a termination by the Company and/or a Company Affiliate of the employment or service of the Grantee with the Company (if the Grantee is then employed or retained by the Company) and all Company Affiliates then employing or retaining the Grantee for any reason other than for Cause or the death or disability (as determined under the then existing long-term disability coverage of the Company or such Company Affiliate) of the Grantee that occurs (A) at least one year after the Grant Date, and (B) at a time when the Grantee’s combined age and years of Continuous Service are equal to or greater than 68 and the Grantee has at least seven (7) years of Continuous Service with the Company or a Company Affiliate.
PSU - Core FFO (Executive)
ESSEX PROPERTY TRUST, INC.
2026 LONG-TERM INCENTIVE AWARD
AWARD AGREEMENT
Name of Grantee: [________] (the “Grantee”)
Target No. of Restricted Stock Units: [_________] (the “Target Stock Units”)
Maximum No. of Restricted Stock Units: [_________]
Grant Date: February 17, 2026 (the “Grant Date”)
RECITALS
A.The Grantee is an employee of Essex Property Trust, Inc., a Maryland corporation (the “Company”) or a Company Affiliate.
B.As of February 17, 2026, the Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”) approved the terms of the 2026 Long-Term Incentive Awards to be granted by the Company under the Company’s 2018 Stock Award and Incentive Compensation Plan (the “2018 Plan”) to provide the Company’s employees with incentive compensation. This award agreement (this “Award Agreement”) evidences a 2026 Long-Term Incentive Award to the Grantee under the 2018 Plan (the “Award”), which is subject to the terms and conditions set forth herein and in the 2018 Plan.
C.The Grantee was selected by the Company to receive the Award. The Company, effective as of the Grant Date set forth above, issued to the Grantee the number of Restricted Stock Units (the “Stock Units”) set forth above.
D.Capitalized terms used herein shall have the respective meanings ascribed to them in Appendix A hereto. Unless the context requires otherwise, capitalized terms used, but not otherwise defined herein or in Appendix A, shall have the respective meanings ascribed to them in the 2018 Plan.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.Grant of Stock Units; Issuance of Stock; Payment of Dividends.
(a)The Company hereby grants the Grantee an award consisting of the Stock Units identified above in accordance with the terms and conditions set forth in this Award Agreement. The 2018 Plan is hereby incorporated herein by reference as though set forth herein in its entirety.
(b)Except as otherwise provided in Sections 2(b), 3(b) and 3(c) below, (i) on the Final Determination Date, the Committee will determine, pursuant to Section 2(a), the Vesting Eligible Units; and (ii) subject to the Grantee’s Continuous
Service through the Final Vesting Date (as defined below), as soon as practicable after the Final Determination Date, but in no event later than March 15, 2029, (A) the Company will issue to the Grantee a number of shares of Stock equal to the number of Vesting Eligible Units determined pursuant to Section 2(a) below, and (B) all remaining Stock Units shall be canceled.
(c)Neither this Award nor the Stock Units may be sold, transferred, pledged assigned or otherwise encumbered or disposed of by the Grantee.
(d)Prior to the date on which the Company issues shares of Stock to a Grantee in respect of the Vesting Eligible Units in accordance with this Agreement, the Grantee shall not be entitled to any dividends with respect to the Stock Units or the Stock issuable in settlement thereof.
2.Performance Criteria and Attainment Levels.
(a) Subject to Section 2(b) and Section 3, the number of Stock Units that will be eligible to vest on the Final Determination Date pursuant to Section 1(b) (the “Vesting Eligible Units”) will be determined as follows:
(i) For each Performance Period, the Committee shall establish in writing threshold, target and maximum Core FFO per share achievement levels no later than March 15 of the applicable Performance Period. On the applicable Determination Date for each Performance Period, the Committee shall determine the Achievement Percentage attained for such Performance Period, in accordance with the following table:
| Core FFO Per Share for Performance Period | Achievement Percentage | ||||
| Below Threshold | 0% | ||||
| Threshold | 50% | ||||
| Target | 100% | ||||
| Maximum | 150% | ||||
If the Core FFO per share for a Performance Period is between two achievement levels, the Achievement Percentage for such Performance Period will be determined by linear interpolation between the applicable achievement levels.
(ii) On the Final Determination Date, the Committee will determine the “Final Achievement Percentage” by (A) adding the Achievement Percentages achieved for each of the three Performance Periods and (B) dividing the sum
by three (3). The Vesting Eligible Units will be determined by multiplying (A) the number of Target Stock Units by (B) the Final Achievement Percentage.
(b) Notwithstanding anything herein to the contrary, if a Change in Control occurs prior to the Final Vesting Date and, except as set forth in Section 3(c) below, the Grantee remains in Continuous Service through immediately prior to the date of such Change in Control, the “Vesting Eligible Units” shall be determined pursuant to the methodology set forth in Section 2(a)(ii) as of the date of the Change in Control using the following Achievement Percentages for each of the three Performance Periods to determine the “Final Achievement Percentage”: (i) for each Performance Period that is completed as of the date of the Change in Control, the Achievement Percentage shall be the Achievement Percentage for such Performance Period as determined by the Committee prior to the date of such Change in Control in accordance with Section 2(a)(i) hereof; (ii) for each Performance Period that is in process as of the date of the Change in Control, the Achievement Percentage shall be equal the greater of (1) one hundred percent (100%) and (2) the actual Achievement Percentage for such Performance Period as determined by the Committee prior to the date of such Change in Control in accordance with Section 2(a)(i) hereof; and (iii) for each Performance Period that has not yet commenced as of the date of the Change in Control, the Achievement Percentage shall be deemed to be one hundred percent (100%). In the event that the Award is not converted, assumed or replaced by a successor entity or survivor corporation, or parent or subsidiary thereof, then the Vesting Eligible Units (as determined pursuant to this Section 2(b)) shall vest immediately prior to the Change in Control, the Company will issue to the Grantee a number of shares of Stock equal to the number of Vesting Eligible Units determined pursuant to this Section 2(b) immediately prior to the Change in Control and all remaining Stock Units shall be canceled.
3.Vesting.
(a)The vesting of the Vesting Eligible Units determined pursuant to Section 2 shall be subject the Grantee’s Continuous Service through December 31, 2028 (the “Final Vesting Date”). Except as otherwise provided in Sections 3(b) and 3(c) below, if the Grantee’s Continuous Service terminates prior to the Final Vesting Date, then all Stock Units subject to this Award that remain unvested at such time, including Stock Units that do not vest pursuant to Section 3(b) or Section 3(c), shall automatically and immediately be forfeited by the Grantee without consideration therefor.
(b)If the Grantee’s Continuous Service terminates due to a Terminating Event that occurs prior to the Final Vesting Date, then, except as set forth in Section 3(c) below, on the date of such Terminating Event, for each Performance Period that is completed as of the date of the Terminating Event, the number of Stock Units that will be eligible to vest (the “Termination Vesting Units”) will be equal to (i) one-third (1/3) of the Target Stock Units, multiplied by (ii) the Achievement Percentage determined by the Committee for such Performance Period in accordance with Section 2(a) hereof, and the resulting Termination Vesting Units shall immediately vest
as of the date of such Terminating Event. No Stock Units will become Termination Vesting Units with respect to any Performance Period that is in progress or has not yet commenced at the time of the Terminating Event. Within thirty (30) days following the date of such Terminating Event, (i) the Company will issue to the Grantee a number of shares of Stock equal to the number of Termination Vesting Units determined pursuant to this Section 3(b), and (ii) all remaining Stock Units shall be canceled; provided that any Stock Units held by the Grantee that do not become Termination Vesting Units in accordance with this Section 3(b) shall remain outstanding and eligible to vest pursuant to Section 3(c) in the event that a Change in Control occurs within two (2) months following the Terminating Event and such Terminating Event is also determined to be a Change in Control Terminating Event; and provided further that if no Change in Control occurs within such period, then all remaining unvested Stock Units will be cancelled on the two (2) month anniversary of the Terminating Event.
(c)If the Grantee’s Continuous Service terminates due to a Change in Control Terminating Event that occurs prior to the Final Vesting Date, then the Vesting Eligible Units, determined in accordance with Section 2(b), shall immediately vest as of the later of (i) the date of such Change in Control Terminating Event or (ii) the date of the Change in Control; provided that if a portion of the Grantee’s Stock Units vested pursuant to Section 3(b) due to a Terminating Event that occurred within two (2) months prior to the Change in Control, then the number of additional Vesting Eligible Units that shall vest upon the Change in Control shall be equal to the positive difference of (A) the number of Vesting Eligible Units determined as of the date of the Change in Control in accordance with Section 2(b), minus (B) the number of Termination Vesting Units that previously vested pursuant to Section 3(b) upon such Terminating Event. Within thirty (30) days following the date of such Change in Control Terminating Event (or, if later, the date of the Change in Control), (x) the Company will issue to the Grantee a number of shares of Stock equal to the additional number of Vesting Eligible Units in which Grantee will vest as a result of the Change in Control Terminating Event as determined pursuant to this Section 3(c), and (y) all remaining Stock Units shall be canceled.
(d)In the event of the Grantee’s change in status from Employee, Director or Consultant to any other status of Employee, Director or Consultant, then, unless otherwise required by law, the Stock Units shall remain outstanding and eligible to vest in accordance with the terms of this Award Agreement based on the Grantee’s Continuous Service.
4.Tax Withholding. The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be required by law. The Grantee shall, not later than the date as of which vesting or payment in respect of this Award becomes a taxable event, pay to the Company or make arrangements satisfactory to the Company for payment of any Federal, state and local taxes required by law to be withheld on account of such taxable event; provided that, to the extent such taxable event occurs upon or concurrently with the issuance or vesting of the Stock Units and shares of Stock issuable hereunder, the Company will satisfy any
required tax withholding obligation by withholding a number of shares of Stock issued or issuable hereunder with a Fair Market Value on the date of withholding equal to the aggregate amount of such tax withholding obligation based on the maximum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to this Award, as determined pursuant to the 2018 Plan. For purposes of this Section 4, the Fair Market Value of the shares of Stock to be withheld shall be calculated in the same manner as the shares of Stock are valued for purposes of determining the amount of withholding taxes due.
5.Changes in Capital Structure. If (i) the Company shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or substantially all of the assets or stock of the Company or other transaction similar thereto, (ii) any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, significant repurchases of stock, or other similar change in the capital stock of the Company, (iii) any cash dividend or other distribution to holders of shares of Stock shall be declared and paid other than in the ordinary course, or (iv) any other extraordinary corporate event shall occur that in each case in the good faith judgment of the Committee necessitates action by way of equitable or proportionate adjustment in the terms of this Award Agreement, the Stock Units or the shares of Stock issuable pursuant to this Award to avoid distortion in the value of this Award, then the Committee shall make equitable or proportionate adjustment and take such other action as it deems necessary to maintain the Grantee’s rights hereunder so that they are substantially proportionate to the rights existing under this Award and the terms of the Stock Units and the shares of Stock prior to such event, including, without limitation: (A) interpretations of or modifications to any defined term in this Award Agreement; (B) adjustments in any calculations provided for in this Award Agreement, and (C) substitution of other awards under the 2018 Plan or otherwise. All adjustments made by the Committee shall be final, binding and conclusive.
6.Effectiveness of Award Agreement
(a)This award shall be binding upon the successors and permitted assigns of the Grantee and shall be binding upon successors and assigns of the Company.
(b)Every provision of this Award Agreement is intended to be severable, and if any term or provision hereof is held to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder hereof.
7.Governing Law.
This Award Agreement shall be construed in accordance with and governed by the internal laws of the State of Maryland without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Maryland to the rights and duties of the parties.
8.Administration.
This Award shall be administered by the Committee, which in the administration of this Award shall have all the powers and authority it has in the administration of the 2018 Plan as set forth in the 2018 Plan.
9.Section 409A.
The Award is intended to comply with or be exempt from (under the “short term deferral” exception) Section 409A of the Internal Revenue Code (“Section 409A”) and, to the extent applicable, this Award Agreement shall be interpreted in accordance with Section 409A, including without limitation any applicable Department of Treasury regulations and other interpretive guidance currently in effect or that may be issued after the effective date of this Award Agreement. In addition, notwithstanding any provision herein to the contrary, in the event that following the Grant Date, the Administrator determines that it may be necessary or appropriate to do so, the Administrator may adopt such amendments to the Plan and/or this Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Plan and/or the Stock Units from the application of Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to this Award, or (b) comply with the requirements of Section 409A; provided, however, that this paragraph shall not create an obligation on the part of the Administrator to adopt any such amendment, policy or procedure or take any such other action. No payment hereunder shall be made during the six (6)-month period following the Grantee’s “separation from service” (within the meaning of Section 409A) to the extent that the Administrator determines that paying such amount at the time set forth herein would be a prohibited distribution under Section 409A(a)(2)(B)(i). If the payment of any such amounts is delayed as a result of the previous sentence, then within thirty (30) days following the end of such six (6)-month period (or, if earlier, the Grantee’s death), the Administrator shall pay to the Grantee (or to the Grantee’s estate) the cumulative amounts that would have otherwise been payable to the Grantee during such period, without interest. Notwithstanding anything herein or in the Plan to the contrary, to the extent required to avoid the imposition of additional taxes under Section 409A, a “Change in Control” shall not be deemed to have occurred for purposes of this Award Agreement unless such transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).
10.Communication.
Any notice, demand, request or other communication which may be required or contemplated herein shall be sufficiently given if (i) given either by electronic mail transmission , by reputable overnight delivery service, postage prepaid, or by registered or certified mail, postage prepaid and return receipt requested, to the address
indicated herein or to such other address as my party hereto may specify as provided herein, or (ii) delivered personally at such address.
11. Recovery of Erroneously Awarded Compensation.
If the Grantee is now or hereafter become subject to any policy providing for the recovery of Awards, Shares, Stock Units, proceeds or payments to the Grantee in the event of fraud or other circumstances, then this Award, the Stock Units, and any Shares issuable upon the settlement of this Awards or proceeds therefrom, are subject to potential recovery by the Company under the circumstances provided under such policy as may be in effect from time to time.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Award Agreement as of the Grant Date.
ESSEX PROPERTY TRUST, INC.
By: | |||||
Hereunto duly authorized | |||||
Agreed and Accepted:
_______________________________
Name:
[Signature page to 2026 PSU Award Agreement]
APPENDIX A
DEFINITIONS
“2026 Performance Period” means the period beginning on January 1, 2026 and ending on December 31, 2026.
“2027 Performance Period” means the period beginning on January 1, 2027 and ending on December 31, 2027.
“2028 Performance Period” means the period beginning on January 1, 2028 and ending on December 31, 2028.
“Cause” shall mean, and shall be limited to, the occurrence of any one or more of the following events:
(i) a willful act of dishonesty by the Grantee with respect to any matter involving the Company or any Company Affiliates;
(ii) conviction of the Grantee of a crime involving moral turpitude; or
(iii) the deliberate or willful failure by the Grantee (other than by reason of the Grantee’s physical or mental illness, incapacity or disability) to substantially perform the Grantee’s duties with the Company and the Company Affiliates and the continuation of such failure for a period of 30 days after delivery by the Company or a Company Affiliate to the Grantee of written notice specifying the scope and nature of such failure and its intention to terminate the Grantee for Cause.
For purposes of clauses (i) and (iii) above, no act, or failure to act, on the Grantee’s part shall be deemed “willful” unless done, or omitted to be done, by the Grantee without reasonable belief that the Grantee’s act, or failure to act, was in the best interest of the Company and/or the Company Affiliates.
“Change in Control Terminating Event” means a Qualified Termination of the Grantee (i) at any time following the date of a Change in Control, or (ii) during the two-month period prior to the date of a Change in Control, and it is reasonably demonstrated by the Grantee that any such termination of employment or service occurring prior to the date of the Change in Control (1) was at the request of a third party that had taken steps reasonably calculated to effect such Change in Control or (2) otherwise arose in connection with or anticipation of a Change in Control; provided that a Change in Control Terminating Event under this clause shall not be deemed to have occurred solely as a result of the Grantee being an employee or consultant of any direct or indirect successor to the business or assets of the Company, rather than continuing as an employee or consultant of the Company following a Change in Control.
“Company Affiliate” means any parent entity of the Company, if any, that directly or indirectly owns a majority of the common equity of the Company, any direct or indirect subsidiary of any such parent entity and any direct or indirect subsidiary of the Company.
“Core FFO Per Share” means, for each Performance Period (or pro-rated portion of the Performance period in the event of a Change in Control), the Company’s Core FFO per share determined by reference to the Company’s quarterly filings with the SEC or quarterly earnings release and supplemental for such Performance Period.
“Determination Date” means the date on which the Achievement Percentage for a Performance Period is determined by the Compensation Committee pursuant to Section 2(a)(i), which shall occur as promptly as practicable following the conclusion of the applicable Performance Period (but, in any event, no later than two and one-half months after the conclusion of the applicable Performance Period).
“Executive Severance Plan” means the Essex Property Trust, Inc. Executive Severance Plan, as amended, modified or supplemented from time to time.
“Final Achievement Percentage” means the percentage determined in accordance with Section 2(a)(ii).
“Final Determination Date” means the Determination Date with respect to the 2028 Performance Period.
“Good Reason” means, for purposes of determining whether a Terminating Event occurred in connection with a Change in Control, the occurrence of any of the following events:
(i) a substantial adverse change in the nature or scope of the Grantee’s responsibilities, authorities, title, powers, functions, or duties from the responsibilities, authorities, powers, functions, or duties exercised by the Grantee immediately prior to the Change in Control; or
(ii) a reduction in the Grantee’s annual base salary as in effect immediately prior to the Change in Control or as the same may be increased from time to time; or
(iii) a reduction in the Grantee’s annual bonus opportunity to an annual bonus opportunity that is less than the highest bonus opportunity during the three fiscal years preceding the date of the Change in Control or as the same may be increased from time to time; or
(iv) a reduction of the Grantee’s target annual long-term incentive opportunity from the target annual long-term incentive opportunity as in effect immediately prior to the Change in Control or as the same may be increased from time to time; or
(v) a material reduction of the Grantee’s savings and retirement program opportunities, health and welfare benefits and fringe benefits, in the aggregate, to a level that is less favorable than such benefits and opportunities, in the aggregate, as are in effect on immediately prior to the Change in Control or as the same may be increased from time to time; or
(vi) the relocation of the offices of the Company or Company Affiliate at which the Grantee is principally employed immediately prior to the date of the Change in Control to a location more than 30 miles from such offices, or the requirement by the Company or a Company Affiliate for the Grantee to be based anywhere other than the offices of the Company or Company Affiliate at such location, except for required travel on the business of the Company and the Company Affiliates to an extent substantially consistent with the Grantee’s business travel obligations immediately prior to the Change in Control; or
(vii) the failure by the Company or a Company Affiliate to pay to the Grantee any portion of Grantee’s compensation or to pay to the Grantee any portion of an installment of deferred compensation under any deferred compensation program of the Company or a Company Affiliate within 15 days of the date such compensation is due without prior written consent of the Grantee; or
(viii) the failure by the Company and the Company Affiliates to obtain an effective agreement from any successor to assume and agree to perform the obligation of the Company and the Company Affiliates under the Executive Severance Plan; or
(ix) any material breach by the Company or by any successor of the Company of the Executive Severance Plan.
Notwithstanding the foregoing to the contrary, none of the circumstances described above will constitute Good Reason unless the Grantee has provided written notice to the Company that such circumstances exist within ninety (90) days of the Grantee’s learning of such circumstances and the Company has failed to cure such circumstances within thirty (30) days following its receipt of such notice; and provided further, that the Grantee did not previously consent in writing to the action leading to his or her claim of resignation for Good Reason.
“Performance Period” means each of the 2026 Performance Period, the 2027 Performance Period and the 2028 Performance Period.
“Qualified Termination” of the Grantee means (i) termination by the Company and/or a Company Affiliate of the employment or service of the Grantee with the Company (if the Grantee is then employed or retained by the Company) and all Company Affiliates then employing or retaining the Grantee for any reason other than for Cause or the death or disability (as determined under the then existing long-term disability coverage of the Company or such Company Affiliate) of the Grantee or (ii) termination by the Grantee of the Grantee’s employment or service with the Company (if the Grantee
is then employed or retained by the Company) and all other Company Affiliates then employing or retaining the Grantee for Good Reason; provided, for avoidance of doubt, that no such termination shall constitute a Qualified Termination if the Grantee remains or becomes an employee or consultant of the Company or a Company Affiliate immediately following such termination.
“Stock” means a share of the Company’s common stock, par value $0.001 per share.
“Terminating Event” shall mean a termination by the Company and/or a Company Affiliate of the employment or service of the Grantee with the Company (if the Grantee is then employed or retained by the Company) and all Company Affiliates then employing or retaining the Grantee for any reason other than for Cause or the death or disability (as determined under the then existing long-term disability coverage of the Company or such Company Affiliate) of the Grantee that occurs at least one year after the Grant Date.
3 Year Vest (Executive)
ESSEX PROPERTY TRUST, INC.
2026 LONG-TERM INCENTIVE AWARD
AWARD AGREEMENT
Name of Grantee: [________] (“the Grantee”)
Target No. of Restricted Stock Units: [_________] (the “Target Stock Units”)
Maximum No. of Restricted Stock Units: [_________]
Grant Date: February 17, 2026 (the “Grant Date”)
RECITALS
A.The Grantee is an employee of Essex Property Trust, Inc., a Maryland corporation (the “Company”) or a Company Affiliate.
B.As of February 17, 2026, the Compensation Committee (the “Committee”) of the Board of Directors of the Company (the “Board”) approved the terms of the 2026 Long-Term Incentive Awards to be granted by the Company under the Company’s 2018 Stock Award and Incentive Compensation Plan (the “2018 Plan”) to provide the Company’s employees with incentive compensation. This award agreement (this “Award Agreement”) evidences a 2026 Long-Term Incentive Award to the Grantee under the 2018 Plan (the “Award”), which is subject to the terms and conditions set forth herein and in the 2018 Plan.
C.The Grantee was selected by the Company to receive the Award. The Company, effective as of the Grant Date set forth above, issued to the Grantee the number of Restricted Stock Units (the “Stock Units”) set forth above.
D.Capitalized terms used herein shall have the respective meanings ascribed to them in Appendix A hereto. Unless the context requires otherwise, capitalized terms used, but not otherwise defined herein or in Appendix A, shall have the respective meanings ascribed to them in the 2018 Plan.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1.Grant of Stock Units; Issuance of Stock; Payment of Dividends.
(a)The Company hereby grants the Grantee an award consisting of [________] Stock Units in accordance with the terms and conditions set forth in this Award Agreement. The 2018 Plan is hereby incorporated herein by reference as though set forth herein in its entirety.
(b)On the Determination Date, (i) the Committee will determine, pursuant to Section 2(b), the number of Stock Units for which the performance criteria applicable to such Stock Units were satisfied as of the Valuation Date, (ii) the Company will issue to the Grantee a number of shares of Stock equal to the number of such earned Stock Units and (iii) all of the Stock Units shall be canceled.
(c)Neither this Award nor the Stock Units may be sold, transferred, pledged assigned or otherwise encumbered or disposed of by the Grantee. The shares of Stock issuable hereunder may not be sold, assigned, transferred, pledged or otherwise encumbered or disposed of by the Grantee prior to vesting and any book entries or certificates for the shares of Stock shall bear an appropriate legend, as determined by the Committee in its sole discretion, to the effect that such shares are subject to restrictions as set forth herein and in the 2018 Plan.
(d)With respect to the shares of Stock issuable pursuant to Section 1(b) above, the Grantee shall be entitled to dividends with a record date on or after the later of the Determination Date or the applicable Vesting Date (as defined below). Prior to the occurrence of the later of the Determination Date or the applicable Vesting Date, Grantee shall not be entitled to any dividends with respect to the Stock Units or the Stock issuable in settlement thereof.
2.Determination of Earned Stock Units.
(a) The Stock Units will be eligible to be earned based on the Company TSR performance relative to the FTSE NAREIT Apartment Index TSR and FTSE NAREIT Equity REITS Index TSR during the Performance Period. The total number of Stock Units that will be earned based on the Company TSR performance relative to the FTSE NAREIT Apartment Index TSR and FTSE NAREIT Equity REITS Index TSR (calculated in accordance with Appendix A) during the Performance Period will be equal to the sum of:
(i) The number of Stock Units determined by multiplying (A) fifty percent (50%), by (B) the number of Target Stock Units, by (ii) the FTSE NAREIT Apartment Index TSR Achievement Percentage; plus
(ii) The number of Stock Units determined by multiplying (A) fifty percent (50%), by (B) the number of Target Stock Units, by (ii) the FTSE NAREIT Equity REITS Index TSR Achievement Percentage.
(b) The Committee, as promptly as practicable following the conclusion of the Performance Period (but, in any event, no later than two and one-half months after the conclusion of the Performance Period), shall determine the actual number of the Stock Units that are earned in accordance with this Section 2 and issue the resulting number of Shares pursuant to Section 1(b). Notwithstanding anything herein to the contrary, if a Change in Control occurs on or prior to the twelve (12)-month anniversary of the Grant Date and the Grantee remains employed by the Company or a Company Affiliate until at least immediately prior to the date of such Change in Control or has incurred a Qualified Termination prior to such Change in Control, one hundred percent (100%) of the Stock Units subject to this Award shall be deemed earned in accordance with this Section 2 and the date of such Change in Control shall be deemed the Determination Date.
3.Vesting.
(a)All of the Stock Units and shares of Stock issued pursuant to this Award prior to the Final Vesting Date (as defined below) shall be subject to time-based vesting, with one-third (1/3) of the Stock Units earned pursuant to this Award and the shares of Stock issued or issuable pursuant to this Award vesting on each of the first three (3) anniversaries of the Grant Date (each, a “Vesting Date,” and the third (3rd) anniversary of the Grant Date, the “Final Vesting Date”), subject to the Grantee’s Continuous Service with the Company (or a Company Affiliate) through the applicable Vesting Date. All shares of Stock issued pursuant to Section 2(b) of this Award after the Final Vesting Date shall be fully vested upon issuance. Except as provided in Sections 3(b) and 3(c) below, if at any time the Grantee’s Continuous Service terminates for any reason, then the Stock Units and shares of Stock issued pursuant to this Award that remain unvested at such time shall automatically and immediately be forfeited by the Grantee without consideration therefor.
(b)If the Grantee’s Continuous Service terminates in circumstances that constitute a Terminating Event, any then unvested Stock Units or shares of Stock issued pursuant to this Award will not be forfeited and such Stock Units or shares of Stock issued pursuant to this Award will be fully time-vested as of the date of such Terminating Event (or, in the event such Terminating Event occurs as a result of the Grantee’s Qualified Termination prior to a Change in Control, on the date of such Change in Control) (which shall be considered a “Vesting Date” for purposes of this Agreement). Any shares of Stock issued pursuant to Section 2(b) of this Award with respect to Stock Units that vested pursuant to this Section 3(b) will be fully time-vested upon issuance.
(c)In the event of the Grantee’s change in status from Employee, Director or Consultant to any other status of Employee, Director or Consultant, then, unless otherwise required by law, the Grantee shall continue to time-vest in any then unvested Stock Units or shares of Stock issued pursuant to this Award based on the Grantee’s Continuous Service.
4.Tax Withholding. The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be required by law. The Grantee shall, not later than the date as of which vesting or payment in respect of this Award becomes a taxable event, pay to the Company or make arrangements satisfactory to the Company for payment of any Federal, state and local taxes required by law to be withheld on account of such taxable event; provided that, to the extent such taxable event occurs upon or concurrently with the issuance or vesting of the Stock Units and shares of Stock issuable hereunder, the Company will satisfy any required tax withholding obligation by withholding a number of shares of Stock issued or issuable hereunder with a Fair Market Value on the date of withholding equal to the aggregate amount of such tax withholding obligation based on the maximum statutory withholding rates for federal, state, local and foreign income tax and payroll tax purposes that are applicable to this Award, as determined pursuant to the 2018 Plan. For purposes
of this Section 4, the Fair Market Value of the shares of Stock to be withheld shall be calculated in the same manner as the shares of Stock are valued for purposes of determining the amount of withholding taxes due.
5.Changes in Capital Structure. If (i) the Company shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or substantially all of the assets or stock of the Company or other transaction similar thereto, (ii) any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, significant repurchases of stock, or other similar change in the capital stock of the Company, (iii) any cash dividend or other distribution to holders of shares of Stock shall be declared and paid other than in the ordinary course, or (iv) any other extraordinary corporate event shall occur that in each case in the good faith judgment of the Committee necessitates action by way of equitable or proportionate adjustment in the terms of this Award Agreement, the Stock Units or the shares of Stock issuable pursuant to this Award to avoid distortion in the value of this Award, then the Committee shall make equitable or proportionate adjustment and take such other action as it deems necessary to maintain the Grantee’s rights hereunder so that they are substantially proportionate to the rights existing under this Award and the terms of the Stock Units and the shares of Stock prior to such event, including, without limitation: (A) interpretations of or modifications to any defined term in this Award Agreement; (B) adjustments in any calculations provided for in this Award Agreement, and (C) substitution of other awards under the 2018 Plan or otherwise. All adjustments made by the Committee shall be final, binding and conclusive.
6.Effectiveness of Award Agreement.
(a)This award shall be binding upon the successors and permitted assigns of the Grantee and shall be binding upon successors and assigns of the Company.
(b)Every provision of this Award Agreement is intended to be severable, and if any term or provision hereof is held to be illegal or invalid for any reason whatsoever, such illegality or invalidity shall not affect the validity of the remainder hereof.
7.Governing Law.
This Award Agreement shall be construed in accordance with and governed by the internal laws of the State of Maryland without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Maryland to the rights and duties of the parties.
8.Administration.
This Award shall be administered by the Committee, which in the administration of this Award shall have all the powers and authority it has in the administration of the 2018 Plan as set forth in the 2018 Plan.
9.Section 409A.
The Award is intended to comply with or be exempt from (under the “short term deferral” exception) Section 409A of the Internal Revenue Code (“Section 409A”) and, to the extent applicable, this Award Agreement shall be interpreted in accordance with Section 409A, including without limitation any applicable Department of Treasury regulations and other interpretive guidance currently in effect or that may be issued after the effective date of this Award Agreement. In addition, notwithstanding any provision herein to the contrary, in the event that following the Grant Date, the Administrator determines that it may be necessary or appropriate to do so, the Administrator may adopt such amendments to the Plan and/or this Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (a) exempt the Plan and/or the Stock Units from the application of Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to this Award, or (b) comply with the requirements of Section 409A; provided, however, that this paragraph shall not create an obligation on the part of the Administrator to adopt any such amendment, policy or procedure or take any such other action. No payment hereunder shall be made during the six (6)-month period following the Grantee’s “separation from service” (within the meaning of Section 409A) to the extent that the Administrator determines that paying such amount at the time set forth herein would be a prohibited distribution under Section 409A(a)(2)(B)(i). If the payment of any such amounts is delayed as a result of the previous sentence, then within thirty (30) days following the end of such six (6)-month period (or, if earlier, the Grantee’s death), the Administrator shall pay to the Grantee (or to the Grantee’s estate) the cumulative amounts that would have otherwise been payable to the Grantee during such period, without interest. Notwithstanding anything herein or in the Plan to the contrary, to the extent required to avoid the imposition of additional taxes under Section 409A, a “Change in Control” shall not be deemed to have occurred for purposes of this Award Agreement unless such transaction also constitutes a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).
10.Communication.
Any notice, demand, request or other communication which may be required or contemplated herein shall be sufficiently given if (i) given either by electronic mail transmission, by reputable overnight delivery service, postage prepaid, or by registered or certified mail, postage prepaid and return receipt requested, to the address indicated herein or to such other address as my party hereto may specify as provided herein, or (ii) delivered personally at such address.
11. Recovery of Erroneously Awarded Compensation.
If the Grantee is now or hereafter become subject to any policy providing for the recovery of Awards, Shares, Stock Units, proceeds or payments to the Grantee in
the event of fraud or other circumstances, then this Award, the Stock Units, and any Shares issuable upon the settlement of this Awards or proceeds therefrom, are subject to potential recovery by the Company under the circumstances provided under such policy as may be in effect from time to time.
[Signature Page Follows]
IN WITNESS WHEREOF, the undersigned has executed this Award Agreement as of the Grant Date.
ESSEX PROPERTY TRUST, INC.
By: | |||||
Hereunto duly authorized | |||||
Agreed and Accepted:
_______________________________
Name:
[Signature page to 2026 RSU Award Agreement]
APPENDIX A
DEFINITIONS
“2018 Plan” means the Essex Property Trust, Inc. 2018 Stock Award and Incentive Compensation Plan, as amended, modified or supplemented from time to time.
“Cause” shall mean, and shall be limited to, the occurrence of any one or more of the following events:
(i) a willful act of dishonesty by the Grantee with respect to any matter involving the Company or any Company Affiliates;
(ii) conviction of the Grantee of a crime involving moral turpitude; or
(iii) the deliberate or willful failure by the Grantee (other than by reason of the Grantee’s physical or mental illness, incapacity or disability) to substantially perform the Grantee’s duties with the Company and the Company Affiliates and the continuation of such failure for a period of 30 days after delivery by the Company or a Company Affiliate to the Grantee of written notice specifying the scope and nature of such failure and its intention to terminate the Grantee for Cause.
For purposes of clauses (i) and (iii) above, no act, or failure to act, on the Grantee’s part shall be deemed “willful” unless done, or omitted to be done, by the Grantee without reasonable belief that the Grantee’s act, or failure to act, was in the best interest of the Company and/or the Company Affiliates.
“Company Affiliate” means any parent entity of the Company, if any, that directly or indirectly owns a majority of the common equity of the Company, any direct or indirect subsidiary of any such parent entity and any direct or indirect subsidiary of the Company.
“Company TSR” means the total stockholder return of the Company, expressed as a percentage, computed based on the total return that would have been realized by a stockholder who (i) bought $100 of shares of common equity securities of the Company on the first day of the Performance Period at a price per share equal to the closing sales price per share on the principal national stock exchange on which shares of such common equity securities are listed on such date (or, if such date is not a trading date, on the most recent prior trading date), (ii) contemporaneously reinvested in shares of Stock each dividend and other distribution declared during the Performance Period and received with respect to such share (and any other shares previously received upon reinvestment of dividends or other distributions) and (iii) sold such shares on the last day of the Performance Period for a per share price equal to the average closing sales price per share on the principal national stock exchange on which shares of such common equity
securities are listed for the twenty (20) consecutive calendar day period up to and including the Valuation Date; provided that if the Valuation Date is the date upon which a Transactional Change in Control occurs, the ending stock price of the Stock as of such date shall be equal to the fair market value in cash, as determined by the Committee, of the total consideration paid or payable in the transaction resulting in the Transactional Change in Control for one share of Stock. Total stockholder return shall be computed on a consistent basis with the total stockholder return calculation methodology used in the FTSE NAREIT Apartment Index and FTSE NAREIT Equity REITS Index, as applicable, using total stockholder return data obtained from such third party data providers as are selected by the Committee in its sole discretion.
“Determination Date” means the date on which the number of Stock Units earned pursuant to this Award is determined by the Compensation Committee pursuant to Section 2(b), which shall occur as promptly as practicable following the conclusion of the applicable Performance Period (but, in any event, no later than two and one-half months after the conclusion of the applicable Performance Period); provided, however, if the Valuation Date is the date of a Change in Control, the date of such Change in Control shall be deemed the Determination Date.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Executive Severance Plan” means the Essex Property Trust, Inc. Executive Severance Plan, as amended, modified or supplemented from time to time.
“FTSE NAREIT Apartment Index” means the FTSE NAREIT Apartment Index (FN18), or in the event such index is discontinued or its methodology is significantly changed, a comparable index selected by the Compensation Committee in good faith.
“FTSE NAREIT Apartment Index TSR” means the total stockholder return of the FTSE NAREIT Apartment Index, expressed as a percentage, for the Performance Period. The total stockholder return of the FTSE NAREIT Apartment Index for the Performance Period will be measured by using (i) the beginning price or level of the index on the first day of the Performance Period (or, if such date is not a trading date, on the most recent prior trading date), and (ii) the average price or level of the index for the twenty (20) consecutive calendar day period up to and including the Valuation Date. The FTSE NAREIT Apartment Index TSR calculation will be based on the companies traded on the index as of the applicable dates and is used as of the applicable dates even if companies are added or removed from the index during the Performance Period. The total stockholder return of the FTSE NAREIT Apartment Index shall be computed using total stockholder return data obtained from FTSE NAREIT (or such other third party data provider as is selected by the Committee in its sole discretion).
“FTSE NAREIT Apartment Index TSR Achievement Percentage” means the percentage determined as of the Valuation Date in accordance with the following table:
| Company TSR Performance Relative to FTSE NAREIT Apartment Index TSR during the Performance Period | Achievement Percentage | ||||
| Company TSR more than 5.0% below FTSE NAREIT Apartment Index TSR | 0% | ||||
| Company TSR 5.0% below FTSE NAREIT Apartment Index TSR | 50% | ||||
| Company TSR equal to FTSE NAREIT Apartment Index TSR | 100% | ||||
| Company TSR 5.0% or more above FTSE NAREIT Apartment Index TSR | 150% | ||||
If the Company TSR relative to the FTSE NAREIT Apartment Index TSR for the Performance Period is between two achievement levels, the percentage of Stock Units earned will be based on linear interpolation between the applicable achievement levels.
“FTSE NAREIT Equity REITS Index” means the FTSE NAREIT Equity REITS Index (FNRE), or in the event such index is discontinued or its methodology is significantly changed, a comparable index selected by the Compensation Committee in good faith.
“FTSE NAREIT Equity REITS Index TSR” means the total stockholder return of the FTSE NAREIT Equity REITS Index, expressed as a percentage, for the Performance Period. The total stockholder return of the FTSE NAREIT Equity REITS Index for the Performance Period will be measured by using (i) the beginning price or level of the index on the first day of the Performance Period (or, if such date is not a trading date, on the most recent prior trading date), and (ii) the average price or level of the index for the twenty (20) consecutive calendar day period up to and including the Valuation Date. The FTSE NAREIT Equity REITS Index TSR calculation will be based on the companies traded on the index as of the applicable dates and is used as of the applicable dates even if companies are added or removed from the index during the Performance Period. The total stockholder return of the FTSE NAREIT Equity REITS Index shall be computed using total stockholder return data obtained from FTSE NAREIT (or such other third party data provider as is selected by the Committee in its sole discretion).
“FTSE NAREIT Equity REITS Index TSR Achievement Percentage” means the percentage determined as of the Valuation Date in accordance with the following table:
| Company TSR Performance Relative to FTSE NAREIT Equity REITS Index TSR during the Performance Period | Achievement Percentage | ||||
| Company TSR more than 5.0% below FTSE NAREIT Equity REITS Index TSR | 0% | ||||
| Company TSR 5.0% below FTSE NAREIT Equity REITS Index TSR | 50% | ||||
| Company TSR equal to FTSE NAREIT Equity REITS Index TSR | 100% | ||||
| Company TSR 5.0% or more above FTSE NAREIT Equity REITS Index TSR | 150% | ||||
If the Company TSR relative to the FTSE NAREIT Equity REITS Index TSR for the Performance Period is between two achievement levels, the percentage of Stock Units earned will be based on linear interpolation between the applicable achievement levels.
“Good Reason” means, for purposes of determining whether a Terminating Event occurred in connection with a Change in Control, the occurrence of any of the following events:
(i) a substantial adverse change in the nature or scope of the Grantee’s responsibilities, authorities, title, powers, functions, or duties from the responsibilities, authorities, powers, functions, or duties exercised by the Grantee immediately prior to the Change in Control; or
(ii) a reduction in the Grantee’s annual base salary as in effect immediately prior to the Change in Control or as the same may be increased from time to time; or
(iii) a reduction in the Grantee’s annual bonus opportunity to an annual bonus opportunity that is less than the highest bonus opportunity during the three fiscal years preceding the date of the Change in Control or as the same may be increased from time to time; or
(iv) a reduction of the Grantee’s target annual long-term incentive opportunity from the target annual long-term incentive opportunity as in effect immediately prior to the Change in Control or as the same may be increased from time to time; or
(v) a material reduction of the Grantee’s savings and retirement program opportunities, health and welfare benefits and fringe benefits, in the aggregate, to a level that is less favorable than such benefits and opportunities, in the aggregate, as are in effect immediately prior to the Change in Control or as the same may be increased from time to time; or
(vi) the relocation of the offices of the Company or Company Affiliate at which the Grantee is principally employed immediately prior to the date of the Change in Control to a location more than 30 miles from such offices, or the requirement by the
Company or a Company Affiliate for the Grantee to be based anywhere other than the offices of the Company or Company Affiliate at such location, except for required travel on the business of the Company and the Company Affiliates to an extent substantially consistent with the Grantee’s business travel obligations immediately prior to the Change in Control; or
(vii) the failure by the Company or a Company Affiliate to pay to the Grantee any portion of Grantee’s compensation or to pay to the Grantee any portion of an installment of deferred compensation under any deferred compensation program of the Company or a Company Affiliate within 15 days of the date such compensation is due without prior written consent of the Grantee; or
(viii) the failure by the Company and the Company Affiliates to obtain an effective agreement from any successor to assume and agree to perform the obligation of the Company and the Company Affiliates under the Executive Severance Plan; or
(ix) any material breach by the Company or by any successor of the Company of the Executive Severance Plan.
Notwithstanding the foregoing to the contrary, none of the circumstances described above will constitute Good Reason unless the Grantee has provided written notice to the Company that such circumstances exist within ninety (90) days of the Grantee’s learning of such circumstances and the Company has failed to cure such circumstances within thirty (30) days following its receipt of such notice; and provided further, that the Grantee did not previously consent in writing to the action leading to his or her claim of resignation for Good Reason.
“Performance Period” means the period beginning on the Grant Date and ending on the Valuation Date.
“Qualified Termination” of the Grantee means (i) termination by the Company and/or a Company Affiliate of the employment or service of the Grantee with the Company (if the Grantee is then employed or retained by the Company) and all Company Affiliates then employing or retaining the Grantee for any reason other than for Cause or the death or disability (as determined under the then existing long-term disability coverage of the Company or such Company Affiliate) of the Grantee or (ii) termination by the Grantee of the Grantee’s employment or service with the Company (if the Grantee is then employed or retained by the Company) and all other Company Affiliates then employing or retaining the Grantee for Good Reason; provided, for avoidance of doubt, that no such termination shall constitute a Qualified Termination if the Grantee remains or becomes an employee or consultant of the Company or a Company Affiliate immediately following such termination.
“Stock” means a share of the Company’s common stock, par value $0.001 per share.
“Terminating Event” shall mean:
(i) a Qualified Termination of the Grantee (A) at any time following a Change in Control or (B) during the two-month period prior to the date of a Change in Control, and it is reasonably demonstrated by the Grantee that such termination of employment or service (1) was at the request of a third party that had taken steps reasonably calculated to effect such Change in Control or (2) otherwise arose in connection with or anticipation of a Change in Control; provided that a Terminating Event under this clause (i) shall not be deemed to have occurred solely as a result of the Grantee being an employee or consultant of any direct or indirect successor to the business or assets of the Company, rather than continuing as an employee or consultant of the Company following a Change in Control; or
(ii) a termination by the Company and/or a Company Affiliate of the employment or service of the Grantee with the Company (if the Grantee is then employed or retained by the Company) and all Company Affiliates then employing or retaining the Grantee for any reason other than for Cause or the death or disability (as determined under the then existing long-term disability coverage of the Company or such Company Affiliate) of the Grantee that occurs (A) at least one year after the Grant Date, and (B) at a time when the Grantee’s combined age and years of Continuous Service are equal to or greater than 68 and the Grantee has at least seven (7) years of Continuous Service with the Company or a Company Affiliate.
“Transactional Change in Control” means a Change in Control resulting from any person or group making a tender offer for Stock, a merger or consolidation where the Company is not the surviving entity, the shares of Stock outstanding immediately prior to such merger are converted or exchanged by virtue of the merger into other property or consisting of a sale, transfer or disposition of all or substantially all of the assets of the Company.
“Valuation Date” means the earlier of (i) February 16, 2029, or (ii) the date upon which a Change in Control shall occur.
Exhibit 31.1
ESSEX PROPERTY TRUST, INC.
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Angela L. Kleiman, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Essex Property Trust, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: April 29, 2026
| /s/ ANGELA L. KLEIMAN | |||||
| Angela L. Kleiman Chief Executive Officer and President Essex Property Trust, Inc. | |||||
Exhibit 31.2
ESSEX PROPERTY TRUST, INC.
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Barbara Pak, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Essex Property Trust, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: April 29, 2026
| /s/ BARBARA PAK | |||||
| Barbara Pak Executive Vice President and Chief Financial Officer Essex Property Trust, Inc. | |||||
Exhibit 31.3
ESSEX PORTFOLIO, L.P.
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Angela L. Kleiman, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Essex Portfolio, L.P.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: April 29, 2026
| /s/ ANGELA L. KLEIMAN | |||||
| Angela L. Kleiman Chief Executive Officer and President Essex Property Trust, Inc., general partner of Essex Portfolio, L.P. | |||||
Exhibit 31.4
ESSEX PORTFOLIO, L.P.
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Barbara Pak, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Essex Portfolio, L.P.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: April 29, 2026
| /s/ BARBARA PAK | |||||
| Barbara Pak Executive Vice President and Chief Financial Officer Essex Property Trust, Inc., general partner of Essex Portfolio, L.P. | |||||
Exhibit 32.1
ESSEX PROPERTY TRUST, INC.
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350 as adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), I, Angela L. Kleiman, hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Form 10-Q”) of Essex Property Trust, Inc. fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Essex Property Trust, Inc.
| Date: April 29, 2026 | /s/ ANGELA L. KLEIMAN | |||||||
| Angela L. Kleiman Chief Executive Officer and President Essex Property Trust, Inc. | ||||||||
Exhibit 32.2
ESSEX PROPERTY TRUST, INC.
Certification of Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350 as adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), I, Barbara Pak, hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Form 10-Q”) of Essex Property Trust, Inc. fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Essex Property Trust, Inc.
| Date: April 29, 2026 | /s/ BARBARA PAK | |||||||
| Barbara Pak Executive Vice President and Chief Financial Officer Essex Property Trust, Inc. | ||||||||
Exhibit 32.3
ESSEX PORTFOLIO, L.P.
Certification of Chief Executive Officer
Pursuant to 18 U.S.C. Section 1350 as adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), I, Angela L. Kleiman, hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Form 10-Q”) of Essex Portfolio, L.P. fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Essex Portfolio, L.P.
| Date: April 29, 2026 | /s/ ANGELA L. KLEIMAN | |||||||
| Angela L. Kleiman Chief Executive Officer and President Essex Property Trust, Inc., general partner of Essex Portfolio, L.P. | ||||||||
Exhibit 32.4
ESSEX PORTFOLIO, L.P.
Certification of Chief Financial Officer
Pursuant to 18 U.S.C. Section 1350 as adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), I, Barbara Pak, hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended March 31, 2026 (the “Form 10-Q”) of Essex Portfolio, L.P. fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Essex Portfolio, L.P.
| Date: April 29, 2026 | /s/ BARBARA PAK | |||||||
| Barbara Pak Executive Vice President and Chief Financial Officer Essex Property Trust, Inc., general partner of Essex Portfolio, L.P. | ||||||||